(Adds background about investigation into Weber in a previous job and detail throughout)
By Sarah N. Lynch
WASHINGTON, May 10 (Reuters) - The new lead investigator at the U.S. Securities and Exchange Commission's watchdog office has been placed on administrative leave after he talked openly about wanting to carry a concealed firearm at work and some employees complained he was a physical threat, according to people familiar with the matter.
David Weber, who joined the SEC only a few months ago as the new assistant inspector general for investigations, was placed on leave Tuesday after internal security personnel revoked his SEC identification and banned him from entering SEC headquarters in Washington D.C., the people said.
Chris Mead, an attorney for Weber, said his client is being wrongfully retaliated against. He added he was also dismayed that efforts to invoke a lawful process to carry a firearm could be called a "threat."
Weber complained earlier this year to SEC commissioners about alleged misconduct in the inspector general's office, the sources said. His complaint came to light in news reports earlier this week.
"The timing doesn't make any sense because he was not considered threatening until people had a motive for retaliating against him," Mead said. "A chronology of events will reveal that any allegations against my client are not only false, but are unlawful retaliation against an employee who did the right thing."
He said Weber's firearm proposal was tied to provisions that allows some officials in watchdog offices to have law enforcement powers.
The events are the latest sign of turmoil in the SEC's Office of Inspector General, which polices any waste, fraud and abuse at the agency. The office came under scrutiny shortly before then inspector general David Kotz left in January after questions were raised about Kotz's hard-hitting tactics and ethical behavior. Kotz has denied any wrongdoing.
Now, AT-RISK, a security consulting firm, has been tapped to review the complaints about Weber's conduct, the sources said.
The firm's investigators are interviewing employees inside the watchdog office about their interactions with Weber, the sources added.
AT-RISK could not be immediately reached for comment.
Weber came to the SEC from the Federal Deposit Insurance Corp, where he was a supervisory counsel in charge of banking enforcement. He joined the SEC in January, just before Kotz departed to work for a private investigations firm.
Among the complaints by SEC staff about Weber are that he openly spoke about wanting to carry a concealed firearm inside the SEC's headquarters building in Washington, the sources said.
He also solicited investigators inside the office to participate in special training so they could become eligible for a concealed weapons permit and brought a bullet-proof vest into work, the sources said.
John Nester, an SEC spokesman, declined to comment about Weber.
Earlier this week, Nester said the agency received a complaint from an individual about possible misconduct by current and former inspector general's office employees.
He declined to provide any details, saying the SEC was hiring an outside investigator.
He also said the matter had been referred to the Council of Inspectors General on Integrity and Efficiency, or CIGIE, a government council that monitors the work of 73 inspectors.
Weber had complained to SEC officials, and later to CIGIE, that a person in the inspector general's office had told him that Kotz admitted he had engaged in certain inappropriate conduct, people familiar with the matter said.
Weber told officials he was concerned the person never took action or looked into the matter, and that Kotz's behavior could have tainted some of his investigative reports.
Kotz, who now works as a managing director at the private investigative firm Gryphon Strategies, said he does not believe any allegations were actually ever made about him and he said CIGIE had already decided that Weber's accusations had no merit.
He called Weber's accusations "completely and utterly ludicrous and untrue."
"I have learned that allegations about the SEC OIG were considered by the Integrity Committee and determined to be not worthy of investigation and dismissed entirely. I was not advised at any point that any allegations were made about me or that the Integrity Committee was reviewing any allegations about me," he said in an email.
He added that no one within his prior office was ever aware of such allegations. He said the source of them was "questionable" and that he had "almost no contact" with Weber during the brief time their tenures overlapped.
In addition to previously working at the FDIC, Weber also worked as a Special Counsel for Enforcement at the Office of the Comptroller of the Currency and before that, a law clerk for a U.S. district court judge in New York.
While he was at the OCC, the Treasury Inspector General's Office investigated Weber, and concluded he had misused his government-issued badge and credentials after presenting them to a police officer during a traffic incident, according to people familiar with the matter.
The incident is documented in at least two Treasury Inspector General reports to Congress in 2010-2011, though they do not name him. According to the reports, criminal prosecution was declined for an undisclosed reason by the U.S. Attorney's Office for the District of Columbia. The OCC, though, proposed suspending him.
His attorney Mead disputed the allegation that Weber had misusing his badge, and said that Weber contested the proposed suspension through union representation prior to transferring to the FDIC. Mead said that Weber informed the FDIC about the proposed suspension.
"Mr Weber was the complaining witness against a driver exhibiting road rage in the underlying incident, so showing his credentials could not be construed as attempting to influence any action against him," Mead said in an email.
"Mr. Weber informed his SEC supervisor at the time about the incident early in his employment at the SEC. Mr Weber denies any wrongdoing, and was contesting the proposed discipline when he received his transfer (to the FDIC). OCC could have held him as an employee for the purpose of seeking discipline, but did not do so."
The SEC's five commissioners are searching for a new inspector general. The inspector general will be in charge of overseeing all of the office's operations, including audits and investigations. Weber's job is to oversee the investigative arm of the office. (Editing by Martin Howell, Andre Grenon and Robert Birsel)