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Repeal of FOIA exemption for SEC passes both houses of Congress

Securities and Exchange Commission (SEC) logoThe U.S. House joined the Senate today in voting to repeal the exemption to the Freedom of Information Act (FOIA) that the Securities and Exchange Commission (SEC) received in the Dodd-Frank financial-reform law. Bloomberg News reports:

“The financial-overhaul law signed by Obama in July says the SEC doesn’t have to release records gathered for ‘surveillance, risk assessments, or other regulatory and oversight activities.’ Lawmakers criticized the SEC for seeking the FOIA provision, saying the agency might use the authority to limit transparency and hide regulatory failures.

“SEC Chairman Mary Schapiro, testifying before Congress last week, said her agency sought the measure to encourage money managers and brokerages to turn over documents during inspections. Firm are sometimes hesitant to release information out of concern that it will later be made public through a FOIA request, she said.”

Fox Business first raised concerns about the exemption, but many organizations took issue with it, including the Society of American Business Editors and Writers, the Project on Government Oversight, OpenTheGovernment.org and the Sunlight Foundation.

“This is a big win for open government and accountability. It is especially a victory for defrauded investors, the media and whistleblowers,” said Danielle Brian, executive director of the Project on Government Oversight, in a statement.

In Basics, Investigation, Investing | Banking.

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