SEC may have insider trading problem: Report

SEC Building

A study suggests that some SEC employees engaged in insider trading in companies that became subjects of agency scrutiny, The Washington Post reports.

The study, "The Stock Picking Skills of SEC Employees," was based on data obtained from the Securities and Exchange Commission by researchers at Emory and Georgia State universities using the Freedom of Information Act.

(Read more: Cramer: Has the SEC fallen asleep on its watch? )

They found that out of the 56 enforcement actions against publicly traded companies during the study period, agency employees traded ahead of six, the newspaper said. The transactions were more likely to be sales than buys, the newspaper said.

"It appears that SEC employees continue to take advantage of non-public information to trade profitably in stocks under their regulatory purview," the researchers said.

None of the trades were linked to a name, so the profits could not be ascertained, the newspaper said.

Agency spokesman John Nester told the Post that staff members must sell any stock holdings of a company before they can work on issues involving the firm. "Each of the transactions was individually reviewed and approved in advance by the Ethics office," he said.

Read full story here

-By CNBC.com

image: © Scott S

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