The SEC’s complaint alleges that David Humphrey, who worked at the regulator from 1998 to 2014 in the division of corporation finance, concealed his personal trading from the SEC’s ethics office and later misrepresented his trading activities to the SEC’s office of inspector general when questioned during an investigation.

He has been permanently excluded him from participating in the financial reporting or audits of public companies.

SEC employees are subject to rigorous rules regarding securities transactions to guard against even the appearance of using public office for private gain.  The ethics rules specifically prohibit trading in options or derivatives.  The rules also require staff to disclose their securities holdings and transactions to the agency’s ethics office in annual filings.

According to the SEC’s complaint, Humphrey violated the rules by engaging in transactions involving derivatives, failing to obtain pre-clearance before trading non-prohibited securities, and failing to hold securities for the required period.

Gerald Hodgkins, associate director in the SEC’s division of enforcement, said: ‘As alleged in our complaint, Humphrey never sought pre-clearance for his prohibited options trades and he filed forms that falsely represented his securities holdings.’

Humphrey has agreed to settle the charges and pay $51,917 (£40,028) in disgorgement of profits made in the improper trades plus $4,774 in interest and a $51,917 penalty.

He also agreed to be permanently suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.  The settlement is subject to court approval.

In a parallel action, the Department of Justice announced that Humphrey has pleaded guilty to criminal charges stemming from his false federal filings.

Pat Sweet