New law exempts SEC from FOIA

A provision by the newly signed financial-reform bill has exempted the Securities and Exchange Commission (SEC) from disclosing information to the public, even under the Freedom of Information Act. According for Fox Business:

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.” Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings.”

The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network. Steven Mintz, founding partner of law firm Mintz & Gold LLC in New York, lamented what he described as “the backroom deal that was cut between Congress and the SEC to keep the SEC’s failures secret. The only losers here are the American public.”

This is by far one of the most startling developments for transparency this year. The SEC is one of America’s largest agencies and now it does not have to disclose public data when citizens make public inquiries. Fox was able to quote three cases exposing SEC wrongdoing by FOIA in 2009 alone, and it’ll be unknown how much vital information will remain missing in the future. This marks a huge step backwards for the transparency movement.