Bloomberg News

SEC Says Ethics Contractor Improperly Shared Employee Trade Data

October 14, 2011

Oct. 14 (Bloomberg) -- A company hired to track securities trading by U.S. Securities and Exchange Commission employees passed data to subcontractors and consultants who weren’t vetted by the agency, according to a letter sent to SEC staff.

Financial Tracking Technologies LLC, which was monitoring trading to support an SEC ethics program, acted improperly in sharing the information, which may have included workers’ “full name and brokerage account information,” the SEC said in the letter to employees dated Oct. 7.

“Because FTT did not seek the SEC’s preapproval, the SEC had not subjected the unauthorized personnel to background investigation,” Thomas Bayer, the agency’s chief information officer, wrote in the letter.

The agency isn’t “aware of any actual misuse” of the information, Bayer said in the letter. The agency is offering to sign employees up for a credit monitoring service for a year, he wrote.

The SEC learned about information-sharing when a former FTT employee approached the agency to express concern, said John Nester, a spokesman for the regulator. The agency hasn’t determined what to do about the FTT contract, Nester said in a telephone interview.

Tony Turner, principal at Greenwich, Connecticut-based FTT, didn’t respond to a telephone call seeking comment.

FTT was hired in 2009, when the ethics program began tracking employee trading activity. In a statement at the time, the company said its software “provides for SEC employees to pre-clear and report personal securities transactions and holdings and enable the Ethics Office to administer, supervise and manage the SEC’s ethics program.”

Reuters reported on the SEC letter earlier today.

--Editor: Gregory Mott

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net.

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.


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