The Probes Reporter™ FOIA Update is designed to let you know of new documents and information we recently received from the SEC in response to our Freedom of Information Act requests, appeals, and follow-up activities. 

At present, this report is posted in real-time for free.  In the future, and by necessity, Probes Reporter will likely become a paid subscription service.  If we move toward a paid service, you should expect both timing and access to our content that you enjoy today for free will gradually change.

Probes Reporter FOIA Update

AECOM Technology Corporation (ACM):  Documents received from a previously undisclosed probe that is now closed. 

Based on information and records now provided to us, it appears that sometime around Nov-2012 AECOM was involved in a formal SEC investigation the company did not disclose.  It ended in March-2014.

We have no idea what it was about nor do we have enough information to even assess if investors might deem in meaningful.  The only information/records we have from this closed probe of AECOM are the following --

• On 30-Nov-2012 outside counsel for the company wrote a letter to the SEC requesting a copy of the Formal Order of investigation related to this probe.  Though we requested it too this spring (2014), the SEC neither acknowledged nor provided us with that Formal Order. 
   
• We were also provided with a Case Closing Report dated 24-Mar-2014.  See below, What is a Case Closing Report?
   
• Finally, we were informed AECOM is attempting to block your access to an estimated 5,565 pages of records produced to the SEC between Aug-2013 and Nov-2013 as part of this investigation.  They did this by claiming every word on every single one of those pages is confidential.  We don't buy it and are pushing back. 
  
  In our experience, this is a sufficiently large volume of records as to have us question the veracity of the confidentiality claims; that is, we suspect AECOM made sweeping claims of confidentiality because it really does not want you to know what it's formal SEC probe was about.  Hey, at least they are consistent.

What is an SEC Case Closing Report?

The name "Case Closing Report" sounds impressive enough.  However, in reality it is just the cover page for something called a "Case Closing Recommendation."  Despite our repeated efforts, the SEC adamantly refuses to release its Case Closing Recommendations.  All of the administrative appeals we file to get them are denied.  We only get the cover pages, a.k.a., Case Closing Reports.

Where the Case Closing Report identifies the name of the Matter that was investigated and the date it ended, it tells you nothing else of analytical value.  The Case Closing Recommendation, however, tells you a lot more.  The full report says why the investigation was opened, what took place, and what was found.

One of the reasons the SEC denies our requests for Case Closing Recommendations is they claim they are "privileged". We don't buy this excuse for a second.  Neither should you.

This is because the SEC uses a dodge wildly popular among government agencies to block your access to these reports.  Every page, every single word; Nothing from a Case Closing Recommendation is ever released.

Here's how it works:  You make a FOIA request.  If the government just doesn't want to release the records, but otherwise has no legitimate reason under law to deny your access, they will then cite Exemption 5 of the FOIA to deny your request.

Outside of government circles we commonly refer to Exemption 5 as the "Withhold It Because You Want To Exemption".  This link takes you to a story detailing efforts by the US Senate Judiciary Committee to rein-in excessive use of Exemption 5.  This Justice Department link gives you a legal overview of Exemption 5.

It takes tenacity, time, and money to push back on any FOIA exemption.  The government knows few can do that.  So the SEC dodges away, keeping you from seeing its Case Closing Recommendations.  This is true for any and all of its closed investigations.  We are sharply critical of the SEC for this blatant lack of transparency.

In the meantime, public companies continue to say whatever they want about their investigations.  Sometimes they say nothing.  In nearly 30 years of reviewing SEC filings and records acquired under the FOIA, we have yet to find a case where the SEC took a company to task on inadequate disclosures related to the risk posed by an SEC investigation.

So long as public companies know a Case Closing Recommendation won't come out later, they have no incentive to disclose more. As a result, investors are kept in the dark.

Imagine what would happen if the SEC started releasing those reports that tell you exactly why the investigation was opened, the work performed and the conclusions reached?  Public companies would likely start disclosing more.  The SEC itself would be held more accountable.  Dare we say it?  Perhaps, just perhaps, even public confidence in capital markets would be restored.   It’s time.

Notes: The SEC did not disclose the details on investigations referenced above. The SEC reminds us that its assertion of the law enforcement exemption should not be construed as an indication by the Commission or its staff that any violations of law have occurred with respect to any person, entity, or security.  New SEC investigative activity could theoretically begin or end after the date covered by this latest information which would not be reflected here.

To learn more on our process and what our findings mean, click here.