House passes bill taking away SEC's FOIA exemption

The House of Representatives passed a bill Thursday that would eliminate the Freedom of Information Act exemption for the Securities and Exchange Commission included in this year’s financial services reform regulation.

The exemption was cited this summer by the SEC in denying a records request by Fox Business Network. Since then, business journalism groups such as the Society of American Business Editors and Writers and Bloomberg News editor in chief Matthew Winkler have spoken out against it.

“We cannot allow the SEC, a regulatory body that failed to catch Allen Stanford’s fraud and Bernie Madoff’s ponzi scheme, to operate in secrecy,” said Rep. Darrell Issa (R-Calif.) in a statement.  “The SEC exists in no small way in order to create transparency and honesty of information from public companies so that we can have public confidence and trust in them.  By repealing this section, we have reaffirmed our commitment to ensure that the SEC will be held to the highest possible standard of accountability and transparency.”

A similar bill has already passed the Senate.

“Only after Fox Business News brought its lawsuit did people become aware of the provision’s negative implications,” said House financial services committee Chairman Barney Frank (D-Mass.) in a statement. “We immediately scheduled a hearing and got bipartisan agreement that a legislative remedy was necessary. Our Senate colleagues acted first with legislation to solve the immediate problem, and we decided that the best way to proceed was to concur with the Senate so that the President could sign legislation that solves the immediate problem.”