Subject: RE: Comment to File No. S7-14-99. Via E-mail Author: "DAN JAMIESON" at Internet Date: 5/24/99 9:21 PM Dan Jamieson 14341 Spa Drive Huntington Beach, CA 92647 Office of the Secretary Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549-0609. RE: Comment to File No. S7-14-99. Via E-mail. Letter with attachments to follow via mail. Dear Mr. Katz: The proposed rule should include a clause stating that the Commission will not interpret any FOIA Exemption more stringently than under well-established case law, such as the Critical Mass case, and statutory language, and/or in all cases will attempt to closely follow such case law. Unfortunately, SEC staff now takes shocking liberties in interpreting case law and the FOIA statute. For example, this commentator recently requested voluntarily submitted records (letters) provided to the SEC from an unknown number of brokerage firms relating to defamation lawsuits brought against those members by industry employees. There is simply no way these voluntary letters, submitted as part of the firms' lobbying efforts for an industry-sought rule (which was long since past the public comment process) should be kept from public view. Indeed, the letters are quite probably a last-minute attempt by staff to gather anecdotal information that could support passage of the rule (NASD Rule 1150)--a strange and frustrating process to watch from the outside since the SEC has been closely involved with supporting and drafting the rule for a number of years. There could be no sensitive or meaningful financial or commercial information contained in these letters. Even if some nominal financial or commercial information was present, the voluntary and lobbying nature of the letters should provoke full disclosure. At the very least, any small amount of financial or commercial information could have been redacted. Yet this commentator's request was denied (see attached). Therefore, the SEC staff needs explicit instructions to follow the precise wording and meaning of all relevant FOIA statutes and court decisions, and explicit instructions that they can in no circumstances make more stringent interpretations. Regarding the release's paragraph that reads: "The Commission now proposes to amend its rules so that confidential treatment requests and substantiations of confidential treatment requests will also be deemed confidential." This request by the Commission should be dropped from the proposed rule. As noted, the Commission has a pattern of misinterpreting FOIA to the benefit of the industry it regulates, and adopting a tendency toward secrecy. Further, industry interests have ample opportunity now to meet privately with SEC staff, unlike unorganized investor or industry employee interests that have no connections at the agency. This proposed language will simply thicken the veil of secrecy that now shrouds the SEC's regulatory process, and should therefore be dropped from the proposed rule. Regarding the release's paragraph that reads: "A number of the proposed amendments would conform 17 CFR 200.80 to the EFOIA. For example, in addition to (1) final opinions and orders, (2) statements of policy and interpretations adopted by the agency but not published in the Federal Register, and (3) staff manuals and instructions which must be available for inspection and copying in the public reference room, 23<23>/ EFOIA requires that each agency make available: (4) records processed and disclosed in response to a FOIA request when the agency determines that those records have become or are likely to become the subject of subsequent requests; and (5) a general index of such previously released records. 24<24>/" The Commission should apply the above provision to SROs as well. Much of the SEC's regulatory efforts exist in the form of moral persuasion and informal orders to the SROs to carry out certain actions, or to make certain interpretations. SROs likewise take it upon themselves to implement informal procedures and requirements from members and brokers. These unpublished procedures should not be buried in private associations like SROs, which nonetheless have governmental power to shut down industry participants. Full disclosure must apply to SROs as well. Finally, the Commission should consider removing the appeals process from the General Counsel's office in order to expedite review. The SEC general counsel should not be bogged down with these non-securities related issues. A dedicated FOIA counsel should be considered. Sincerely, Dan Jamieson