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Dodd-Frank Protects SEC from Releasing Information

The Securities and Exchange Commission was born in the 1930s to protect the public from Wall Street predators. Now it protects Wall Street predators from the public. Examples abound: Bernard Madoff, Pequot, Bear Stearns, etc. Now, San Diegan Gary Aguirre, who personally forced the SEC, kicking and screaming, into pursuing insider trading by the Pequot hedge fund, is pointing out that tucked away in the Dodd-Frank financial reform act that has passed is a measure barring the public's access to SEC records of situations in which the agency derailed an investigation. Although Dodd-Frank sings the praises of transparency and full disclosure, Section 9291 exempts the SEC from Freedom of Information Act (FOIA) access to records under three important securities acts. Already, the SEC releases information in only 13% of FOIA requests, versus 60% in other agencies, says Aguirre.

On June 29, the SEC agreed to pay $775,000 to Aguirre. It had fired him for wanting to pursue Wall Street powerhouse John Mack for possibly passing inside information to the hedge fund Pequot. Two Senate committees and the SEC's inspector general studied the matter and concluded that the SEC was wrong and Aguirre was right. Then Aguirre kept gathering information on Pequot until May of this year, when the SEC finally nailed the hedge fund, which forfeited $28 million. But Mack is still free, and powerful as ever.

Aguirre had spent three years and thousands of dollars in legal fees to exonerate himself. "Under the SEC's broad new exemption, a court would likely deny access to the Pequot records which I obtained through the court proceedings," he says.

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The Securities and Exchange Commission was born in the 1930s to protect the public from Wall Street predators. Now it protects Wall Street predators from the public. Examples abound: Bernard Madoff, Pequot, Bear Stearns, etc. Now, San Diegan Gary Aguirre, who personally forced the SEC, kicking and screaming, into pursuing insider trading by the Pequot hedge fund, is pointing out that tucked away in the Dodd-Frank financial reform act that has passed is a measure barring the public's access to SEC records of situations in which the agency derailed an investigation. Although Dodd-Frank sings the praises of transparency and full disclosure, Section 9291 exempts the SEC from Freedom of Information Act (FOIA) access to records under three important securities acts. Already, the SEC releases information in only 13% of FOIA requests, versus 60% in other agencies, says Aguirre.

On June 29, the SEC agreed to pay $775,000 to Aguirre. It had fired him for wanting to pursue Wall Street powerhouse John Mack for possibly passing inside information to the hedge fund Pequot. Two Senate committees and the SEC's inspector general studied the matter and concluded that the SEC was wrong and Aguirre was right. Then Aguirre kept gathering information on Pequot until May of this year, when the SEC finally nailed the hedge fund, which forfeited $28 million. But Mack is still free, and powerful as ever.

Aguirre had spent three years and thousands of dollars in legal fees to exonerate himself. "Under the SEC's broad new exemption, a court would likely deny access to the Pequot records which I obtained through the court proceedings," he says.

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Comments
8

ya know i expect to see ya someday arriving in blue spandex and a big red cape Don

i'm thinking of nicknaming u Underdog...cause that's who u try to help the most to see the light of the corruption all around us

those who protect them r cohorts in crime

Aug. 5, 2010

Response to post #1: The lawyers, accountants, and regulators who knowingly assist in pulling off white collar crime deserve the same treatment the perpetrators get. Best, Don Bauder

Aug. 5, 2010

You do us a service in pointing out Congress' role in financial fraud cover-ups due to these SEC loopholes for tossing Freedom of Information Act requests into the SEC's trashbag-lined file on the floor.

Aug. 5, 2010

Response to post #3: The spirit of FOIA is not observed in Washington, DC. Best, Don Bauder

Aug. 5, 2010

What else can be expected from a 2,000+ page bill co-written by a senator who is "retiring" because of special favors he received from the financial industry: a "Friend of Angelo VIP" loan and a special deal on a vacation home in Ireland. Lets see what plum lobby job Dodd lands after he ends his "public service."

These "landmark" 1,000+ page bills may do some good to the general public, but they will unquestionably do much good to the well-connected in private industry and in government.

Aug. 5, 2010

Response to post #5: Yes, Dodd will almost certainly wind up as a very highly-paid lobbyist. Best, Don Bauder

Aug. 6, 2010

They're used to the likes of us kicking and screaming. We are but gnats, and that's nothing gnu, but we must persist.

Frankly, I wonder what Barney is up to . . .

Aug. 10, 2010

Response to post #7: Gnats don't kick very hard, but they can be a helluva nuisance. Best, Don Bauder

Aug. 10, 2010

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