U.S. SEC says probes hindered by lack of access to stored emails

Reuters News
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Posted: Sep 16, 2015 12:59 PM

By Sarah N. Lynch

WASHINGTON (Reuters) - Active investigations into foreign bribery, accounting fraud and manipulation are potentially being hindered amid an ongoing legal debate over whether U.S. enforcement agencies can get archived emails from the cloud without obtaining a warrant, a top U.S. securities regulator said on Wednesday.

Andrew Ceresney, the enforcement director for the Securities and Exchange Commission, told a U.S. Senate committee the SEC is refraining from issuing subpoenas to internet service providers in order to obtain emails for active probes.

"I can't talk about the details of ongoing investigations, but I can say there are a number of investigations in which, if we were exercising our authority ... to obtain emails from (internet service providers), we would do that," he told the Senate Judiciary Committee.

Ceresney's comments came in response to renewed efforts in Congress to modernize an outdated 1986 law designed to protect the privacy of Americans' digital communications.

That law allows government agencies to obtain emails stored on the cloud that are more than 180 days old directly from an internet service provider with just a subpoena, a lesser standard than a warrant, which must be approved by a judge.

However, a 2010 opinion in the U.S. Sixth Circuit Court of Appeals found the Justice Department's use of a subpoena to obtain emails on the cloud violated constitutional protections against warrantless searches.

Since then, service providers like Google have refused in many cases to provide emails without warrants.

A draft bill in the Senate to update the 1986 privacy law would require civil agencies like the SEC to obtain a warrant in order to access emails stored on the cloud.

The SEC, the Justice Department, and the Federal Trade Commission have opposed the move, saying it makes no sense because civil agencies don't have criminal investigative powers and cannot obtain warrants.

"Civil investigators enforcing civil rights, environmental, antitrust and a host of other laws would be left unable to obtain stored communications content from providers," said Elana Tyrangiel, a principal deputy assistant attorney general for the Justice Department.

Groups like the American Civil Liberties Union have urged Congress to require warrants, warning that not doing so would allow civil agencies to obtain emails under a lesser standard and share them with criminal investigators.

Ceresney said he does not believe the 2010 court decision prevents the SEC from obtaining emails stored on the cloud because that case involved a criminal grand jury matter.

In an abundance of caution, however, Ceresney and a top FTC official said their agencies have since avoided making requests to service providers directly.

Ceresney proposed a compromise measure to lawmakers, in which targets of civil probes could get a chance in court to challenge subpoenas issued to service providers for access to their emails.

(Reporting by Sarah N. Lynch; Editing by Paul Simao)