Iowa Senator Chuck Grassley had asked “for details of all referrals related to SAC Capital sent to the [SEC] since January 2000.”
The SEC has said no.
Originally it was thought that Grassley’s requests for details on certain trades was because he was investigating Steve Cohen’s mammoth hedge fund, but in fact, he was investigating the SEC.
SAC was being used a case study by the Senator’s office, as he is concerned with how the SEC handles insider trading probes and referrals.
But the SEC has rejected Grassley’s request “to disclose how they have handled referrals they received of suspicious trading at hedge fund SAC Capital,” according to the WSJ.
The regulator “cited confidentiality in rejecting the request.”
Grassley responded that the SEC’s response is “isn’t what I asked for, and it’s not an acceptable response.”
According to the WSJ, SEC director of enforcement Robert Khuzami sent a letter to Grassley saying it won’t reveal “what it had done with the SAC referrals” — referrals that came from the FINRA.
“In order to protect confidential and nonpublic investigative information, we generally do not comment on the status of investigations or related referrals and, in turn, are not providing information concerning the specific Finra referrals you identified,” Khuzami wrote.
This isn’t what I asked for, and it’s not an acceptable response. I’m looking for the SEC to explain how it handled specific referrals. Did the agency review them and find no credible evidence of wrongdoing? Or are they sitting in a drawer because the agency ignored them?
If the SEC didn’t pursue the older cases, the question is why not. And if the SEC didn’t pursue them, the agency can’t legitimately withhold the resolution under the blanket excuse of ongoing investigations.
Maybe there are legitimate reasons for not pursuing certain cases, but it’s impossible to make a determination like that without more information.
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