SEC Attorney Lowers the Boom on the Agency
MANHATTAN (CN) - An SEC attorney sued the Securities and Exchange Commission, claiming it retaliated for her complaints that its New York Regional Office had a policy not to go after investment managers - including Bernard Madoff.
Kathleen Furey sued the SEC for records in a federal FOIA complaint. The 19-page lawsuit includes 123 pages of attached exhibits.
Furey claims that from Jan. 1, 2002 to December 2008, an assistant director in the New York Regional Office told his 20 staff attorneys not to bring administrative proceedings or civil actions under the Investor Advisor Act or the Investment Company Act.
Furey claims the assistant director had a "personal policy" not to "seriously pursue such cases. Said assistant director stated the policy and practice as follows: 'We do not do IM (Investment Management) cases,'" according to the complaint.
Furey says she complained about this in 2007 to her supervisors, including the director of the New York Regional Office, but nothing was done about it.
"Instead, the director told plaintiff she could recant her allegation or present it to the SEC's inspector general," Furey says in the lawsuit.
It continues: "Consequently, and reluctantly, plaintiff informed the SEC's inspector general in November 2007 and thereafter of the policy and practice of her assistant director not to enforce the IAA or ICA against suspected violators of those acts. Shortly after plaintiff's disclosures to her supervisors and defendant SEC's inspector general, plaintiff's branch chief and assistant director began to engage in reprisals against her.
"Plaintiff's assistant director did not terminate his moratorium on IAA and ICA cases until at least early 2009, when Congress began to investigate and the media began to report on defendant SEC's and NYRO's failure to enforce the securities acts, and in particular the IAA and ICA, against Bernard Madoff, despite the warnings of an external whistleblower. Immediately thereafter, the reprisals against plaintiff by defendant SEC's senior officials broadened and intensified and would continue until the present."
Furey claims she was promoted each year from 2004 to 2007, but when she blew the whistle the promotions stopped. The SEC also slowed down and stopped her monetary awards and raises, she says, and assigned her more work without paying her for working in a higher capacity as a staff attorney.
She says an independent contractor was called in and decided that she was performing at a higher level and was entitled to more pay.
Then, Furey says, the SEC began tampering with her personnel records and altering her scores on performance evaluations.
She claims her supervisors refused to provide her with a copy of the classification audit report and repeatedly gave her "different and conflicting reasons why they could not give it to her."
She filed her first FOIA request for the audit report in December 2011, and when the SEC refused her repeated requests for all records that mention her name, she sued.
She wants to see the records.
She is represented by Helen Davis Chaitman with Becker & Poliakoff.