I guess he got sick of eating lunch alone. I can see it now, he walks into the SEC’s cafeteria (actually I don’t think they have a cafeteria) and says,”You guys mind if I join you?”
“Sure,” says Head of Enforcement Robert Khuzami, hoping not to offend the respected yet independent-minded and powerful Inspector General, H. David Kotz. “But actually we were—hmmmm—just leaving.” And so it goes, another lunch alone.
Next time, he figures, he’ll just work through lunch. Since 2007, Kotz has produced some stinging and thoughtful reports on the failure of his agency to do its job. He will be best known for his thoughtful, take-no-prisoners critique of the Commission’s failure to ferret out the Madoff and Stanford schemes earlier. He also highlighted problems at Bear Stearns before its collapse and drew attention to insider trading and conflicts of interest among SEC employees.
We should all commend his tireless service. The role of the Inspector General is a unique one. The French Army had an IG as early as the mid-17th Century, assigned to report to King Philip (or was it Louis?) regarding the state of the army. The United States adopted the position during the Revolutionary War: An Army Inspector General was assigned to training the Continental Army (which was really just an assembly of militias) and ensuring uniformity of tactics. In the three-plus centuries since, the role has expanded in the United States to just about every major governmental department. Mr. Kotz filled the role admirably at the SEC, and at a difficult time. We wish him well.
We now look forward to seeing Chair Mary Schapiro’s obvious choice for his replacement. “Drum roll please…”