SEC vs. the media, round two

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission was not seeking a blanket exemption from public information laws, when it asked Congress to include a little known provision in the Wall Street reform law, the agency said in a letter to lawmakers Friday.

Journalism industry groups have been up in arms about the wording of section 929I of the law, since Fox Business reported on Wednesday that the SEC tried to block one of its requests for internal documents invoking the new provision.

In what is widely considered to be a crucial part of the media's role as a check on government, journalists will often submit requests under the Freedom of Information Act, or FOIA, to obtain internal documents from federal agencies.

By partially exempting the SEC from FOIA, the new Wall Street reform law seemed to fly in the face of the so-called "transparency" championed by both President Obama and the legislators who wrote the law, journalism groups and Fox Business said.

But in letters to Sen. Christopher Dodd, D-Conn., and Rep. Barney Frank, D-Mass., who sponsored the bill, SEC chairman Mary Schapiro said the exemption is critical to the agency's ability to conduct compliance investigations.

Journalism groups including the Society of American Business Editors and Writers and the Reporters Committee for Freedom of the Press were concerned about the law's language that said it would exempt the SEC from disclosing documents related to its "surveillance, risk assessments, or other regulatory and oversight activities."

Since the SEC is a regulatory agency, that broad wording had those groups wondering if the agency could interpret the law to block essentially all requests for information.

The SEC responded to those concerns in its letters to Dodd and Frank on Friday, saying the exemption was merely meant to apply to documents related to routine examinations, in which companies will often reveal "sensitive and proprietary information" including customer records, trading algorithms and company strategies.

Without the exemption, the SEC said many companies would refuse to cooperate with such examinations out of fear that their private information may be made public. The FOIA exemption makes it harder for companies to refuse to participate in the examinations, the SEC.

"It will allow the SEC to gain access in a timely fashion to information and data that it otherwise may not receive, thereby further enhancing our ability to identify fraud and root out wrongdoing," Schapiro said in the letters.

Schapiro also said the agency will publish guidelines on its Web site to ensure its staff uses the provision only as intended, and not as a "blanket" exemption. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.30%4.25%
15 yr fixed3.29%3.32%
5/1 ARM3.45%3.63%
30 yr refi4.27%4.20%
15 yr refi3.26%3.24%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,086.93 -26.61 -0.16%
Nasdaq 4,472.60 16.58 0.37%
S&P 500 1,987.47 3.94 0.20%
Treasuries 2.46 -0.00 -0.08%
Data as of 2:53pm ET
Company Price Change % Change
Apple Inc 97.55 2.83 2.99%
Facebook Inc 71.02 1.75 2.53%
Microsoft Corp 44.84 0.02 0.03%
Bank of America Corp... 15.54 0.02 0.13%
Juniper Networks Inc... 22.49 -2.33 -9.37%
Data as of 2:38pm ET

Sections

General Motors recalls another 718,000 U.S. cars to deal with variety of problems including seat height adjustments, welds and power steering. More

Belgian holdings of U.S. debt have skyrocketed in the last year, though many suspect China is the reason why. More

As 65,000 IDF reservists are tapped to serve in Gaza, Israeli's tech community tries to maintain business as usual, amidst bombs, sirens and employees called to war. More

Court documents show big support from Detroit employees and retirees for a turnaround plan that should help the city emerge quickly from bankruptcy. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.