Recently, the historians at the National Archives have weighed in on the SEC’s disclosure that it had destroyed possibly over 9,000 documents, and they are not happy. As a result, the SEC suspended its document destruction policies for several high profile cases.
This indicates a strong suspicion that the SEC had been destroying documents that were required to be maintained. Apparently, the SEC destroyed records relating to some of the most controversial cases that its handled over the last several years, including, but not limited to, cases involving Bernie Madoff, Goldman Sachs, Lehman Brothers and Bank of America.. It appears that the SEC may have become somewhat lax in its internal protocols. Senator Chuck Grassley and the SEC’s own Inspector General have, in fact, launched investigations into the document destruction, and devoted serious investigative resources to understanding what occurred.
In sum, the SEC will undergo a strict review, and will be forced to adopt changes to its procedures to address these significant shortfalls. Nonetheless, this is another example of the SEC being tone deaf to the public’s concern as to its operations and mission. Time will tell if the SEC learns any lessons from these missteps.