The Securities and Exchange Commission will soon need to look for a new inspector general as David Kotz will be leaving his position at the end of January to start working for a private investigative service.
Helping Whistleblowers
Kotz, age 45, will join Gryphon Strategies as a managing director in their office in Washington, DC. At Gryphon he will investigate corporate fraud and will help witnesses and whistleblowers who are trying to expose fraud.
Before joining the SEC in December, 2007 Kotz was the inspector general of the Peace Corps.
Tough Inspector
Kotz is known for his hard-hitting, aggressive style and has sometimes been criticized for creating a culture of fear at the SEC by his overly contentious tactics. Last December it was reported that at least two employees at the SEC had filed formal complaints concerning Kotz, saying he had bullied witnesses and stretched or twisted the facts to help build his case against them.
“I am tremendously proud of the accomplishments of my office and the agency over the past four years,” Kotz said. “The reports we have issued have not only been significant to the agency, Congress and the investing public, but they have also directly resulted in a transformation of many of the divisions and offices of the commission.”
Not everyone was unhappy with Kotz’s assiduous style. He acquired more than a few friends in Congress after he wrote a 477-page report on the SEC’s failure to catch Madoff, which led the agency to be more insistent in using a new database to help keep track of tips from informants.
“David Kotz produced strong, conclusive reports, even as critics claimed he was too aggressive,” said Republican Senator Charles Grassley, who has been a big supporter of Kotz’s work. “An aggressive, independent inspector general is best for the agency in the long run, even if that’s uncomfortable for management.”