Carmen Lawrence, a high-profile former

Securities and Exchange Commission

official, is being accused of possibly violating federal ethics rules in seeking employment with a powerful law firm representing the

New York Stock Exchange

in suits related to its 1998 floor-broker scandal.

The SEC's renowned revolving door in June deposited Lawrence, the SEC's recently departed New York regional director, at the high-powered firm of

Fried Frank Harris Shriver & Jacobson

as a partner.

In her role at the SEC, she oversaw a highly publicized investigation of illegal floor trading at the NYSE, one of Fried Frank's high-profile clients. Lawrence also headed the SEC's regional office in April when it charged one of the exchange's former floor brokers, John D'Alessio, with violating securities laws by taking part in the illegal floor trading.

Now, D'Alessio has filed a federal lawsuit against the NYSE, charging that the exchange and its executives not only knew of the illegal floor trading, but encouraged it because the activity profited the exchange. As a result, D'Alessio's lawyer, Dominic Amorosa, is now arguing that Lawrence may have violated federal employee ethics law.

On Monday, Amorosa wrote a letter to

U.S. District Court

Judge Jed Rakoff questioning whether Lawrence broke the ethics law by negotiating for her job at Fried Frank while her office was prosecuting D'Alessio, particularly if she was personally involved in that case.

"In the event that Ms. Lawrence did make such decisions, an issue arises as to whether she and the SEC violated the law in this matter, which would affect the legality of the complaint against my client," Amorosa wrote.

He asked Rakoff to order the SEC to produce information about Lawrence's involvement with the case and Fried Frank.

"This is often what people do when they are desperate," says Harvey Pitt, the lead lawyer for Fried Frank representing the NYSE in the floor-trading lawsuit. "There is absolutely no basis to the allegations. No discussions took place while she was involved in the New York Stock Exchange matter."

Lawrence, who left the SEC on June 30 and starts work at Fried Frank in September, is aware of Amorosa's letter and the ethics issue he raised concerning her, but she declined a request by

TheStreet.com

for an interview on the matter, says SEC spokesman Chris Ullman.

Ullman says the SEC's official position is, "She was in full compliance with all of the applicable ethics rules."

Barry Raskover, the associate director of the SEC's New York regional office and the agency's lead lawyer in the case against D'Alessio, refused to discuss Lawrence's involvement in the SEC's enforcement action against D'Alessio.

He also refused to say whether he had discussed the ethics issue with Lawrence, but added: "There's been absolutely no impropriety here."

In his letter to Judge Rakoff, Amorosa questioned whether Lawrence may have violated provisions of the

ethics law .

According to Amorosa's letter, ethics regulations do not permit a federal employee "to act in his official capacity in matters in which he may have a personal financial interest or matters in which 'any organization with whom he is negotiating or has any arrangement concerning prospective employment has a financial interest.' "

Although Amorosa said he was not alleging that Lawrence had definitely violated that law, he told Rakoff he wants more information about her involvement with the SEC's action against D'Alessio.

Lawrence was involved in the SEC's overall investigation of the floor-trading scandal, and even personally announced a settlement with the NYSE over its involvement with the floor-trading activity last June.

Bye, Bye Civil Service

Fried Frank's Securities Regulation and Enforcement Practice Group, which Lawrence was hired to head,

prides itself on having defended clients in "representations in nearly every high-profile securities enforcement case since the early 1980s" and mentions its work for financier

Ivan Boesky

in negotiating his settlement with the SEC in the 1980s.

Fried Frank partners are paid average annual salaries of $760,000, according to a recent

survey by the

New York Law Journal

. As director of the SEC's regional office in New York, Lawrence was paid an annual salary of $130,200, Ullman says.

Lawrence, 43, who held the top post at the SEC's Northeast regional office since 1996, is by no means unusual in leaving the agency for a large law firm.

For years, the SEC has been a incubator for young lawyers to cut their teeth on securities cases on a government salary before moving on to more lucrative jobs at investment banks and law firms.

As an example, Fried Frank's

Pitt is a former general counsel of the SEC.

Pitt says that under federal law, Lawrence will not be able to appear before the SEC in person on behalf of Fried Frank clients for one year after she begins working at the firm.