The Securities and Exchange Commission’s first Investor Advocate Rick Fleming has never had a personal financial advisor.

But successfully prosecuting a crooked one looms as his biggest gotcha trophy in nearly two decades as an attorney for a state securities regulator and the association for state securities overseers.

Fleming referred to the $7.2 million Ponzi schemer he prosecuted for the Kansas Securities Commission as a “mini-Madoff” -- religious affinity theft included.

To prevent future big Madoffs, he said the SEC would do well to persuade Congress for more money so it could examine more than just 9 percent of registered investment advisors annually.

On Tuesday, Fleming sat down with Financial Advisor magazine to discuss his plans himself and his staff of seven at the SEC’s newest unit.

Looking at the landscape of financial regulation in the country, Fleming said, it is the state supervisors rather than the SEC who do and should carry the biggest burden of protecting the smallest retail investors.

The mom and pops who feel they’ve been swindled out of $5,000 or $10,000 infrequently go to the SEC, Fleming said. Instead, they knock of the door of the local district attorney.

“Probably a guy in Hays, Kansas, has never heard of the Kansas Securities Commission. When he goes to the country attorney to complain about a stock broker, though, the attorney will refer him to that office,” Fleming said.

While by law his office will include an ombudsman charged with handling complaints from the public about the SEC -- and the Financial Industry Regulatory Authority and other self-regulatory organizations -- Fleming said their staffs need not feel they should avoid him as an embedded critic.

“It doesn’t have to be a combative relationship. I can advocate for things good for investors and complain about things at bad for investors,” he said.

A top Fleming priority is to get the SEC to do surveys of individual investors including presenting potential disclosure forms to find out which features serve their needs the best and to study new financial products that could be problematic for consumers.

Here are some other excerpts from the interview:

FA: The SEC constantly talks about its limited budget and the need to leverage outsiders such as corporate compliance departments and the Justice Department to increase its effectiveness. Who will you be approaching to expand your impact and what will you be asking them to do?

Fleming: One of my biggest challenges will be to develop a network of people in tune with retail investor interests. I can pontificate by myself, but I have not found a real network I can go to that reaches out to people who look after the interests of individual investors.

FA: What about the SEC’s Investor Advisory Committee?

Fleming: They are just 20 people. I want more than 20 people.

FA: Do you see yourself as a filter or a conduit for investor voices?

Fleming: I hope to be a conduit.  

FA: In talking about your work with the Kansas Securities Commission, you take pride in probably being the only attorney in the country who ever brought a criminal case for churning. Since the SEC has no criminal authority, do you think the U.S. Justice Department’s white collar crimes section needs an investor advocate?

Fleming: No, and despite my background, I won’t be making criminal referrals to the Justice Department. I will leave it to other units within the SEC to do that. I don’t have subpoena authority and the ability to conduct the extensive investigations that have to be done before referrals are made.