New FinReg Law Exempts SEC From Public Oversight

Meredith Jessup | July 28, 2010 10:10 AM

Some pretty disturbing relevations out this morning from Fox Business, a network who tried to request formerly-public information from the Securities and Exchange Commission.

The response from the SEC? Oh, we no longer have to answer to people like you:

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

Raise your hand if you trust Congress and federal agencies to hold the SEC accountable... Anyone?

The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network. Steven Mintz, founding partner of law firm Mintz & Gold LLC in New York, lamented what he described as “the backroom deal that was cut between Congress and the SEC to keep the SEC’s failures secret. The only losers here are the American public.”

If the SEC’s interpretation stands, Mintz, who represents FOX Business Network, predicted “the next time there is a Bernie Madoff failure the American public will not be able to obtain the SEC documents that describe the failure,” referring to the shamed broker whose Ponzi scheme cost investors
billions.

The SEC didn’t immediately respond to a request for comment.