Without Freedom of Information, Who Will Keep the Regulators Honest?
Posted by Larry Doyle on September 16, 2010 7:36 AM |
Information is everything.
Without access to information, how can we ever learn the full and true stories currently buried beneath our financial and economic landscape? Unearthing information through every means possible is a tedious — but necessary — pursuit if we are ever to learn our mistakes and failings of the past so that we can improve our economic standing in the future.
While those in Washington would maintain that they are charged with unearthing this information, there is little doubt that the American populace at large has little confidence in the rigor of that pursuit. The greatest of Jesuit principles instilled in me from my days at Holy Cross is the ‘never ending pursuit of the truth.’ That pursuit brings us today to a story which has received significant coverage here at Sense on Cents, but not nearly enough coverage elsewhere. Let’s navigate as The Wall Street Journal writes, SEC Looks to Allay Fears on FOIA Limits:
The Securities and Exchange Commission will limit its staff’s ability to keep certain documents from public hands, a bid to appease members of Congress who say a new law allows too much secrecy.
Which documents? If we knew the exact documents, wouldn’t we learn the true intent and desires of the SEC and those in Congress who passed the initial legislation?
The financial-regulation law passed in July allows the SEC to keep private information it gathers from brokers and investment advisers for purposes such as surveillance and risk assessment.
Critics say the law’s limits on Freedom of Information Act requests could shield thousands of documents from public scrutiny, and lawmakers have introduced four bills in Congress to narrow the SEC’s ability to reject requests.
Here we go. Ms. Schapiro, President Obama, and so many others in Washington can talk all they want about how they believe in greater transparency and disclosures, but this is where the rubber meets the road. Have we ever experienced a situation in which we say we learned too much information? In light of the financial meltdown on Wall Street and the resulting economic crisis throughout our nation, how can our regulators and legislators remain focused on shielding documents rather than releasing them? For whom do these regulators work? Wall Street, or our nation at large? Let’s navigate further.
SEC Chairman Mary Schapiro on Wednesday released new guidance for the SEC’s staff a day before she is set to testify at a House committee hearing.
How timely. Mary ‘beats the clock’ so she can ‘grab cover’ in front of Congress. Call me suspect.
The SEC has said that the law was intended to codify existing practice and was meant to ensure that protection already afforded to financial institutions will extend to other entities in the financial industry that may not be clearly recognized as “financial institutions.”
The guidance says staff should use the new law only for information the SEC obtains through examinations of entities it regulates, and only in cases where the information would already be protected if the entity was clearly a financial institution.
Oh boy, here we go. Let’s stop right here. “The guidance says staff should use the new law only for information the SEC obtains through examinations of entities it regulates”…!!
Hey now!! Who might this be? Can you say the Financial Industry Regulatory Authority, or FINRA? Yes, that very entity formerly run by Mary Schapiro herself. Who on the House Committee will have the balls and the backbone to ask Mary if the new law literally and effectively provides cover for FINRA and in turn Mary herself? Anybody? Anybody? Bueller…?
Sense on Cents is asking.
I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.