Some post-Thanksgiving turkey…

December 1, 2008

As footnoted regulars know, companies love to file juicy stuff on days like this past Friday — a day when few people are likely to pay attention. And while there were quite a few worthwhile SEC filings, this report from the SEC’s Office of the Inspector General quickly rose to the top. Extra points were given because there was no press release and finding the report on the SEC’s site takes a bit of poking around. Nor was the OIG’s RSS feed (which I subscribe to) updated as of Sunday night, which meant you had to know to look for it.

At 94 pages, it’s about as long as a typical 10Q. But unlike most 10Qs that we come across, this one had an entire section devoted to company employees spending time surfing the web for Internet porn — while they were at work. Starting on pg. 53, the OIG’s office talks about several SEC employees or contractors “who had numerous attempts to access pornographic websites from their Commission computers that were blocked by the agency’s Internet filter, as well as instances where they successfully accessed pornography or inappropriate material.”

While the porn stuff is interesting, especially since some of that surfing was presumably happening as markets were free-falling, it wasn’t the only juicy thing in the report. As the Washington Post reported over the weekend, the OIG also looked into unusual insider trading patterns by two SEC employees. That section of the report begins on p.58 and reads in part:

OIG investigators have completed a comprehensive review and analysis of more than two years of these employees— brokerage records, the employees— required reports on those transactions, and their case assignments. The OIG has also reviewed the employees— Commission e-mails for a substantial time period, and found and analyzed numerous e-mails discussing stocks and securities transactions sent from their SEC computers.

Mark Cuban, who was charged with insider trading by the SEC on Nov. 17, takes particular delight in this irony.

Image source: BBC Good Food

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