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SEC taps Capitol Police Inspector General as Top Watchdog

The U.S. Securities and Exchange Commission has selected a criminal investigator as the agency's new top internal watchdog, a hire that comes just one day after President Barack Obama tapped a former criminal prosecutor to chair the SEC.

WASHINGTON, Jan 25 The U.S. Securities and Exchange Commission has selected a criminal investigator as the agency's new top internal watchdog, a hire that comes just one day after President Barack Obama tapped a former criminal prosecutor to chair the SEC.

The SEC has offered the job of inspector general to Capitol Police Inspector General Carl W. Hoecker, two people familiar with the matter told Reuters. One of those people said Hoecker has accepted the offer.

The people spoke on the condition of anonymity because the hiring decision is not yet public.

Both Hoecker and an SEC spokesman declined to comment.

Hoecker will replace Jon Rymer, the Federal Deposit Insurance Corp's inspector general who has temporarily served as the SEC's interim inspector general while commissioners searched for a permanent replacement.

A provision in the 2010 Dodd-Frank law empowered the commissioners of the SEC to jointly hire the inspector general.

His hiring was reported earlier on Friday by Bloomberg.

The SEC's decision to hire Hoecker signals a major sea change from past hiring practices for the post of inspector general, which came under scrutiny over the past few years when David Kotz served in the top spot.

Considered to be an activist inspector general, Kotz raised the profile of the office by probing everything from the SEC's failure to catch Madoff to bungled SEC contracts and the viewing of pornography at work.

His aggressive tactics, however, also made him many enemies and at least two SEC staffers filed formal complaints against him with a council that oversees inspectors general alleging he did not offer the targets of his probes due process and created a culture of fear at the SEC.

Kotz in previous interviews with Reuters denied all of the allegations made against him.

He left the SEC about a year ago amid an ethics scandal and potential conflicts of interest reported in articles by Bloomberg involving a sit-down interview with a financial adviser who later sold Kotz football tickets.

Unlike Hoecker, who has more than 30 years experience as a criminal investigator and is also a certified public accountant and fraud examiner, Kotz was an attorney who previously served as the inspector general of the peace corps.

Some of his critics said his lack of auditing and investigative background was a flaw that might have contributed to his at times over-zealous investigations.

Hoecker has served as the inspector general of the Capitol Police since 2006.

He had also been a U.S. military policeman, a special agent in the Army Criminal Investigations Command, a criminal investigator of the U.S. Information Agency and a deputy inspector general for investigations at the Treasury Office of the Inspector General.

He will come to the agency just as it gears up to welcome former U.S. Attorney Mary Jo White, who was nominated by Obama to chair the SEC and is expected to easily win Senate confirmation.

Copyright 2010 by Reuters. All rights reserved.

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