Two days after FOX Business broke the news that the Securities and Exchange Commission was now exempt from honoring Freedom of Information Act requests from the public, the agency said it was taking steps to not abuse its new-found powers.

In a letter to Sen. Christopher Dodd, SEC chairman Mary Schapiro disputed FOX Business’ contention that the SEC is “exempt” from FOIA and that the new provisions were “hidden” in the 2,300-page financial reform law.

However, Schapiro then goes on to say that “existing FOIA exemptions were insufficient to allay concerns due in part to limitations in FOIA (including that certain existing exemptions may not apply to all registrants) and the fact that FOIA exemptions are not applicable when the SEC must respond to a subpoena (as either a party or non-party). The Commission's resulting inability to obtain this information hindered our capacity to enforce the securities laws and protect investors.”

What’s more, Schapiro also said she will ask the Commission to issue guidance to the agency’s staff that “ensures the provision is used only as it was intended.”

Earlier Friday, Delaware Sen. Ted Kaufman said he will “work with the SEC and other Senators to craft a more reasonable approach that satisfies the legitimate concerns of the SEC without sacrificing the goals of transparency and public accountability.”

As first reported by FOX Business, 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.

 

 

 

 

 

 

 

 

 

Mary Shapiro's Letter to Sen. Chris Dodd on SEC FOIA Exemptions