A Reuters review of financial disclosures provided by the agency show that while working for the SEC in 2013, Higgins reported holding stocks, American depository shares and one specialized product that gives shareholders certain rights after a merger. Collectively, these investments ranged in value from a little less than $2 million to just under $6 million.
From those holdings, Higgins reported between about $53,000 to about $185,000 in dividends and/or capital gains for calendar year 2013.
An SEC spokesperson said that the agency has a strong conflict-of-interest policy and that Higgins' holdings have not resulted in many recusals. He's complying with the conflicts rules, the spokesperson said.
"The SEC's stock ownership rules are one of the most, if not the most, stringent of any federal government agency and go well beyond the standard prohibitions," the spokesperson said. "A number of safeguards are in place in order to avoid even the appearance of a potential conflict of interest, including the requirement that all transactions be approved in advance and reported to the agency's ethics office.
"Mr. Higgins' limited number of recusals has had no impact on his ability to perform his responsibilities as the Director of the Division of Corporation Finance. He has and will continue to provide his sound judgment and expertise in making decisions on the significant matters in the division."
Higgins declined to comment for this story.
Ropes & Gray
Higgins, 63, joined the SEC in June 2013, after spending about 30 years at the Boston-based law firm of Ropes & Gray where he handled numerous initial public offerings.
Higgins reported a partnership income of about $1.1 million for his work in 2013, according to his disclosures.
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At the SEC, Higgins oversees the division that reviews thousands of potentially market-moving company disclosures each year and gives companies feedback on their compliance with SEC disclosure rules.
The division also decides when companies can exclude shareholder proposals from corporate ballots, and can determine when companies that break the law can be granted certain regulatory waivers, such as one that lets larger, well-known companies conduct capital-raising deals without prior SEC approval.
Former SEC officials say Higgins' job typically involves higher-level policy decisions, and directors rarely get involved in company-specific disclosures and decisions. They also said the agency is careful about managing conflicts through recusals.
David Martin, a former SEC corporation finance director who now works for the law firm Covington & Burling LLP, said, "I would imagine that Keith could serve his entire time there and never be the deciding voice on a major issue for one of the companies in which he holds stock."
An SEC spokesperson said that some of the stocks reported by Higgins last year are in a trust that belongs to his mother-in-law. She relies on the trust for financial support, and Higgins' wife is the contingent beneficiary.
Under federal ethics laws, the financial interest of these holdings would be imputed to him as well.
Richard Painter, a professor at the University of Minnesota Law School and former White House ethics lawyer, said family trusts are a common problem when trying to navigate conflicts, and sometimes the only way to resolve it is through recusals.
"It is very difficult to ask family members and family trusts to sell stocks when they will surely get hit with a capital gains tax for doing so," he said.
"The best answer is sometimes to live with the conflict."
The SEC declined to say how many times Higgins has needed to recuse himself due to his financial holdings.
"To reduce the time needed to monitor his holdings, Mr. Higgins reduced his individual stock holdings through a series of sales in the fall of this year," an SEC spokesperson said. "Because any stock held in his mother-in-law's trust continues to require monitoring, the sales involved stocks not also owned by the trust."
Federal ethics rules give employees across the government a variety of options for managing conflicts. Employees, for instance, are not required to recuse on matters if they own below $15,000 in a stock. Staffers can also manage conflicts through other means, including recusals and seeking ethics waivers.
All U.S. government employees are required to recuse themselves from any particular matter that could financially benefit themselves, their spouse or a dependent child.
Many government agencies have supplemental rules tailored for them. The Federal Reserve, for instance, bans employees from investing in banks or certain government securities dealers.
The SEC adopted tighter ethics restrictions in 2010 that ban staff from holding the stock of any company directly regulated by the SEC, including many banks, which operate SEC-regulated brokerages, asset managers or stock exchanges.
The agency staff is also prohibited from buying and selling any stock of a company under investigation, and they are generally subject to a six-month holding period after purchasing a security.
In addition, staff must get all of their trades pre-cleared through an automated ethics program that checks for possible conflicts and, in some cases, by an SEC ethics attorney.
Some experts said the ethics rules on the books are already strict enough, and making them tougher could adversely affect the SEC.
Donald Langevoort, a professor at Georgetown University Law Center, said tightening ethics rules further could chill recruitment of top talent. There are benefits to having active investors in SEC leadership ranks, including the idea that it gives them "a little skin in the game," he said.
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Michael Guttentag, a professor of securities law at Loyola Law School in Los Angeles, said it's "ill-advised" for public figures in a position of power in the markets to own individual securities. "At the very least, it creates the potential impression of impropriety," he said.
Some of the stocks in Higgins' disclosures, such as Google and Apple, were listed for multiple accounts, including an IRA retirement account.
In addition to stocks, Higgins' 53-page 2013 year-end disclosure lists corporate bonds, mutual funds and exchange-traded funds, municipal bonds, bank accounts and real estate investments.
Since the beginning of 2014, Higgins collectively reported about 60 stock transactions that in total ranged in value from a little over $600,000 to as high as over $2 million, according to more recent disclosures Higgins filed throughout this year.
For many of Higgins' individual stock holdings, the disclosures don't specify when the stocks were originally bought or at what price.
Some of the transactions reported suggest the stocks were not sold at especially opportune times.