The staff at the nation’s top securities regulatory agency, the Securities and Exchange Commission, has long had a reputation for being no-nonsense investigators, good at stripping away the window dressing and seeing financial relationships for what they really are.

It appears, however, that some people on the SEC staff are spending their time looking at a different kind of stripped down images: porn, to be precise.

A year ago, a scandal erupted at the commission when SEC Inspector General David Kotz reported that a number of SEC investigators were spending their time using government computers to access porn sites even as Bernie Madoff was running his massive multi-billion-dollar ponzi scam. Among those involved were 17 high-ranking senior agency officers, earning salaries of more than $222,000 each.

These were not casual porn viewers, either. One employee was found to have been spending eight hours a day searching for porn sites, while another was discovered to have visited 16,000 porn sites in one month.

But that scandal appears not to have put a stop to the SEC’s porn problem.

According to a new report released by Inspector General Kotz, three SEC employees and an agency contractor were caught this year accessing porn sites on their government computers during business hours.

One of the employees, a lawyer at the SEC’s main office in Washington, resigned after being confronted. A second employee faces termination. The private contractor has had his contract with the agency terminated.

The SEC computer network reportedly has a security system that blocks access to porn sites, which are notorious for introducing viruses to computer systems, and for being used by hackers to gain unauthorized access to computers. But the SEC’s porn aficionados appear to be skilled at getting past these firewalls. 

Kotz’s office says several of the offenders had managed to reach porn sites on their government computers after being blocked “hundreds of times” by the security system.

Stanley Sporkin, a former chief of enforcement at the SEC, once explained to a group of financial journalists that one way SEC investigators discovered arcane financial scams was to “sit around making up fraud schemes themselves and then going out and looking for people actually doing them.”

It appears that lately at least some of the agency’s employees have been using their creativity for less worthy purposes.


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