Regulation

The SEC's BlackBerry Compromise


Robert Khuzami, the ex-Deutsche Bank (DB) lawyer running the enforcement shop at the Securities & Exchange Commission, is winning kudos for bringing civil fraud charges against Goldman Sachs (GS) and helping repair the agency's tattered image after missing Bernard Madoff's $65 billion Ponzi scheme. Yet the deep cultural chasm between Wall Street and Washington has occasionally tripped him up.

Khuzami in January announced a plan to hand out BlackBerry (RIMM) smartphones to his staff to keep everyone in the loop about current cases. Yet the labor union that represents the division's mostly law school-educated employees—yes, there is one—balked. Concerned that staff would be chastised for not responding to midnight e-mails, the National Treasury Employees Union said the devices should go only to those SEC employees who requested them.

Intense negotiations followed, and a compromise was struck: Almost every worker would get a BlackBerry, but they could be turned off after normal work hours and on weekends. "We just don't think employees should be expected to be on call 24/7," says Greg Gillman, a Boston enforcement attorney who serves as the local union president. "It wouldn't be fair to characterize employees as lazy," adds Gillman, who represents almost every SEC nonmanager whether they sign up for the union or not.

Khuzami plans to issue 294 BlackBerrys by the end of July. The SEC believes employees will "welcome the device because it's vital that enforcement staff have all the tools they need whenever they're called upon to pursue wrongdoing," says SEC spokesman John Nester. That is, as long as "whenever" doesn't fall after 5 p.m. or on a Saturday.

The bottom line: SEC enforcement lawyers will be issued BlackBerrys and, under union rules, will be allowed to turn them off once they clock out.


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