Washington, D.C. – Today, CREW won a significant victory when the district court in CREW v. U.S. Securities and Exchange Comm’n , (D.D.C.), gave CREW the green light to proceed with its lawsuit against the SEC for failing to take any action to recover unlawfully destroyed records of closed preliminary investigations. CREW also challenged the agency’s now abandoned document retention policy, which authorized SEC staff to destroy all records of preliminary investigations once those investigations were closed.
The SEC had argued for dismissal of the case on the theory that CREW hadn’t been harmed by the agency’s policy of destroying records and that the agency had no obligation to attempt to recover any of the deleted records. The court disagreed, finding CREW has standing to sue and that SEC Chairman Mary Schapiro has an obligation to try to restore the deleted records.
Following widespread criticism, the SEC publicly abandoned its policy of destroying its files. As a result, the court ruled CREW’s challenge to the policy is now moot.
Had the SEC prevailed, the agency would not have been held accountable for its deliberate destruction of many thousands of closed investigative files, including files concerning the activities of Bernard Madoff. CREW will continue its effort to hold the SEC accountable for its failures and force the agency to restore files that may be critical to exposing the next Bernie Madoff.
Citizens for Responsibility and Ethics in Washington (CREW) is a non-profit legal watchdog group dedicated to holding public officials accountable for their actions. For more information, please visit www.citizensforethics.org or contact Jordan Libowitz at 202.408.5565 or firstname.lastname@example.org.