SEC Loses Exemption from Freedom of Information Act and is forced to turn in their Hide and Seek Game

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
10/6/10

President Obama on Tuesday repealed a controversial provision in the recent financial reform legislation that made it easier for the Securities and Exchange Commission to deny requests for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.

Mary Schapiro Playing Hide and Seek on disclosure

By Rachelle Younglai
(Reuters) - U.S. regulator Mary Schapiro sought to assure lawmakers on Thursday that the Securities and Exchange Commission would remain accountable to the public amid charges it was using a new law to hide information.

Under the recently passed Wall Street reform bill, the SEC does not have to disclose the results of examinations of specific firms.

That has rankled news organizations and government accountability advocates, who are concerned that the SEC will be exempt from most requests for information from the public, including those under the Freedom of Information Act, or FOIA.

SEC Chairman Schapiro told a congressional hearing on Thursday that this was not the case and said her staff would not be able to deny requests for information if the SEC or the U.S. government was a party.

Schapiro issued guidance to her staff, giving them limited use of the new provision. Under the guidance, the SEC will still produce documents where the person requesting the information has "demonstrated a substantial need for them that outweighs the confidentiality interest of the examined entity."

At a House Financial Services Committee hearing, lawmakers questioned whether the new law had to be adjusted. Four lawmakers have introduced legislation to repeal the provision.

One of those lawmakers, Republican Rep. Darrell Issa, said: "every bureaucrat, no matter how well-intended, always wants to err on the side of caution and less while the public believes they should err on the side of more."

Schapiro defended the spirit of the provision, which was also a measure sought by former SEC Chairman Christopher Cox and approved by the House of Representatives in 2008.

The provision was "designed to eliminate a substantial and longstanding impediment to our examiners' ability to obtain vital examination information on a timely basis," Schapiro told the hearing.

She said that it gave market players clarity that the SEC could protect their confidential and proprietary information.

"Some regulated entities have in the past expressed concern about the level of protection available to examination materials provided to the commission," she said.

The Freedom of Information Act requires federal agencies to disclose certain information in response to a written request. Under the act individuals can request nonpublic consumer complaints, staff comment letters and information compiled during the course of investigations from a federal agency.

ZERO HEDGE POST: Ron Paul Goes After The SEC's FOIA Exclusivity, Introduces SEC Transparency Act

Another GREAT POST from Zero Hedge:

Just because being the most corrupt organization in the world was not enough, the SEC decided, courtesy of Donk (aka Frankendodd), that it is beyond accountability to anyone, even the constitution, after it was recently made public that the world's most incompetent and bribed regulators will continue watching kiddie porn, instead of regulatoring, only do so in complete opacity from now on, as in the future the SEC would be exempt from FOIA (freedom of information act) responses.

And with retail investors saying "no more" to trading stocks in a rigged casino that shares the same level of integrity as its regulator, and is programmed to generate profits for the house and the computers on 99.9% of trades (except of course for those newsletter and subscription peddlers who catch every single inflection point ever, and can predict what the market will do not only tomorrow but a week, a month and a year from now) the market will soon be a ghost town.

Recent attempts by Senator Kaufman to bring some honesty to stocks have so far been met with failure as the Sisyphean task is far too great for any one individual. Which is why we are glad to learn that Ron Paul has joined those few who still hold the long-forgotten dream that the market should be fair and impartial for all (and yes, that means eliminating discount window access for the chosen few Bank Holding Company hedge funds out there) and has introduced the SEC Transparency Act of 2010 (HR 5970), a bill designed to force greater transparency in the Securities and Exchange Commission.

Little by little, every single "intervention" by the world's two most corrupt politicians is being overturned: first the rating agency accountability provision which nearly destroyed the shadow market with a complete lockup of all new ABS issuance, and now the SEC's exclusion from that simple concept known as "checks and balances." Soon FinReg will finally be exposed for the fraud it has been since its inception - the much touted Obama financial regulatory reform is nothing but a scam designed to allow Wall Street to steel what middle class wealth remains faster, bolder and in ever greater amounts, as the point where the system breaks is now months away, and the Wall Street-DC joint venture is all too aware. As a result all must be done to allow theft to be bigger than ever, all the while the "regulator" is no longer held responsible for looking the other way.

From: Ron Paul

Link to Ron Paul

Congressman Ron Paul yesterday introduced the SEC Transparency Act of 2010 (HR 5970), a bill designed to force greater transparency in the Securities and Exchange Commission. The bill is designed to repeal the amendments made by section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to the confidentiality of materials submitted to the Securities and Exchange Commission.

Recent news reports have publicized the little-noticed provision in the recently-passed financial reform package that the Securities and Exchange Commission has used to deny requests for information under the Freedom of Information Act. Paul’s bill would repeal the provision in the newly-passed legislation the SEC has used to deny FOIA requests.

“It is unfortunate, yet not unexpected, that legislation touted as fixing problems with the banking system actually makes them worse and provides more cover and power for organizations that failed us like the SEC and the Fed,” Paul said in introducing the bill. “I expect in the coming weeks and months that many more harmful provisions like this will come to light and it will take quite a bit of work to undo the damage from this massive and misguided legislation.”

What is unclear is whether the Ron Paul law prohibts SEC staffers to spend 40 hours per week to browse porn on the taxpayer's dime, while sending out their resumes to assorted HFT (high frequency trading) outfits, where they will participate in the same bid stuffing crime first hand, instead of just looking away from it when the latest bribery check clears.

On behalf of grandchildren everywhere, thank you ZERO HEDGE

Zero Hedge Link