SEC Says New Financial Regulation Law Exempts it From Public Disclosure

UPDATE: On the same day that the SEC declared it is not obligated to disclose any records under the FOIA, the chairwoman of the S.E.C., Mary Schapiro, announced the SEC’s improved public participation procedures at a forum sponsored by the United States Chamber of Commerce. She outlined the new procedures and noted that the commission had set up a web site for submission of comments.

Ms Shapiro said, “the idea is to offer maximum opportunity for public comment and to provide greater transparency.

What?? Is she joking? While blocking public access to records, Ms Shapiro has the audacity to claim the SEC is more transparent!

Linda O’Keefe – On Tuesday, the Security and Exchange Commission (SEC) announced that it is no longer obligated to comply with the Freedom of Information Act (FOIA).

Citing section 929I of the new Financial Regulation Bill which President Obama signed into law last week, the SEC is blocking public access to its records. As President Obama specifically praised this new legislation as “transparent”, it is very disturbing that government agencies like the SEC will no longer be accountable to the public.

Fox Business Channel, the sister network of Fox News Channel, reported today that the SEC informed the network that it would block FOIA requests.

SEC Says New Financial Regulation Law Exempts it From Public Disclosure

So much for transparency.

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.” Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings.”

The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network. Steven Mintz, founding partner of law firm Mintz & Gold LLC in New York, lamented what he described as “the backroom deal that was cut between Congress and the SEC to keep the SEC’s failures secret. The only losers here are the American public.”

Criticism of the provision has been swift. “It allows the SEC to block the public’s access to virtually all SEC records,” said Gary Aguirre, a former SEC staff attorney-turned-whistleblower who had accused the agency of thwarting an investigation into hedge fund Pequot Asset Management in 2005. “It permits the SEC to promulgate its own rules and regulations regarding the disclosure of records without getting the approval of the Office of Management and Budget, which typically applies to all federal agencies.”

Read More – http://www.foxbusiness.com/markets/2010/07/28/sec-says-new-finreg-law-exempts-public-disclosure/

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