The new financial regulation law was supposed to make the financial system more transparent, thus preventing skullduggery and lessening the chance for another meltdown.
But the legislation pushes the public further back from the Securities and Exchange Commission, a key regulatory watchdog for the system.
The law allows the SEC to deny almost all public requests for information, including those filed under the Freedom of Information Act (FOIA), FoxBusiness.com reports.
The SEC doesn’t have to release information that comes from "surveillance, risk assessments, or other regulatory and oversight activities." To be sure, the agency does have to provide that information to Congress and other government agencies.
But the provision keeping the public at bay extends to almost every SEC action, lawyers told Fox.
Many of them are blasting the rule.
“It allows the SEC to block the public’s access to virtually all SEC records,” Gary Aguirre, a former SEC staff attorney who ran afoul of the agency for being a whistle blower, told Fox.
“It permits the SEC to promulgate its own rules and regulations regarding the disclosure of records without getting the approval of the Office of Management and Budget, which typically applies to all federal agencies.”
Aguirre used FOIA requests in his own lawsuit against the SEC, which the agency recently settled by paying him $755,000. Those requests could be denied now, he says.
“It is hard to imagine how the bill could be more counterproductive.”
Fox Business Network sued the SEC in March 2009 for refusing to hand over documents involving its failed examinations of alleged investment frauds engineered by Bernie Madoff and R. Allen Stanford.
Some experts say the financial regulation law’s flaws go far wider than the SEC provision.
Diana Furchtgott-Roth, a senior fellow at the Hudson Institute, says the law is bad for banks, bad for companies, bad for individuals and bad for the economy.
The law purportedly protects consumers and business, she told Newsmax.TV. “What it actually does is constrain credit. It makes it a lot harder for banks to lend money to small businesses and consumers”
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