Meet the High-Ranking SEC Official Who Surfed Porn While Your 401K Vanished

David Ito is an assistant regional director in the SEC's Los Angeles office. He makes around $200,000 a year supervising the commission's L.A. regulators. According to a source, he was looking at porn at work during the economic collapse.

Ito, according to an SEC insider, is the SEC supervisor at the center of a redacted inspector general report into "misuse of government computer resources and official time" late last year in which he admitted to attempting to view sites like www.fuck-my-wife.com and analsins.com from his Los Angeles office more than 1,800 times over a 17-day period. Though the inspector general's report called Ito's porn obsession a "serious matter" that "could have discredited the SEC" and recommended "disciplinary action up to and including dismissal," the insider says Ito still has his job and hasn't been disciplined in any outwardly evident way. In fact, Ito has held on to the promotion he received just before the investigation into his workplace porn habits began.

"Maybe they quietly suspended him for a few days," the source says. "But he kept his job." And Ito's own boss, Los Angeles Regional Director Rosalind Tyler, told staffers that viewing pornography at work was "not a big deal" after stories about the SEC's porn problem first surfaced. "It happens all the time," Tyson said at a staff meeting, according to a source who was familiar with what was said at the meeting. "It goes on nationwide. It's not a big deal, and we're really happy with the way we've handled it."

Meet the High-Ranking SEC Official Who Surfed Porn While Your 401K Vanished

The way they handled it was to keep paying Ito somewhere in the neighborhood of $200,000 a year to oversee the Los Angeles office's teams of regulators, who are charged with ensuring that firms in L.A.—obviously one of the commission's most important offices—comply with SEC regulations. According to this database of federal employee salaries, Ito, who graduated from UCLA and attended law school at UC-Davis, made $157,000 a year in 2008 at the commission's "SK-15" pay grade. He's since been promoted to an "SK-17," the source says. Similarly situated SEC staffers at that pay grade were earning $200,000 or more in 2008.

When we called Ito to confirm that he was indeed the target of the Los Angeles investigation, he said, "I don't comment on anything." When pressed, he said, "My position is that I'm not commenting on that." A spokesman for SEC likewise declined comment.

According to the report of the investigation into Ito's internet usage [pdf], Ito was visiting transvestite porn sites during the nadir of the financial crisis in 2008:

Meet the High-Ranking SEC Official Who Surfed Porn While Your 401K Vanished



To put that in perspective, just days later, on September 15, Lehmann Brothers went bankrupt. The day after that, the federal government took control of AIG.

Ito admitted to investigators that he viewed porn from his office—with the door closed, of course—"up to twice a day." He told them that it was a stress reliever for him, and that he lacked the self-control to stop himself:

Meet the High-Ranking SEC Official Who Surfed Porn While Your 401K Vanished



He also apologized profusely and told investigators that he was "ashamed" of his conduct:

Meet the High-Ranking SEC Official Who Surfed Porn While Your 401K Vanished



The SEC insider says staffers are shocked that Ito seems to have been given a slap on the wrist for the highly embarrassing behavior, especially because the commission is generally exceedingly strict about enforcing rules against, for instance, accepting offers of food from firms that it regulates. "It angers people," the source says, "because if this had happened to anyone in the lower ranks, they would have been fired. We're always told that out reputation is our most important asset, and that we have to keep up appearances. I'd get in trouble for eating a bagel from a company we're looking into, and he gets nothing. It's a double standard."

Ito is far from alone among SEC staffers: According to reports of inspector general investigations we've obtained, no fewer than 16 commission staffers have been investigated over the past two years for a total of more than 8,200 attempts to view restricted pornographic sites on government computers. The commission is fighting back against the perception that its staffers are porn-addicted office masturbators: Spokesman John Nester told the New York Post yesterday that "each of the cases investigated was detected by our surveillance systems and referred to the inspector general for investigation."

Trouble is, that's not true, according to two SEC sources who contacted Gawker. The inspector general has asked for more information about attempts by SEC staffers to visit restricted sites, and the commission has declined to hand it over: "John Nester isn't telling the truth," one SEC source says. "They've refused to provide reports of pornography to the inspector general. The SEC says their system is down. There were nine months when the SEC refused to provide the information to the IG." Another highly placed source confirms that the SEC has been dragging its heels in turning over information about porn-viewing to the IG.

We called SEC Inspector General H. David Kotz to ask him if the commission has been forthcoming in handing over all the data he's asked for. "There are certain things I choose not to comment on in order to make sure my office works with the SEC in a productive way," he said. An SEC spokesman declined to comment on the commission's cooperation with Kotz.

A final note: Much has been made, by us and by others, about the rather humorous nature of some of the sites being visited in these cases, particularly Ito's, which included ladyboyjuice.com and trannytits.com. We don't care what kind of porn Ito spent time looking at while getting paid $200,000 in taxpayer dollars to help ensure the smooth and transparent functioning of the financial system that was in freefall around him. And we're all for porn! We just think public officials should be held responsible for their conduct while they're on the clock.