As reported by Bloomberg and Above the Law, James Kidney, an SEC enforcement lawyer who had worked at the agency since 1986 (with a four year hiatus in the private sector) favored his retirement party with a fiery speech telling his colleagues what a lousy job they do.
The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said“On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”
Kidney accused SEC manager of being focused on getting high-paying jobs after their government service rather than on bringing difficult cases. “I have had bosses, and bosses of my bosses, whose names we all know, who made little secret that they were here to punch their ticket,” Kidney said. “They mouthed serious regard for the mission of the commission, but their actions were tentative and fearful in many instances.”
He accused his soon-to-be former employers of having little interest in “afflicting the comfortable and powerful,”and condemned the agency for massaging statistics to burnish its reputation. There was more. We only know of Kidney’s comments from notes; there was no video or formal transcript.
Your Ethics Alarms Ethics Quiz today:
Was Kidney’s farewell speech ethical?
My position: Of course not.
To the contrary, it was rude, inappropriate, self-indulgent, wrongly timed, late and cowardly. What did Kidney do to change the culture in the 14 years he worked at the SEC? If it was so bad, why did he hang around so long? If he wanted to blow the whistle, why did he wait? Why didn’t he have the guts to go public when there might be a personal cost, rather than doing this hit-and-run stunt?
It doesn’t justify his conduct to say that he is right in the details his critique; he probably is. This wasn’t the time or place to raise them. His friends and colleagues came to his retirement party to honor him and say good-bye, and he thanked them by exploiting the event as a cheap opportunity to vent his frustrations and settle scores, while simultaneously insulting some of the guests, if not all of them.
They should make him give his watch back.