Watchdog sues SEC in push for FOIA documents

A government watchdog group is suing the Securities and Exchange Commission (SEC) for not responding to Freedom of Information Act requests.

Specifically, the group Citizens for Responsibility and Ethics in Washington (CREW) is seeking documents indicating how much the SEC is doing to overhaul its enforcement arm, after the agency came under fire for failing to detect some of the largest frauds perpetrated during the financial crisis.

CREW sent a FOIA request to the SEC in June demanding documents detailing what the SEC has done to reform its enforcement work following an internal critique by its inspector general, as well as outside consultant, The Boston Consulting Group.

The SEC acknowledged it received the request in a letter, but the complaint states that CREW has not received a single document from the agency, or provided a date by which it plans to meet that request.

Under law, government agencies must acknowledge receipt of a FOIA request within 20 days; fulfilling those requests can typically take months, if not years. Lawsuits are often filed in an effort to speed up the process.

The suit is the second CREW has filed against the SEC in recent weeks. On Sept. 27, the group sued the agency and its chairman, Mary Schapiro, for destroying documents tied to preliminary investigations. The watchdog charged the SEC repeatedly violated the Federal Records Act by routinely destroying documents tied to early queries that did not develop into full-blown investigations.

The National Archives and Records Administration chastised the SEC in August, saying it did not have the authority to destroy the documents. The SEC says it has since stopped the practice, but defended its prior use, arguing that records of those examinations were kept, if not every document tied to them.