In a post a while back, I noted a WSJ op-ed by Russell Ruan discussing the SEC's pattern of overblown statements in press releases dealing with enforcement actions. In it, I noted that the SEC also has a tendency to trumpet cases when filed while failing to acknowledge when it later loses such cases. It turns out that Ryan had previously noted that same phenomenon:
More than three months ago, the Supreme Court unanimously dismissed Securities and Exchange Commission penalty claims against investment adviser Marc Gabelli because the SEC took too long to file its case. But you wouldn't know that if you monitored the case on the SEC website. You'd find the regulator's initial fraud allegations against Mr. Gabelli but no official acknowledgment that the Supreme Court has significantly gutted the case.
The same is true for many other cases the SEC loses or abandons in court. ...
Like other federal agencies, the SEC has long been good at publicizing its initial accusations of wrongdoing—which is fair enough—but not so good at letting the public know when those accusations turn out to be unfounded or an overreach. ...
... today's SEC publicity is permanent and widely dispersed. The regulator's accusations can persist indefinitely among the top search-engine results for the names of those accused.
This presents an issue of fairness and transparency for a venerable agency where I proudly served from 1994 to 2004.
Exactly right.
