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Former SEC investigator sues the agency for wrongful termination

David Weber, who is seeking $20 million in damages, says he was fired after voicing concerns about former SEC Inspector General David Kotz

A former U.S. Securities and Exchange Commission (SEC) investigator who was fired for allegedly threatening his colleagues has filed a multimillion-dollar wrongful termination lawsuit against the government agency.

David Weber was chief investigator in the SEC inspector general’s office until May, when he was placed on paid leave for reportedly creating a threatening work environment and expressing his desire to carry a gun while on the job. He was eventually fired on Oct. 31.

Weber has denied these charges, and says he was actually fired for voicing concerns about official misconduct at the agency’s internal watchdog unit, the Office of Inspector General (OIG). According to his lawsuit, he notified the agency that possible wrongdoing by former SEC Inspector General David Kotz may have compromised probes of the SEC’s investigation into Ponzi schemers Bernie Madoff and Allen Stanford.

Kotz resigned from his post in January, four months before the SEC hired an outside investigator to examine alleged misconduct by employees in the OIG. Although the agency did not identify the targets of the investigation, Kotz told the Wall Street Journal at the time that the allegations did not involve him.

An independent examination into Weber’s allegations revealed that Kotz may have had conflicts of interest in some of the cases, although it did not name any specific examples. The same investigation found that Weber did have some performance problems, although it did not conclude that he had created a threatening workplace.

Weber is seeking $20 million in damages and reinstatement, according to Thomson Reuters.

For more InsideCounsel coverage of the SEC, read:

Court clarifies standard for SEC aiding and abetting claims

SEC makes first payment under Dodd-Frank program

Business groups sue SEC over Dodd-Frank rule

Litigation: 2nd Circuit lends a helping hand to the SEC

SEC settling with more individual defendants

SEC settles case with fraudulent entrepreneur

Alanna Byrne

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