SEC Fines Former Staffer for Ethics Violations

Further, the complaint alleges that he made “misleading representations on forms filed with broker-dealers and he failed to disclose to [a friend on whose behalf he was trading] that this trading violated government ethics rules and would result in his submitting false annual certifications of his trading activity to the SEC.”

When confronted by agents of the SEC Office of Inspector General in 2014, Humphrey “falsely denied that he had traded in options or in his mother’s brokerage account while employed at the SEC,” the complaint says.

SEC ethics rules prohibit trading in options or derivatives, the SEC states, and also require “staff to disclose their securities holdings and transactions to the agency’s ethics office in annual filings.”

Humphrey agreed to settle the charges and pay $51,900 in disgorgement of profits made in the improper trades plus nearly $4,800 in interest and a $51,900 penalty. He also agreed to be permanently suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The settlement is subject to court approval.