Corina Zaragoza 11:30 a.m., Sept. 1
Dodd-Frank Gives SEC Exemption from Providing Documents
San Diego attorney Gary Aguirre has an article in the September edition of "Wall Street Lawyer," a publication for securities attorneys. Aguirre describes how the Dodd-Frank Act gives the securities agency "unique FOIA [Freedom of Information Act] exemptions available only to the SEC." The agency, while denouncing secrecy and lauding full disclosure, managed to maneuver Section 9291 into the Act, which provided it protection when lawyers seek agency documents. Aguirre thinks his own use of FOIA in his case against the SEC may have prompted the SEC's desire to protect itself. As told on this blog many times, Aguirre, while working for the SEC, wanted to interview the head of Morgan Stanley over possible insider trading in connection with the Pequot hedge fund. The agency reminded him that the mogul had clout. It fired Aguirre. He fought. Two Congressional committees and the SEC's own internal watchdog said Aguirre was right and the SEC wrong. Finally, the hedge fund that Aguirre suspected of insider trading was caught in the act (thanks to evidence provided by Aguirre), and heavily fined. It shut down. The SEC bureaucrats went unpunished. Aguirre sued the SEC and got a good settlement. I must repeat one more time: the SEC was founded in the 1930s to protect the public from Wall Street predators. Now it protects Wall Street predators from the public. It hasn't changed significantly under the Obama administration. One of the key methods by which Wall Street controls the SEC is through the "rotating door" phenomenon. An SEC lawyer is assigned to pursuing a crook. The crook's law firm offers the SEC lawyer a job for $2 million a year. Its client gets off.