Assessment of the Office of Investor 

Education and Advocacy’s 

Functions

 

September 30, 2011

Report No. 498
O ..

.. ICI! 0 .. 

INSPECTOR GENERAL 

SECU

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

ii

To: Lori J. Schock, Director, Office of Investor Education and 

Advocacy (OlEA) 

From: H. David Kotz, Inspector General, Office of Inspector General (OIGY $' 

Subject: Assessment of the Office of Investor Education and Advocacy's Functions, 

Report No. 498 

MEMORANDUM 

September 30, 2011 

This memorandum transmits the U.S. Securities and Exchange Commission OIG's final 

report detailing the results of our audit of OlEA's functions. This audit was conducted 

as part of our continuous effort to assess management of the Commission's programs 

and operations, and as part of our audit plan. 

The final report contains 16 recommendations which if fully implemented will enhance 

OlEA's processes for providing assistance to investors. OlEA concurred with all the 

report's recommendations. Your written response to the draft report is included in 

AppendixV. 

Within the next 45 days, please provide the OIG with a written corrective action plan 

that is designed to address the report's recommendations. The corrective action plan 

should include information such as the responsible official/point of contact, timeframes 

for completing required actions, and milestones identifying how you will address the 

recommendations. 

Should you have any questions regarding this report, please do not hesitate to contact 

me. We appreciate the courtesy and cooperation that you and your staff extended to 

our auditor during this audit. 

UNITED STATES 

RITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

iii

Attachment

cc: James R. Burns, Deputy Chief of Staff, Office of the Chairman

Luis A. Aguilar, Commissioner

Troy A. Paredes, Commissioner

Elisse B. Walter, Commissioner

Jeffery Heslop, Chief Operating Officer, Executive Director, Office of Chief 

 of Operations

Elizabeth M. Murphy, Director, Office of the Secretary

Robert S. Khuzami, Director, Division of Enforcement 

Craig M. Lewis, Director, Division of Risk, Strategy, and Financial 

 Innovation 

Mary S. Head, Deputy Director, Office of Investor Education and 

Advocacy

Vincente L. Martinez, Assistant Director, Office of Market Intelligence,

 Division of Enforcement
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

iv

Assessment of the Office of Investor 

Education and Advocacy’s Functions

Executive Summary

Background. The Securities and Exchange Commission (SEC or the 

Commission) receives investor inquiries and complaints from the general public. 

The Office of Investor Education and Advocacy (OIEA) is responsible for 

gathering, processing, and responding to inquiries and complaints from the 

investing public. OIEA consists of four offices: the Office of Investor Assistance, 

the Office of Investor Education, the Office of Chief Counsel, and the Office of 

Policy. 

The Office of Investor Assistance processes and responds to inquiries and 

complaints from investors. It utilizes the Investor Response Information System

(IRIS) to track and maintain inquiries and complaints received from the investing 

public. As noted in the Commission’s 2010 Performance and Accountability 

Report, tens of thousands of investors each year contact the SEC with 

investment-related complaints and questions, and OIEA staff “aims to close out 

as many new investor assistance matters within seven and 30 business days.”1

 

Staff in the Office of Investor Assistance consist of investor specialists and 

attorneys who focus on inquiries and complaints involving legal matters. The 

Office of Investor Assistance routinely works with other Commission divisions 

and offices, broker-dealers, investment advisers, and companies to provide 

answers to investors.

The Office of Investor Education produces educational material about investing 

activities and holds events to educate the investing public. The Office of Chief 

Counsel provides legal guidance to OIEA and is primarily responsible for 

preparing investor alerts and bulletins. The Office of Policy participates in the 

rulemaking process and, in an effort to promote the investor’s perspective, 

reviews the Commission’s rules, concept releases, and studies that might affect 

investors.

Objectives. As part of our annual audit plan, the Office of Inspector General 

(OIG) conducted an audit of OIEA’s efficiency in assisting the investing public 

and improving investor education. The purpose of the audit was to conduct an 

assessment of OIEA’s functions. 

 

1 OIEA attempts to close 80 percent of complaints and inquiries within 7 days and 90 percent within 30 days. 

SEC, 2010 Performance and Accountability Report, p. 66, http://www.sec.gov/about/secpar/secpar2010.pdf. 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

v 

The specific audit objectives were to determine whether OIEA

• addresses investor inquiries accurately and timely, 

• processes complaints from investors and/or refers them to other parties in 

a timely manner, 

• properly utilizes information from previously received complaints, 

• has a tracking system and standard operating procedures for investor 

inquiries and complaints that enable the office to address the inquiries and 

complaints in accordance with OIEA’s goal, and

• provides useful and relevant educational material and events to the 

investing public. 

Where appropriate, we will also identify areas for improvement and best 

practices. 

Prior OIG Audit Reports. From 1990 through 2004, the OIG performed six 

audits related to OIEA’s operations.

2

 Although OIEA has implemented most of 

the prior reports’ recommendations, we found two that have not been addressed.

The report released in 1994 recommended periodic review of the quality of 

responses to letter and telephone complaints and to inquiries Commission-wide. 

OIEA stated that this recommendation has not been fully addressed because 

OIEA does not have the authority to monitor regional offices. OIEA added that 

although it does not have the authority to monitor regional offices and it does not 

directly monitor regional offices’ responses, it indirectly monitors them through its 

review of responses to surveys sent to investors after they have received a 

response to an inquiry or complaint. We also understand that there have been 

times when the OIEA Assistant Director has been able to identify survey 

comments related to a response prepared by a regional office and has called the 

regional office to follow up. 

The report released in 2000 recommended that OIEA develop and implement 

uniform complaint and inquiry processing policies and procedures for OIEA and 

the field offices and that it monitor information provided to investors for 

compliance with OIEA policies and procedures. This recommendation has not 

been addressed. According to OIEA management, it cannot monitor regional 

activities because staff in regional offices report to regional directors, not to OIEA 

management. 

Results. We found that, based on the samples we reviewed, OIEA’s review 

procedures have lengthened the response time for priority inquiries. OIEA’s goal 

 

2 Management of Investor Complaints, Report No. 135 (Mar. 29, 1990); Investor Complaints and Inquiries

Report No. 202 (Sept. 29, 1994); Oversight of Self-Regulatory Organization Arbitration, Report No. 289

(Aug. 24, 1999); Investor and Small Business Town Meetings, Report No. 303 (Nov. 18, 1999); Investor 

Education and Assistance Program, Report No. 288 (Apr. 25, 2000); and Commission Responses to 

Investor Inquiries, Report No. 373 (Mar. 29, 2004).
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

vi

is to close out investor inquiries and complaints within 7 and 30 business days. 

Its specific performance targets, as stated in the SEC’s fiscal year 2010 

performance and accountability report, are to close 80 percent of complaints and 

inquiries within 7 days and 90 percent within 30 days.3 In the sample we tested, 

which covered the period from November 14, 2009, to March 31, 2011,4 53 

percent of congressional correspondence, 33 percent of Chairman’s

correspondence, and 22 percent of White House correspondence, excluding 

repeat complaints,

5 were not closed out within 30 days. Only about 7 percent of 

the nonpriority responses in our sample were not closed out within 30 days, 

however.

6

 Some staff members indicated that review by multiple layers of 

management has caused response time for priority correspondence to be 

prolonged. According to OIEA management, the multiple review process for 

priority correspondence is consistent with OIEA’s focus on the quality of 

responses rather than on simply closing inquiries. Additionally, OIEA 

management stated that certain inquiries require extensive research and that it 

was important for OIEA to do its best to assist investors.

During the audit, we also identified several errors in the processing and

categorizing of investor inquiries and complaints. In addition, a number of OIEA 

staff indicated that they needed training on OIEA’s tracking system and on the 

securities industry and new securities products to better serve investors. OIEA 

management indicated that they believe staff have been offered many training 

sessions on OIEA’s tracking system and the securities industry. 

Additionally, we found that the automated bridge for transferring allegations of 

wrongdoing from the OIEA tracking system to the Tips, Complaints, and 

Referrals (TCR) system, which the Commission uses for enforcement and 

examination purposes, has experienced problems with transmitting complete 

information and transferring document attachments. We found two cases in 

which the information in the field describing the investor’s allegation(s) in the 

TCR system was incomplete because of a limit on the amount of text that could 

be entered in that field. In addition, due to problems related to the automated 

bridge, the Office of Market Intelligence (OMI), which is responsible for collecting, 

analyzing, and monitoring complaints that the SEC receives, has expressed 

concern that it may not receive complete information from OIEA. OIEA 

 

3

 SEC, FY 2010 Performance and Accountability Report (Nov. 15, 2010), p. 66, 

http://www.sec.gov/about/secpar/secpar2010.pdf. The Government Performance and Results Act requires 

federal agencies to prepare annual performance plans and reports, and the performance and accountability 

report fulfills the reporting component of this requirement See 31 U.S.C. § 1115. 4 We did not review priority files prior to IRIS’s November 14, 2009, launch because we were informed that 

OIEA’s previous tracking system could not produce a listing of Chairman’s, congressional, or White House 

correspondence.

5 OIEA often receives repeat inquiries from the same correspondent in different periods. These percentages 

do not include the inquiries that took OIEA longer than 30 days due to repeat inquiries. Effective late April 

2011, OIEA’s policy was to open a new file if OIEA receives a repeat inquiry after 90 days from the receipt of 

the initial inquiry.

6 The scope for our review of nonprioirty responses ranged from January 1, 2008 to March 31, 2011.
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

vii

employees also expressed concerns about the time it takes to manually transfer 

information to OMI if there is a problem with the automated bridge.

During our audit, we also found that investor specialists in regional offices do not 

follow the same procedures used by OIEA investor specialists and provide 

inconsistent responses to inquiries. OIEA stated that because investor 

specialists in regional offices report to regional directors, it does not have the 

authority to monitor their investor assistance and education activities. 

Further, we found that while OIEA staff are required to ask investors who call 

OIEA with an inquiry or complaint to take a survey at the end of the call, they are 

not consistently doing so. Investors who submit an inquiry or complaint using the 

SEC web form are supposed to receive a follow-up survey from OIEA, but only a 

low percentage of these surveys are completed and returned to OIEA. We also 

found that the survey sent to investors who use the web form contained 

questions specifically geared to telephone inquiries.

We also found that information on the SEC website about how investors may 

contact OIEA by telephone to make inquiries or complaints is not displayed 

prominently or presented clearly. When we examined the SEC website, 

www.sec.gov, we found that the home page contains no specific information 

about how to contact OIEA by telephone to make inquiries or complaints. 

Further, the SEC has two telephone numbers that lead callers to the same

recorded greeting and menu options. Additionally, Investor.gov, which was 

established to support OIEA’s mission to educate investors, separate from the 

SEC’s main website, does not show the SEC Toll-Free Investor Information 

telephone number on the home page.

Finally, we found that there is lack of communication between Office of Investor 

Assistance staff members and OIEA management. Many employees expressed 

concerns about management’s lack of interest in addressing their suggestions on 

OIEA’s procedures and requiring them to follow certain procedures that they 

believe are rigid or inappropriate. OIEA management stated that it seeks 

feedback from employees but that staff members are unwilling to communicate 

with management. We also found that Office of Investor Assistance staff thought 

it would be beneficial to have officewide meetings on a periodic basis so that they 

would be informed about what other offices in OIEA do. 

Summary of Recommendations. Based on the results of our audit, we

recommend the following:

(1) OIEA should evaluate its review process for responses to 

priority and other inquiries to determine whether bottlenecks or 

inefficiencies are present and whether opportunities to 

streamline the process and improve the timeliness of responses 

exist. Based on the results of the evaluation, OIEA should 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

viii

make any appropriate changes to management review 

responsibilities and revise its operating procedures accordingly.

(2) OIEA should enhance the training available to OIEA staff on 

IRIS and on processing investor inquiries and complaints. In 

particular, these enhancements should address areas where 

confusion or errors are common or persistent.

(3) OIEA should make additional training available to OIEA staff, 

including training provided by other divisions or offices within the 

SEC, on new and emerging topics in the securities industry to 

help ensure that information provided to investors is accurate 

and current. OIEA management should regularly solicit ideas 

for training topics from OIEA staff.

(4) OIEA should take measures to ensure that all staff, including 

staff with telephone duty responsibilities, have sufficient time to 

attend periodic training. 

(5) OIEA, in coordination with the Office of Market Intelligence and 

the Division of Risk, Strategy, and Financial Innovation, should 

continue to enhance the bridge between OIEA’s IRIS and the 

Tips, Complaints, and Referrals system, particularly the

functions for transferring attachments and for ensuring the

complete transfer of information.

(6) OIEA should provide regional office investor specialists with 

ongoing training on investor assistance, including information on 

resources available on the SEC website, and on IRIS. 

(7) OIEA should coordinate with regional offices to establish a 

system for communicating regularly to help ensure that investor 

specialists throughout the Commission are providing consistent 

assistance to investors and that OIEA is aware of significant 

issues in the regional offices.

(8) OIEA should continue to consult with regional offices to 

determine ways it could facilitate participation by the SEC in 

local events held to educate investors and ways to assist 

regional offices with other efforts related to educating investors. 

(9) OIEA should issue periodic reminders to OIEA staff members 

that they are required to provide investors with the option to 

complete a survey after every call. 
Assessment of OIEA’s Functions September 30, 2011

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(10) OIEA should revise the questions in its survey sent to investors 

who use the SEC’s web form for inquiries and complaints by 

deleting questions applicable only to telephone inquiries and 

complaints and adding questions specifically relevant to

inquiries and complaints submitted through the web form. 

(11) OIEA, in coordination with the Office of the Secretary, should 

move the SEC’s Toll-Free Investor Information Service 

telephone number to a more prominent location on the SEC 

website, such as the home page.

(12) OIEA should determine, in coordination with the Office of the 

Secretary, whether there should be one SEC information 

service telephone number instead of two on the “Useful SEC 

Contact Information” list on the SEC website. 

(13) OIEA should display the SEC Toll-Free Investor Information 

Service telephone number on the home page of Investor.gov for 

investors to make inquiries or complaints.

(14) OIEA should communicate matters related to OIEA operations, 

such as personnel changes and initiatives by offices within 

OIEA, to staff members at least once a month through 

officewide e-mails or an officewide meeting and ensure 

appropriate and necessary communication between the different 

offices within OIEA. 

(15) OIEA should continue to seek feedback from staff members on 

new and revised policies and procedures and other matters that 

would affect the office and should provide adequate time for 

staff to review and respond to feedback requests. 

(16) OIEA should participate in team-building exercises that are 

available at the Commission to improve communications and 

relations between management and staff.
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TABLE OF CONTENTS

Executive Summary...............................................................................................

Table of Contents ..................................................................................................

Background and Objectives ...........................................................................

Background ................................................................................................

Objectives ...................................................................................................

Findings and Recommendations...................................................................

Finding 1: Internal OIEA Processes Have Lengthened Response Time for

Priority Inquiries and Complaints.................................................................

Recommendation 1................................................................

Finding 2: OIEA Staff Need Additional Training Opportunities and 

Sufficient Time to Attend Training ...............................................................

Recommendation 2................................................................

Recommendation 3................................................................

Recommendation 4................................................................

Finding 3: The Automated Bridge for Transferring Allegations of 

Wrongdoing From IRIS to TCR Has Experienced Problems With 

Transmitting Complete Information and Transferring Document 

Attachments ................................................................................................

Recommendation 5 ................................................................

Finding 4: Investor Specialists in SEC Regional Offices Do Not Follow the

Same Procedures Used by Investor Specialists at Headquarters and 

Provide Inconsistent Responses to Inquiries...............................................

Recommendation 6 ................................................................

Recommendation 7 ................................................................

Recommendation 8 ................................................................

Finding 5: OIEA Obtains Very Limited Qualitative Feedback on Its 

Performance From Investors.......................................................................

Recommendation 9 ................................................................

Recommendation 10..............................................................

Finding 6: Information on the SEC Website About How Investors May 

Contact the SEC by Telephone to Make Inquiries or Complaints Is Not 

Displayed Prominently or Presented Clearly...............................................

Recommendation 11..............................................................

Recommendation 12..............................................................

Recommendation 13..............................................................
Assessment of OIEA’s Functions September 30, 2011

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Finding 7: Communication Between the Office of Investor Assistance Staf

and Management and Between OIEA Offices Needs Improvement............

Recommendation 14.............................................................. ..... 33 

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Recommendation 15....................................

Recommendation 16....................................

endices

Appendix I: Abbreviations.................................................

Appendix II: Scope and Methodology................................

Appendix III: Criteria..........................................................

Appendix IV: List of Recommendations ............................

Appendix V: Management Comments...............................

Appendix VI: OIG Response to Management’s Comments

f 

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App
Assessment of OIEA’s Functions September 30, 2011

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Page 1 

Background and Objectives 

Background 

The Securities and Exchange Commission (SEC or the Commission) receives 

investor inquiries and complaints from the general public. The Office of Investor 

Education and Advocacy (OIEA) is responsible for gathering, processing, and 

responding to inquiries and complaints from the investing public. OIEA consists 

of four offices: the Office of Investor Assistance, the Office of Investor Education, 

the Office of Chief Counsel, and the Office of Policy. 

The Office of Investor Assistance serves investors by processing and responding 

to inquiries and complaints. It utilizes the Investor Response Information System

(IRIS) to track and maintain inquiries and complaints received from the investing 

public. As noted in the Commission’s 2010 Performance and Accountability 

Report, tens of thousands of investors each year contact the SEC with 

investment-related complaints and questions, and OIEA staff “aims to close out 

as many new investor assistance matters within seven and 30 business days.”7

 

Staff in the Office of Investor Assistance who serve the investing public consist of 

investor specialists and attorneys who focus on inquiries and complaints 

involving legal matters. The Office of Investor Assistance routinely works with 

other Commission divisions and offices, broker-dealers, investment advisers, and 

companies to provide answers to investors.

The Office of Investor Education produces educational material about investing 

activities and holds events to educate the investing public. 

The Office of Chief Counsel provides legal guidance to OIEA and is primarily 

responsible for preparing investor alerts and bulletins, which are short articles 

written to inform the investing public and others about a variety of subjects, such

as municipal securities, stock trading basics, day trading, margin rules, life 

settlements, and new SEC rules. Investor alerts and bulletins may cover topical 

issues, such as specific frauds, or they may be general education pieces. OIEA 

also issues joint alerts with other agencies and organizations, such as the 

Department of Labor and the Financial Industry Regulatory Authority (FINRA). 

Investor alerts and bulletins are posted on the SEC website, SEC.gov, and on 

Investor.gov. 

The Office of Policy participates in the rulemaking process and, in an effort to 

promote the investor’s perspective, reviews the Commission’s rules, concept 

releases, and studies that might affect investors.

 

7 OIEA attempts to close 80 percent of complaints and inquiries within 7 days and 90 percent within 30 days. 

SEC, 2010 Performance and Accountability Report, p. 66, http://www.sec.gov/about/secpar/secpar2010.pdf. 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 2 

OIEA management informed us that it has taken the following measures to

improve OIEA’s operations: 

• The OIEA tracking system for investor inquiries and complaints has 

been upgraded, which has led to significant improvement in 

correspondence tracking and reporting. OIEA maintains that this

upgrade has also helped to address the frustration of staff in the 

Office of Investor Assistance with the previous system, which was 

fundamentally flawed and made processing correspondence 

difficult. 

• The OIEA management team has been changed extensively— 

o The former Director was replaced with a Director who has

significant experience in investor education and investor 

assistance.

o A Deputy Director with substantive securities law expertise and 

extensive experience with senior SEC leadership was hired to 

help manage OIEA. 

o An Assistant Director, an attorney with securities law expertise 

and significant experience with senior SEC leadership, was 

hired to manage the Office of Investor Assistance.

o A Chief Counsel and staff with substantive securities and 

administrative law expertise were hired to, among other things, 

review OIEA’s core content and create investor alerts and 

bulletins.

o Two new Deputy Directors were hired—one to focus exclusively 

on education and one to assist OIEA with its new policy 

responsibilities.

o A new Branch Chief was added. 

o Weekly or semi-weekly meetings between Office of Assistance 

staff and their direct managers were instituted. 

• A third-party survey platform was acquired to gauge investor 

response to OIEA’s services.

 

• Standard operating procedures were drafted by the Office of 

Investor Assistance in May 2011. In the past, there were few 

formalized procedures and they were not aggregated or easy for 

staff to find.

OIG Survey. On June 16, 2011, with assistance from the Office of Information 

Technology, the Office of Inspector General (OIG) released a survey that 

contained questions about OIEA operations to OIEA staff members, excluding 

management personnel. The survey addressed OIEA’s internal communication 

process, the tracking system used to process investor inquiries and complaints, 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 3 

the sufficiency of tools available to OIEA staff members, management of OIEA 

personnel, and the usefulness and relevance of OIEA’s educational events and 

material for the investing public. The survey consisted of 42 yes/no and multiplechoice questions and an open-ended section in which respondents could provide 

detailed feedback. Our purpose in administering the survey was to obtain OIEA 

staff’s views on the performance of OIEA functions. Survey responses were

voluntary, and respondents were anonymous unless they elected to identify 

themselves to us. We encouraged respondents to provide written comments, 

where applicable, to support and explain their responses. By July 1, 2011, the 

closing date of the survey, 29 of 35 OIEA staff members answered all the 

questions in the survey, and the remaining 6 staff members answered some of 

the questions. Many OIEA staff also provided numerous written comments in 

response to this survey. In addition, 4 of the respondents asked to be contacted 

for an interview to further discuss their views.

Objectives 

As part of the OIG annual work plan, we conducted an audit of OIEA’s efficiency 

in assisting the investing public and improving investor education. The purpose 

of the audit was to conduct an assessment of OIEA’s functions. The specific 

audit objectives were to determine whether OIEA

• addresses investor inquiries accurately and timely, 

• processes complaints from investors and/or refers them to other 

parties in a timely manner, 

• properly utilizes information from previously received complaints, 

• has a tracking system and standard operating procedures for 

investor inquiries and complaints that enable the office to address 

the inquiries and complaints in accordance with OIEA’s goal, and

• provides useful and relevant educational material and events to the 

investing public. 

Where appropriate, OIG will also identify areas of improvement and best 

practices. 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 4 

Findings and Recommendations 

Finding 1: Internal OIEA Processes Have 

Lengthened Response Time for Priority Inquiries 

and Complaints

OIEA’s review process for priority correspondence has

resulted in delays in responding to such correspondence. In 

addition, some staff cited OIEA policy requiring that staff 

obtain permission from their branch chiefs before speaking 

with staff in other SEC divisions or offices as a source of 

inefficiency in responding to investor inquiries and 

complaints. 

Procedures for Responding to Inquiries

OIEA categorizes investor inquiries and complaints as either priority or 

nonpriority correspondence. Priority correspondence consists of allegations of 

wrongdoing and also the following:

• Chairman’s correspondence, which is correspondence received by 

the Office of the Chairman and forwarded to OIEA for response. 

OIEA branch chiefs have responsibility for responding to all 

Chairman’s correspondence. Chairman’s correspondence is 

reviewed by a branch chief and the Assistant Director.

• Congressional correspondence, which is correspondence from 

members of Congress on behalf of their constituents. It is generally 

forwarded from the SEC’s Office of Legislative and 

Intergovernmental Affairs to OIEA for response. The Deputy 

Director of OIEA has responsibility for responding to all 

congressional correspondence. Congressional correspondence is 

reviewed by a branch chief and the Deputy Director.

• White House correspondence, which is correspondence sent by the 

Executive Office of the President to the Office of the Chairman. 

The Office of the Chairman refers the correspondence to OIEA. 

The Deputy Director of OIEA has responsibility for responding to all 

White House correspondence. White House correspo

8

ndence is 

reviewed by a branch chief and the Deputy Director.

 

8 OIEA, Standard Operating Procedures for the Investor Assistance Group, pp. 7, 33, and 35.
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 5 

OIEA staff members respond to allegations of wrongdoing, and the responses 

are reviewed by a branch chief.9

 All other correspondence is considered 

nonpriority and not subject to supervisory review. If in responding to an inquiry—

priority or nonpriority—an OIEA staff member needs to contact another SEC 

office or division, the staff member must first obtain permission to do so from his 

or her branch chief.10 

Results of OIG Testing of Priority Files

OIEA’s goal is to close out investor inquiries and complaints within 7 and 30 

business days. Its specific performance targets, as stated in the SEC’s fiscal 

year 2010 performance and accountability report, are to close 80 percent of 

complaints and inquiries within 7 days and 90 percent within 30 days.11

We conducted testing to determine whether OIEA is meeting its timeliness goal 

and found that a significant portion of the priority inquiries and complaints in our 

sample were not closed within 30 days and that some additional inquiries and 

complaints took more than 60 days to close. In the sample we tested, which 

covered the period from November 14, 2009, to March 31, 2011,12 53 percent of 

congressional correspondence, 33 percent of Chairman’s correspondence, and 

22 percent of White House correspondence, excluding repeat complaints,

13 were 

not closed out within 30 days. Only about 7 percent of nonpriority responses in 

the sample we tested were not closed out within 30 days, however.

14

Efficiency of Current Procedures

In our survey, we asked the following question: “Are there any tasks that you or 

other OIEA employees perform that you believe are inefficient?” Approximately 

63 percent of the respondents answered “yes.” We also asked, “Are there any 

areas of improvement OIEA needs to consider to manage its personnel 

resources?” Approximately 76 percent of respondents answered “yes” to that 

question. The survey asked respondents who answered “yes” to provide 

suggestions or additional detail.

 

9 OIEA, Standard Operating Procedures for the Investor Assistance Group, p. 23. 10 OIEA, Standard Operating Procedures for the Investor Assistance Group, p. 34. 11 SEC, FY 2010 Performance and Accountability Report (Nov. 15, 2010), p. 66, 

http://www.sec.gov/about/secpar/secpar2010.pdf. The Government Performance and Results Act requires 

federal agencies to prepare annual performance plans and reports, and the performance and accountability 

report fulfills the reporting component of this requirement See 31 U.S.C. § 1115. 12 We did not review priority files prior to IRIS’s November 14, 2009, launch because we were informed that 

OIEA’s previous tracking system could not produce a listing of Chairman’s, congressional, or White House 

correspondence.

13 OIEA often receives repeat inquiries from the same correspondent in different periods. These percentages 

do not include the inquiries that took OIEA longer than 30 days due to repeat inquiries. Effective late April 

2011, OIEA’s policy was to open a new file if OIEA receives a repeat inquiry after 90 days from the receipt of 

the initial inquiry.

14 The scope for our review of nonprioirty responses ranged from January 1, 2008 to March 31, 2011.
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 6 

In their comments, a number of OIEA staff indicated that multiple layers of 

management review for priority files interfered with efficiency. The comments

included the following:

• “[T]he approval process has gotten out of control. The majority of 

steps that we take in order to work a file require some form of 

approval. From removing an AWD [allegation of wrongdoing] 

designation, to requesting to make contact within or without the 

SEC, to approval of every response that is sent out, the amount of 

time it takes to close each file has been stretched beyond 

reasonableness.” 15

• “[G]et help for [management official] and policy review because the 

system is broken. By policy review, I mean in their review of 

[priority responses]. This would speed up the turnaround time. It is 

not efficient now. It is sad to say, but the average investor who 

calls or e-mails on a Wednesday gets their answer fast. If it is 

congressional, it might be three to four months later. The average 

investor gets faster responses than the other person with a priority 

matter.”

• “OIEA staff members get [responses] up and out in 24 hours per 

OIEA’s [standard operating procedures], then the responses sit in

the policy and management queue for months. Not only that, but 

some [investor complaints about broker-dealers] are congressional 

[which] we send to the broker-dealer and write an interim response. 

. . . Plenty of times, I have sent [the response] to management for 

their review and it waits for approval and takes so long that brokerdealers have responded to investors and OIEA staff members 

before management reviews them. On one case, I alerted the 

management personnel that the broker-dealer already responded 

to the question and our response is ready for management review. 

A lot of times, the response is drafted and ready to be sent to 

investors, but just sitting there.” 

An OIEA employee also informed us during an interview that “there are situations 

where a congressional office will call because they have not heard from us. . . .” 

In addition, during our audit we were told about a specific congressional inquiry 

to which the broker-dealer responded before the SEC did. Our review of the 

records related to this inquiry indicated that the delay in the SEC’s response to 

the investor occurred because a senior management official was unable to 

review the OIEA staff member’s response to the investor in a timely manner. 

The SEC’s point of contact for congressional inquiries agrees that the approval 

 

15 OIEA management stated that management does not review every response prepared by staff members. 

As we indicate in this report, OIEA management reviews responses to priority correspondence.
Assessment of OIEA’s Functions September 30, 2011

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process should be expedited. As previously noted, the Deputy Director has 

responsibility for reviewing all responses to congressional correspondence. We 

were advised by the SEC point of contact for congressional inquiries that 

although the manager responsible for reviewing congressional inquiries is “great 

at providing me with final results,” OIEA needs another experienced person who 

can review responses and provide a final recommendation and closure for 

congressional inquiries in order to speed up responses to investors and 

constituents. 

Many of the staff who responded to our survey also commented about the 

inefficiency of requiring staff to obtain supervisory approval before they could 

contact another SEC office or division, as follows: 

• “[I]n order to contact another office or division within the SEC, we 

must first seek approval from our Branch Chief by e-mail through 

the IRIS system. It is only after we receive the approval that we 

may then initiate contact. This can lead to a delay from 1 to several 

days. When added up to the many contacts each attorney and 

specialist receives, this causes a great deal of delay.” 

• “Our management staff employed a policy where we are not 

allowed to contact other SEC staff members without their 

permission. This was a knee jerk reaction decision that has slowed 

production immensely. . . . Not being able to contact colleagues in 

a timely manner makes our job much harder and inefficient. 

Numerous employees voiced their concerns over this policy and 

were scoffed at. Management cited an employee who was not 

professional in a phone conversation with an employee from 

another division . . . [and] they implemented this across-the-board 

policy. In an effort to save face . . . and avoid actually being a 

manager, they create policies which make our job more difficult and 

inefficient.”

16

• “In order to communicate with other SEC offices in order to get 

assistance with an investor inquiry, we must first ask our supervisor 

for permission to contact the person and then wait for approval. . . . 

It is such a waste of time and inefficient use of my time and 

resources. I should be able to contact our liaisons in other offices 

directly without having to get permission from my supervisor and 

then wait sometime days for a response back from my supervisor 

with permission!”

• “I believe at times it would be more efficient if OIEA could 

communicate with other divisions and offices within the SEC 

 

16 OIEA management stated that OIEA policies are not based on one employee’s action.
Assessment of OIEA’s Functions September 30, 2011

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without needing to get supervisor approval for each contact to be 

made; this would be less time consuming and more efficient for the 

investor.” 

According to OIEA management, the multiple review process for priority 

correspondence is consistent with OIEA’s focus on the quality of responses 

rather than on simply closing inquiries. Additionally, OIEA management stated

that certain inquiries require extensive research and that it was important for 

OIEA to do its best to assist investors. OIEA management also said that delays 

in responding to investors might have resulted from the implementation of IRIS, 

OIEA’s new tracking system, in November 2009, and to an increase in investor 

inquiries and complaints following the liquidations of Lehman Brothers, Inc., 

Bernard L. Madoff Investment Securities, LLC, and Stanford Group Company. 

We asked the Deputy Director, who reviews all responses to congressional 

correspondence, about the delays and concerns that we identified and whether 

other management personnel could also perform the reviews. She said that 

reviewing the responses was a way for her to be informed of the inquiries and 

complaints received by OIEA. In addition, because of the significance of the 

responses and the fact that they are congressional requests, she stated that she 

believes that her review is necessary. She further indicated that she could not 

always review the priority cases as timely as she would like and often reviews 

them over the weekend. 

Recommendation 1: 

The Office of Investor Education and Advocacy (OIEA) should evaluate its 

review process for responses to priority and other inquiries to determine 

whether bottlenecks or inefficiencies are present and whether opportunities to 

streamline the process and improve the timeliness of responses exist. Based 

on the results of the evaluation, OIEA should make any appropriate changes 

to management review responsibilities and revise its operating procedures 

accordingly.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.
Assessment of OIEA’s Functions September 30, 2011

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Finding 2: OIEA Staff Need Additional Training 

Opportunities and Sufficient Time to Attend 

Training 

Based on errors and delays that we found during our audit 

and in staff responses to our survey, we determined that 

OIEA staff could benefit from additional training related to 

IRIS, OIEA’s tracking system for inquiries and complaints. 

Numerous survey respondents also commented that in order 

to respond effectively to inquiries and complaints, they 

needed training to keep abreast of new developments and 

products in the securities industry but often lacked adequate 

time to participate in training. 

Errors and Delays in Processing and Categorizing Complaints 

and Inquiries

During the OIG audit, we identified several errors in the processing and 

categorizing of investor inquiries and complaints. For example, we found that 

OIEA did not respond to a complaint that involved a non-SEC matter in part 

because, according to an OIEA branch chief, “the amount of time that has 

elapsed since receipt of the letter mitigate[d] against responding at this late date.” 

OIEA management agreed with our assessment that OIEA’s tardiness was not a 

valid reason for not responding to an investor. We also found that it took OIEA 

72 days to close this correspondence and that no closeout memorandum was 

included in OIEA’s records. In addition, although this complaint was a 

Chairman’s correspondence, which required review by the Assistant Director of 

the Office of Investor Assistance, the file did not make it to the Assistant 

Director’s review queue in IRIS. The Assistant Director informed the OIG that 

this was a system issue that has been corrected.

We also found that eight files had been erroneously marked as White House 

correspondence. OIEA management concurred that these files had been 

improperly categorized.

Staff Unfamiliarity With Certain Capabilities of IRIS 

In our survey, we asked OIEA staff the following question: “Do you believe you 

have sufficient tools to perform your assigned duties?” Approximately 28 percent 

of the respondents answered “no.” In the explanatory comments respondents 

provided, one employee stated that IRIS was not efficient in meeting “our 

complaint handling needs.” 
Assessment of OIEA’s Functions September 30, 2011

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We also asked staff, “Are there any areas IRIS could be improved?” More than 

55 percent of respondents answered “yes.” Some staff indicated that a 

significant deficiency in IRIS is that its search function generates too many 

records. They said, for example, that it was difficult to search IRIS for previously 

prepared and approved responses involving a particular broker-dealer that they 

could use to respond to similar complaints about the same broker-dealer. An 

OIEA staff member indicated that OIEA’s previous tracking system allowed staff 

to perform a narrow search and that it was easy to find previously prepared 

responses. Although IRIS has an advanced search function that allows users to 

narrow their searches, we found that certain OIEA staff were unaware of or not 

adequately trained on how to use the advanced search function. 

Securities Industry Training

In response to our survey questions, a number of OIEA staff indicated that they 

needed training on the securities industry and new securities products. Their 

comments included the following: 

• “[W]e don't receive nearly enough securities training to keep us 

on top of what's happening in the securities industry. Since the 

financial mess of 2008, the products in the industry have 

severely changed. We haven't received the proper training on 

these products such as CDOs, etc.” 

• “I think more staff and definitely more training is needed on the 

assistance [side for] . . . OIEA [to] achieve its goal in assisting 

investors. The complaint side of OIEA has taken a [back seat]

to the education side despite the fact there has been an 

unprecedented amount of fraud being committed over the past 

several years.” 

• “The responses provided by the assistance staff are often 

incomplete or erroneous. There is a lack of training of the staff. 

Given the broadness of the questions asked, it is difficult to 

know the answers to many of the questions asked.” 

• “Better training for the assistance staff is needed to ensure the 

consistency and quality of responses.” 

• “The staff should have regular training in identifying red flags of 

investment fraud and also in understanding SEC rules, 

regulations, and filing requirements.” 

OIEA management said that at its request, other divisions and offices, such as 

the Division of Investment Management and the Office of Market Intelligence, 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

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have provided training or spoken to OIEA employees about specific topics. They 

further stated that numerous training sessions related to the securities industry 

are offered periodically to OIEA staff. However, comments provided in response 

to our survey indicate that some OIEA staff believe that they need training

beyond what is currently available. 

Availability of Training Time for Office of Investor Assistance 

Staff 

During our audit, several OIEA staff members commented they did not have 

sufficient time to attend training because of their job responsibilities, including 

their telephone duty responsibilities. One commenter stated the following:

• “[T]raining is vital for us to keep abreast in the dynamic 

securities industry. Yet, it's so hard to go to training because of 

our phone duty responsibilities (now 9:00 a.m.–5:30 p.m.). You 

literally have to ask other OIEA Assistance staff to cover your 

phone duty time, which infringes on their work responsibilities. 

So it's becoming progressively harder to achieve. Shouldn't our 

OIEA staff, which acts as the front line of defense for the 

investors, receive the best securities-related training available to 

outsmart the fraudsters? We need more training to outsmart the 

fraudsters. Maybe management can turn off the phones for a 

day or so here and there to allow ALL OIEA Assistance staff to 

attend the same training which is available to all other SEC 

staff.” 

OIEA management stated that with a few exceptions, investor assistance staff

members have telephone duty during either the morning or the afternoon, but not 

for the entire day. According to OIEA management, only three individuals have 

telephone duty for a full day, and each of these individuals has full-day duty only 

once during each two-week pay period.

Recommendation 2:

The Office of Investor Education and Advocacy (OIEA) should enhance the 

training available to OIEA staff on the Investor Response Information System 

and on processing investor inquiries and complaints. In particular, these 

enhancements should address areas where confusion or errors are common 

or persistent.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

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Recommendation 3:

The Office of Investor Education and Advocacy (OIEA) should make 

additional training available to OIEA staff, including training provided by other 

divisions or offices within the Securities and Exchange Commission, on new 

and emerging topics in the securities industry to help ensure that information 

provided to investors is accurate and current. OIEA management should 

regularly solicit ideas for training topics from OIEA staff.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Recommendation 4:

The Office of Investor Education and Advocacy should take measures to 

ensure that all staff, including staff with telephone duty responsibilities, have 

sufficient time to attend periodic training. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Finding 3: The Automated Bridge for 

Transferring Allegations of Wrongdoing From 

IRIS to TCR Has Experienced Problems With 

Transmitting Complete Information and 

Transferring Document Attachments

OIEA transfers allegations of wrongdoing it receives from the 

investing public through an automated bridge from IRIS to 

the Tips, Complaints, and Referrals (TCR) system, a 

repository for storing all tips, complaints, and referrals that 

the SEC receives. We found cases in which the description 

of a transferred item was incomplete in the TCR listing and 

cases in which supporting documents submitted by investors 

as attachments to complaints had not transferred across the 

bridge. 
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Data Transfer From IRIS to the TCR System

Through an automated bridge, OIEA transfers all allegations of wrongdoing that it 

enters in IRIS to the TCR system, a repository for storing all tips, complaints, and 

referrals that the SEC receives. The Office of Market Intelligence (OMI) in the 

Division of Enforcement (Enforcement) uses the TCR system to fulfill its

responsibility to collect, analyze, and monitor the complaints the SEC receives 

each year. The SEC’s Division of Risk, Strategy, and Financial Innovation 

(RiskFin) maintains the TCR system. 

IRIS was launched on November 14, 2009. Before April 2010, OIEA e-mailed 

allegations of wrongdoing to Enforcement. From April 2010 through June 22, 

2010, OIEA used a manual synchronization process between IRIS and an interim 

repository for tips, complaints, and referrals maintained by OMI.17 In late June 

2010, OIEA began running an automated synchronization process between IRIS 

and the interim repository. OIEA ran this process until mid-March 2011, when 

the interim repository was retired and the current TCR system and automated 

bridging system were activated. 

Data Field Limitations in the TCR System 

We obtained a list of allegations of wrongdoing from RiskFin that were obtained 

from the TCR system for the period covering November 14, 2009, through March 

31, 2011.

18 We examined a sample of items from that list to determine whether 

the information in the TCR list maintained by RiskFin was consistent with the 

information in OMI’s TCR summary and the information contained in IRIS. We 

found two cases in which the information in the field describing the investor’s 

allegation(s) in the TCR system was incomplete.

OMI staff said that they did not know why the information in the TCR system was 

incomplete and referred us to RiskFin for an explanation. RiskFin stated that 

there is a known limitation in the TCR system with respect to its text field. The 

field can contain a maximum of 4,000 characters, including spaces. To submit 

material that exceeds this limit, OIEA must send a PDF file of the entire IRIS 

complaint form to OMI. We asked a RiskFin employee whether the SEC planned 

to address this limitation in the TCR system, and he responded that it “is unlikely 

to be resolved in this version of the TCR software due to the difficulty of 

addressing it technically and issues related to the software development vendor.” 

However, another RiskFin employee, who oversees the TCR system, said in late 

August 2011 that the Commission planned to increase the character limitation “in 

the next four to six weeks.” 

17 The manual process required the SEC’s Office of Information Technology to execute queries to generate 

the data, which would be copied from IRIS to the interim repository.

18 We did not review transfers of allegations of wrongdoing from OIEA to Enforcement before IRIS’s 

November 14, 2009, launch because we were advised that obtaining a complete listing of such transfers 

would be time-consuming and difficult and the interim system is no longer in use. 

 
Assessment of OIEA’s Functions September 30, 2011

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Limitations in the Automated Bridge Between IRIS and the TCR 

System

During our audit, we found instances in which supporting documents provided by 

investors had not transferred from IRIS through the automated bridge to the TCR 

system.19 Some of the IRIS files that we reviewed indicated that documents had 

been attached to the file, but we did not find the attachments in the files that had 

transferred to the TCR system. We also reviewed a TCR record in which an 

Enforcement employee stated that an attachment had been mentioned in OIEA’s 

notes but that the transmitted file contained no attachment. We obtained a 

subsequent e-mail from an OIEA employee to Enforcement that transmitted the 

attachment. We are uncertain how frequently attachments fail to transfer across 

the automated bridge. A RiskFin employee said that it would be difficult to 

estimate the percentage of cases that experienced problems with attachments 

without performing extensive research. 

To address the attachment issue, OIEA implemented a procedure on May 28, 

2010, to send attachments and IRIS records to OMI by e-mail. OIEA’s standard 

operating procedures regarding transferring information to OMI state the 

following:

Miscellaneous AWD [allegation of wrongdoing] issues. 

Attachments, including web forms, must be added as pdf 

documents to the IRIS record in the Attachment section 

BEFORE seeking AWD approval from the branch chiefs. 

Branch chiefs should confirm the attachments, including 

those in e-mails, are in the record before approving an AWD.

Attachments added to an IRIS record AFTER an AWD 

crosses the bridge will not be added to the TCR record. 

Therefore, if additional information or attachments come in 

for an already migrated AWD, e-mail them to TCR-ENF and 

OMI staff will perform the update. Be sure to include IRIS 

and TCR numbers in the subject line.20

We found concern among OIEA staff about the limitations of the automated

bridge, including time they spend sending attachments to OMI. In our survey, we 

asked OIEA staff the following question: “Are there any tasks that you or other 

OIEA employees perform that you believe are inefficient?” In narrative 

responses to survey questions and in interviews, several OIEA staff members 

cited the automated bridge as an example of an inefficiency, as follows: 

 

19 Supporting documents include, for example, account statements, news clippings, and letters written to 

broker-dealers and investment advisers. 20 OIEA, Standard Operating Procedures for the Investor Assistance Group (May 5, 2011), p. 27.
Assessment of OIEA’s Functions September 30, 2011

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• “Some of the procedural guidelines within the IRIS system are 

redundant [with tasks] we perform for other offices; i.e., TCRENF.”

• “Coordination between the OMI and IRIS systems.” 

• “OIEA staff members are expected to send a PDF of the IRIS 

screen with file comments and activities along with any 

attachments and exhibits that investors might have sent 

separately (outside of the bridge) in an e-mail to OMI because 

PDFs do not go over the bridge to OMI.” 

OMI has also expressed concern about problems with transferring information 

between IRIS and the TCR system using the automated bridge. According to 

OMI, certain fields in IRIS do not transfer to the TCR system, and the fields that 

do transfer often contain bunched text that is difficult to read. As a result, OMI 

said that it is concerned that important information might be missed and that it

often has to reach out to OIEA or go into IRIS manually to deal with difficulties in 

the bridge process. OMI indicated that this incomplete transfer of information is a 

significant issue. 

An OMI management official also told us that an OMI staff member spends many 

hours dealing with documents that are not transferred from IRIS to the TCR 

system. According to the OMI official, OMI is particularly concerned about 

transfers of documents that OIEA receives after the related file has already been

transferred to the TCR system. In those cases, OIEA sends an e-mail to OMI 

and expects OMI to upload the documents into the TCR system. Some of these 

e-mails attach the additional documents. Other e-mails, however, consist only of 

a notification that additional documents are in IRIS, and an OMI staff member 

must retrieve the attachments from IRIS. OMI is concerned not only about the 

additional work for OMI staff, but also about the potential loss of important 

information when the documents are not automatically transferred by the bridge. 

The OMI management official said that he had met with OIEA managers and 

asked them to enter certain items into the TCR system directly, rather than 

submitting them through the IRIS bridge, because he believes this would be a 

more efficient process. He said that OIEA had declined his request, however. 

The OMI staff member who works on items transferred from IRIS to the TCR 

system told us that she spends less time on manual work now than in the past: 

“[F]or a period we were attaching the documents manually. That is still true for 

subsequent information. I cannot say with certainty, but it appears that the 

information now comes over accurately and is in the proper fields.”
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Recommendation 5: 

The Office of Investor Education and Advocacy (OIEA), in coordination with 

the Office of Market Intelligence and the Division of Risk, Strategy, and 

Financial Innovation, should continue to enhance the bridge between OIEA’s 

Investor Response Information System and the Tips, Complaints, and 

Referrals system, particularly the functions for transferring attachments and 

for ensuring the complete transfer of information.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Finding 4: Investor Specialists in SEC 

Regional Offices Do Not Follow the Same 

Procedures Used by Investor Specialists at 

Headquarters and Provide Inconsistent 

Responses to Inquiries

Investor specialists in SEC regional offices report to regional 

directors and follow the internal procedures of their regional 

offices, which are not always consistent with OIEA’s 

standard operating procedures. We also found significant 

gaps in regional office investor specialists’ knowledge of the 

resources available on the SEC website, which led to 

inconsistent responses to investor inquiries. In addition, 

regional office investor specialists did not receive the same 

training on IRIS as their headquarters counterparts. Further, 

they stated that they have found it difficult to participate in 

local educational events because of budget constraints. 

Different Procedures Employed by Regional Offices

During our audit, we found that investor specialists in regional offices follow 

procedures that differ from OIEA’s standard operating procedures in their 

handling of allegations of wrongdoing and the processing of investor complaints 

and inquiries.

Processing of Allegations of Wrongdoing. We found that investor specialists

in regional offices determine whether their supervisors should review an inquiry 

or a complaint based on the type of inquiry or complaint involved or the 
Assessment of OIEA’s Functions September 30, 2011

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complexity of a matter. We reviewed a sample of allegations of wrongdoing 

processed in regional offices and found that only 33 percent of the sample had 

been reviewed by supervisors. In comparison, OIEA’s standard operating 

procedures call for branch chief review of all allegations of wrongdoing and 

emphasize the importance of such review to prevent improper handling of 

allegations of wrongdoing.

21 

We also found that six regional offices entered allegations of wrongdoing directly 

into the TCR system, rather than entering them into IRIS and then transferring 

them to TCR through the automated bridge, as called for in OIEA’s standard 

operating procedures. Because of issues with incomplete transfer of information 

and inability to transfer attachments that arose when the bridge was activated, 

some regional offices decided to enter allegations of wrongdoing directly into the 

TCR system. Managers in several regional offices said that because their 

investor specialists also work on Enforcement matters, they are more familiar 

with the TCR system than OIEA investor specialists. According to one of the six 

regional offices whose investor specialists enter allegations of wrongdoing 

directly into the TCR system, OIEA is aware of this inconsistent practice. A 

regional office employee stated that although regional office investor specialists 

enter allegations of wrongdoing into IRIS, they also hand-deliver material related 

to allegations of wrongdoing directly to regional Enforcement staff. An employee 

in OMI, which is responsible for collecting, analyzing, and monitoring tips, 

complaints, and referrals that the SEC receives each year, told us that OMI

preferred that regional offices enter allegations of wrongdoing directly into the 

TCR system. Accordingly, there is no present effort to resolve this inconsistency. 

Processing of Investor Complaints and Inquiries. During our testing of a 

sample of investor complaints and inquiries, we identified an inquiry from 

November 2010 that had been handled by a regional office and appeared to still 

be open. The investor specialist in the regional office who was responsible for 

the file told us that the inquiry was closed but that she has not had time to record 

file activities and close the case in IRIS. In addition, we found during our audit 

that five regional offices consolidate inquiries and complaints and enter them in 

IRIS all at once two or three times a week. Some investor specialists in those 

regional offices indicated that the reason for this practice is that they lack 

resources and have multiple job duties and are therefore unable to enter inquiries 

and complaints more frequently. This practice, however, is inconsistent with 

OIEA standard operating procedures, which require investor specialists to enter 

inquiries and complaints into IRIS shortly after they have received a call from an 

investor or reviewed a written inquiry or complaint and may result in less than 

timely information in IRIS.

During our review of the sample of complaints and inquiries handled by regional 

offices, we also found that staff in some regional offices do not always complete 

 21 OIEA, Operating Procedures for the Investor Assistance Group, p. 28.
Assessment of OIEA’s Functions September 30, 2011

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the “description” field in IRIS, which explains the nature of the complaint or 

inquiry. Failure to complete this field is inconsistent with OIEA practice and 

results in a lack of complete information being provided in IRIS. In some cases, 

the lack of descriptive information prevented us from being able to evaluate 

whether investor inquiries were addressed because we were unable to determine 

what the investor was inquiring about and how the inquiry was handled. In the 

case of telephone inquiries, there is no record of the nature of the inquiry if the 

responding regional investor specialist did not enter sufficient information and the 

investor did not provide any written documents.

Inconsistent Responses to Inquiries

To determine whether SEC investor specialists provided consistent information in 

response to inquiries, we called OIEA and all 11 regional offices with the same 

inquiry— how to obtain background information on a person offering stocks with 

a high rate of return and verify the legitimacy of the person. We asked regional 

office investor specialists whether it was possible to obtain any information from 

the SEC website that addressed our questions. The SEC website does contain 

such information. The “Check Out Brokers & Advisors link,” which appears under

“Investor Information” on the SEC home page,

22 takes investors who click on it to 

a page that contains tips on verifying the identity of brokers and advisers; 

detailed information about broker-dealers and investment advisers; procedures 

investors should perform before investing; links to the FINRA BrokerCheck 

website and the National Association of Securities Dealers website; and a link to 

the Central Registration Depository, a computerized database that contains 

information about most brokers, their representatives, and the firms for which 

they work.

23 

One OIEA investor specialist properly guided us to the “Check Out Brokers & 

Advisors” link to obtain the information we were seeking and to the link to 

FINRA’s BrokerCheck website to verify the legitimacy of a person selling a stock, 

but we found that investment specialists in several SEC regional offices were 

unfamiliar with the information on the SEC website. In response to our inquiry, 

one regional office investor specialist told us that there was nothing on the SEC 

website about obtaining information on an individual selling a stock and 

instructed us to call the National Association of Securities Dealers (which is the 

former name of FINRA). Another regional office investor specialist said that the 

SEC did not have a system to check whether a broker-dealer is licensed, but that 

FINRA did have such a system. While this statement is true, the SEC website, 

as noted above, has a link to FINRA’s BrokerCheck website, and the investor 

should have been directed to the “Check Out Brokers & Advisors” page of the 

SEC website, which contains the link and other pertinent information. 

 

22 http://www.sec.gov. 23 http://sec.gov/investor/brokers.htm. 
Assessment of OIEA’s Functions September 30, 2011

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Lack of IRIS Training for Regional Office Investor Specialists

OIEA management and regional office staff informed us that regional office

investor specialists did not receive the same training on IRIS as OIEA investor 

specialists received. When IRIS was implemented, OIEA headquarters staff 

received 53 hours of classroom training on using the system. Training for 

regional office investor specialists, on the other hand, consisted primarily of a 

webinar and telephone training. In addition, the former Assistant Director of 

OIEA visited five regional offices to train regional investor specialists. Another 

regional office indicated that it had been promised a visit from OIEA to train staff 

on the use of IRIS, but no one from OIEA visited and nothing further was heard 

from OIEA regarding the training. Investor specialists in five regional offices

indicated that the webinar and the telephone training were not sufficient. 

Although OIEA does, on occasion, address specific questions that regional office 

investor specialists have concerning IRIS, staff in several regional offices said

that they should have received the same in-person training that OIEA staff 

received because regional office investor specialists perform the same functions 

as OIEA staff. Further, a number of regional office investor specialists indicated 

that it was difficult to navigate IRIS because it was more complicated than the 

previous system. 

OIEA Does Not Review Regional Office Responses or Oversee 

Their Practices

During our audit, when we asked questions about issues identified in regional 

office files in our sample, OIEA management suggested that we contact the 

regional offices directly because OIEA management does not have authority over 

regional office investor specialists and is not aware of their processes or issues. 

During our review of sampled files, for example, we found that a regional office 

had created a “dummy” file. OIEA told us that it did not know why the file had 

been created. When we asked regional office staff about the file, they said that it 

had been created because a staff member was on leave and they wanted to 

ensure that another employee who assumed the staff member’s job had access 

to ACTS Plus and could properly use the system.24 OIEA management was also 

unaware of a two-month delay in assigning an inquiry received by a regional 

office to an investor specialist and the fact that some investor specialists in 

regional offices did not complete the “description” field in IRIS for some inquiries. 

According to OIEA management, the OIEA standard operating procedures are

sent to regional offices as a courtesy, and OIEA cannot require the regions to 

follow those procedures because regional offices do not report to OIEA. Hence, 

OIEA has indicated that it has no responsibility or authority related to regional 

offices’ operations pertaining to investor assistance or education.

24 ACTS Plus was the tracking system that preceded IRIS.

 
Assessment of OIEA’s Functions September 30, 2011

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Inadequate Funds for Regional Office Investor Specialists to 

Participate in Local Educational Events 

Several regional offices informed the OIG that because of budget constraints, 

investor specialists in regional offices have had to decline invitations to 

participate in educational events in their regions. Federal agencies and other 

organizations that work with OIEA have said that the SEC’s presence at and 

involvement in such events are critical to educate investors. In written 

correspondence, OIEA management and the former SEC Executive Director had 

asked regional directors to assign a portion of their budgets for regional office 

investor specialists to participate in educational events. Regional office

management and staff told us that it would be helpful for SEC headquarters to 

allocate a certain amount of funds to regional offices for educational events 

because staffing resources and funds that they receive are usually used for

enforcement matters and the examination program.

Recommendation 6: 

The Office of Investor Education and Advocacy should provide regional office 

investor specialists with ongoing training on investor assistance, including 

information on resources available on the Securities and Exchange 

Commission website, and on the Investor Response Information System.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation. 

Recommendation 7: 

The Office of Investor Education and Advocacy (OIEA) should coordinate with 

regional offices to establish a system for communicating regularly to help 

ensure that investor specialists throughout the Securities and Exchange 

Commission are providing consistent assistance to investors and that OIEA is 

aware of significant issues in the regional offices.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation. 
Assessment of OIEA’s Functions September 30, 2011

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Recommendation 8: 

The Office of Investor Education and Advocacy should continue to consult 

with regional offices to determine ways it could facilitate participation by the 

Securities and Exchange Commission in local events held to educate 

investors and ways to assist regional offices with other efforts related to 

educating investors. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation. 

Finding 5: OIEA Obtains Very Limited 

Qualitative Feedback on Its Performance 

From Investors

OIEA staff are required to ask investors who call OIEA with 

an inquiry or complaint to take a survey at the end of the call, 

but the audit found that OIEA staff are not consistently doing 

so. Investors who submit an inquiry or complaint using the 

SEC web form are supposed to receive a follow-up survey 

from OIEA, but only a low percentage of these surveys are 

completed and returned to OIEA. We also found that the 

survey sent to investors who use the web form contained 

questions specifically geared to telephone inquiries.

OIEA Surveys of Investors Who Contact OIEA

Because telephone calls to OIEA from investors are not monitored or recorded 

and management review of files related to investor inquiries and complaints is 

limited, surveys—despite their limitations—are one of the only available 

mechanisms for obtaining feedback on OIEA’s customer service. 

OIEA officials informed us that it began using the American Customer 

Satisfaction Index in July 2010 to obtain feedback on inquiries received through 

the SEC’s web form. According to an OIEA technology specialist, OIEA’s 

tracking system automatically sends a survey to an investor 10 days after an

inquiry is closed as long as the investor has supplied a valid e-mail address and 

certain other criteria (outlined later in this section) are met. Until recently, the 

survey was sent 3 days after the inquiry was closed, but in their survey 

responses, some investors indicated that they had not yet received a response to 

their inquiry. An OIEA management official told us that investors usually 
Assessment of OIEA’s Functions September 30, 2011

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received responses to their inquiries within 7 days but not within 3 days, and that 

the survey send-out date was changed in order to obtain more accurate survey 

responses. In addition, OIEA initially received the survey results in batches once 

or twice a month but began receiving them weekly in February 2011. 

In fall 2010, OIEA began offering surveys to investors who make telephone 

inquiries. To access the survey, the caller must be connected by the OIEA staff 

member who takes the call. According to OIEA management, OIEA staff 

members are required to ask investors who call OIEA to take a survey at the end 

of the call. 

OIEA Management’s Review of Survey Results

According to OIEA management, OIEA’s three branch chiefs and the Assistant 

Director of the Office of Investor Assistance review the survey results weekly and 

follow up, as necessary, if possible. For instance, if an investor has provided his 

or her name and contact information and OIEA management deems it necessary 

to follow up on the results of the survey, an OIEA staff member, working under 

management’s direction, contacts the investor. However, because a majority of 

the survey responses are anonymous and many do not note the name of the 

staff member who addressed the inquiry, OIEA is unable to associate many of 

the survey comments with specific inquiry files and therefore cannot always 

respond directly to the investor. 

Criteria for Receiving a Follow-Up Survey by E-Mail 

The OIG audit found that surveys are not sent to all investors who submit 

inquiries or complaints using the SEC web form. According to an OIEA 

information technology specialist, the following criteria must be met for a followup survey to be sent:

1. The case must be closed. 

2. In the web form, the primary e-mail, personal e-mail, or other email field must contain the @ symbol. 

3. “Correspondent type” must be “individual.”

4. The disposition of the case must be "responded to 

correspondent." 

5. The type of the case must be “OIEA correspondence.” 

For instance, if OIEA determines that no correspondence or further action is 

necessary on an inquiry because it is a repeat inquiry that has been previously

addressed, a survey would not be sent. 

From July 1, 2010, through March 31, 2011, OIEA received 1,780 responses to 

e-mailed surveys. OIEA management determined that 12,092 out of 48,223 

inquiries from July 1, 2010, through March 31, 2011, met the necessary criteria to 
Assessment of OIEA’s Functions September 30, 2011

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receive a follow-up survey by e-mail. Assuming that 12,092 surveys were emailed to correspondents over that period, 1,780 responses represent a 

response rate of about 15 percent.25

Failure to Offer Telephone Follow-Up Survey 

As part of our audit, we placed two telephone calls to 1-800-SEC-0330, the SEC 

Toll-Free Investor Information Service number, which is handled by OIEA 

employees at SEC headquarters. We also called all of the SEC’s 11 regional 

offices. In each case, we asked how to obtain background information on a 

person offering stocks with high rates of return and how to verify the legitimacy of 

the person. 

When we called the SEC’s Toll-Free Investor Information Service number, the 

greeting stated that callers would have the option of taking a survey at the end of 

the call, but we were not offered that option at the end of either of our calls to that 

number. Although we called all 11 regional offices, we spoke with an investor 

specialist in only three of the regional offices, and none offered us the opportunity 

to take a survey.26 We were unable to reach an investor specialist in the other 

eight regional offices and were connected instead to voicemail. Accordingly, 

notwithstanding the requirement to allow investors to take a survey after the call, 

in none of the cases in which we contacted OIEA or the regional offices were we 

given the opportunity to take the survey. 

Irrelevant Questions in E-Mailed Surveys 

As part of our audit, we submitted an inquiry using the SEC’s web form that was 

related to a banking issue that OIEA should have referred to another federal 

agency. After 5 days, we received a response from OIEA that provided another 

agency’s contact information and instructions on where to find information about 

banking issues on the SEC website. A survey was sent to us 10 days after the 

inquiry was addressed. In reviewing the survey, however, we found that it 

contained a number of questions relevant only to telephone inquiries. For 

example, it asked survey recipients to “rate availability of staff, staff knowledge of 

the issue you called about, convenience of contact center hours, and consistency 

of response/information if you spoke to more than one person.” 

 

25 We calculated this number by dividing the number of survey responses received by the estimated number 

of written inquiries (1,780 ÷ 12,092). 26 OIEA management informed us that regional offices’ telephone systems do not have the ability to offer a 

survey to investors.
Assessment of OIEA’s Functions September 30, 2011

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Recommendation 9:

The Office of Investor Education and Advocacy (OIEA) should issue periodic 

reminders to OIEA staff members that they are required to provide investors 

with the option to complete a survey after every call. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Recommendation 10: 

The Office of Investor Education and Advocacy should revise the questions in 

its survey sent to investors who use the Securities and Exchange 

Commission’s web form for inquiries and complaints by deleting questions 

applicable only to telephone inquiries and complaints and adding questions 

specifically relevant to inquiries and complaints submitted through the web 

form. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Finding 6: Information on the SEC Website 

About How Investors May Contact the SEC by 

Telephone to Make Inquiries or Complaints Is 

Not Displayed Prominently or Presented 

Clearly

The SEC.gov home page contains no specific information 

about how to contact the SEC by telephone to make 

inquiries and complaints. To find that information, investors 

must find and click on several links that are neither 

prominently displayed nor clearly presented. 
Assessment of OIEA’s Functions September 30, 2011

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Finding the Appropriate Toll-Free Number

We found that the SEC’s main website is difficult to navigate because of the large 

quantity of information it contains and the manner in which the information is 

displayed. OIEA management and staff members agree with our assessment of 

the website and stated that it could be modified. 

When we examined the SEC website, www.sec.gov, we found that the home 

page contains no specific information about how to contact OIEA by telephone to 

make inquiries or complaints. To find a telephone number, investors must first 

go to the bottom of the page and click “Contact.” Doing so takes the investor to a 

page that lists seven general options, including “Key Telephone Numbers” and 

“Investor Complaint Center.” The “Investor Complaint Center” option does not 

provide a telephone number for inquiries and complaints. To find such a number, 

the investor must instead select “Key Telephone Numbers,” which takes the 

investor to another list, titled “Useful SEC Contact Information.” Included on that 

list are the following two entries, among others:

Information Line (General SEC Information):

(888) SEC-6585

To contact the SEC and to obtain free investor education materials.

SEC Toll-Free Investor Information Service: 

1-800-SEC-0330

To request investor assistance or to file a complaint, please see 

"SEC Center for Complaints and Enforcement Tips."

Callers to either number receive the same recorded greeting and menu options.

We were unable to determine why two telephone numbers are provided. OIEA 

agreed with our assessment that only one number should be provided and that 

the SEC Toll-Free Investor Information Service telephone number should be 

moved up on the “Useful SEC Contact Information” list, where it is currently listed 

fifth. 

Investor.gov and PAUSE

Investor.gov was established to support OIEA’s mission to educate investors, 

separate from the SEC’s main website. It provides tools for investors to use in

their investing activities and displays publications, studies, and other information. 

However, the Investor.gov home page does not display the SEC Toll-Free 

Investor Information Service telephone number. To find that number, investors 

must click on the “Contact Us” link in the upper right corner of the home page. 

OIEA management stated that it prefers that investors use the SEC web form to 

file a complaint instead of calling OIEA because in many cases investors have to 

send documents related to their complaint to OIEA. A link to Investor.gov is on 

the home page of the SEC website.
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The SEC also maintains Public Alert: Unregistered Soliciting Entities (PAUSE) 

on the SEC website. PAUSE lists unregistered entities or entities that have been 

the subject of complaints received by the SEC. Because Investor.gov provides

guidance to investors about investing activities, including safe investing, we 

recommended to OIEA that information about PAUSE be included on the 

Investor.gov website. During the course of our audit, OIEA posted PAUSE on 

the Investor.gov website. 

Recommendation 11:

The Office of Investor Education and Advocacy (OIEA), in coordination with 

the Office of the Secretary, should move the Securities and Exchange 

Commission’s (SEC) Toll-Free Investor Information Service telephone 

number to a more prominent location on the SEC website, such as the home 

page.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Recommendation 12:

The Office of Investor Education and Advocacy should determine, in 

coordination with the Office of the Secretary, whether there should be one 

Securities and Exchange Commission information service telephone number

instead of two on the “Useful SEC Contact Information” list on the Securities 

and Exchange Commission website. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Recommendation 13:

The Office of Investor Education and Advocacy should display the SEC TollFree Investor Information Service telephone number on the home page of 

Investor.gov for investors to make inquiries or complaints. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments. 
Assessment of OIEA’s Functions September 30, 2011

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OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Finding 7: Communication Between Office of 

Investor Assistance Staff and Management and 

Between OIEA Offices Needs Improvement

Communication between Office of Investor Assistance staff 

and management and between OIEA offices is inadequate. 

This lack of communication has raised concerns about low 

morale within the Office of Investor Assistance. 

In narrative responses to survey questions and in interviews, OIEA staff 

repeatedly expressed concern about the lack of communication between OIEA 

management and staff and about the effect of poor communication on staff 

morale. For example, we received the following comments: 

• “I believe management routinely makes poor decisions that 

hamper production/progress. Management has no interest in 

listening to the opinions of its staff. This disconnect has led to 

extremely low morale amongst the staff. For the past year, the 

communication from management illustrates their lack of 

respect for their employees. This lack of respect makes it hard 

to take pride in one's job. I find it unsettling the lack of 

professionalism exemplified by the management staff. They 

routinely minimize the job responsibilities of the staff which in 

turn ruins any sense of motivation.”

• “I thought that the procedures were overly rigid, totally 

micromanaged. This contributed to the poor morale, 

significantly.” 

• “The office’s morale is horrible. They [management personnel] 

are not allowing staff input. . . . You try to make suggestions 

about making the office better, but suggestions are dismissed 

out of hand. You make a suggestion and get an e-mail saying I 

told you how I want you to do it.” 

During our audit, we found that OIEA management was also concerned about 

poor morale within the Office of Investor Assistance. Our review of OIEA 

meeting agendas revealed agenda items related to office morale, and OIEA 

managers expressed concern about office morale during interviews. OIEA 
Assessment of OIEA’s Functions September 30, 2011

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management also indicated that there have been concerns with respect to

communication between staff and management.

Standards for Internal Control in the Federal Government states, “For an entity to 

run and control its operations, it must have relevant, reliable, and timely 

communications relating to internal as well as external events.” It also states, 

“Effective communications should occur in a broad sense with information flowing 

down, across, and up the organization.”27 We found during this audit that 

communication within OIEA is not as effective as possible, particularly—but not 

exclusively—with respect to “information flowing down.” As a result, staff morale 

appears to have suffered, which could negatively affect the efficiency and 

effectiveness of OIEA operations.

Overall Communication Between Management and Staff 

Responses to our survey cited overall weaknesses in communications between 

OIEA management and staff. When asked whether senior management in OIEA 

communicates its goals and priorities to OIEA employees, only 30 percent of the 

respondents answered “yes.” Of the remaining 70 percent, 40 percent answered 

“occasionally” and 30 percent answered “no.” 

Staff concerns about overall communication between management and staff 

were evident in narrative responses to a number of the survey questions, 

including the following examples:

• “Things were just told to us . . . mainly through e-mail from 

Deputy Director.” 

• “Information is parceled out on a ‘need to know’ basis. There is 

something of a ‘hide the ball’ mentality among senior 

management. While this is true of senior management in other 

divisions and offices as well, there have been instances in OIEA 

of work going out prematurely and then being pulled because a 

key piece of information was not communicated.” 

• “I believe there needs to be communication between 

management and the staff. We have asked for this before and 

weekly/biweekly meeting have been set up between the staff 

and their respective branch chief. These meetings serve as a 

way for the branch chief to relay senior management's 

concerns/upcoming policies. I find these meeting to be an 

improvement to the nonexistent communication which existed 

before. My issue with this system is there is no forum to provide 

 

27 Government Accountability Office, Standards for Internal Control in the Federal Government, GAO/AIMD00-21.3.1 (November 1999), pp. 18-19.
Assessment of OIEA’s Functions September 30, 2011

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feedback/suggestions from the staff. The branch chiefs are 

intimidated by senior management and routinely say they would 

not be receptive to our input. I understand that management 

will always have the final say. However, to have no interest in 

listening to our opinions is very frustrating and does not foster 

motivation.” 

• “Management needs to listen to the concerns of the staff on a 

regular basis.” 

However, three OIEA employees indicated in their comments that they found that 

management is accessible and communicates with staff members: 

• “Management is very involved and focused. Management is 

approachable and very responsive.” 

• “We are afforded appropriate levels of independence and are 

not micromanaged. If I need the support of my supervisor, all I 

have to do is ask. If I am comfortable working a project by 

myself, it’s my responsibility to keep everyone informed.” 

• “Within OIEA investor assistance, there is great communication, 

and we all work together in a nice atmosphere. The branch 

chiefs contribute to a serene work environment.” 

OIEA managers stated that they have an open door policy but that staff members 

do not communicate with them. Some OIEA staff stated that management has 

heard their suggestions but has not acted upon them.

Communication Related to OIEA Procedures

Many employees we interviewed stated that when OIEA operating procedures 

are revised, staff members are simply instructed to follow the new procedures

without being provided any explanation for the changes or any opportunity to 

provide feedback before the changes are implemented. 

In our review of e-mails and meeting notes prepared by OIEA management, we 

did not find specific evidence that management sought feedback from staff on 

revised procedures. After we informed OIEA management of this finding on 

August 11, 2011, management provided us with an e-mail that had been sent to 

all OIEA staff and regional offices asking for feedback on OIEA’s draft standard 

operating procedures. The e-mail was dated April 26, 2011, and asked for 

comments by May 3, 2011, giving recipients only five business days to respond. 

A manager told us that he had received only three responses from OIEA staff

and one response from a regional office. According to an OIEA staff member, 

however, the difficulty of having only five days to review and provide comments 
Assessment of OIEA’s Functions September 30, 2011

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on the draft was compounded by the fact that OIEA staff were in the process of 

addressing a backlog of investor complaints and questions when they received 

the e-mail. The OIEA staff member said that he did not have time to review the 

draft until three weeks after the e-mail had been sent. He stated that although he 

had comments on the draft, he did not see any benefit to sending them to 

management because the deadline for commenting had passed. 

In response to our request for additional examples of management seeking 

feedback on OIEA procedures from staff, a management official stated, 

“[E]xamples of e-mails specifically requesting feedback on policies and 

procedures is limited. Instead, the majority of e-mails regarding procedures spell 

out the new or revised procedures and invite the staff to contact management 

with any questions. Management views these invitations as an opportunity for 

the staff to provide feedback.” OIEA management provided us with examples of 

such e-mails. 

We also found an instance in which staff were not informed of a new procedure 

even after it had been implemented. Beginning in February 2009, a senior OIEA 

attorney started reviewing allegations of wrongdoing received by OIEA staff, 

including determining whether staff had entered them correctly in IRIS. We 

asked an OIEA manager whether OIEA staff had been notified about the 

introduction of this review. The manager said that there had been no official 

announcement because the senior attorney is a resource on other matters and 

staff are therefore not surprised when she offers observations. She added that 

there was “nothing to notify employees of.” However, in an interview with a staff 

member who had received a communication from the senior attorney resulting 

from the senior attorney’s review of the staff member’s handling of a complaint, 

the staff member said the following with respect to the communication: “I was 

wondering why it did not come from my branch chief. . . . I had a situation where I 

wrote to the firm. . . . The firm was late with their response. [The senior attorney] 

had been monitoring it and sent me a reminder e-mail that the firm had not 

responded, with language like I was a third grader.” 

 

Other OIEA staff expressed their dissatisfaction with management’s blanket 

implementation of new procedures to address concerns about the actions of a

single employee, along with their belief that management does not treat staff as 

professionals, commenting as follows:

• “Allow the attorneys to act as attorneys. In other words, believe 

that we have the ability, intelligence and training to respond to 

investors without micromanagement. In addition, treat the 

specialists like the professionals that they are. To set out 

procedures for the entire office based on the actions of one 

person is not an efficient way to run any office.” 
Assessment of OIEA’s Functions September 30, 2011

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• “Management does not treat OIEA employees as professionals 

and micromanages. As an attorney, you would think I would 

have discretion, but I do not have any discretion anymore. It is 

totally a cover your behind type of office, and I cannot speak for 

others’ performance, but it seems if there is a problem with one 

employee, a whole new set of policies is implemented for the 

whole staff and it is not very efficient or thought out. Some 

things work for some employees, but not for others. My other 

big concern is that current top-level management besides [the 

Director] have never performed the duties of my position and 

the way they go about implementing policies shows that. If they 

were actual users they would understand how difficult it is and if 

you make a little mistake, it seems like a very big deal now.” 

With respect to staff concerns about management’s implementation of new or 

revised procedures without obtaining adequate feedback from staff, OIEA 

management said that staff should know that certain rules and regulations are 

required and that following them is not at OIEA’s discretion. For example, 

several OIEA staff members informed us that OIEA recently learned that its 

employees should not tell FINRA employees whether there is an ongoing 

investigation of a company or individual. In the past, if a FINRA employee asked 

an OIEA employee whether there was an ongoing investigation, the OIEA 

employee would provide an answer even when the information was not public. 

The OIEA Chief Counsel’s Office, after consulting with the Division of 

Enforcement, advised OIEA that such requests for information should be handled 

by OMI, rather than OIEA, because SEC regulations delegate authority for 

providing access to nonpublic information to the Director of the Division of 

Enforcement.

28 Under the revised procedure, OIEA employees are required to 

refer requests from FINRA for nonpublic information to OMI. The OIEA 

employees who spoke with us were dissatisfied with the new process and that 

they were not initially provided an explanation of why the procedure changed. 

According to OIEA management, some OIEA procedures were based on 

historical practices rather than on written standard operating procedures and had 

not been thoroughly researched to determine whether they were legally 

permissible. In addition, an OIEA manager said that she believes there was no 

clear line of authority in the past and that staff were accustomed to having more 

discretion in processing certain inquiries and communicating with SEC staff 

outside of OIEA. She commented that OIEA staff need to understand that 

management is accountable for the actions of everyone in OIEA and that OIEA 

employees should also be held accountable for their actions. 

 

28 17 C.F.R. § 200.30-4(7); see also 17 C.F.R. § 240.24c-1 pertaining to access to nonpublic Commission 

information. 
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Communication Between OIEA Offices

Several OIEA staff members also expressed significant concern about the lack of 

communication between offices within OIEA. We found that some staff in the 

Office of Investor Assistance do not have an understanding of what staff in the 

Office of Investor Education do, as reflected in the following comments:

• “We also have next to no idea of the priorities for the Education 

side. They do not communicate the projects the Education team is 

working on, who they are hiring, or what events they are attending 

or sponsoring. It's unfortunate because we are one office but we 

are not united and seem to be managed differently.” 

• “Investor Assistance is generally not made aware of the activities of 

the Educational unit.” 

• “I don't work on the Education side and the Assistance side is not 

informed of the various educational events that are being hosted.” 

We also received comments from staff that OIEA is not a cohesive organization. 

To address this issue, several survey respondents suggested having more 

officewide meetings, as follows: 

• “[H]ave more office meetings with the whole staff regarding issues 

of our office. The communication from management to staff is 

LACKING and often the staff is kept in the dark on important 

issues.” 

• “Maybe [hold] monthly office meetings, also with the Education 

side.” 

We asked OIEA management whether communication between offices within 

OIEA is sufficient, and OIEA management responded that upper-level managers 

within OIEA communicate with one another. The Director of OIEA said that 

OIEA’s senior-level staff meeting is an opportunity for all parts of OIEA to discuss 

overarching objectives and tasks. We also asked OIEA management whether 

the Office of Investor Assistance informs the Office of Investor Education about 

questions or issues that investors raise frequently. The Director of OIEA stated 

that such coordination occurs. However, the comments we received indicate that 

additional coordination is necessary. 
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Recommendation 14:

The Office of Investor Education and Advocacy (OIEA) should communicate 

matters related to OIEA operations, such as personnel changes and initiatives 

by offices within OIEA, to staff members at least once a month through 

officewide e-mails or an officewide meeting and ensure appropriate and 

necessary communication between the different offices within OIEA. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Recommendation 15:

The Office of Investor Education and Advocacy should continue to seek 

feedback from staff members on new and revised policies and procedures 

and other matters that would affect the office and should provide adequate 

time for staff to review and respond to feedback requests. 

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.

Recommendation 16:

The Office of Investor Education and Advocacy should participate in teambuilding exercises that are available at the Securities and Exchange 

Commission to improve communications and relations between management 

and staff.

Management Comments. OIEA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIEA concurred with this 

recommendation.
Appendix I

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Abbreviations

COSO Committee of Sponsoring Organizations of the 

Treadway Commission 

Enforcement Division of Enforcement

FINRA Financial Industry Regulatory Authority

IRIS Investor Response Information System 

OIEA Office of Investor Education and Advocacy

OIG Office of Inspector General 

OMI Office of Market Intelligence

PAUSE Public Alert: Unregistered Soliciting Entities

RiskFin Division of Risk, Strategy, and Financial Innovation

SEC or Commission U.S. Securities and Exchange Commission

TCR system Tips, Complaints, and Referrals system
Appendix II

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Scope and Methodology

As part of the OIG annual audit plan, we conducted an assessment of OIEA’s 

functions. We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require that we plan 

and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. 

We determined that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 

Scope. We conducted our fieldwork from April 2011 to August 2011. Our audit 

focused on the functions of OIEA’s Office of Investor Assistance and whether it is 

achieving its goal of providing timely responses to investor inquiries and 

complaints. In addition, we reviewed investor alerts and bulletins primarily 

prepared by OIEA’s Office of Chief Counsel and educational material for the 

investing public prepared by OIEA’s Office of Investor Education. Our audit also 

addressed responses to investor inquiries and complaints provided by investor 

specialists in SEC regional offices. We reviewed documentation on OIEA’s 

functions covering calendar years 2008, 2009, and 2010 and from January to

March 2011. 

Methodology. To meet the objectives of assessing whether OIEA (1) addresses 

investor inquiries accurately and timely and (2) processes complaints from 

investors and/or refers them to other parties in a timely manner, we obtained and 

reviewed the Commission’s regulation setting forth the responsibilities of the 

Director of the Office of Consumer Affairs, OIEA’s predecessor,29 and the Office 

of Investor Assistance’s standard operating procedures, which describe internal 

policies and procedures related to processing investor inquiries and complaints. 

We developed and administered a survey to OIEA staff about its procedures for 

responding to investors, and we reviewed and analyzed the results of the survey. 

We also interviewed and submitted inquiries to OIEA management and to staff 

and management from other Commission divisions and offices who have worked 

with OIEA. 

To achieve the objective of assessing whether OIEA’s current tracking system

and standard operating procedures for investor inquiries and complaints enable 

the office to address inquiries and complaints in accordance with OIEA’s goal, we 

reviewed a sample of investor inquiries and complaints. Additionally, we 

reviewed records in OIEA’s tracking system and learned about functions of 

OIEA’s tracking system. Some of the questions in the survey we administered to 

 

29 During our audit, we discussed with OIEA the need for updating this legislation. OIEA indicated that it 

intends to pursue an update after certain organizational issues resulting from enactment of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act have been resolved. 
Appendix II

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 36

OIEA staff addressed issues related to OIEA’s standard operating procedures 

and the functionality of OIEA’s tracking system.

To meet the objective of determining whether OIEA provides useful and relevant 

educational material and events to the investing public, we conducted interviews 

with other SEC divisions and offices that have worked with OIEA and external 

organizations that have coordinated with OIEA, such as FINRA and the 

Department of the Treasury. We also reviewed materials for certain educational 

events held by OIEA for the investing public. An OIG staff member also attended 

an OIEA educational event held at SEC headquarters. Additionally, our survey of 

OIEA staff included questions about the usefulness and relevance of OIEA 

educational materials provided to investors.

Finally, we identified areas in which improvement could be made, documenting 

the results of our audit work and facilitating implementation of recommendations 

noted in the report.

Internal Controls. The Internal Control—Integrated Framework, published by 

the Committee of Sponsoring Organizations of the Treadway Commission 

(COSO), provides a framework for organizations to design, implement, and 

evaluate controls that facilitate compliance with federal laws, regulations, and 

program compliance requirements.30 For this audit, we based our assessment of 

OIEA internal controls that were significant to the audit objectives on the COSO 

framework, including control environment, control activities, information and 

communication, and monitoring. Among the internal controls that we assessed

were OIEA’s controls related to processing priority inquiries, management’s 

review of priority inquiries, OIEA’s policies and procedures in place to meet its 

objectives, and OIEA’s internal communication process. 

Judgmental Sampling. OIEA provided us with a list of all investor inquiries and 

complaints for the period from January 1, 2008, to March 31, 2011. The universe 

of investor inquiries and complaints received by SEC headquarters and regional 

offices totaled 193,255. We judgmentally selected 150 inquiries and complaints 

from this list for our sample, including inquiries and complaints received by SEC 

regional offices as well as by SEC headquarters. In addition, our selection was 

made to ensure that our sample included the various types of inquiries and 

complaints processed by OIEA, including White House, Chairman’s, and 

congressional correspondence; allegations of wrongdoing; and advance fee 

fraud schemes. Because we did not use statistical sampling techniques, we did 

not try to project the results of the investor inquiries and complaints reviewed in 

our sample to the entire population. 

 

30 Committee of Sponsoring Organizations of the Treadway Commission, Internal Control—Integrated 

Framework (1992).
Appendix II

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 37

Prior Audit Coverage. From 1990 through 2004, the OIG performed six audits 

related to OIEA’s operations, as shown below. 

 

• Management of Investor Complaints, Report No. 135, March 29, 

1990

• Investor Complaints and Inquiries, Report No. 202, September 29, 

1994

• Oversight of Self-Regulatory Organization Arbitration, Report No. 

289, August 24, 1999

• Investor and Small Business Town Meetings, Report No. 303, 

November 18, 1999

• Investor Education and Assistance Program, Report No. 288, April 

25, 2000

• Commission Responses to Investor Inquiries, Report No. 373, 

March 29, 2004

Although OIEA has implemented most of the prior reports’ recommendations, we 

found two that have not been addressed.

The 1994 report recommended periodic review of the quality of responses to 

letter and telephone complaints and to inquiries Commission-wide. OIEA stated 

that this recommendation has not been fully addressed because OIEA does not 

have the authority to monitor regional offices. OIEA added that although it does 

not have the authority to monitor regional offices and it does not directly monitor 

regional offices’ responses, it indirectly monitors them through its review of 

responses to surveys sent to investors after they have received a response to an 

inquiry or complaint. There have been times when the OIEA Assistant Director 

has been able to identify survey comments related to a response prepared by a 

regional office and has called the regional office to follow up. 

The 2000 report recommended that OIEA develop and implement uniform 

complaint and inquiry processing policies and procedures for OIEA and the field 

offices and that it monitor information provided to investors for compliance with 

OIEA policies and procedures. This recommendation has not been addressed. 

According to OIEA management, it cannot monitor regional activities because 

staff in regional offices report to regional directors, not to OIEA management. 
Appendix III

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 38

Criteria

OIEA Standard Operating Procedures for the Investor Assistance Group. 

(May 2011). Describes internal procedures that investor specialists and 

attorneys in the Office of Investor Assistance should follow to process investor 

inquiries and complaints. Adopted on May 5, 2011.

SEC Administrative Regulation 3-2, Tips, Complaints, and Referrals Intake 

Policy. Prescribes the policies, procedures, and responsibilities for the SEC’s

intake program for Tips, Complaints, and Referrals. The policy applies to all SEC 

staff, including fellows, interns, contractors, and anyone employed on a full-time 

or part-time basis by the SEC. Adopted on March 10, 2010. 

17 C.F.R. § 200.24a, Director of the Office of Consumer Affairs. Describes 

the responsibilities assigned to OIEA’s predecessor organization, including 

responsibilities to present seminars and instructional programs to educate 

investors about securities markets and their rights as investors, to prepare and 

distribute to the public materials describing the operations of the securities 

markets and related matters, and to increase public knowledge of the functions of 

the Commission. Also describes responsibilities to implement and administer a 

nationwide system for resolving investor complaints received from individual 

investors; to provide information to investors who inquire about individuals and 

entities regulated by the Commission, as well as the operation of the securities 

markets or the functions of the Commission; to advise the Commission and its 

staff about problems frequently encountered by investors and possible solutions 

to them; to transmit to other Commission offices and divisions information 

provided by investors that concerns the responsibilities of these offices and 

divisions; and to provide for greater consumer input to the Commission’s 

rulemaking proceedings. 

17 C.F.R. § 200.30-4(A)(7), Delegation of Authority to Director of Division of 

Enforcement. Delegates authority to the Director of Enforcement to administer 

the provisions of 17 C.F.R. § 240.24c-1, provided that access to nonpublic 

information as defined in that section shall be provided only with the concurrence 

of the head of the Commission division or office responsible for such information 

or the files containing such information. 

17 C.F.R. § 240.24c-1, Access to Nonpublic Information. Defines the term 

“nonpublic information” as records, as defined in Section 24(a) of the Securities 

Exchange Act of 1934, and other information in the Commission’s possession, 

which are not available for public inspection and copying. Allows the 

Commission, in its discretion, to provide nonpublic information to, among other 

parties, a self-regulatory organization as defined in Section 3(a)(26) of the 

Securities Exchange Act of 1934, such as FINRA, if assurances of confidentiality 

that the Commission deems appropriate are provided.
Appendix IV

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 39

List of Recommendations

Recommendation 1: 

The Office of Investor Education and Advocacy (OIEA) should evaluate its review 

process for responses to priority and other inquiries to determine whether 

bottlenecks or inefficiencies are present and whether opportunities to streamline

the process and improve the timeliness of responses exist. Based on the results 

of the evaluation, OIEA should make any appropriate changes to management 

review responsibilities and revise its operating procedures accordingly.

Recommendation 2:

The Office of Investor Education and Advocacy (OIEA) should enhance the 

training available to OIEA staff on the Investor Response Information System and 

on processing investor inquiries and complaints. In particular, these 

enhancements should address areas where confusion or errors are common or 

persistent.

Recommendation 3:

The Office of Investor Education and Advocacy (OIEA) should make additional 

training available to OIEA staff, including training provided by other divisions or 

offices within the Securities and Exchange Commission, on new and emerging 

topics in the securities industry to help ensure that information provided to 

investors is accurate and current. OIEA management should regularly solicit 

ideas for training topics from OIEA staff.

Recommendation 4:

The Office of Investor Education and Advocacy should take measures to ensure 

that all staff, including staff with telephone duty responsibilities, have sufficient 

time to attend periodic training. 

Recommendation 5:

The Office of Investor Education and Advocacy (OIEA), in coordination with the 

Office of Market Intelligence and the Division of Risk, Strategy, and Financial 

Innovation, should continue to enhance the bridge between OIEA’s Investor 

Response Information System and the Tips, Complaints, and Referrals system, 

particularly the functions for transferring attachments and for ensuring the

complete transfer of information.
Appendix IV

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 40

Recommendation 6:

The Office of Investor Education and Advocacy should provide regional office 

investor specialists with ongoing training on investor assistance, including 

information on resources available on the Securities and Exchange Commission 

website, and on the Investor Response Information System.

Recommendation 7: 

The Office of Investor Education and Advocacy (OIEA) should coordinate with 

regional offices to establish a system for communicating regularly to help ensure 

that investor specialists throughout the Securities and Exchange Commission are 

providing consistent assistance to investors and that OIEA is aware of significant 

issues in the regional offices.

Recommendation 8:

The Office of Investor Education and Advocacy should continue to consult with 

regional offices to determine ways it could facilitate participation by the Securities 

and Exchange Commission in local events held to educate investors and ways to 

assist regional offices with other efforts related to educating investors. 

Recommendation 9: 

The Office of Investor Education and Advocacy (OIEA) should issue periodic 

reminders to OIEA staff members that they are required to provide investors with 

the option to complete a survey after every call. 

Recommendation 10:

The Office of Investor Education and Advocacy should revise the questions in its

survey sent to investors who use the Securities and Exchange Commission’s

web form for inquiries and complaints by deleting questions applicable only to 

telephone inquiries and complaints and adding questions specifically relevant to

inquiries and complaints submitted through the web form. 

Recommendation 11:

The Office of Investor Education and Advocacy (OIEA), in coordination with the 

Office of the Secretary, should move the Securities and Exchange Commission’s 

(SEC) Toll-Free Investor Information Service telephone number to a more 

prominent location on the SEC website, such as the home page.
Appendix IV

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 41

Recommendation 12:

The Office of Investor Education and Advocacy should determine, in coordination 

with the Office of the Secretary, whether there should be one Securities and 

Exchange Commission information service telephone number instead of two on 

the “Useful SEC Contact Information” list on the Securities and Exchange 

Commission website. 

Recommendation 13:

The Office of Investor Education and Advocacy should display the SEC Toll-Free 

Investor Information Service telephone number on the home page of Investor.gov 

for investors to make inquiries or complaints.

Recommendation 14:

The Office of Investor Education and Advocacy (OIEA) should communicate 

matters related to OIEA operations, such as personnel changes and initiatives by 

offices within OIEA, to staff members at least once a month through officewide emails or an officewide meeting and ensure appropriate and necessary 

communication between the different offices within OIEA. 

Recommendation 15:

The Office of Investor Education and Advocacy should continue to seek feedback 

from staff members on new and revised policies and procedures and other 

matters that would affect the office and should provide adequate time for staff to 

review and respond to feedback requests. 

Recommendation 16:

The Office of Investor Education and Advocacy should participate in teambuilding exercises that are available at the Securities and Exchange Commission 

to improve communications and relations between management and staff.
Management Comments

MANAGEMENT COMMENTS 

MEMORANDUM 

To: H. David Kotz, Inspector General 

Office of Inspector General 

From: Lori J. Schock, Director

Office of Investor EducatiS;nd Advocacy 

Date: September 27, 2011 

Re: Response to the Office of Inspector General"s Report. Assessment of the Office 

of Investor Education and Advocacy's Functions, Report No. 498 

Thank you for the opportunity to review and respond to the Office of Inspector 

General's Draft Report No. 498 entitled Assessment of tile Office of Investor Education 

and Advocacy's Functions (the "Report"). Please find below our response. 

General Observations 

First, we appreciate your taking note of the numerous changes that OlEA has 

made ' during the audit period to improve the efficiency of its functions. Among other 

things, OlEA has employed new management for every office, put in place a new 

complaint tracking system, and adopted a comprehensive Standard Operating 

Procedures manual. OlEA believes that these actions have contributed to greater 

efficiency of OlEA operations and we will continue to enhance our operations. starting 

with the implementation of the recommendations contained in the Report. 

Second, the Report includes many anonymous quotes taken from a survey of 

OlEA staff. We caution that some of the substance of those statements m a y n o t be 

factually accurate. 

Third, the Report notes that OlEA has implemented all but two of the 

recommendations from prior audits conducted by your office, both of which involve the 

regional offices. 2 The two recommendations involve the periodic review of the quality 

of investor responses handled by regional office staff and the development and 

monitoring of uniform complaint and inquiry processing policies and procedures for 

OlEA and the field offices. OlEA believes that it has addressed both of these issues 

within the confines of the structure of OlEA and the regional offices. As the Report 

recognizes, OlEA does not have authority over regional office investor assistance staff. 

I See Report. al 2. 'We nole Ihat the regionat offices collectively handle no more than 15% of the Commission·s annuat total 

volume of investor inquiries and complaints that are recorded in OIEA·s Investor Response Information 

System. 

J.l 

Appendix V 

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 42
Appendix V 

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 43

Rather, the staff in the regional offices report to, and are supervised by, regional office 

management. 

OlEA Responses to the Report Recommendations 

We concur with all of the Report's recommendations. Our specific response to each 

recommendation follows. 

Recommendation 1: 

The Office of Investor Education and Advocacy (OlEA) should evaluate its review 

process for responses to priority and other inquiries to determine whether boWenecks or 

inefficiencies are present and whether opportunities to streamline the process and 

improve the timeliness of responses exist. Based on the results of the evaluation, OlEA 

should make any appropriate changes to management review responsibilities and 

revise its operating procedures accordingly. 

OlEA Response to Recommendation 1: 

OlEA will evaluate its review process for responses to priority and other inquiries and 

will make any appropriate changes to management review responsibilities. OlEA's 

operating procedures will be revised to reflect any such changes. 

Recommendation 2: 

The Office of Investor Education and Advocacy (OlEA) should enhance the training 

available to OlEA staff on the Investor Response Information System and on processing 

investor inquiries and complaints. In particular, these enhancements should address 

areas where confusion or errors are common or persistent. 

OlEA Response to Recommendation 2: 

OlEA will enhance the training available to OlEA staff on IRIS and on processing 

investor inquiries and complaints in order to address areas where confusion or errors 

are common or persistent. 

Recommendation 3: 

The Office of Investor Education and Advocacy (OlEA) should make additional training 

available to OlEA staff, including training provided by other divisions or offices within the 

Securities and Exchange Commission, on new and emerging topics in the securities 

industry to help ensure that information provided to investors is accurate and current. 

OlEA management should regularly solicit ideas for training topics from OlEA staff. 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 44

Appendix V 

OlEA Response to Recommendation 3: 

OlEA has and will continue to make additional training available to OlEA staff members 

on new and emerging topics In the securities industry to help ensure that information 

provided to investors Is accurate and current. 3 

Recommendation 4: 

The Office of Investor Education and Advocacy should take measures to ensure all 

staf. including staff with phone duty responsibilities. have sufficient time to attend 

periodic training. 

OlEA Response to Recommendation 4: 

OlEA management is not aware of any investor assistance staff being denied the 

opportunity to attend a training session because of telephone duty. OlEA will take 

measures to ensure that all staff. including staff with telephone duty. have sufficient time 

to attend periodic training. 

Recommendation 5: 

The Office of Investor Education and Advocacy (OlEA). in coordination with the Office of 

Market Intelligence and the Division of Risk, Strategy. and FinanCial Innovation, should 

continue to enhance the bridge between OlEA's Investor Response Information System 

and the Tips. Complaints. and Referral system. particularly the functions for transferring 

attachments and for ensuring the complete transfer of information. 

OlEA Response to Recommendation 5: 

OlEA agrees with the recommendation that the automated "bridge" between IRIS and 

the Tips, Complaints and Referral (TCR) system be enhanced. particularly the functions 

for transferring attachments and ensuring the complete transfer of information. As you 

are aware. the TCR System is governed by an Executive Steering Committee (ESC). 

The ESC is well aware of the Issues related to the bridge and considers enhancing the 

bridge as a high priority for the next release of the TCR System planned for 2012. 

Recommendation 6: 

The Office of Investor Education and Advocacy should provide regional office investor 

specialists with ongOing training on investor assistance. including information on 

l As previously provided to audit staf, Included as Appendix A to these Management Comments is a list 

of training events ofred to, and attended by, OlEA staff during the audit period. OlEA also actively 

encourages Its staff to participate in training eKefClses conducted by other offices and diviSions within the 

Commission. 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 45

Appendix V 

resources available on the Securities and Exchange Commission website, and on the 

Investor Response Information System. 

OlEA Response to Recommendation 8: 

In light of statements in the Report that investor assistance specialists in the regional 

offices indicated that previously provided webinar and telephone training was . 

insufficient, OlEA will schedule in-person IRIS training at headquarters and provide 

related information on the Commission's website. OlEA notes that attendance at such 

training will be subject to regional ofice management's budgetary and other concerns. 

Recommendation 7: 

The Office of Investor Education and Advocacy (OlEA) should coordinate with regional 

offices to establish a system for communicating regularly to help ensure that investor 

specialists throughout the Commission are provided consistent assistance to investors 

and that OlEA is aware of significant issues in the regional offices. 

OEIA Respon_ to Recommendation 7: 

OlEA will continue to communicate with regional office investor assistance staff by 

providing them with information regarding aSSistance to investors. OlEA will request 

that the investor assistance specialists in the regional offices inform OlEA of significant 

issues that they encounter in order to promote the consistency of assistance provided to 

investors. 

Recommendation 8: 

The Office of Investor Education and Advocacy should consult with regional offices to 

determine ways it could facilitate participation by the Securities and Exchange 

Commission in local events held to educate investors and ways to assist regionai offices 

with other efforts related to educating investors. 

Response to Recommendation 8: 

OlEA's Office of Investor Education will continue to conduct quarterly conference calls 

with the regional offices regarding education events, including coordination of efforts to 

educate investors. 

Recommendation 9: 

The Office of Investor Education and Advocacy (OlEA) should issue periodic reminders 

to OlEA staff members that they are required to provide investors with the option to 

complete a survey after every call. 
Appendix V 

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 46

OlEA Response to Recommendation 9: 

?IEA has revlse� the language in its interactive voice response system to clarify for 

Investors contacting us by telephone that they will be asked to participate in a survey at 

the conclusion of their discussion with our investor assistance staff. OlEA has also 

updated Its Standard Operating Procedures, with staf input, to specify more clearly the 

requirements for notifying a caller that he or she will be transferred into an automated 

survey at the conclusion of the call and for actually transferring the caller into the 

survey. 

Recommendation 10: 

The Ofice of Investor Education and Advocacy should revise the questions in its survey 

sent to investors who use the Securities and Exchange Commission's webform to 

submit complaints and inquiries by deleting questions applicable only to telephone 

contacts and adding questions specificany relevant to complaints and inquiries 

submitted through the webform. 

OlEA Response to Recommendation 10: 

The current survey soliciting investor feedback regarding our customer service asks 

investors to complete the survey on the basis of their "most recent phone conversation 

or interaction" with OlEA. The survey was designed to include telephone conversations 

as well as online contacts because in some instances, an initial written inquiry to OlEA 

will be followed up by a telephonic discussion with the investor. Nonetheless, to avoid 

confusion, OlEA will revise the survey for investors who submit webforms by deleting 

questions applicable to telephone conversations and, as appropriate, will add questions 

specificaHy relevant to inquiries or complaints submitted through the webform. 

Recommendation 11: 

The Office of Investor Education and Advocacy (OlEA), in coordination with the Office of 

the Secretary, should move the Securities and Exchange Commission's (SEC) Toll-Free 

Investor Information Service telephone number to a more prominent location on the 

SEC's website, such as the home page. 

OlEA Response to Recommendation 11: 

OlEA has coordinated with the Office of the Secretary to have the Securities and 

Exchange Commission's (SEC) Toll-Free Investor Information Service telephone 

number moved to a more prominent location on the SEC's website. 
Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 47

Appendix V 

Recommendation 12: 

The Office of Investor Education and Advocacy should determine, in coordination with 

the Office of the Secretary, whether there should be one Securities and Exchange 

Commission information service telephone number instead of two on the ·Useful SEC 

Contact Information" list on the Securities and Exchange Commission's website. 

OlEA Response to Recommendation 12: 

OlEA has determined, in coordination with the Office of the Secretary, that there should 

be one Securities and Exchange Commission information service telephone number 

instead of two on the Commission's website and the Office of the Secretary has 

implemented this change. 

Recommendation 13: 

The Office of Investor Education and Advocacy should display the SEC Toll-Free 

Investor Information Service telephone number on the home page of Investor.gov for 

estors to make inquiries or complaints. 

OlEA Response to Recommendation 13: 

OlEA will revise Investor.gov in order to display the SEC Toll-Free Investor Information 

Service telephone number on the home page. 

Recommendation 14: 

The Office of Investor Education and Advocacy (OlEA) should communicate matters 

related to OlEA operations, such as personnel changes and initiatives by offices within 

OlEA, to staff members at least once a month through office wide e-mails or an office 

wide meeting and ensure appropriate and necessary communication between the 

difrent Offices within OlEA. 

OlEA Response to Recommendation 14: 

OlEA will communicate matters related to OlEA operations to staff members at least 

once a month through office wide e-malls to ensure appropriate and necessary 

communication between the different Offices within OlEA. 

Recommendation 15: 

The Office of Investor Education and Advocacy should continue to seek feedback from 

staf members on new and revised policies and procedures and other matters that 

would affect the office and should provide adequate time for staff members to review 

and respond to feedback requests. 

. inv
Appendix V 

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 48

OlEA Response to Recommendation 15: 

Subject to and consistent with management's rights as outlined in the Collective 

Bargaining Agreement between the Securities and Exchange Commission and the 

National Treasury Employees Union, OlEA will continue to seek feedback from staff 

members on new and revised policies and procedures and other matters that would 

affect the ofice and will provide adequate time for staff members to review and respond 

to feedback requests. 

Recommendation 16: 

The Office of Investor Education and Advocacy should participate in team-building 

exercises that are available at the Securities and Exchange Commission to improve 

communications and relations between management and staff. 

OlEA Respon_ to Recommendation 16: 

OlEA has contacted the Commission's Work Life Programs Officer and has scheduled 

two training sessions in order to improve communications and relations between 

management and staff. Specifically, OlEA has scheduled a training session entitled 

"Building Better Relationships through Effective Communication" for October 2011 and 

a training session entitled "Non-Verbal Communication: Understanding, Identifying and 

Using Body Language" for November 2011. 
Appendix VI

Assessment of OIEA’s Functions September 30, 2011

Report No. 498

Page 49

OIG Response to Management’s Comments

The OIG is pleased that the OIEA has concurred with all 16 of the report’s 

recommendations. We are also encouraged that OIEA has indicated that it 

intends to take prompt action to address the areas of concern that we identified 

in the audit. 

We believe that fully implementing all of these important recommendations will 

significantly enhance the efficiency and effectiveness of OIEA in connection with 

its important work of gathering, processing, and responding to inquiries and 

complaints from the investing public.
Audit Requests and Ideas

The Office of Inspector General welcomes your input. If you would like to 

request an audit in the future or have an audit idea, please contact us at

U.S. Securities and Exchange Commission

Office of Inspector General

Attn: Assistant Inspector General, Audits (Audit Request/Idea)

100 F Street, N.E.

Washington D.C. 20549-2736

Telephone: 202-551-6061

Fax: 202-772-9265

E-mail: oig@sec.gov

Hotline 

To report fraud, waste, abuse, and mismanagement at the SEC, 

contact the Office of Inspector General at

Telephone: 877.442.0854

Web-Based Hotline Complaint Form:

www.reportlineweb.com/sec_oig