S.E.C. Files Were Illegally Destroyed, Lawyer Says

WASHINGTON — An enforcement lawyer at the Securities and Exchange Commission says that the agency illegally destroyed files and documents related to thousands of early-stage investigations over the last 20 years, according to information released Wednesday by Congressional investigators.       

The destroyed files comprise records of at least 9,000 preliminary inquiries into matters involving notorious individuals like Bernard L. Madoff, as well as several major Wall Street firms that later were the subject of scrutiny after the 2008 financial crisis, including Goldman Sachs, Lehman Brothers, Citigroup and Bank of America.

The S.E.C. is the very agency that is charged with making sure that Wall Street firms retain records of their own activities, and has brought numerous enforcement cases against firms for failing to do so.

Whistleblower: SEC Destroyed Thousands of Documents Linked to Wall Street Probes

News of the probe comes as the U.S. Securities and Exchange Commission is being accused of destroying thousands of documents related to potential violations by the nation’s largest banks and hedge funds. On Wednesday, Republican Sen. Chuck Grassley of Iowa said an agency whistleblower has sent him a letter detailing the unlawful destruction of records detailing more than 9,000 information investigations. The documents included cases linked to the financial crisis such as Goldman Sachs, AIG, and the Bernard Madoff Ponzi scheme. The whistleblower, Darcy Flynn, has worked as a lawyer at the Securities and Exchange Commission for 13 years. In a statement, Grassley said: "It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence."

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Source: Democracy Now!