Magazine article American Banker

Protecting the Public Is All in a Day's Work; Securities and Exchange Commission's New York Head Takes Fraud Investigations and Controversy in Stride

Magazine article American Banker

Protecting the Public Is All in a Day's Work; Securities and Exchange Commission's New York Head Takes Fraud Investigations and Controversy in Stride

Article excerpt

IRA LEE SORKIN IS NOT SHY. Mr. Sorkin, the Securities and Exchange Commission's top administrator in New York, keeps a sign saying, "Damn, I'm Good," in a prominent position in his office at 26 Federal Plaza.

The 42-year-old securities lawyer, a cheerful workaholic who lives on Long Island with his wife and two children, frequently calls the mediato alert financial reporters of his office's latest filing against an individual or a company suspected of malfeasance.

Most of all, "Ike" Sorking is not shy about aggressively protecting the sanctity of the financial markets and the welfare of investors -- his mandates.

"I love this job -- the work, protecting the public," he says, in a characteristic outpouring of pride.

"We get to see so much here -- insider trading, market manipulation, stock-loan fraud," he adds. "I'm not sure there's much more we can do."

Since Mr. Sorkin was sworn in on May 14, 1984 -- replacing Donald Malawsky, now a senior vice president at the New York Stock Exchange -- he also has seen his share of controversy. And not all of it has been pleasant.

Since taking office, Mr. Sorkin has supervised investigations of, or had a hand in actions involving, among others, R. Foster Winans, the former reporter for The Wall Street Journal who was convicted of insider trading violations; E.F. Hutton & Co., which pleaded guilty to 2,000 counts of mail and wire fraud last May 2; and Kidder, Peabody & Co., which was accused in October of mishandling $145 million worth of its customers' securities from October 1983 to September 1984.

Still, none of the cases brought the agency -- and Mr. Sorkin -- under scrutiny as much as the one involving First Jersey Securities and its flamboyant founder and chairman, Robert Brennan.

When the commission announced its second suit against Mr. Brennan since 1983 -- charging that First Jersey churned illegal profits of at least $9.6 million during a three-month period in 1982 and 1983 in trades of low-priced stocks -- Mr. Brennan fired back that the suit constituted harassment.

The filings by the commission took place on Halloween, and Mr. Brennan told reporters that the timing was appropriate.

"It's a witch hunt," said Mr. Brennan wryly. "The ghosts and goblins have left the SEC building and flown into a courthouse."

He became serious when discussing Mr. Sorkin and the commission. "I'm going to sue them personally," he said. "He's [Mr. Sorkin's] not goint to get away from this one."

Unruffled, Mr. Sorkin has the comfort of knowing that he is doing his job of trying to protect the safety of the public. Besides, he knows that he is "damn good," as the sign says.

"I'm not sure the SEC has to be defended on that one," he says, referring to Mr. Brennan's claims. "These are different charges. The first time the charge was making a market in a security at the same time they were underwriting it, which is prohibited."

Mr. Sorkin bristles at the suggestion that the commission was late -- or too lenient -- in its handling of the E.F. Hutton case. The agency announced its findings several weeks after Griffin Bell, the former U.S. Attorney General who was Hutton's handpicked outside investigator, issued his report in September.

Was the SEC too soft?

"That's an absurd statement," Mr. Sorkin says. "Those people who suggest it's a slap on the wrists don't know the facts of the case. Hutton is paying in excess of $1 million to shareholders in a fund."

Finds Job Rewarding

His job is often flushed with hostile publicity. …

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