The former internal watchdog for the U.S. Securities and Exchange Commission violated ethics rules by overseeing investigations that touched on people with whom he had "personal relationships," an outside review found, Bloomberg News reported yesterday. H. David Kotz, who resigned as the agency’s inspector general in January amid questions about his tactics and conduct, should not have participated in a probe of the SEC’s office re- organization because he engaged in "extensive" and "flirtatious" communications with an employee associated with the project, according to the review. Kotz also should not have opened an investigation related to R. Allen Stanford’s Ponzi scheme because he was friends with a female attorney who represented victims of the fraud, investigators said in the 66-page report.
