Godahewa this week resigned from George Steuart Finance (formerly Divasa Finance) a firm connected to investor Dilith Jayaweera, who has received letters from the SEC regarding several deals made by his investment firm.
Tilak Karunaratne, the former SEC chief resigned allegedly following pressure from Sri Lanka's so-called stock market mafia, which has engaged in securities fraud.
He said probes in to 17 cases securities fraud were drawing to a close when he was forced to quit.
Influential investors who helped create a stock market bubble with margin loans has blamed the SEC for a subsequent market fall after a credit bubble collapsed taking Sri Lanka's balance of payments and the exchange rate with it.
Shortly before his ouster, stock brokers and selected investors met Sri Lanka's president.The SEC chairman before Karunarantne, Indrani Sugathadasa, a retired senior public servant also resigned saying she was upholding her principles.
Sri Lanka has had ever worsening problems with rule of law and justice since a civil service commission was abolished and the institution of 'permanent secretaries' was broken by two constitutions in 1972 and 1978.