Ted Kaufman - United States Senator for Delaware

Obama Approves Bill to Delete SEC FOIA Exemptions Under Dodd-Frank

Source: Bureau of National Affairs

October 6, 2010

President Obama Oct. 4 signed a measure repealing certain exemptions to the Freedom of Information Act provided to the Securities and Exchange Commission in recent financial reform legislation.

Congress cleared the bill, S. 3717, during the week of Sept. 20 out of concern that Section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act provided a “blanket exemption” for the SEC from FOIA requirements (184 DER EE-15, 9/24/10).

The bill was sponsored by a bipartisan group of senators, including Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.), and Sens. Charles Grassley (R-Iowa), John Cornyn (R-Texas), and Ted KAUFMAN (D-Del.). On Sept. 21, following the Senate's unanimous vote to send the bill to the House, Leahy contended that the government's legitimate right to protect confidential records must be balanced with the public's right to know.

SEC Chairman Mary Schapiro, however, urged Congress against taking such action. According to Schapiro, Section 929I provides an essential tool and its removal would undermine her agency's ability to efficiently conduct examinations of registered entities (179 DER EE-17, 9/17/10). Without the flexibility of Section 929I, Schapiro warned that the agency will have to resort to subpoenas. In some cases, firms, such as hedge fund advisers, are reluctant to turn over strategic, valuable, proprietary information to SEC examiners for fear that it eventually may be leaked to the public.

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