Insight into SEC

SEC Insight, a private investment research company that uses Freedom of Information Act (FOIA) requests, issued a press release today on its court victory over the Securities and Exchange Commission (SEC). The company saw a sharp spike in the number of "Glomar" FOIA denials under former SEC Chairman Harvey Pitt's tenure. A Glomar response is when an agency decides to "refuse to confirm or deny" even the existence of records sought by a requestor.

For the decade prior to 2002, Glomar was only used by the SEC three times. Yet in 2003 alone, Glomar was used 99 times—66 of those instances were used to block disclosure of information to SEC Insight. Since SEC Insight's lawsuit, the SEC has stop using Glomar, according to the press release.

SEC was denying disclosure because of fears that release of documents could interfere with ongoing investigations of companies. SEC Insight argue that segregable portions of documents that won't interfere with investigations should be released, rather than not releasing anything at all. And that "in many instances the release of correspondence or subpoenas the SEC sends to a public company under investigation will not, in most instances, interfere with ongoing investigations and can better protect investors."

SEC's excessive use of Glomar in 2003 is highly questionable; it is a response that should be rarely used. Why did the SEC suddenly start using Glomar all of a sudden? Who made this decision?

While POGO is glad SEC Insight won its case against the SEC, we wonder how much of this information could simply be made available from the SEC directly, preferably on the internet, without having to utilize FOIA at all.