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The inspector general at the Securities and Exchange Commission, H. David Kotz, created a bit of a furor this week when he disclosed that his office is looking at whether former staff lawyers might have influenced a case.

The inspector general at the Securities and Exchange Commission, H. David Kotz, created a bit of a furor this week when he disclosed that his office is looking at whether former staff lawyers might have influenced a case. 4

The inspector general at the Securities and Exchange Commission, H. David Kotz, created a bit of a furor this week when he disclosed that his office is looking at whether former staff lawyers might have influenced a case.

In a letter to Senator Charles E. Grassley, Republican of Iowa, Mr. Kotz wrote that “we are currently conducting an investigation into allegations very recently brought to our attention that a prominent law firm’s significant ties to the S.E.C., specifically, the prevalence of S.E.C. attorneys leaving the agency to join this particular firm, led to the S.E.C.’s failure to appropriate actions in a matter involving the firm.”

This is not the first time Mr. Kotz has looked at the impact that a former staff member had on an investigation. Reports on the S.E.C.’s handling of investigations of Allied Capital and the Stanford Financial Group included a discussion of former enforcement staff members representing clients shortly after leaving the commission.

The inspector general is certainly not the only person raising questions about the revolving door that takes lawyers from the S.E.C. to private firms subject to its regulations. Senator Ted Kaufman, Democrat of Delaware, described the recent hiring of an associate director of the S.E.C.’s trading and markets division by Getco, a high-frequency trading firm, as “another example of regulatory capture at its worst.”

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