SEC Compliance Examiner Arrested For Non-Compliance, Misreporting Stock Holdings

Perhaps this should have been a “Humor” post but in possibly the most ironic news story of the day, New York-based SEC employee Steven Gilchrist was charged with three counts of making false statements regarding the nature of his personal financial holdings. As WSJ reports, the 48-year-old compliance examiner at the agency, allegedly certified that his stock holdings were in compliance with the agency’s ethics rules, when in reality he had held shares of six companies that agency staffers are barred from holding. The SEC is “very disappointed that an employee allegedly made false statements to conceal prohibited holdings after being told by our ethics office to divest.” Gilchrist, unlike Cohen, faces a maximum 15 year sentence!

 

Via WSJ,

Mr. Gilchrist was arrested Tuesday morning and released on his own recognizance after a court appearance, according to the Manhattan U.S. Attorney’s Office.

 

The arrest is tied to a recent probe of the personal financial holdings of some SEC employees in New York by U.S. prosecutors and the SEC’s internal watchdog, which The Wall Street Journal reported on last week.

 

 

As an SEC examiner, Steven Gilchrist had a duty to avoid conflicts of interest that might compromise or even appear to compromise his integrity,” Manhattan U.S. Attorney Preet Bharara said in a news release. “Instead, as alleged, he violated the SEC’s internal rules about stock ownership and repeatedly lied to the SEC about his holdings.”

 

 

Mr. Gilchrist allegedly told the agency that he no longer held the stocks and also certified using the agency’s computer compliance system that his holdings were in keeping with the rules when neither was true, the complaint said. Mr. Gilchrist also allegedly bought 100 shares of J.P. Morgan Chase & Co. stock online through the joint account without getting the required approval for purchase with the SEC.

 

 

The release said Mr. Gilchrist faces a maximum sentence of 15 years in prison.

    



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