The Securities and Exchange Commission may have destroyed documents related to investigations into major banks and hedge funds, according to Sen. Chuck Grassley (R-Iowa).
“From what I’ve seen, it looks as if the SEC might have sanctioned some level of case-related document destruction,” Grassley said in a statement. “It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame, and to what extent its actions were consistent with the law.”
Grassley has asked the SEC to respond to these allegations, which he says were made by an agency whistle-blower decribing “the SEC’s unlawful destruction of the federal records generated in at least 9,000 informal investigations.”
The allegedly destroyed documents are said to pertain to “matters under inquiry,” or MUIs. That’s the official term used by the SEC for the preliminary stages of an investigation. MUIs may or may not turn into official investigations.
After reviewing the whistleblower’s letter and supporting documents, Grassley sent a letter to SEC chairman Mary Schapiro.
“If (the whistleblower’s) allegations are correct, the intentional destruction of at least 9,000 MUIs would appear to greatly handicap the SEC’s ability to create patterns in complex cases and calls into question the SEC’s ability to properly retain and catalog documents,” the letter said.
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