FOX Business broke the news last week that the Securities and Exchange Commission, thanks to a provision in the financial reform package recently signed into law, gained an exemption from honoring Freedom of Information Act (FOIA) requests. On Monday the SEC defended itself, saying it is taking steps to ensure it does not abuse these new-found powers.
Kicking off the month of August, the Dow soared 208 points thanks to strong earnings from financial companies and better-than-expected manufacturing data. The average closed at 10674.
The major U.S. automakers reported that July sales rose from a year ago. And that’s saying a lot, considering the government’s “Cash for Clunkers” program was going on in July 2009.
Meanwhile, FOX Business learned that Goldman Sachs (NYSE:GS) is considering spinning off its private equity business. The recently signed financial reform legislation restricts the ownership banks can have on private equity and hedge funds.
A day after a judge ruled the SEC cannot use its FOIA exemption power retroactively, House Financial Services Committee Chairman Barney Frank said he plans on holding hearings on this provision of financial reform. “Given the serious questions that have been raised about the impact this provision could have on access to important information about financial transactions, I will hold a hearing of the Financial Services Committee when Congress returns in September,” Frank said Wednesday.
Barney Frank isn’t the only lawmaker concerned with these SEC issues. Four prominent Senators introduced a bill Thursday that would strike down this provision in the financial reform legislation. Senators Patrick Leahy, John Cornyn, Ted Kaufman, and Chuck Grassley put together a new bill, which would strip this power away from the SEC, if passed.
Meanwhile, the White House said it is not considering changing its policy toward the struggling mortgage giants Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE). This might seem ironic to many, who consider these two government-sponsored entities to be one of the primary causes of the financial meltdown, which the financial reform package was supposed to prevent from happening again. Spokesman for the Treasury Andrew Williams said, "The administration is not considering a change in policy in this area.”
Ending the week on a sour note, the job situation does not seem to be getting any better, as the economy shed 131,000 jobs in July. This is according to a report from the Labor Department. The unemployment rate held at 9.5%, despite economists’ expectations that it would rise to 9.6%. Counter-intuitively, a rise at this point would suggest that more people are actively looking for jobs, as the measurement does not include people who have given up on their search.