A recently conducted survey confirms that the Securities and Exchange Commission is now viewed unfavorably by a remarkable 55% of respondents. To put this into some context, the percentage of unfavorable opinions of the SEC exceeded even that of the Internal Revenue Service!

In its National Juror Survey, Litigation PostScript found that the SEC is the most negatively viewed federal agency of the six included in the survey, with 55% of respondents expressing an unfavorable opinion. This compares to 46% of respondents expressing an unfavorable opinion towards the "always-hated Internal Revenue Service," Litigation PostScript found.

In the months since the arrival of new Chairman Mary Schapiro and Director of Enforcement Robert Khuzami, there seemed to be positive momentum in the press for the SEC, with numerous articles about the reforms that Schapiro and Khuzami have brought and intend to bring in the near future. In addition, the SEC has been quite aggressive in pursuing frauds such Ponzi schemes, and has begun to trumpet its successes in a more visible way on its website.

Any positive gains that the SEC made in public opinion recently, however, have likely been undercut by the most recent report emerging from the SEC IG's office of potential insider trading by two staff attorneys. This highly inflammatory and damaging report has fanned the flames of the public's discontent with the SEC yet again, and led to a new round of (misguided, in my opinion) editorials calling for the SEC to be demolished and replaced.

It will be very interesting to see how the SEC leadership responds, if at all, to the recent IG report, and how the SEC tries to regain its momentum after this latest misstep.