SEC chief defends FOI provision

Securities and Exchange Commission Chairman Mary Schapiro said a controversial section of the new Wall Street reform bill dealing with Freedom of Information Act requests will sharpen its ability to investigate wrong-doers, reports Dunstan Prial of Fox Business.

The provision has drawn criticism from business journalists, who say that it limits their ability to get information from the regulatory agency for stories.

Prial writes, “Schapiro said the SEC will not use the law to cover up its mistakes. To the contrary, she said, the agency has issued guidance to ensure that its employees remain committed to ‘principles of open government.’

“The law allows the SEC to reject Freedom of Information Act requests for documents obtained while examining regulated firms, according to Schapiro’s prepared remarks.

“Rather than give the SEC greater powers, the provision merely clarifies an existing FOIA exemption for ‘financial institution’ records, Schapiro said. Without the new clause, the SEC might have been forced to release documents collected while inspecting credit-rating companies and municipal-bond advisers.

“Since Fox Business Network first reported on the new clause in July, the SEC has argued that it will help the SEC in its efforts to expand its surveillance and investigations by allowing information obtained from banks and other financial institutions to remain confidential.”

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