Dear Senator McCain / Flake:
I’m writing about my good friend Eric Wanger, a Chicago money manager who has had a nightmarish experience with the SEC over the last six years.
The SEC accused Eric of violating technical rules when he executed 15 transactions over a period of years. The total losses resulting from these claimed violations was $2,200 — a tiny fraction of Eric’s portfolio. The SEC’s enforcement division initiated a legal action that was heard by an Administrative Law Judge — an SEC employee, who, unsurprisingly, ruled consistently against Eric. Believing he could not get a fair shake, Eric agreed to settle the charges without admitting liability. He paid a fine and agreed to a one-year suspension from the industry.
The one-year “suspension” ended five years ago, but Eric remains barred from the industry. Nobody will hire him, and the SEC’s staff has rejected his pleas for reinstatement.
Pulitzer-prize winning journalist Gretchen Morgenson told Eric’s story in a recent New York Times article:
As your constituent, I’m outraged that an American citizen — and a good man — has been treated so shabbily. He has been denied due process before the SEC, and has received a shockingly disproportionate punishment for the minor violations he was accused of. I am reminded of the fictional character Jean Valjean, who was hounded for years by a police officer because he stole a loaf of bread. I don’t believe Eric violated any rule, but even if he did, this penalty — a virtual life sentence for a $2,200 violation — is grossly unwarranted and unfair.
Enough is enough. There is a petition now pending before the SEC requesting Eric’s reinstatement to the securities industry. Please do whatever you can to make sure this absurd penalty is lifted. Contact the members of the Banking Committee or the Commissioners themselves, and help bring Eric’s nightmare to an end.
For years, Eric believed what he was taught in civics class: that the Constitution guarantees due process in administrative proceedings, and that the government acts in the interest of justice. This experience has given him grave doubts. Make him believe again.