In an August 2, 2010 blog, our firm’s fearless leader, David B. Cosgrove, wrote about the SEC’s stingy grants to information requests pursuant to the Freedom of Information Act (“FOIA”). Our firm takes the stance that industry confidential information is certainly worth protecting, but protecting it cannot go so far as to enfeeble the right to access provided by the FOIA. Well, it seems the Senate is finally taking heed and agreeing with us.
On Wednesday, September 22, 2010, the Senate Judiciary Committee unanimously approved a bill (S. 3717) that repeals Section 929I, of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”), which permits the SEC to withhold certain records from the public. The House concurred the following day and the legislation is awaiting signature from President Obama.
Section 929I states that the Securities and Exchange Commission (“SEC”) cannot be compelled by FOIA requests to disclose records or other information obtained from its registered entities if this information is used for “surveillance, risk assessments, or other regulatory oversight activities” as defined by the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1941.
Proponents of Section 929I fought to keep this language in the Act and justified their position by stating that the Act’s language codified existing practice and was intended to guarantee that certain protections already given to financial institutions will be extended to other types of entities.
However, the Senate stated that it voted to repeal this Section in order to “restore stability and accountability to [the] financial system.” The Senate further justified its action by stating that exemptions to the FOIA’s disclosure requirements should be narrowly applied to uphold the public interest is transparency and accountability. Cosgrove Law, LLC is excited that the Senate has finally tuned into its blog and is taking it seriously.