Did the SEC improperly destroy documents?

The Securities and Exchange Commission is under scrutiny for allegedly destroying document without authorization from the National Archives.

By Vyomika Jairam
Federal News Radio

The Securities and Exchange Commission is under scrutiny for allegedly destroying records without authorization.

A whistleblower in the agency’s enforcement division reached out to Sen. Chuck Grassley (R-Iowa) alleging that documents related to thousands of preliminary investigations had been destroyed.

Darcy Flynn, a lawyer within the SEC’s enforcement department who helped manage the agency’s enforcement records also reached out to the National Archives. NARA says they reached out to the SEC a year ago after they heard the allegations but said in a statement that they were “satisfied that the destruction has stopped.”

A Rolling Stone magazine article about Flynn then prompted Grassley to reach out to SEC Chairman Mary Schapiro for more information.

The destroyed documents are reports from MUIs – Matters Under Inquiry – which is the preliminary step to a full investigation. According to Flynn, a directive on the SEC’s intranet mandated that all documents from terminated MUIs (preliminary inquiries that do not result in full investigations) be destroyed.

Rolling Stone reports that Flynn has told officials he believes the directive dates back to as early at 1993. Among the records destroyed are MUIs reviewing AIG, Morgan Stanley, Bernie Madoff and Lehman Brothers.

Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.

    Amelia Brust/Federal News Networkmanagement workforce

    More guardrails needed for any potential agency relocations, federal advocates say

    Read more
    (Getty Images/iStockphoto/wildpixel)Whistle blower or whistleblower concept as a symbol of a secret informer agent posing as an employee with his cast shadow of a whistle as a metaphor for inside infoermation on misconduct in a 3D illustration style.

    Justice Department’s new whistleblower program

    Read more