SEC Staffers Sold Stock Before Enforcement Actions, Study Finds

Members of the Securities and Exchange Commission staff who owned stock in companies under investigation were more likely to sell their shares than other investors during the period leading up to agency enforcement actions, a new study shows. The SEC staffers, for example, sold shares of JPMorgan Chase & Co. and General Electric Co. in 62 percent of their trades, as opposed to a 50 percent rate for outside investors. Emory University accounting professor Shivaram Rajgopal and co-author Roger M. White, a doctoral student at Georgia State University, analyzed records of 7,200 trades from 2009 to 2011, through information obtained from the SEC through Freedom of Information Act requests.