Probes Reporter Submits Report to Congress on SEC's Failures to Comply with Freedom of Information Laws


In response to queries from the House Committee on Oversight & Government Reform, this week Probes Reporter LLC filed a nine-page report detailing the Securities and Exchange Commission’s refusal to abide by the Freedom of Information Act (“FOIA”).  The SEC's willful and ongoing failures to comply with the FOIA tarnish its role as the self-proclaimed "investor's advocate". 

Our report, titled A Failure of Transparency: The Securities and Exchange Commission and a Pattern and Practice of FOIA Violation details ways in which the SEC overtly hides critical information about investigations of publicly traded companies.  Supported by documentary evidence also submitted to Congress, the Probes Reporter report highlights:

  • The SEC’s refusal to disclose “Case Closing Recommendations,” which are government documents that summarize why an SEC investigation was opened, the investigator’s factual findings and the conclusions reached. 
  • Repeatedly making false or incomplete statements regarding the existence of documents related to SEC investigations.
  • Blatant disregard for the President’s instruction to federal agencies to disclose documents that are within the agency’s discretion to do so.

"Over the years I have heard from many of you that the FOIA process is broken," House Oversight Committee spokesperson Melissa Subbotin Sillin wrote in an email to reporters. "Many requests go unaddressed, come back heavily redacted for no apparent reason, or are ignored altogether. Both majority and minority committee members are coming together to do a deep analysis to find where the problems exist and what fixes need to be made.”

Probes Reporter founder John P. Gavin, CFA, told The Economist last year that “If the SEC simply complied with the FOIA, transparency would be improved. Investors in capital markets would benefit as regulators and the regulated would be held more accountable.”

The report and exhibits, which are authorized for public distribution, are posted here.