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The SEC, which recently launched a whistle blower program that offers financial rewards for people who report securities violations, now has one of its own attorneys alleging that the agency destroyed thousands of documents involving banks and hedge funds, Rolling Stone’s Matt Taibbi reported.The allegations come from SEC attorney Darcy Flynn, who is a 13-year veteran with the agency. According to the report, Flynn claims the SEC has been destroying records relating to the investigations of financial criminals since 1993.
Some of the records that were allegedly destroyed involve Goldman Sachs, Bank of America, Wells Fargo, Lehman Brothers, Deutsche Bank, SAC Capital and Madoff.
What’s more is Sen. Chuck Grassley (R-Iowa) who is also the ranking Republican on the Senate Judiciary Committee has requested that the SEC look into the allegations.
“From what I’ve seen, it looks as if the SEC might have sanctioned some level of case-related document destruction,” Sen. Chuck Grassley said. “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.”
Ironically, the new whistle blower program the SEC launched allows company employees who report securities law violations to the agency to be eligible for financial reward if their tip leads to an enforcement action and a fine of more than $1 million.