INSIGHT-SEC director with big stock holdings stirs debate

Fri Nov 21, 2014 1:00am EST
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By Sarah N. Lynch

WASHINGTON Nov 21 (Reuters) - Keith Higgins, who runs the office that reviews public companies' books at the U.S. Securities and Exchange Commission, reported stock holdings worth between about $2 million and $6 million last year and the sale of stocks throughout 2014, according to SEC disclosures viewed by Reuters.

Higgins disclosed holdings in about 90 public companies during his SEC tenure in 2013, making him the biggest investor in individual stocks among the agency's top officials last year.

Since the beginning of the year, he has reported about 60 transactions involving sales of stocks such as Dollar Tree , Apple, Abbott Laboratories and Raytheon, with about two-thirds of those occurring in late September in a flurry of sales. Higgins may no longer be the biggest stock holder among the top SEC officials Reuters reviewed because of these sales.

Such stock holdings are permitted by federal and SEC ethics laws and regulations. The law already protects against conflicts by prohibiting government officials from working on matters that could benefit them financially.

But Higgins' large holdings, and the volume of trading he reported during 2013 and 2014, may stoke debate about whether it's proper for the Director of Corporation Finance or other top SEC officials to be active stock market participants and whether the SEC needs to tighten its ethics policies to further reduce the appearance of potential conflicts.

"The SEC should explain how and why its procedures allowing top officials to hold individual stock are adequate to prevent the appearance of a conflict of interest," said Iowa Republican Senator Charles Grassley, responding to questions posed by Reuters. Grassley is a frequent SEC watchdog and is due to become the next chairman of the Senate Judiciary Committee.

A Reuters review of financial disclosures provided by the agency show that while working for the SEC in 2013, Higgins reported holding stocks, American depository shares and one specialized product that gives shareholders certain rights after a merger. Collectively, these investments ranged in value from a little less than $2 million to just under $6 million.

From those holdings, Higgins reported between about $53,000 to about $185,000 in dividends and/or capital gains for calendar year 2013.   Continued...