Obama bans Hide and Seek at the SEC
and God forbid our elected "officials"
would actually read a bill prior to voting!
By Dunstan Prial
President Obama on Tuesday repealed a controversial provision in the recent financial reform legislation that made it easier for the Securities and Exchange Commission to deny requests for information.
Gone is a little-noticed measure, Section 9291, that said the SEC no longer had to comply with virtually all requests for information from the public, including those filed under the Freedom of Information Act.
The provision came under fire just days after the massive Dodd-Frank Wall Street Reform bill was signed into law in July. The FOX Business Network first reported the provision and its potential impact after the SEC cited the new law in a FOIA action brought by the network.
“We’re very pleased that the repeal of 9291 is complete. The American public deserves the right to know what the SEC is doing,” Steven G. Mintz, an attorney representing FOX Business in its FOIA cases, said Tuesday.
The effort to repeal the measure quickly gathered bipartisan support, unusual for any legislation given the divisive atmosphere in Washington, D.C. Opponents of the measure said the SEC should be more transparent, not less.
The law exempted the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Critics had charged that given that the SEC’s role as a regulatory body, the provision covered almost every action by the agency and therefore shielded it from being forced to disclose its actions.
After FOX Business reported on the law and it was widely covered by the media, many members of Congress admitted that they were unaware of its inclusion in the vast Dodd-Frank reform bill.
The SEC defended the provision, suggesting it would help the agency in its efforts to expand its surveillance and investigations by ensuring that information obtained from banks and other financial institutions remained confidential.
SEC Chairman Mary Schapiro made that case last month before a Congressional committee while arguing against repealing the provision.
But the SEC wasn’t deaf to the criticism targeting the new law. The agency in September issued guidance to its employees apparently intended to ensure that SEC staffers did not withhold information that should be released to the public.
Meanwhile, Congressman Darrell Issa, R-Calif., who spearheaded the repeal effort, said in a letter to Schapiro last month he feared the SEC would use the provision to “avoid embarrassment and hide evidence of its regulatory and management failures.”
Critics such as Issa have argued that more transparency is needed if government regulators hope to avoid more well-publicized debacles such as Bernie Madoff’s $65 billion Ponzi scheme and the alleged fraud orchestrated by financier R. Allen Stanford.