Allergan Removed From Watch List | Access to Records on Older SEC Probe Denied


Based on new information received from the SEC, we are removing Allergan from our Watch List.  The SEC also denied our access to documents that would explain what took place in an SEC investigation which closed on 02-Jan-2013.

"Files Do Not Contain Information Responsive to Your Request"

The SEC had previously cited the "law enforcement exemption" of the FOIA as basis to block our access to the detailed records we sought on Allergan.  As a matter of law, the SEC acknowledged some sort of investigative activity. The SEC did not disclose the details of that investigation. 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.

At the time of the SEC’s earlier response to us, we found no clear disclosures of SEC investigative activity made by Allergan.  We then added it to the Probes Reporter Watch List as companies with “Possible Undisclosed SEC Investigations”.

In response to an appeal we filed with the SEC's Office of the General Counsel, we were informed there are no records responsive to our request.  The SEC's letter was dated 01-Jul-2014.  While the SEC’s letter was not specific, we were told this could mean:

  1. There was an investigation that concluded in the past but the SEC’s records were not current at the time of our request. 
  2. Alternatively, there may be an investigation involving not the company, but some other person or entity and the company was incidentally named or tangentially listed.

Access to Case Closing Recommendation Denied

The SEC also denied our appeal aimed at getting 3 pages forming the so-called Case Closing Recommendation pertaining to an investigation of Allergan that ended 02-Jan-2013. This occurred in that same letter of 01-Jul-2014 cited above.

The history of this denial goes back to a letter to us dated 06-Mar-2014 in which the SEC acknowledged the existence of some responsive documents on Allergan but declined to produce them citing the “deliberative process privilege” and “attorney work product privilege” of Exemption (b)(5) of the Freedom of Information Act. 

Again, the records denied to us were three pages forming the Case Closing Recommendation for an SEC probe that ended 02-Jan-2013. Those very few Case Closing Recommendations we've managed to see over the years provide an excellent summary of what took place in an SEC probe.  Despite spending untold resources on its investigations, the SEC is firmly entrenched in its view the public should not be able to actually know what took place in them.

In appealing the denial we argued, in part, that the law is clear that “blanket secrecy” is the exception – not the rule – regarding FOIA disclosures; and second, the law is well-settled that the agency has the obligation of reviewing the documents for which an exemption is claimed and in the case of Exemption (b)(5), making a good faith effort to segregate factual assertions (which must be disclosed) from any genuine deliberative discussion or attorney thought processes and legal analysis (which may be properly withheld).

Our appeal failed.  The SEC still refuses to release the Case Closing Recommedation on Allergan's investigation ending 02-Jan-2013. 

The US Senate Takes Notice

The deliberative process privilege is an exemption that we and many other reputable entities assert is overused by the government as means to deny access to records they simply do not want people to see, know about, or have access to. 

The abuses of the deliberative process and related privileges have risen to the point that Senators Leahy (D) and Cornyn (R), ranking members of the Senate Judiciary Committee, co-sponsored the FOIA Improvement Act of 2014 in late June in an attempt to rein-in the overuse of the deliberative process privilege by the government. 

Using the Allergan denial as an example, we've reached out to these senators, as well as Senators Klobuchar (D) and Franken (D) from Minnesota (our home state) to express our support for this important legislation.  We are very active in this arena and encourage our readers to join us.