… The academic study, entitled “Does the Revolving Door Affect the SEC’s Enforcement Outcomes,” is the first to actually apply some rigorous analysis to the proposition that SEC staff let future job considerations affect their professional judgment. The outcome, not surprising to me, is an emphatic “no” — employment considerations had no measurable impact on enforcement outcomes and that SEC alumni appear to have no measurable advantage on behalf of their clients facing investigation.
This conclusion has common sense in its corner. Enforcement staff, having landed a highly sought-after and difficult-to-obtain job, often passing up other opportunities in the process, would not risk reputation and career and even jail by undermining an investigation for a possible future job prospect. Any enforcement staff member who would consider such a betrayal would be so lacking in respect and credibility as to be of no value to future employers. Nor would they get hired — to put it bluntly, would you hire someone so dishonest, so without principle and held in low esteem by former colleagues (which they would have to be to consider such an act of deceit) to represent you in matters of importance? I have seen no evidence of such a betrayal in my years at the SEC, or in my 15 years in public service. To believe the critics on this point is to have a disturbingly cynical and misguided view of public service and the dedicated and professional members of the Enforcement Division.
via Guest post by SEC’s Khuzami: Cynics perpetuate ‘revolving door’ myth — On the Case