Chris Prentice and Sarah N. Lynch

WASHINGTON, (Reuters) – The U.S. Securities and Exchange Commission suspended Carl Hoecker as its inspector general for seven consecutive days in 2020 despite a recommendation by an independent government panel that the agency fire him for “serious misconduct,” according government records obtained by Reuters.

    The SEC documents provide new details on how the agency responded after a government investigation, first reported by Reuters in December, concluded that Hoecker abused his authority by conducting a “remarkably biased and flawed” internal probe into allegations against two of his employees. Reuters received the SEC documents via a public record request.  

    The government investigation into Hoecker was led from 2017 to 2019 by the Integrity Committee, a federal panel that examines allegations of wrongdoing against inspectors general, after two whistleblowers alleged that he conducted a substandard investigation. The government’s watchdog for the misuse of taxpayer money, inspectors general protect against it.

    The previously unreported documents show that the SEC, which received the Integrity Committee’s report on Hoecker in 2019, also concluded wrongdoing by Hoecker. In an active investigation, he failed to “avoid the appearance” of bias and displayed “poor judgment in contacting witnesses.”

    The SEC concluded that Hoecker failed “to report allegations of improper conduct pursuant to the SEC’s policy of preventing harassment,” according to the documents, which include Hoecker’s time-sheets.  

    While the Integrity Committee recommended the SEC consider firing Hoecker, its Commissioners voted instead on May 8 to suspend him without pay from May 24-June 2, 2020, the records show. Hoecker was earning nearly $277,000 per year at the time.

    Hoecker, who disputed the committee’s findings, and his attorney did not respond to requests for comment about the disciplinary action.

    In an email he sent to staff two days after Reuters’ report in December, Hoecker wrote: “I strive to do the best job possible” and added: “As far as any willful or negligent inaccuracies and omissions in the article or the underlying…Integrity Committee report, I cannot comment.”

    The SEC declined to comment on its response to the Integrity Committee’s report. Requests for comment were not answered by a spokesperson from the SEC Office of Inspector General.

    Jay Clayton, SEC chair at the time of Hoecker’s disciplinary action, did not respond to requests for comment.

    Three attorneys who specialize in disciplinary proceedings said a seven-day unpaid suspension appeared to be light given the committee’s findings, and its recommendation that the SEC consider removing Hoecker.

    “It seems odd they’d let [him]Debra D’Agostino is the founding partner of Federal Practice Group, Washington.

    Hoecker got a “big break,” said John Berry, an attorney specializing in disciplinary action defenses.

    The SEC can fire its inspector general provided two thirds of its sitting commissioners agree and it notifies Congress of its reason at least 30 days beforehand.

    In his email, Hoecker told staff: “I hope you still have confidence in me as your IG. It has been almost nine years since I joined, and I want to stay here as long as possible. () future.”