Former SEC supervisor was surfing porn while investigating Ponzi schemes, report finds

A report released by the Securities and Exchange Commission reveals that a regional supervisor key to the investigation of Westridge Capital, the money manager accused of running a $550 million Ponzi scheme, was surfing pornographic web sites on his work computer when he should have been investigating the firm instead.
The report, written in 2009 but only recently released, did not suggest that the supervisor, whose name was not revealed, missed an opportunity to notice Westridge’s suspicious money management style because of his perverted web browsing habits.

Currently, Westridge, which was owned by two former players for the New York Islanders, is shut down and still is under investigation for duping large institutional investors such as the University of Pittsburgh’s and Carnegie Mellon’s endowment funds into a massive Ponzi scheme.

SEC Inspector General David Kotz said that during one week in 2008, the supervisor tried to access pornographic web sites nearly 200 times, and that the SEC found numerous lewd sexual photos on the hard drive of the supervisor’s computer.

Kotz also found that the supervisor, who confessed to frequently surfing pornographic web sites at his office desk, missed significant opportunities to uncover the alleged fraud at Westridge in 2005. The supervisor has since resigned.

Kotz also found last year that 30 or so SEC employees or contractors regularly used government computers to view pornographic materials, and that all were disciplined. He added that the agency has since taken steps to prevent the activity.