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‘Top Internet cop’ leaves SEC

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WASHINGTON — The "top cop" of the Securities and Exchange Commission, Richard Walker, who established the agency's Internet enforcement program, is leaving for work in the private sector.

News Tuesday that Walker is stepping down as enforcement director came as President Bush's nominee to head the SEC awaits Senate confirmation. The White House announced in early May Bush's intention to nominate prominent securities lawyer Harvey Pitt as SEC chairman, but the nomination wasn't formally sent to the Senate until Tuesday.

Laura Unger, the only Republican SEC commissioner, has been acting head of the agency since former chairman Arthur Levitt left in February.

The death last month of Paul Carey left the SEC with only two commissioners, Unger and Isaac Hunt, out of its full complement of five — which includes the chairman. Norman S. Johnson, a Republican appointed by former President Clinton, left in May 2000.

Several lawmakers have expressed concern in recent weeks over the vacancies at the watchdog agency, which regulates securities markets, mutual funds and investment companies.

Walker joins a stream of attorneys, accountants and examiners who have left the SEC in recent years for more lucrative jobs outside government, an exodus that Unger says has created a "staffing crisis."

Walker, 50, who was SEC general counsel from 1996 to 1998, became enforcement director in 1998 under Levitt, one of the most activist chairmen in the agency's 66-year history. Walker led the agency's pursuit of insider trading by individuals and accounting fraud and irregularities by corporations, pushed for more criminal prosecutions of securities laws violations by federal prosecutors and the FBI, and in 1998 set up the SEC's 240-strong "Cyberforce" team that prowls the Internet for investment scams and other securities fraud.

The agency has brought some 250 Internet enforcement cases, including one concluded in March against a flamboyant, self-proclaimed stock expert calling himself Tokyo Joe who operated an investment Web site. He agreed in a settlement to pay $429,696 in civil penalties and $324,934 in restitution of allegedly ill-gotten gains, without admitting nor denying the allegations.