Review of the SEC’s Compliance 

with the Freedom of Information 

Act 

September 25, 2009 

Report No. 465

Prepared by: Elizabeth A. Bunker, Contractor
Review of the SEC’s Compliance with FOIA September 25, 2009 

Report No. 465 

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Review of the Securities and Exchange 

Commission’s Compliance with the 

Freedom of Information Act

Executive Summary 

Background: The Freedom of Information Act (FOIA or Act), was enacted in 

1966. It was amended in 1974, 1976, 1986, and most recently, in 2007 to narrow 

the scope of FOIA exemptions and the ability of agencies to withhold information. 

The Act provides that any person has a right to access federal agency records, 

with certain exceptions, that address issues such as national security and 

personal rights. Pursuant to the Act, the right of access is enforceable in court. 

Agencies are required under the Act to respond to FOIA requests within 20-

working days and to notify requesters of their right to appeal a response that 

denies the request to access records. In a Memorandum to the Heads of 

Executive Departments and Agencies, issued January 21, 2009, President 

Obama directed FOIA to be administered with a “presumption in favor of 

disclosure,” which emphasizes the importance of transparency and openness in 

government. 

Executive Order 13392 “Improving Agency Disclosure of Information” was issued 

on December 14, 2005 (Executive Order 13392), and directs federal agencies to 

become more “citizen-centered and results-oriented” in responding to FOIA 

requests. Additionally, pursuant to the Executive Order federal agencies provide 

the public with information on their FOIA requests, designate liaisons to interact 

with the public, and appoint senior-level Chief FOIA Officers to oversee the FOIA 

process. Executive Order 13392 was followed by the Openness Promotes 

Effectiveness in our National Government Act of 2007 (OPEN Government Act), 

which affirmed the requirements of the Executive Order, further limited 

extensions to a 20-day time period, and added a new “Office of Government 

Information Services.” 

At the U.S. Securities and Exchange Commission (SEC or Commission), the 

Office of Freedom of Information Act and Privacy Act Operations (FOIA/PA 

Office) processes FOIA requests. The FOIA/PA Office receives the initial FOIA 

requests from the public and then identifies the appropriate Commission office or 

division that has the capability to address the FOIA request. The FOIA/PA Office 

coordinates record searches with the relevant Commission offices/divisions to 

provide a consolidated response to a requester. The Office of General Counsel 

(OGC) reviews and makes all Commission FOIA appeal determinations. 

Review of the SEC’s Compliance with FOIA September 25, 2009 

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Review of the SEC’s Compliance with FOIA September 25, 2009 

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At the end of Fiscal Year (FY) 2008, the FOIA/PA Office had 27 full-time 

personnel. Although the office’s total FOIA processing costs amounted to $4.29 

million, it collected $62,466 in processing fees, representing only 1.45 percent of 

the FY’s FOIA processing costs. During FY 2008, the FOIA/PA Office carriedover 6,909 FOIA requests from the prior year, received 9,586 new FOIA 

requests, processed 15,596 FOIA requests, and reduced its FOIA backlog by 87 

percent. As a result, 899 FOIA requests were pending at the end of FY 2008. 

Objectives: The Office of Inspector General (OIG) contracted with Elizabeth A. 

Bunker to conduct a review of the Commission’s FOIA processes and 

procedures. The objectives of the review were to assess the: 

1. FOIA/PA Office’s compliance with applicable laws and regulations. 

2. Coordination with FOIA/PA Office liaison staff, select field offices, and the 

Office of General Counsel. 

3. Commission’s compliance with prior OIG audit recommendations. 

This review was not conducted in accordance with the government auditing 

standards. 

Prior OIG Audit Report. In March 2007, the OIG conducted an audit of the 

Commission’s FOIA backlog. The audit found that the FOIA backlog was 

primarily caused by a large increase in FOIA requests starting in FY 2003. The 

increase in FOIA requests came from commercial entities for comment and 

response letters that were primarily from the Division of Corporation Finance 

(Corporation Finance) and the Division of Investment Management (IM). 

In total, the March 2007 OIG report made eight recommendations 

(Recommendations A - H) to streamline and facilitate the FOIA process and to 

proactively post information for public access via the Commission’s website. We 

found that Recommendation G, which involved providing access to the FOIA/PA 

Office’s FOIAXpress tracking system, has not been fully implemented. We found 

that only two offices (OGC and Corporation Finance) currently use the read-only 

access feature of the FOIAXpress database. 

The other recommendations in the May 2007 OIG report were either fully 

implemented or the responsible office has demonstrated progress in 

implementing the recommendations. Corporation Finance expanded its number 

of staff, restructured work processes, and instituted detailed monitoring and 

reporting systems to ensure review and the posting of comment letters on the 

SEC website. IM had a smaller backlog, but also added staff and developed a 

tracking system to address its backlog. IM staff are also still in the process of 
Review of the SEC’s Compliance with FOIA September 25, 2009 

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posting the prior years’ FOIA data and continue to post current filings and 

comment letters on the SEC’s website. 

Results. The OIG found that the manner that the Commission’s Chief FOIA 

Officer functioned was not in compliance with the requirements of Executive 

Order 13392 or the OPEN Government Act. Prior to our review of the FOIA 

program in connection with this report, the Commission had not defined any 

explicitly stated authorities, responsibilities, or reporting duties for the Chief FOIA 

Officer. During the course of this review, the SEC has taken steps to fill the Chief 

FOIA Officer position. 

Further, we determined that few FOIA liaisons have developed written policies 

and procedures for processing FOIA requests. This increases the risk of error 

and could result in information being inappropriately disclosed or the SEC could 

withhold information from the public that should be released. Additionally, we 

found that the SEC has inadequate or incorrect procedures for disclosing 

responsive documents that are not in compliance with Act. We also found that 

there is an insufficient separation of the administrative processes between the 

initial FOIA determination and the FOIA appeal process. In addition, SEC 

management has not established any comprehensive management, supervisory, 

or personnel practices for staff that are responsible for FOIA processing. We 

determined that SEC management needs to improve the skill set of FOIA liaison 

staff by providing them with FOIA training opportunities, updating position 

descriptions, and revising FOIA liaison staff’s performance standards to include 

FOIA liaison duties. We also determined the following: 

• Commission staff need FOIA related training that is commensurate with 

their level of FOIA responsibilities; 

• Inefficient retrieval systems, voluminous paper and electronic records, and 

documents that are not organized for efficient FOIA review contributed to 

delays in processing FOIA requests; 

• There are duplicate tracking systems that waste time and hinder the 

efficient processing of FOIA requests; and 

• Only three FOIA liaisons in two offices knew they had read-only access to 

the FOIA request database. 

Summary of Recommendations. Our report makes the following 

recommendations. The Chairman’s Office shall ensure that the Chief FOIA 

Officer has sufficient Commission-wide support to fulfill the responsibilities 

outlined in the OPEN Government Act and should affirm the importance of the 

FOIA to its mission. The Chief FOIA Officer shall address existing document 

review practices to enhance the maximum disclosure of responsive information, 

address the deficiencies identified in this report, and comply with the OPEN 

Government Act. The Chief FOIA Officer, in collaboration with SEC managers 
Review of the SEC’s Compliance with FOIA September 25, 2009 

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and supervisors, should revise the position descriptions, FOIA response task 

descriptions, and performance standards for the current FOIA/PA staff members 

and liaisons. The Chief FOIA Officer should ensure that appropriate FOIA 

training is provided to all Commission staff concerning the responsibility to 

comply fully with FOIA requirements. The FOIA/PA Officer should provide 

assistance to the FOIA liaisons in order to incorporate the FOIAXpress tracking 

system capabilities as appropriate. 

The OGC should establish and provide a clear policy to emphasize the 

separation of roles and responsibilities between staff members that decide FOIA 

appeals and staff members that advise, counsel, or process the initial FOIA 

response. To support the proper role of OGC, skills of all FOIA staff should be 

strengthened to address the amount and quality of FOIA work demands. 
Review of the SEC’s Compliance with FOIA September 25, 2009 

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TABLE OF CONTENTS 

Executive Summary...................................................................................................... ii 

Table of Contents ........................................................................................................ vi 

Background and Objectives ..................................................................................1 

Background........................................................................................................1 

Objectives ..........................................................................................................5 

Findings and Recommendations..........................................................................6 

Finding 1: The Chief FOIA Officer Did Not Have Sufficient Authority to 

Address FOIA ...................................................................................6 

Recommendation 1.......................................................................8 

 Recommendation 2 .......................................................................8 

Finding 2: FOIA Processing Practices Need Improvement ................................9 

Recommendation 3.....................................................................17 

Recommendation 4.....................................................................18 

Finding 3: The OGC May Not Provide an Unbiased Review of FOIA 

Appeals ............................................................................................18 

 Recommendation 5 ....................................................................20 

Recommendation 6.....................................................................20 

Finding 4: FOIA Responsibilities Have Not Been a Commission Priority .........21 

Recommendation 7.....................................................................25 

Recommendation 8.....................................................................25 

Finding 5: FOIA Processing Needs Improved Information Management .........25 

Recommendation 9.....................................................................30 

Recommendation 10...................................................................31 
Review of the SEC’s Compliance with FOIA September 25, 2009 

Report No. 465 

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Appendices 

Appendix I: Acronyms and Abbreviations.........................................................32 

Appendix II: Scope and Methodology...............................................................33 

Appendix III: Criteria.........................................................................................36 

Appendix IV: List of Recommendations ...........................................................38 

Appendix V: Management Comments..............................................................41 

Appendix VI: OIG Response to Management’s Comments .............................50 

Tables 

Table 1: Costs, Fees, and Staffing for FOIA/PA.................................................3 

Table 2: Backlog Reduction ...............................................................................4 

Table 3: Dispositions of SEC and All Federal Agencies...................................10 

Table 4: SEC’s FOIA Exemption Denials .........................................................11 

Table 5: Median Days Needed to Process FOIA Requests .............................26 
Background and Objectives

Background 

The Freedom of Information Act (FOIA or Act), was enacted in 1966, and is 

codified in Title 5 of the United States Code, Section 552. The Act generally 

provides that any person has a right of access to agency records, with certain 

exceptions. Agency records that are not available to the public through “reading 

rooms,” may be made available in response to FOIA requests. All United States 

government agencies are required to disclose their records, or portions of the 

records, upon receiving a written request, except when the records are protected 

from disclosure under one or more of the FOIA’s nine exemptions. Pursuant to 

the Act, the right of access is enforceable in court. The Act also generally 

requires agencies to respond to FOIA requests within 20-working days and to 

notify requesters of their right to appeal a response denying access to records. 

According to the Act, “if the government can show exceptional circumstances 

exist and that the agency is exercising due diligence in responding to the 

request,” the court may allow the agency additional time to complete its review of 

the request. 

The FOIA’s nine exemptions generally cover the following information: 

1) Classified national defense and foreign relations information; 

2) Internal agency personnel rules and practices; 

3) Material prohibited from disclosure by another law; 

4) Trade secrets and other confidential business information; 

5) Certain inter-agency or intra-agency communications; 

6) Personnel, medical, and other files involving personal privacy; 

7) Certain records compiled for law enforcement purposes; 

8) Matters relating to the supervision of financial institutions; and 

9) Geological information on oil wells. 

The FOIA was amended in 1974, 1976, 1986, 1996, and in 2007 to narrow the 

scope of FOIA exemptions and the ability of agencies to withhold information. 

Each amendment expands the scope of information that is available to the public 

by the Freedom of Information Act. Changes implemented in the last decade 

demonstrate how Congress and recent administrations have been progressively 

modifying the Act to facilitate public access to agency records. 

• Amendments in 1996 extended FOIA’s provisions to electronic records, 

and required agencies to package information electronically if requested. 

Review of the SEC’s Compliance with FOIA September 25, 2009

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Review of the SEC’s Compliance with FOIA September 25, 2009

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• Executive Order 13392, “Improving Agency Disclosure of Information,” 

was issued on December 14, 2005 (Executive Order 13392). Executive 

Order 13392 promoted a “customer service” orientation to the FOIA by 

requiring the establishment of public liaisons, clarifying exemptions, and 

providing tracking numbers for consumers. Executive Order 13392 

ordered agencies to designate Chief FOIA Officers and to address the 

FOIA backlogs of requests. Finally, the Executive Order required that 

agencies report specific monitoring data such as the number of days to 

process FOIA requests and appeals, the number of FOIA requests 

granted and denied, and to report progress in resolving FOIA backlogs. 

• The “Openness Promotes Effectiveness in our National Government Act 

of 2007,” (OPEN Government Act), modified the FOIA by codifying into 

law most of the provisions of Executive Order 13392, such as the public 

liaisons and the Chief FOIA Officer. The OPEN Government Act further 

limited and defined the 20 day time period to respond to FOIA requests, 

and added a new “Office of Government Information Services.” 

• Most recently, in a Memorandum to the Heads of Executive Departments 

and Agencies issued January 21, 2009, President Obama directed that 

FOIA be administered with a “presumption in favor of disclosure.” A 

second Memorandum, “For the Heads of Executive Departments and 

Agencies”, issued March 19, 2009 by Attorney General Eric H. Holder Jr., 

further underscored the goal of maximum disclosure in response to FOIA 

requests. Subsequent guidelines emphasized that the presumption of 

disclosure means that information should not be withheld “simply because 

[an agency] may do so legally.” Furthermore, when an agency determines 

that it cannot make a full disclosure, the Memorandum directs the agency 

to consider if it can make a partial disclosure. 

Within the U.S. Securities and Exchange Commission (SEC or Commission), the 

FOIA processing function is centralized and the FOIA/PA Office processes all 

FOIA requests. The FOIA/PA Office receives the initial FOIA requests from the 

public and then identifies which office or division within the Commission should 

be contacted to search for records that respond to the request. Personnel in the 

FOIA/PA Office coordinate record searches with the relevant Commission office 

or division to provide a response to requesters. The OGC reviews and makes 

FOIA appeal determinations. Personnel in the FOIA/PA Office also record and 

track requests for confidential treatment, provide technical support to OGC in the 

event of FOIA litigation, and respond to requests for public information. 

As shown in Table 1, Costs, Fees, and Staffing for FOIA/PA, at the end of FY 

2007 the FOIA/PA Office had approximately 28 full-time personnel, total FOIA 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

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processing costs were $3.78 million, and the Commission collected $140,106 in 

fees, which was about 3.7 percent of its actual processing costs. 

Table 1 further shows that during FY 2008 the FOIA/PA Office had 27 full-time 

personnel, its processing costs were $4.29 million and the office collected 

$62,466 in fees, or 1.45 percent of the FY’s processing costs. 

Table 1: Costs, Fees, and Staffing for FOIA/PA

Staffing Levels FY 2007 FY 2008

Number of full‐time FOIA/PA Office personnel 28 27

Number of personnel with part‐time or

occasional FOIA duties (In total work‐years or

FTEE*) 3.81 6.75

Total Number of Personnel (In total work‐

years or FTEE) 31.81 33.75

Total Costs (Including staff and all resources)

FOIA processing (Including appeals) $3,509,418 $ 4,052,681  

Litigation‐related activities $   275,921 $    238,685  

Total costs $3,785,339 $ 4,291,366  

Fees

Total amount of fees collected by agency for

processing requests $   140,106 $       62,466

Percentage of Total Costs 3.7 1.45

Source: SEC FOIA/PA Office Annual Reports for Fiscal Year 2007 and 2008 

 *Full-time Equivalent Employees 

Backlog Reduction 

During FY 2007 through 2008, the Commission’s FOIA/PA Office’s achievements 

were noteworthy. Overall, the FOIA/PA Office met and exceeded the backlog 

goals that were established in its “Program Action Plan.” The “Program Action 

Plan” was required per Executive Order 13392, and was submitted to the 

Department of Justice.1

 These results were accomplished with no significant 

changes in the FOIA/PA Office’s staffing and overall costs. While other divisions 

within the Commission had its staff and resources increased to proactively make 

information readily available to the public, the FOIA/PA Office reduced its 

backlog and responded to new FOIA requests though neither its staff nor budget 

were increased. 

Table 2, Backlog Reduction, shows that during FY 2008, the FOIA/PA Office: 

 

1

 The SEC’s “Freedom of Information Act Program Action Plan” was initially submitted to the Department of 

Justice and the Office of Management and Budget on June 13, 2006. Revisions were later submitted on 

October 13, 2006 and February 1, 2008.
Review of the SEC’s Compliance with FOIA September 25, 2009

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• Carried over 6,909 FOIA requests that were pending at the end of FY 

2007; 

• Received 9,586 new FOIA requests; and 

• Processed 15,969 FOIA requests. 

At the end of FY 2008, the FOIA/PA Office had 899 FOIA requests that were still 

pending. 

 Table 2: Backlog Reduction 

Number of Initial Requests                      FY 2007 FY 2008

Requests pending at the end of the preceding FY 10,403 6,909

Requests received during current FY 9,070 9,586

Requests processed during current FY 12,564 15,596

Requests pending at the end of the current FY   6,909 899

 Source: SEC FOIA/PA Office Annual Reports for Fiscal Year 2007 and 2008

Customer Service Orientation 

To further address the Executive Order 13392 requirements, the Commission 

established a FOIA Customer Service Center (Service Center) and appointed 

four public liaisons in March 2006. The purpose of the Service Center and the 

public liaisons was to assist in reducing FOIA delays, increase transparency, to 

help requesters understand the status of requests, and to assist in resolving 

disputes. 

To review the Service Center’s effectiveness, we conducted telephone interviews 

with 10 of the Commission’s most frequent FOIA requesters. Our sample 

population consisted of 8 commercial vendors and 2 journalists. Universally, the 

requesters praised the politeness and courtesy of the FOIA/PA Office staff and 

noted that service improved significantly. Some referred to the FOIA/PA Office 

staff by name and emphasized the staff’s helpfulness and responsiveness. One 

commented that while the actual information received was disappointing, the staff 

was “wonderful, accessible, and made it clear they were doing all they could.” 

Another said “they are like family.” 

Particularly, we found that many commercial requesters described and 

applauded its proactive negotiations with the FOIA/PA staff, whereby the 

requesters could tailor their requests in order to correctly and efficiently receive 

information that is actually available. Other requestors agreed to submit multiple 

requests in smaller units over a period of time rather than submit a large number 

of requests simultaneously to the FOIA/PA Office. These arrangements allowed 

the FOIA/PA staff to respond to FOIA requests more effectively. Based on our 

interviews, the commercial requesters reported they were generally satisfied with 

the efforts of the FOIA staff. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

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The SEC Website 

The SEC’s website and its policies for posting, reviewing, and updating FOIA 

information are consistent with Executive Order 13392. The SEC staff 

responsible for maintaining the website has written policies and procedures to 

establish performance standards that ensure information is posted on its website 

on a timely basis. A link to the FOIA webpage is easily accessible from the main 

SEC website. Updates to the “Frequently Requested FOIA Documents” a 

feature of the FOIA webpage, are “typically posted within 24 hours of receipt.” 

We found that the Commission’s website management standards exceed the 

requirement that quarterly reviews are conducted to assure website information 

is current and accurate. Instead, the Commission conducts these reviews every 

two weeks. In 2004 the Commission received an award for the best webpage 

design in the category of “Financial Services.” 

Objectives 

Based on our annual plan, the Office of Inspector General (OIG) contracted the 

services of Elizabeth A. Bunker to conduct a review of the Commission’s FOIA 

process and procedures. The objectives were to review the: 

1. FOIA/PA Office’s compliance with applicable laws and regulations. 

2. Coordination with FOIA/PA Office liaison staff, select field offices, and the 

Office of General Counsel. 

3. Commission’s compliance with prior OIG audit recommendations. 
Findings and Recommendations 

Finding 1: The Chief FOIA Officer Did Not Have 

Sufficient Authority to Address FOIA 

The role of the Chief FOIA Officer, as established by the 

Commission, has not been in compliance with the 

requirements of Executive Order 13392 or the OPEN 

Government Act. The Chief FOIA Officer did not have 

sufficient authority or accountability to address FOIA 

deficiencies. 

Both the Executive Order 13392 and the OPEN Government Act requires federal 

agencies to appoint a Chief FOIA Officer who has the authority to implement a 

wide range of management and policy objectives to ensure the agency’s FOIA 

compliance. 

While the Commission’s FOIA backlog was a focus of negative publicity in 2006,2

the role of Chief FOIA Officer was temporarily filled by the FOIA/PA Officer,3

 who 

facilitated the Commission’s efforts to reduce the backlog during FYs 2007 and 

2008. However, the FOIA/PA Officer did not meet the requirements of Executive 

Order 13392 because the Executive Order required that the Chief FOIA Officer’s 

position be at the “Assistant Secretary or equivalent level.”4 

In 2007, the Commission assigned the Chief FOIA Officer duty as a collateral 

duty of an Office Director. This person resigned from the position in June 2009, 

and a new Chief FOIA Officer was designated during the same month. This 

person is also an Office Director who serves in the Chief FOIA capacity as a 

collateral duty. 

During interviews conducted for this review, some staff indicated that they were 

not aware of the Chief FOIA Officer’s role. Of the 25 interviews of FOIA liaisons 

that were conducted (excluding the Chief FOIA Officer), few people were able to 

clearly state the Chief FOIA Officer’s function. In fact, some Commission’s FOIA 

liaisons stated they did not know there was such a position or person. The 

 

2

 FOIA Bombs Backlog the SEC, August 31, 2007, CFO.com: An Economist Group. http://community. 

dynamics.com/blogs/financeheadlines. 

3 The FOIA/PA Officer is an SK-17 position, and heads the SEC’s FOIA/PA Office. This is distinguished 

from the Chief FOIA Officer position required under Executive Order 13392 and the OPEN Government Act, 

which is a more senior position and has oversight of not only the FOIA/PA program, but other duties as well. 

Review of the SEC’s Compliance with FOIA September 25, 2009

4

 Hodes, Scott A., FOIA Facts: Chief FOIA/PA Officers Named, Law and Technology Resources for Legal 

Professionals, February 15, 2006, http://www.llrx.com/node/1459 

Report No. 465 

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Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

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person appointed as the Chief FOIA Officer stated in our interview that she was 

aware of the lack of visibility in the position, but viewed this relative obscurity as 

an opportunity to explore the Commission’s compliance to the FOIA with a view 

toward developing a suitable role. 

We determined that the position did not have a position description within the 

personnel structure, personnel classification system, or in the Code of Federal 

Regulations (CFR). Furthermore, the Chief FOIA Officer has not been required 

to submit reports about FOIA operations to senior Commission management. 

Thus, the authority of the role appeared to rest in the Chief FOIA Officer’s 

personal influence within the Commission. Without clear authority and 

accountability or without senior management’s recognition, a Chief FOIA Officer 

may not be effective. 

The OPEN Government Act describes a broad set of responsibilities for the Chief 

FOIA Officer as follows: “Each agency shall designate a Chief FOIA Officer who 

shall be a senior official of such agency (at the Assistant Secretary or equivalent 

level). The Chief FOIA Officer of each agency shall, subject to the authority of 

the head of the agency shall—” 

(1) Have agency-wide responsibility for efficient and 

appropriate compliance [with the FOIA]; 

(2) Monitor implementation [of the FOIA] throughout the 

agency . . .; 

(3) Recommend to the head of the agency such adjustments 

to agency practices, policies, personnel, and funding as may 

be necessary to improve its implementation [of the FOIA]; 

(4) Review and report to the Attorney General, through the 

head of the agency; 

(5) Facilitate public understanding of the purposes of the 

statutory exemptions . . .; and 

(6) Designate one or more FOIA public liaisons.” 

President Obama’s January 21, 2009 FOIA Memorandum for the Heads of 

Executive Departments and Agencies and the March 19, 2009 Memorandum 

issued by Attorney General Holder to the Heads of Executive Departments and 

Agencies, stressed that the Chief FOIA Officers be “active participants in their 

agency’s FOIA operations.” 

Seeking to enhance the importance of the FOIA within agencies, Congress 

requested that the Office of Personnel Management (OPM) submit a report with 

recommended changes in personnel policies to enhance the stature of 

government employees who are involved in administering the FOIA.5

 Congress 

5

 OPEN Government Act: §11: Report on Personnel Policies Related to FOIA. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

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requested that the OPM consider changes to personnel policies to provide 

greater encouragement to employees with FOIA responsibilities including 

performance evaluations, pay, promotions, and training. In its response, the 

OPM declined to make recommendations, but in recognition of the concern 

expressed by Congress and FOIA professionals, issued a letter that stated: 

The challenges identified by the FOIA community center 

around lack of senior leadership support. These issues are 

appropriately addressed through management direction and 

are within the control of individual agencies. 6

 

It appears this statement is an apt description of the past condition of the Chief 

FOIA Officer’s role in the SEC. 

During the course of this review, the SEC reconsidered the position of Chief 

FOIA Act Officer and created a full-time senior officer level position, for which a 

new position description was written and a vacancy advertised.7 Applications for 

the position were accepted by the agency between July 14, 2009 and July 28, 

2009. A review of the position description shows that the responsibilities 

identified in the OPEN Government Act are now described in the position 

description. The position description includes agency-wide responsibility for 

coordinating the Commission’s FOIA/PA policies and procedures. As a senior 

officer, the Chief FOIA Officer will monitor, report, and advise the head of the 

Commission concerning FOIA compliance. The position description, if observed, 

will now meet the specifications of the OPEN Government Act. As of this date, 

the position has not yet been filled. 

 

Recommendation 1: 

The Chairman’s Office shall fill the Chief FOIA Officer position with a qualified 

candidate and ensure that the Chief FOIA Officer has the appropriate authority to 

implement FOIA and to effectively fulfill the responsibilities outlined in the OPEN 

Government Act of 2007. 

Recommendation 2: 

The Chairman’s Office shall communicate on an ongoing basis to Commission 

employees and the public the importance of the Freedom of Information Act 

(FOIA) to the agency’s mission. This can be accomplished by updating the 

Commission’s FOIA webpage to emphasize the importance of FOIA to the public, 

6

 Michael W. Hager, Acting Director, United States Office of Personnel Management, December 16, 2008. 

http://www.accesspro.org/OPM_ReportCongress_121608.pdf 7 This position was advertised by the SEC as a “Chief FOIA/PA Officer,” however, in order to avoid 

confusion with the SK-17 FOIA/PA Officer, for purposes of this report, we will refer to the senior officer 

position the way it was referenced in Executive Order 13392, as “Chief FOIA Officer.”
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 9 

and by issuing an SEC Administrative Notice to Commission employees on an 

annual basis. 

Finding 2: FOIA Processing Practices Need 

Improvement 

There are inadequate or incorrect procedures for determining 

whether potentially responsive documents exist and how 

exemptions, such as Exemption (b)(7)(A), are applied, which have 

the effect of creating a presumption in favor of withholding, rather 

than disclosure, as required by the FOIA. Few FOIA liaisons have 

written policies and procedures for processing FOIA requests, thus 

increasing the risk of errors resulting in the inappropriate disclosure 

of information, or unnecessarily withholding information. 

The Presumption of Non-Disclosure 

We reviewed data that measured the Commission’s compliance with the FOIA 

and found that in all FOIA request disposition categories, the Commission’s 

overall rate was significantly lower when compared to all other federal agencies. 

Table 3, FOIA Dispositions by SEC and All Federal Agencies, is based on the 

2008 reporting guidelines that separate Privacy Act requests from FOIA requests 

making the data in the table comparable across all agencies. Table 3 illustrates 

the SEC’s disposition of FOIA requests in comparison to ”All Federal Agencies,” 

as reported in the SEC’s Freedom of Information Act Annual Reports for FY 2008 

(Annual Reports). The table shows that the SEC made “full grants” and “partial 

grants” 10.5 and 2.9 percent of the time, respectively. In contrast, “All Federal 

Agencies” reported making “full grants” and “partial grants” of information 41.8 

and 18.7 percent of the time, respectively. 

 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

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 Table 3: Disposition of SEC and All Federal Agencies’ FOIA 

 Requests in FY 2008 

Disposition of

FOIA Requests

SEC  

FY 2008

Percent of  

SEC Processed

Requests

All Federal

Agencies  

FY 2008

Percent of

All Federal

Agencies

Processed

Requests

Granted in Full 1,635 10.5 260,594 41.8

Granted in Part 453 2.9 117,032 18.7

Denied in Full 612 3.9 25,549 4.0

No Information

Found

8,764 56 81,238 13.0

Total Closed 15,596 ‐‐  623,186 ‐‐ 

 Source: SEC FOIA/PA Office Annual Reports for FY 2008 and the FOIA Post 2009: Summary 

 of Annual FOIA Reports for FY 2008 

Table 3, also shows that the SEC reported “No Information Found” 56 percent of 

time, in comparison to “All Federal Agencies” reporting 13 percent in the same 

category. 

Our review of the data summarizing request denials showed that while the 

percentage of denials the SEC reported in its FY 2008 Annual Report are similar 

to the percentages that are reported by other federal departments and agencies, 

the exemption most cited for denials in other federal agencies was Exemption 6, 

which protects matters of personal privacy. In comparison, the SEC cited 

Exemption (b)(7)(A), “Interference with Law Enforcement Proceedings” most 

frequently for denials.8

 Below, Table 4, SEC’s FOIA Exemption Denials, shows 

the number of FOIA requests that were denied in FY 2007 and 2008 claiming 

one or more of the nine exemptions. Specifically, the Commission issued 865 

and 1,192 exemption denials in FY 2007 and 2008, respectively. 

 

8

 5 U.S.C. §552: (a) “Each agency shall make available to the public information . . . (b) This section does 

not apply to matters that are . . . (7) records or information compiled for law enforcement purposes, but only 

to the extent that the production of such law enforcement records or information (A) could reasonably be 

expected to interfere with enforcement proceedings. . . .” 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 11 

Table 4: SEC’s FOIA Exemption Denials 

Exemption FY 2007 FY 2008

(b)(1) National security 0 0

(b)(2)  Records related solely to internal rules and practices 47 46

(b)(3)  Law specifically exempts the material from disclosure 1 8

(b)(4)  Trade secrets and other confidential business

information 132 160

(b)(5)  Deliberative process privilege, pre‐decisional 46 83

(b)(6)  Information about individuals 70 72

(b)(7)(A)  Interference with law enforcement proceedings 518 705

(b)(7)(B)  A person would be deprived of a fair trial 0 0

(b)(7)(C)  Unwarranted invasion of personal privacy 34 70

(b)(7)(D)  Confidential source 0 1

(b)(7)(E)  Techniques and procedures for law enforcement

investigations 0 5

(b)(7)(F)  Endangering the safety or life of any individual 0 0

(b)(8)  Examination of banks and other financial institutions 17 42

(b)(9)  Geological and geophysical information 0 0

Total Number of Exemption Denials 865 1,192

Source: SEC FOIA/PA Office Annual Reports for Fiscal Year 2007 and 2008 

The SEC’s FOIA process denied the disclosure of information due to exemption 

(b)(7)(A) in 67 percent of all FOIA denials in FY 2007 and 66 percent in FY 

2008.9 This exemption is most frequently applied to requests for records from 

the Division of Enforcement’s (Enforcement) investigative caseload. We 

determined that the deficiencies in the SEC’s method of processing FOIA 

requests may account for the frequent use of the FOIA exemption (b)(7)(A) a

may also contribute to request responses identified as “No Information Found

These deficiencies initially occurred due to inadequate search capabilities su

as searching for documents in key databases. Secondly, we found that 

documents are not sufficiently inspected to determine if the information is 

potentially responsive and if it can be disclosed. Finally, the volume of 

Enforcement’s records prohibits the efficient and timely review of

nd 

.”

ch 

 documents. 

 

The steps taken by FOIA/PA Office staff and liaisons to process FOIA requests 

for information from The Division of Enforcement (Enforcement) are as follows: 

• A FOIA/PA Office staff member initially conducts a search in available 

databases to determine if information is available that is related to the 

subject of the request. The database for searching investigative files is 

the Enforcement’s Name Relationship Search Index (NRSI) database. 

9

 U.S. Securities and Exchange Commission Freedom of Information Act Annual Report for Fiscal 

Year 2007, October 1, 2006 to September 30, 2007 and Fiscal Year 2008, October 1, 2007 to 

September 30, 2008. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 12 

 

This step is completed in compliance with the procedures that are 

documented in the FOIA/PA’s office Work Procedures Manual. If the 

NRSI does not locate a reference to the name of an individual or a 

company, the request disposition is categorized as “No Information 

Found.” 

• If the NRSI database locates a reference, the FOIA/PA Operations staff 

refers the request to the Enforcement liaison who extends the search for 

potentially responsive information using the Case Activity Tracking System 

(CATS 2000) database to conduct a more detailed search. 

• If the CATS 2000 indicates that the subject of the request is associated 

with an “open” investigation or if the information in the CATS 2000 is 

sufficiently detailed, the FOIA liaison will recommend that the information 

is not released or is not responsive to the request. The SEC’s FOIA 

response cites the FOIA exemption, which most frequently is (b)(7)(A), 

and concludes that disclosing the requested information would interfere 

with Enforcement’s proceedings. Generally, there are no further 

searches. 

• If either the NRSI or CATS 2000 database indicates that a case is open 

but has no investigative activity or is nearing completion, the Enforcement 

liaison may contact the case attorney for further information or 

recommend that the FOIA staff refer the request to a regional office liaison 

who determines the location of records that are responsive to the request 

and then estimates the volume of information to be processed. Based on 

the liaison’s estimate, the FOIA staff contacts the requestor with the cost 

estimate before proceeding further. 

We found that in many cases, this search process actually prevents the 

discovery of information that is responsive to FOIA requests. During interviews 

we conducted, staff members identified a number of weaknesses in the NRSI 

database, which is described as an abstracted summary of the information that is 

available in CATS 2000. Repeated studies issued by the Government 

Accountability Office (GAO) identified ongoing deficiencies and weaknesses in 

Enforcement’s information systems, including CATS 2000, such as inadequate 

integration with other systems for data entry and case record updates.10 Also, a 

report the SEC OIG issued in September 2008 revealed that not all Enforcement 

staff used CATS 2000 to record investigative activity.11 The Enforcement’s FOIA 

liaison, corroborated by a GAO review, established that a weakness in the CATS 

10 Government Accountability Office (GAO), Greater Attention Needed to Enhance Communication and 

Utilization of Resources in the Division of Enforcement, 09-358, March 2009. See also GAO Report 07-830, 

and GAO Report 05-670.

11 SEC Office of Inspector General, Survey of Enforcement’s HUB System, Report, No. 449, September 29, 

2008, p. 12. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 13 

 

2000 and NRSI systems is that even though a number of investigative cases may 

no longer be active, they have not been officially closed in the databases.12 The 

effect of this weakness is that Enforcement investigations, which for all intents 

and purposes, are closed, appear in the databases as open. Therefore, the 

initial decision, determining if any response information is available, can be faulty 

because searches are conducted using databases that have incomplete and 

inaccurate information. Thus, searches would show that an Enforcement 

investigation is open when it is in fact essentially closed, so the requested FOIA 

information relating to that investigation could actually be produced. 

The second deficiency that contributes to the inappropriate application of FOIA 

exemption (b)(7)(A) is based on the SEC staff’s judgment that without the visual 

inspection of documents, the disclosure of any information (including information 

available publically) constitutes “interference with law enforcement proceedings.” 

There is not a well-documented process for reviewing documents to segregate 

potentially responsive documents that can be disclosed and, thus, the search 

may not be sufficient—particularly to justify an all-inclusive denial that is based 

on FOIA exemption (b)(7)(A). Many decisions concerning the responsiveness of 

the records are inferred broadly from the recorded narratives in the CATS 2000 

and not by reviewing actual documents. 

Notwithstanding Enforcement’s recent efforts to close cases that are inactive, 

cases labeled as “open” that show some investigative activity in the CATS 2000 

are most often presumed to be exempt from disclosure unless the Enforcement 

FOIA liaison can determine that a case is waiting for payments (e.g., penalties or 

disgorgements) and that responsive information--with proper approval--can be 

disclosed. Thus, instead of actually reviewing relevant documents relating to the 

investigation that is the subject of the FOIA request, the FOIA liaison relies upon 

a database that does not fully have accurate information and makes the decision 

to withhold any and all potential responsive documents in their entirety. Also, we 

determined that insufficient time and attention is paid to determining if a partial 

FOIA release could be made. 

The third obstacle encountered by the Enforcement FOIA liaisons and the 

FOIA/PA Office staff is the volume and organization of documents that have to 

be reviewed, segregated, and redacted to properly process the information that is 

subject to FOIA exemption (b)(7)(A). Consultations with information 

management staff from Enforcement reveal that the volume of information has 

increased beyond the capabilities of the available staff to address FOIA requests. 

The result is that case records, whether closed, open and inactive, or open and 

active, are not consistently reviewed for information that might be responsive to 

FOIA requests, because an exhaustive search to segregate releasable 

documents is often judged not to be feasible. While the volume of records is 

12 GAO Report: 09-358, p. 18. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 14 

 

never stated as a basis for a denial, the expense and time that is needed to 

review the documents effectively deprives the requester of a legitimate response. 

The inadequate review of documents is not limited to documents from 

Enforcement. For FOIA requests in other SEC offices/divisions, there are similar 

processes that may also be inadequate. The steps are similar to the process 

followed by the Enforcement liaisons. The FOIA/PA Office analyst sends the 

relevant office or division a copy of the FOIA request and asks the liaison to reply 

with the responsive records. If the liaison determines there are responsive 

records, the records are usually sent to the FOIA/PA Office for processing and 

subsequent release. If the liaison indicates that there are no responsive records, 

or that an exemption to the disclosure applies, the FOIA analyst does not review 

the records to confirm the liaison’s judgment. 

Administrative Appeals of Exemption (b)(7)(A) 

We also found evidence that OGC supports and defends the practice of limited 

and perfunctory document review.13 We examined 19 FOIA appeal file cases 

that were closed during FY 2007 and FY 2008. Our sample of 19 administrative 

appeal files included 16 appeals from commercial requestors, 2 from media 

requesters, and a disputed fee charge from an individual requestor. Based on 

our review, we found 10 examples of legal memoranda that were prepared by 

OGC attorneys and contained standardized, boilerplate legal explanations 

upholding the SEC’s routine application of FOIA exemption (b)(7)(A). The legal 

memoranda clearly stated the Commission’s policy as follows: 

The appeal file reflects that the FOIA/PA Officer acted 

consistently with the Commission’s policy related to requests 

for information contained in active investigation files. (A 

footnote further explained: “The FOIA/PA Officer, as is 

routinely done with such requests, withheld the investigatory 

information in its entirety.”) 

Some appeal case files that OIG examined for this review had notes and copies 

of emails that documented OGC attorneys’ attempt to verify the status of a case 

that was presumed to be “open,” prior to the appeal being decided. However, 

there was no record or any affidavit confirming a document review was 

completed, nor verifying that responsive records were withheld “which, if 

released, could reasonably be expected to interfere with Enforcement’s 

13 According to the DOJ’s Office of Information Policy, the SEC received the third highest number of 

appeals among all federal agencies and departments that reported FOIA data to the Department of Justice 

for FY 2008. Department of Justice Summary of Annual FOIA Reports for FY 2008. The inadequate 

searches for responsive documents described above may account for a large number of the administrative 

appeals for denied information. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 15 

tive 

 

proceedings,” neither at the time of the initial FOIA response, nor at the time of 

the appeal. 

The FOIA stipulates exemptions from disclosure as: 

... records or information compiled for law enforcement 

purposes, but only to the extent that the production of such 

law enforcement records or information . . . could reasonably 

be expected to interfere with enforcement proceedings. . . . 

[Furthermore] . . . Any reasonably segregable portion of a 

record shall be provided to any person requesting such 

record after deletion of the portions which are exempt under 

this subsection.14 

In our review, we found many cases where no efforts were made to segregate 

portions of records for disclosure purposes. Accordingly, the effect was a 

practical presumption in favor of withholding information, rather than the 

disclosure as required by the Freedom of Information Act. Of the 1,192 

exemption denials that the FOIA/PA Office issued in FY 2008, 196 or 16 percent 

of the requesters filed appeals. In FY 2007, there were 865 denials and 143 (16 

percent) were appealed. We found that when an initial FOIA decision is 

appealed, while a thorough review of responsive documents is still not 

performed, OGC personnel will at least contact the staff attorney assigned to the 

investigation that is the subject of the FOIA request and obtain oral confirmation 

on the status of the investigation. However, because only a small percentage of 

requesters challenge the initial denial by filing an appeal, the majority of 

requesters are deprived of this added step that is taken by OGC counselors. 

The practice of the SEC not conducting a document-by-document review has 

been challenged and has resulted in censure by the courts on two recent 

occasions.15,16 These court decisions reveal the SEC’s consistent pattern of 

non-disclosure expose the Commission to the costs of litigation and nega

14 5 U.S.C. §552: The Freedom of Information Act. (b), The Freedom of Information Act Guide, 

http://www.usdoj.gov/oip/foia_guide07.htm. March 2007, Printed on June 2, 2009. 15 Gavin v. SEC, No. 04-4522 2006 WL 1738417 at *3 (D. Minn. June 20, 2006) wherein the court stated 

that the SEC “continually and deliberately stalled in fulfilling its obligations to conduct a document-bydocument review of material it seeks to withhold pursuant to Exemption 7(A). In doing so the SEC has 

attempted to play by its own rules and [has] disregard[ed] the law.” See Freedom of Information Act Guide, 

p. 697.

16 Aguirre v. SEC, No. 06-1260, 2008 WL 1934342 at *69 (D.D.C. Apr. 28, 2008) the court finds that "there 

can be no doubt that the SEC has failed to demonstrate the adequacy of its search." SEC's declaration [of 

search for responsive documents] "lacks detail and it makes no reference whatsoever to the search terms or 

methods used. Instead, it merely states that SEC staff ‘reviewed their work files’ and ‘followed standard 

procedures.’’ " http://www.usdoj.gov/oip/foiapost/2008foiapost20.htm 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 16 

 

publicity.17 OIG determined that the current SEC practice and policy disregards 

the intent of FOIA to maximize disclosure and, more importantly, negates the 

principle of openness in government that is embodied by FOIA. 

Lack of FOIA Policy and Procedures 

Of the 19 FOIA liaisons we interviewed, only 2 liaisons provided OIG with any 

written policies and procedures for processing FOIA requests. Most liaisons that 

did not have written procedures indicated that they had extensive experience and 

were able to adapt their response to the requests appropriately, though the steps 

that were followed varied. Staff in the FOIA/PA Office provided OIG with the 

office’s procedure manual. A revision of the manual was planned at the time of 

this review. It was supplemented by interim written guidance. 

FOIA/PA Office staff believe that FOIA is not a priority within the Commission 

and FOIA requests do not receive appropriate attention when they are referred to 

Commission divisions/offices. Similarly, FOIA liaisons reported that they often 

have competing priorities or workload pressures that impact their ability to 

adequately address FOIA requests. Liaisons acknowledged that the FOIA/PA 

Office staff has procedures that guide FOIA request processing. However, 

liaisons are not well-informed about the procedures. Some liaisons developed 

their own informal FOIA practices. Others stated that the process depended on 

the nature of the FOIA request. Thus, FOIA processing is variable and 

inconsistent throughout the SEC. 

Absent any formal Commission-wide guidelines and adequate control 

mechanisms, we found examples of noncompliance, errors, and confusion 

among all FOIA staff in addressing the appropriate release of information. Some 

examples and complaints OIG identified were: 

• Discrimination towards some requesters such as commercial 

requesters whose requests have been identified as an “inappropriate 

use of FOIA;”18

• Improperly processing confidential treatment requests; 

• The lack of consistency processing requests and applying exemptions; 

• Confusion assigning responsibility for redacting confidential 

information; 

• Disclosing information without consulting with the FOIA/PA Office or 

the information source(s); 

• Mismanaging sensitive information; 

17 Morgenson, Gretchen, Deafened by the SEC’s Silence, He Sued, New York Times, May 28, 2006. 

http://www.nytimes.com/2006/05/28/business/yourmoney/28gavin.html.

18 The SEC’s “Freedom of Information Act Program Action Plan” June 13, 2006 and revised October 13, 

2006 and February 1, 2008, p. 4.
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 17 

• Compliance with the time limitations requiring request to responses in 

20-days; 

• Lack of opportunity for feedback, review, or approval of the final FOIA 

responses that are sent by the FOIA/PA Office staff; and 

• Low priority given to FOIA responsibilities Commission-wide. 

Two recent instances demonstrated the negative impact of the SEC’s lack of 

clear policies or processes regarding the release of sensitive information that 

may be contained in FOIA responses. In one case, the Commission released 

documents before the affected office or division was given the opportunity to 

review the redacted releases. The second case involved the release of a 

document that was provided directly to a requester by OGC without the 

knowledge of the affected office or the FOIA/PA Office. The impact of releasing 

this information could have potentially impaired an investigation and jeopardized 

the FOIA process. 

We conducted interviews with requesters and FOIA customers and found that the 

Commission’s lack of clarity and commitment to the intent of the Act is obvious. 

For example, some requesters reported that while the FOIA/PA Office staff was 

very pleasant, their experience with the FOIA process was “overall frustrating.” 

Not only were requesters concerned about the “misleading” length of time that it 

takes to respond to FOIA requests, they also noted the “extraordinary variability” 

of the service they experienced. Several requesters indicated that the FOIA/PA 

Office staff did not inform them about the status of their requests and further 

stated there was “little confidence in the process” or evidence of a “good faith 

effort.” Several requestors stated that the FOIA/PA staff members “did all they 

could” but they would like to see more “transparency” from the Commission. One 

requestor informed OIG that there were difficulties with the Commission’s FOIA 

process that “bordered on abusive.” 

These issues were not equally reported by staff members across the 

Commission or by all requesters. But, the fact that these issues were raised by 

the public, as well as by SEC staff members indicates that there is a weakness in 

the FOIA internal controls that puts the Commission at risk. Clear policies, 

adequate supervision, and specific guidelines are needed to help facilitate 

effective and efficient FOIA operations. This further ensures compliance with 

governing laws and regulations, which in turn safeguards the public’s confidence 

in the Commission. 

Recommendation 3: 

The Chairman’s Office shall direct the Chief FOIA Officer to ensure that: 

• Accurate searches are made for responsive information that go beyond 

information available in the databases, 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 18 

• In the event of a denial to disclose information, documented evidence is 

provided to certify that there was a document-by-document review to 

segregate responsive records. 

Recommendation 4: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to provide guidelines or written policies and procedures for all FOIA 

related staff that specifically address the concerns raised in this review, as 

follows: 

• Discrimination towards some requesters; 

• Improperly processing confidential treatment requests; 

• The lack of consistency in processing requests and applying 

exemptions; 

• Confusion in assigning responsibility for redacting confidential 

information; 

• Disclosing information without consulting with the FOIA/PA office or the 

information source(s); 

• Mismanaging sensitive information; 

• Failure to comply with the time limitations requiring request to 

responses in 20-days; 

• Lack of opportunity for feedback, review, or approval of the final FOIA 

responses that are sent by the FOIA/PA office staff; and 

• Low priority given to FOIA responsibilities Commission-wide. 

Finding 3: The OGC May Not Provide an 

Unbiased Review of FOIA Appeals 

There is an inadequate separation of administrative 

functions in the FOIA appeals process that compromises a 

fair and unbiased review of FOIA appeals. Individuals who 

participate in making the initial FOIA determination cannot 

participate in the adjudication of FOIA appeals. 

A FOIA requester has the right to appeal decisions that are made by the 

FOIA/PA Office. The appeal is sent to the FOIA/PA Office and to OGC where it 

is reviewed and adjudicated within 20-business days. To understand the 

Commission’s appeal process, we reviewed a judgmental sample of 19 appeal 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 19 

 

files.19 The sample population consisted of appeals that were submitted by the 

typical appellant. All appeal files, except for three, were from commercial 

requestors who had appealed the SEC’s initial response. The three noncommercial requestors in our sample consisted of two media requesters, and an 

individual requester who was disputing a fee charge. 

We issued a survey to FOIA liaisons and found that 60.6 percent identified OGC 

as a resource for information about the FOIA. The FOIA/PA Office staff and 

liaisons throughout the Commission told us they often sought advice from OGC 

concerning the correct interpretation and application of exemptions during the 

initial processing of FOIA requests. The survey also revealed that a number of 

FOIA liaisons are attorneys who have the capability (with some training) to 

decide how to apply exemptions to FOIA responses on behalf of their office or 

division. However, not all liaisons are lawyers and they may not have access to 

legal support within their office or division or from the FOIA/PA Office. 

We found that some personnel in OGC, who counsel staff during the initial FOIA 

request process, may later evaluate the same appeal decision. This results in a 

potential conflict of interest that raises concerns about OGC’s ability to render 

unbiased appeal opinions. Some FOIA liaisons stated that OGC counselors are 

careful to provide options and legal considerations without making a 

recommendation. OGC counselors acknowledge that they may give advice in 

the initial FOIA request process, and later make a recommendation on the same 

matter if the decision is appealed. But OGC counselors argue that they are able 

to separate the advice they give in the initial decision from making 

recommendation for appeal determinations. Furthermore, they stated that they 

can assess the merits of an appeal independently and objectively even when 

they have given advice on the initial decision. The Associate General Counsel 

stated that he believes that “the practice (of providing advice regarding the FOIA) 

is not only appropriate, but he encourages it.” Other personnel we interviewed 

indicated that OGC’s role was necessary because legal expertise was not 

available until recently within the FOIA/PA Office to support the FOIA liaisons 

needing legal advice. 

The Administrative Procedure Act20 that governs the practice and proceedings of 

federal administrative agencies such as the SEC states as follows: 

An employee or agent engaged in the performance of 

investigative or prosecuting functions for an agency in a 

case may not, in that or a factually related case, participate 

19 The list was generated by the FOIAXpress Tracking System, which is the FOIA/PA Office’s FOIA request 

tracking system. 

20 5 U.S.C.A. §554 (d) (2): Adjudications. 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 20 

 

or advise in the decision, recommended decision, or agency 

review . . . . 

The “separation of powers” is an administrative principle of safeguards to limit the 

authority and actions of staff to ensure accountability, impartiality, and objectivity. 

We determined that this principle also applies to processing FOIA requests and 

appeals. Under the CFR, requests for information under the FOIA are directed to 

the FOIA/PA Officer.21 Staff in the FOIA/PA Office, together with Commission 

staff members who are subject matter experts, have the authority to grant or 

deny FOIA requests and to determine the proper FOIA exemption. The OGC 

has “the authority to grant or deny all appeals. . .”22 

The SEC’s current practice of having the OGC attorney that provides advice to 

initially deny a FOIA request and then decides the appeal based on his/her own 

advice, compromises the FOIA process and deprives FOIA requesters from 

receiving an impartial and unbiased review during the appeal process. 23

Recommendation 5:

The Office of General Counsel shall provide and enforce a clear policy of the 

separation of roles and responsibilities and stipulate that the Office of General 

Counsel lawyers who provide advice and counsel regarding any initial Freedom 

of Information Act request shall not participate in the appeal process. 

Recommendation 6: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to ensure that sufficient legal expertise is available to the Office of 

Freedom of Information Act/Privacy Act Operations staff to process FOIA 

requests in compliance with the Freedom of Information Act, to correctly apply 

the exemptions, and to provide legal support to Commission staff regarding the 

Act. 

21 17 CFR 200.80(d)(1): Requests for Commission records and copies thereof-- 22 17 CFR §200.80(d)(6): Administrative Review. 23 The OGC points out that under the CFR, OGC is “the Commission’s advisor with respect to legal 

problems arising under the Freedom of Information Act . . . .” 17 CFR §200.21 (a). While that is true, the 

CFR also specifically provides that the Chairman or General Counsel may separate these functions if the 

lack of a separation would be deemed “inappropriate.” 17 CFR §200.21 (b)(1)(2). 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 21 

Finding 4: FOIA Responsibilities Have Not Been a 

Commission Priority 

Commission managers have not applied adequate 

management, supervision and personnel practices 

concerning its staff responsible for FOIA processing. These 

deficiencies include providing training opportunities, and 

including FOIA liaison duties in position descriptions and 

performance standards. All Commission staff needs FOIA 

related training commensurate with their level of FOIA 

responsibilities. 

Issues Faced by all FOIA Staff 

The burden to meet the Commission’s obligation to obey the law is incorporated 

in the Act and falls mostly on the FOIA/PA Office staff and the FOIA liaisons. 

Responding to the FOIA requests involves virtually all Commission staff. 

Requests are physically received and transmitted back through the FOIA/PA 

Office staff, but the FOIA liaisons facilitate substantive searches. Liaisons need 

subject matter experts (i.e., investigators, analysts, administrators, etc.) who are 

most familiar with the information to produce the response to FOIA requests and 

who must understand the increasingly stringent requirements of the FOIA. 

As the axis of the Commission’s FOIA process, the FOIA/PA Office staff and 

FOIA liaisons have common observations and challenges that they face in 

responding to FOIA requests. These include: 

• Mandated time limitations that do not account for the complexity of 

Commission activities; 

• The sheer volume of information generated by the Commission; 

• Multiple information and records systems; 

• Increasing numbers of FOIA requests; 

• Rising requester expectations for responsiveness; 

• Sophisticated and complex FOIA requests; 

• Conflicting work priorities wherein addressing FOIA requests competes 

with “substantive work;” and 

• The SEC’s functions emphasizing the protection of information that 

conflicts with the FOIA’s objectives for openness and transparency. 

The FOIA Liaisons 

The FOIA/PA office staff has successfully developed efficient response 

processes for the majority of requests that are received, especially in addressing 
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 22 

 

responses to commercial vendors. However, when a request requires additional 

consultation or research, the request is referred to a FOIA liaison. The FOIA 

liaison’s role in facilitating a timely and appropriate response and returning the 

information to the FOIA/PA Office is pivotal to the Commission’s success in 

processing FOIA requests. 

To understand the concerns experienced by the FOIA liaisons, in May 2009, we 

distributed a survey to all the SEC’s designated FOIA liaisons and the FOIA/PA 

Office staff. There are 40 designated FOIA liaisons that are in 33 Commission 

offices or divisions and 72.7 percent responded to our survey. The FOIA liaison 

responses to the survey revealed the following: 

• Eighty-seven percent spend as little as 10 percent and as much as 40 

percent of their time processing from 3 to 50 requests each month.24 For 

the remaining liaisons, responding to FOIA requests is their full-time role. 

• Fifty-three percent “Agree” that processing FOIA requests interferes with 

their normal workload. 

• Fifty-four percent of FOIA liaisons reported that their FOIA responsibilities 

were not included in their position description or performance plans. 

 

• Twenty-one of 33 (63.6 percent) respondents reported that they had no 

prior FOIA-related experience. 

• Only five out of 33 liaisons indicated they had received formal training. 

• Most liaisons reported that they relied on their predecessors, or relied on 

FOIA/PA Office staff (83.8 percent) or OGC staff (60.6 percent) to answer 

their questions about FOIA. 

• Almost all respondents indicated that training is needed to understand the 

FOIA/PA Office procedures and to better understand the FOIA law; 

specifically they requested updates in appeal and trial cases, applying 

exemptions, Privacy Act training, and the opportunity to attend 

Department of Justice FOIA-sponsored classes. 

Almost all the liaisons’ FOIA job duties and responsibilities are secondary to their 

primary job. The majority of liaisons reported they were not clear on how or why 

they were assigned as a FOIA liaison. One liaison reported feeling she was 

“being punished” when she was assigned to be the FOIA liaison. Many liaisons 

24 This estimate excludes the number of FOIA requests processed by three offices/divisions that receive 

from 100 to 500 FOIA requests per month. For FOIA liaisons with a high FOIA request volume, FOIA duties 

may be their primary job.
Review of the SEC’s Compliance with FOIA September 25, 2009

Report No. 465 

Page 23 

do not believe that their FOIA role is valued. Another liaison said that “FOIA is 

the step-child” of the Commission. Further, some liaisons complained about staff 

or management’s apathy, the lack of cooperation from colleagues, and staff’s 

resistance towards FOIA responsibilities. 

Liaisons also expressed concern about the FOIA/PA Office staff. Liaisons 

reported that FOIA/PA Office staff sometime makes “small but critical” errors 

when referring FOIA requests. There are also questions about the methods that 

are used to search databases and public sources in responding to FOIA requests 

that are incorrectly referred to liaisons. In addition, there is concern that the 

FOIA/PA Office does not have adequate resources to address complex legal 

questions. Finally, FOIA liaisons reported that there is insufficient 

communication and feedback between the FOIA/PA specialists and OGC 

concerning FOIA decisions to redact, disclose, or deny information, which 

exemptions should be applied, and the outcome of appeals. 

The FOIA/PA Office Staff 

Since 2007, the FOIA/PA Office has reduced its FOIA request backlog 

substantially. Both the FOIA/PA Office staff and liaisons report that the FOIA 

process has improved and both groups appreciate their mutual roles and value 

each other’s friendship and cooperation, yet all agree there are areas that need 

improvement. 

 

In May 2009, we distributed a survey to FOIA staff to better assess their 

concerns, challenges, and successes. Nineteen of 24 (or 79 percent) of the 

FOIA/PA Office staff responded to the survey. The FOIA/PA Office staff attributes 

their success in managing a large volume of FOIA requests and reducing its 

backlog to good management within the office. They say that streamlined 

procedures and a tracking system, the FOIAXpress, have enhanced the staff’s 

efficiency. Sixteen of 19 (or 84.2 percent) of the FOIA/PA Office staff reported 

participating in one or more FOIA-related training opportunities. However, in the 

survey, the respondents also identified the following difficulties they have 

experienced in responding to FOIA requests: 

• Receiving untimely responses from liaisons; 

• Locating documents; 

• Dealing with the cumbersome organization of some documents; 

• Verifying the volume of responsive documents, especially electronic 

documents; 

• Confirming the correct FOIA exemption to apply; 

• Segregating responsive information from exempted or non-responsive 

information; 

• Redacting confidential information; 
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• Identifying and protecting confidential sources; 

• Confusing procedures that cover confidential treatment requests; 

• Changing/evolving FOIA interpretations; and 

• Negative reactions from requesters. 

The FOIA/PA Office staff has become an efficient and productive unit. They 

have successfully negotiated with a majority of the commercial vendors making 

FOIA requests to ensure timely and appropriate responses. In FY 2007 and 

2008 commercial vendor requests accounted for 96.8 and 95.7 percent,25

respectively, of the FOIA/PA staff workload. These successes, in addition to 

reducing the backlog, were achieved during FY 2007 and FY 2008, though the 

office’s staffing level did not increase. The office effectively uses the 

FOIAXpress system to manage its FOIA requests and report they are constantly 

seeking to improve the overall quality of FOIA processing. However, like the 

concerns expressed by the FOIA liaisons, many of the FOIA/PA staff members 

observed that FOIA requests are becoming more complicated and that 

requesters are demonstrating increasing sophistication in their requests. 

The Importance of Staff for Effective FOIA Implementation 

The Executive Order 13392 Implementation Guidance provided by the 

Department of Justice (2006), identified 27 “potential improvement areas” for 

agencies to consider when developing their FOIA processing improvement plans; 

seven of these improvement areas addressed personnel issues. These include: 

• Obtaining the necessary cooperation from program personnel; 

• Incorporating ideas from field office personnel; 

• Adding FOIA-related training opportunities; 

• Providing training on FOIA exemptions; 

• Increasing staffing (where applicable); 

• Changing personnel practices such as job series, grades, etc.; and 

• Utilizing contract employees.26

Subsequently, the OPEN Government Act established more rigorous 

expectations such as the time that is allotted to respond to requests, thus placing 

greater demands on staff numbers as well as staff’s skills. In recognition of the 

impact on FOIA staff, the Act placed special emphasis on the importance of 

personnel policies. The Act directed the Office of Personnel Management (OPM) 

to recommend personnel changes that could be made to “enhance the stature” of 

government employees involved in administering FOIA.27 In response, Michael 

W. Hager (Acting Director, OPM), in a letter to the Former Vice President Richard 

25 Special report produced by FOIAXpress and presented by the FOIA/PA Officer, June 17, 2009. 26 http://www.usdoj.gov/archive/oip/foiapost/2006foiapost6.htm 27 OPEN Government Act: §11: Report on Personnel Policies Related to FOIA. 
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B. Cheney on December 16, 2008, advised that agencies have the responsibility 

and the authority to establish employee performance standards, improve 

recruiting and selection methods, set minimum rates of pay, establish career 

advancement tracks, and determine training requirements. Attorney General 

Holder, in his March 19, 2009 Memorandum to the Heads of Executive 

Departments and Agencies, affirmed the responsibility of all staff to respond to 

FOIA requests and highlighted the key role played by FOIA professionals. 

In the past, the Commission’s response to the FOIA Act may be characterized as 

“crisis management.” For example, to address the FY 2007 and FY 2008 

backlog, the Commission achieved important advances in FOIA request 

processing by creating systems and mobilizing staff in response to 

recommendations from OIG Report No. 422. However, it appears there was no 

Commission-wide oversight to address on-going and future needs. As described 

by the FOIA staff that is responsible for compliance with the FOIA, management 

has not addressed basic personnel practices, has neglected to develop and 

provide training opportunities, and has not addressed staffing needs to meet the 

current and expected future FOIA demands. 

Recommendation 7:

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to collaborate with the respective office and division managers and the 

Office of Human Relations to review position descriptions of current Freedom of 

Information Act/Privacy Act (FOIA/PA) staff and FOIA liaisons to include staff’s 

appropriate FOIA task descriptions, performance standards, and review pay 

grades to ensure that they reflect actual FOIA responsibilities and duties. 

Recommendation 8: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to ensure that appropriate training opportunities are provided to all 

Commission staff that is appropriate for their level of FOIA responsibilities to 

effectively and efficiently process FOIA requests. 

Finding 5: FOIA Processing Needs Improved 

Information Management 

FOIA reviews are hindered by the variety of and 

inconsistencies in databases and record-keeping practices. 

In addition, there is a lack of clear policies for management 

of both paper and electronic documents. Further, the OIG 

Report No. 422 recommended that read-only access to the 
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FOIA request database should be made available to all FOIA 

liaisons. At the time of this review, only three FOIA liaisons 

had been making use of FOIAXpress. 

Since 2004, the Commission has taken important policy and procedural steps to 

address the demand that information is made more accessible on the SEC’s 

website. However, the number of FOIA requests has not decreased as was 

expected. Instead, the number of FOIA requests increased by approximately 6 

percent between FY 2007 and 2008. Over 95 percent of the 8,000 to 10,000 

FOIA requests that the Commission receives each year are from commercial 

users. FOIA/PA Office staff negotiated with commercial vendors to tailor their 

FOIA requests so that the data is readily available and to ensure the FOIA/PA 

Office staff serve the vendor needs more efficiently. The vast majority of these 

requests can be researched quickly. However, the sheer quantity of request 

consisting of 4,143 commercial FOIA requests that were processed in 2007 and 

8,545 commercial requests that were processed in 2008, consumes the FOIA/PA 

Office resources. 

 

The SEC’s Annual Reports that were submitted to the Department of Justice for 

FY 2007 and 200828 identify the median29 number of days it took the SEC’s 

FOIA/PA Office to process FOIA requests. The relative amount of effort that is 

required to process these requests is categorized as “simple” or “complex.” A 

third category, “expedited” processing, requires that the FOIA/PA Office respond 

to the requester within 10 rather than the typical 20-days. Expedited processing 

is infrequently granted.30

 Table 5: Median Days Needed to Process FOIA Requests 

Simple Requests FY 2007 FY 2008

a. Number of requests processed 9,652 15,463

b. Median number of days to process 67 66

Complex Requests

a. Number of requests processed 2,912 65

b. Median number of days to process 705 570

Requests accorded expedited processing

a. Number of requests processed 0 2

b. Median number of days to process 0 2

 Source: SEC FOIA/PA Office Annual Reports for Fiscal Years 2007 and 2008 

 

28 SEC Freedom of Information Act Annual Report for Fiscal Year 2007, October 1, 2006 to September 30, 

2007 and Fiscal Year 2008, October 1, 2007 to September 30, 2008. 29 The median is the middle, not the average number. For example, of the numbers 3, 7, and 14, the median 

number is 7. 

30 17 CFR, §200.80 (d)(5)(iii): Expedited Processing. 
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Table 5, Median Days Needed to Process FOIA Requests, indicates that “simple” 

requests took 67 median days to process in FY 2007 and 66 median days in 

2008. The median number of days it took to process “complex” requests was 

705 days in 2007 and 570 days in 2008. Interviews with FOIA staff as well as 

FOIA liaisons reflect the general impression that responding to FOIA requests 

has become more difficult to complete within the required 20-working days that is 

allotted under the Act and even with the additional days that are allowed by law 

for unusual and exceptional circumstances and even though extensions can be 

given with the requesters’ permission. The OIG determined that the 

Commission’s effort to address FOIA requests in a timely manner is not 

sufficient. 

Information and Records Management 

Interviews with the FOIA/PA Officer and staff suggest that a number of factors 

inhibit the rapid search and review of responsive records. These factors include 

large volumes of documents that must be reviewed, the problematic organization 

of documents, locating files from within the Commission’s headquarters and the 

11 regional offices, files must be retrieved from long-term storage, and files that 

may already have been disposed of, or may be lost. 

One of the most frequently requested records are Enforcement’s investigative 

files. An initial search to locate investigative files begins with the NRSI database, 

which may not be accurate. Potentially responsive files maintained in the 

regional offices must be boxed and shipped to headquarters. Files may be in 

transit, or have already been transferred to the Branch of Records Management 

(BRM) for storage. The BRM manages the tracking of records that have been 

sent to the Federal Records Center. Records can also be retrieved from longterm storage at various Iron Mountain facilities. Records that are sent to storage 

facilities require additional time to search and be delivered to the requesting 

office. In most cases, there are no indexes to these paper records. 

Interviews with the Commission Archivist and a review of BRM management 

reports confirm that the FOIA/PA Office is the single biggest user of the BRM and 

accounted for 80 percent of all the requests in FY 2008, for which 68.7 percent 

were delivered to the FOIA/PA Office. The FOIA/PA Officer credits the BRM for 

improving service in the past two years, but stated that waiting for off-site records 

either from the regional offices or from BRM accounts for much of the time that is 

used to process FOIA requests. 

When files are located, the staff assesses the likely presence of the responsive 

files. According to instructions from an Enforcement Memorandum issued on 

August 20, 1993, investigative files are organized by their content into categories 

A through F. Most of the records such as Category A – “Transcripts,” or 
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Category B – “The Commission’s Official Records,” all have specific instructions 

to segregate the information into folders and to index the material in order to 

identify the information in the folder. Category F is a general category that 

contains records that are “subject to a FOIA request.” The memorandum further 

states that: “no index is required for (Category F) records.” Lacking any other 

organizational principle, FOIA/PA staff must review Category F records page by 

page, to determine what information is responsive for a given FOIA request. The 

requested records can range from a small folder to hundreds of boxes of paper 

documents. 

Increasingly, documents and evidence that the SEC accumulates are provided in 

electronic formats. Interviews with staff in Enforcement and FOIA/PA Office staff 

suggest that electronic records are also problematic. Electronic formats often 

exacerbate the volume, as well as the complexity and variety of evidence that is 

accumulated in the course of an investigation. For example, Enforcement staff 

explained that the entire content of several computers may be submitted as 

support documentation for an investigation. Organizing such information in order 

to facilitate the retrieval and review of complex and voluminous records 

challenges the FOIA process even further. 

The work flow priority for the FOIA/PA Office staff is to process current requests 

first. FOIA/PA Office procedures indicate that any FOIA request response that 

requires the review of three or more boxes of documents should be placed in a 

multi-tracked “first-in, first-out” (FIFO) queue, and are processed as staff 

becomes available, in the order of receipt and in agreement with the FIFO 

process. Examples of requests containing large volumes of material include a 

request (pending since 2005) that consisted of 300 boxes of records and was 

only just completed in 2009. Another request, now under review, contains more 

than 245 boxes of records. Currently, there are 17 pending FIFO requests, but 

only three requests are being reviewed at this time. Using the FOIAXpress, the 

FOIA/PA staff periodically sends letters to the requesters confirming their 

continued interest in receiving a response for these requests. Many requesters 

withdraw their request for long-delayed FIFO documents. 

The FOIA/PA Officer confirms that the current staffing level is not sufficient to 

process FIFO requests in a timely manner. On occasion, staff is diverted to 

support OGC during FOIA litigation, because litigation support supersedes FIFO 

requests. While the FOIA/PA Office staff points to the impressive progress that 

they have achieved in reducing the number of pending FOIA requests, the 

obstacles experienced by the Commission’s record retrieval system and the 

cumbersome organization of records continues to hinder the Commission’s ability 

to respond to FOIA requests in a timely way. 
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Access to the FOIAXpress System 

 

In 2007, the OIG conducted an audit of the Commission‘s FOIA backlog and 

issued Backlog of FOIA Requests For Comment Letters, Report No. 422 on 

March 30, 2007. The audit report consisted of eight recommendations 

(Recommendations A - H) and found, among other things, that the FOIA liaisons 

did not have access to the FOIAXpress tracking system and database. In the 

audit report, recommendation G specified that the FOIA/PA Office provide such 

access to FOIA liaisons in the other offices and divisions who respond to FOIA 

requests. In its response to the recommendation, the FOIA/PA Office indicated 

that it planned to provide FOIA liaisons with read-only access to the FOIA 

request database. 

However, Recommendation G has not been fully implemented. Only 3 of 19 

designated FOIA liaisons in OGC and the Corporation Finance reported that they 

had read-only access to the FOIA database and use the FOIAXpress regularly to 

check the FOIA cases that are assigned to them. Other liaisons we interviewed 

stated they did not know they had access to the FOIAXpress and did not know 

how they would use the information to facilitate FOIA work. 

Most of the liaisons have developed their own tracking system and logs to aid in 

monitoring the progress of FOIA requests and to document actions that were 

taken on FOIA requests. Several liaisons used Excel spreadsheets as their 

tracking system or log, and indicated that it took a significant amount of time to 

re-enter data that duplicates information already existing in FOIAXpress. Some 

liaisons stated they found inconsistencies between their own logs and a year-end 

report that was generated by FOIAXpress. Liaisons expressed doubt about the 

accuracy of information in the FOIAXpress. 

The FOIA/PA Officer stated that all FOIA liaisons were informed that they could 

have read-only access to FOIAXpress, and those who responded received 

training on how to download the request information (e.g., FOIA number, name of 

the requester, received date, target date of the request, etc.), rather than 

laboriously re-entering the same data into their own logs. The FOIA/PA Officer 

acknowledged the FOIAXpress system is not capable of recording information 

that is unique to each office or division, but that much FOIA request data can be 

exported from FOIAXpress into an Excel spreadsheet. The FOIA/PA Officer said 

there is no software distribution process or special identification or programming 

required. 

Some features of the FOIAXpress system are not clear and may contribute to the 

liaisons’ mistrust of the system. We noted the following examples: 
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• Tracking numbers from the FOIAXpress system assigned to appeals files 

differed from the tracking numbers utilized by OGC. Therefore, the file 

numbers had to be converted in order to locate the correct appeals files. 

• The FOIAXpress system’s record of the closing dates assigned to the 

appeal differed when compared to the closing dates recorded in OGC 

files. 

The FOIA liaisons reported that the current system for processing FOIA requests 

involves an email notification from the FOIA/PA Office, coupled with a copy of the 

request. The liaison enters the information into an Excel spreadsheet log before 

beginning the search for responsive records, or assigning the search to another 

analyst within the office or division. The liaisons reported that they were puzzled 

that the request might be several days old before reaching the liaison, thus 

reducing the amount of time available to conduct the search and return a 

response. The liaisons we interviewed did not have a clear understanding of the 

FOIA/PA Office staff processes, how liaisons could improve their responses to 

FOIA requests, and the way the FOIAXpress is utilized. 

The OPEN Government Act, specifically addresses the timeliness of FOIA 

responses. The conditions for “tolling” the time taken by an agency to respond to 

a request are specifically delineated. Some “unusual circumstances” may 

provide relief from time limitations, but according to the wording of the Act, 

“exceptional circumstances” cannot include a predictable workload of requests.31 

We found that notwithstanding the reduction of backlogs, the FIFO negatively 

impacts the Commission’s record of FOIA request responsiveness. 

Recommendation 9: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer and the Office of Freedom of Information Act/Privacy Act Operations to 

collaborate with the Office of the Secretary, the Division of Enforcement, and the 

Office of Information Technology to produce a strategy that addresses 

information management obstacles hindering timely and comprehensive FOIA 

responses. This strategy should contain concrete recommendations, specific 

timelines, and cost estimates and should be presented to the Commission for 

action. 

31 5 U.S.C. §552(a)(6)(C)(ii) as described in US Department of Justice, FOIA Post, 

http://www.usdoj.gov/oip/foiapost/2008foiapost9.htm, “Unusual circumstances” occur when there is a need 

to search or collect records from field offices, voluminous records, or consultation with another agency. 

“Exceptional circumstances: cannot include “a delay that results from a predictable agency workload. . . .” 
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Recommendation 10: 

The Chairman’s Office shall direct the Chief Freedom of Information Act Officer 

to conduct training that is needed to fully implement the productive and suitable 

use of the FOIAXpress tracking and document management system. 
Appendix I 

Acronyms and Abbreviations

Annual Report SEC’s Freedom of Information Act Annual 

 Report 

BRM Branch of Records Management 

CATS Case Activity Tracking System 

CFR Code of Federal Regulations 

Enforcement Division of Enforcement 

FIFO First-in, First-out 

FOIA Freedom of Information Act 

FOIA/PA Freedom of Information Act/Privacy Act 

FOIAXpress FOIA/PA tracking and document management 

system 

GAO Government Accountability Office 

IM Division of Investment Management 

OGC Office of General Counsel 

OIEA Chief, Office of Investor Education and 

 Advocacy 

OIG Office of Inspector General 

OPEN Government Act 2007 Openness Promotes Effectiveness in Our 

 National Government Act of 2007 

OPM Office of Personnel Management 

NRSI Name Relationship Search Index 

SEC or Commission U.S. Securities and Exchange Commission 

Service Center FOIA Customer Service Center 

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Appendix II 

Scope and Methodology

This review was not conducted in accordance with the government auditing 

standards. 

Scope. The scope of the review covered Commission FOIA activities during FY 

2007 and 2008 and involved a detailed review of the policies, procedures, and 

processes that were in place for processing FOIA requests and appeals in an 

effort to determine whether they are consistent with FOIA requirements and 

Commission rules. The review included an analysis of the Commission’s 

implementation of Executive Order 13392, Improving Agency Disclosure of 

Information, an assessment of whether public guidance regarding FOIA requests 

and processing was up-to-date, and whether the Commission’s implementation 

of the Act was consistent with current requirements as defined in the OPEN 

Government Act of 2007 and the recent directives from the Attorney General. 

We obtained data from the FIOA/PA Office, OGC, Corporation Finance, IM, 

Enforcement, and BRM. 

Methodology. To address the objective to review the FOIA/PA Office’s 

compliance with applicable laws and regulations, we fielded a survey via the 

SEC’s intra-net to the FOIA/PA Office staff in May 2009. 67.8 percent of the 

FOIA/PA Office staff responded to the survey. We analyzed FOIA/PA Office staff 

responses to the survey to identify issues of compliance with FOIA laws, SEC 

regulations as expressed in the CFR and the documented policies and 

procedures, and we interviewed 9 of 28 the FOIA/PA Office staff members to 

confirm our observations. We reviewed available documentation, including 

policies and procedures, the FOIA/PA Working Procedure Manual, the SEC’s 

Annual Reports to the Department of Justice, and various tracking logs and 

reports. To review the FOIA Customer Service Center’s effectiveness, we 

conducted telephone interviews with the Commission’s most frequent FOIA 

requesters. Lastly, we tested data to determine if information from the FOIA/PA 

Office tracking and documentation system, the FOIAXpress was consistent with 

other reports, tracking systems, and logs. 

To address the objective to review the coordination with FOIA/PA Office liaison 

staff, select field offices, and OGC, we sent a second survey via the SEC’s intranet to all designated FOIA liaisons in all the identified SEC divisions/offices, the 

field offices, and OGC. We received a response from 72.7 percent of the 

designated FOIA liaisons to this survey. We analyzed FOIA liaison responses to 

the survey to identify issues of compliance with FOIA laws, SEC regulations as 

expressed in the CFR and the documented policies and any available written 

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procedures. We interviewed 20 of 40 FOIA liaisons in various Commission 

offices and divisions at headquarters and the regional offices to gain an 

understanding of the coordination with the FOIA/PA Office of the Commission’s 

FOIA process program. We collected and analyzed various tracking logs and 

reports and gathered information available on the Commission’s intranet. We 

interviewed the four attorneys in the Office of General Counsel responsible for 

processing and litigating FOIA appeals. To understand the Commission’s appeal 

process we reviewed selected appeal files. 

Internal Controls. We reviewed the existing internal controls that were 

considered significant within the context of the FOIA program and the evaluation 

objectives. We interviewed personnel from the FOIA/PA Office, OGC, 

Corporation Finance, and IM, identified and reviewed applicable policies and 

procedures, obtained and reviewed available FOIA program documentation, and 

tested data for compliance with selected policies and procedures. 

Prior Audit Coverage. The OIG previously conducted an audit of the 

Commission’s FOIA backlog and issued Backlog of FOIA Requests For 

Comment Letters, Report No. 422, March 30, 2007. The March 2007 OIG report 

made seven recommendations (Recommendation A - E, and H) to streamline 

and facilitate the process of proactively posting information for public access via 

the SEC website. We selected FOIA liaisons from the Corporation Finance and 

IM division/office to assess their compliance with OIG Report No. 422. Interviews 

with the staff responsible for implementing the OIG recommendations revealed 

that except for one, key recommendations have been either fully implemented or 

demonstrating progress. Recommendation G directed that the FOIA/PA Office 

implement its plan to provide FOIA liaisons with access to its FOIA request 

database, (the FOIA/PA tracking system is FOIAXpress), and although formally 

closed, has not been implemented. We found that only two offices use the readonly access to the FOIAXpress database, OGC and Corporation Finance. 

 

Use of Computer-Processed Data. We used computer-processed data such 

as reports generated by the FOIAXpress system, emails, logs maintained in 

Excel spreadsheet form. To the extent practical, we compared the data with 

source documents. We did not perform extensive testing of system or 

application controls. 

Judgmental Samples. All staff with FOIA-related responsibilities were offered 

an opportunity to respond to the two surveys. We used judgmental samples to 

select staff with FOIA related responsibilities for interviews; although all staff who 

requested an interview or identified themselves in the surveys were interviewed. 

We requested a list of the ten most frequent requesters from the FOIA/PA Officer 

in order to review the FOIA Customer Service Center’s effectiveness and we 

conducted telephone interviews with all 10 of the Commission’s most frequent 

FOIA requesters. The sample requester population consisted of 8 commercial 
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vendors and two journalists. To understand the Commission’s appeal process, 

we judgmentally selected 19 of 554 closed appeal files to review that covered FY 

2007 and 2008. Included with these 19 were 16 appeals from commercial 

requestors, 2 from media requesters, and a single appeal which disputed a fee 

charge. We analyzed the appeal process, the number of days to completion, the 

disposition, and the number and kinds of exemptions cited. 
Appendix III

Criteria

Freedom of Information Act, 5 U.S.C. §552: Governs the FOIA Program. 

Administrative Procedures Act, 5 U.S.C.A. §554: Establishes administrative 

rules and procedures. 

The Freedom of Information Act: Amended in 1974, 1976, 1986, 1996, and in 

2007 to narrow the scope of FOIA exemptions and expand the scope of 

information available to the public by the Freedom of Information Act. 

H.R. 3802: The 1996 amendments to FOIA, sometimes named e-FOIA, extended 

FOIA’s provisions to electronic records, and requires agencies to package 

information electronically for any requester. 

Openness Promotes Effectiveness in our National Government Act of 2007 

(OPEN Government Act of 2007): Further modified FOIA by codifying into law 

provisions of the Executive Order 13392 and added a new office: the Office of 

Government Information Services. 

Executive Order 13392, Improving Agency Disclosure of Information,

issued December 19, 2005: Promotes a “customer service” orientation by 

requiring the establishment of public liaisons and providing tracking numbers for 

consumers. Agencies were to designate Chief FOIA Officers and directed to 

monitor specific data points and to report progress. 

Code of Federal Regulations, 17 §§200-239: Commodities and Securities 

Exchanges is the official codification of Federal regulations established under the 

Federal Register Act. 

The SEC’s Freedom of Information Act Program Action Plan: Pursuant to 

Executive Order 13392, as submitted to the Department of Justice and Office of 

Management and Budget, June 13, 2006 and subsequent revisions on October 

13, 2006 and February 1, 2008. 

The SEC’s Freedom of Information Act Annual Reports: FY 2007, October 1, 

2006 to September 30, 2007 and FY 2008, October 1, 2007 to September 30, 

2008. 

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Attorney General's Memorandum for Heads of Executive Departments and 

Agencies Concerning the Freedom of Information Act, March 19, 2009. 
Appendix IV 

 List of Recommendations

Recommendation 1: 

The Chairman’s Office shall fill the Chief FOIA Officer position with a qualified 

candidate and ensure that the Chief FOIA Officer has the appropriate authority to 

implement FOIA and to effectively fulfill the responsibilities outlined in the OPEN 

Government Act of 2007. 

Recommendation 2: 

The Chairman’s Office shall communicate on an ongoing basis to Commission 

employees and the public the importance of the Freedom of Information Act 

(FOIA) to the agency’s mission. This can be accomplished by updating the 

Commission’s FOIA webpage to emphasize the importance of FOIA to the public, 

and by issuing an SEC Administrative Notice to Commission employees on an 

annual basis.

Recommendation 3: 

The Chairman’s Office shall direct the Chief FOIA Officer to ensure that: 

• Accurate searches are made for responsive information that go beyond 

information available in the databases, 

• In the event of a denial to disclose information, documented evidence is 

provided to certify that there was a document-by-document review to 

segregate responsive records. 

Recommendation 4: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to provide guidelines or written policies and procedures for all FOIA 

related staff that specifically address the concerns raised in this review, as 

follows: 

• Discrimination towards some requesters; 

• Improperly processing confidential treatment requests; 

• The lack of consistency in processing requests and applying 

exemptions; 

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• Confusion in assigning responsibility for redacting confidential 

information; 

• Disclosing information without consulting with the FOIA/PA office or the 

information source(s); 

• Mismanaging sensitive information; 

• Failure to comply with the time limitations requiring request to 

responses in 20-days; 

• Lack of opportunity for feedback, review, or approval of the final FOIA 

responses that are sent by the FOIA/PA office staff; and 

• Low priority given to FOIA responsibilities Commission-wide. 

Recommendation 5:

The Office of General Counsel shall provide and enforce a clear policy of the 

separation of roles and responsibilities and stipulate that the Office of General 

Counsel lawyers who provide advice and counsel regarding any initial Freedom 

of Information Act request shall not participate in the appeal process. 

Recommendation 6: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to ensure that sufficient legal expertise is available to the Office of 

Freedom of Information Act/Privacy Act Operations staff to process FOIA 

requests in compliance with the Freedom of Information Act, to correctly apply 

the exemptions, and to provide legal support to Commission staff regarding the 

Act. 

Recommendation 7:

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to collaborate with the respective office and division managers and the 

Office of Human Relations to review position descriptions of current Freedom of 

Information Act/Privacy Act (FOIA/PA) staff and FOIA liaisons to include staff’s 

appropriate FOIA task descriptions, performance standards, and review pay 

grades to ensure that they reflect actual FOIA responsibilities and duties. 

Recommendation 8: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer to ensure that appropriate training opportunities are provided to all 

Commission staff that is appropriate for their level of FOIA responsibilities to 

effectively and efficiently process FOIA requests. 
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Recommendation 9: 

The Chairman’s Office shall direct the Chief Freedom of Information Act (FOIA) 

Officer and the Office of Freedom of Information Act/Privacy Act Operations to 

collaborate with the Office of the Secretary, the Division of Enforcement, and the 

Office of Information Technology to produce a strategy that addresses 

information management obstacles hindering timely and comprehensive FOIA 

responses. This strategy should contain concrete recommendations, specific 

timelines, and cost estimates and should be presented to the Commission for 

action. 

Recommendation 10: 

The Chairman’s Office shall direct the Chief Freedom of Information Act Officer 

to conduct training that is needed to fully implement the productive and suitable 

use of the FOIAXpress tracking and document management system. 

 
Appendix V 

 Management Comments

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Appendix VI 

 Office of Inspector General’s 

Response to Management’s Comments

The Office of Inspector General is pleased that the Office of the Chairman 

concurred with the report’s 8 recommendations addressed to its office. We also 

note that the Office of the Chairman partially concurred with recommendation no. 

3. We believe that the Chairman’s Office proposed actions are responsive to our 

findings and recommendations and are encouraged that the Chairman’s Office 

has already taken action to implement a key recommendation addressing the 

Chief FOIA Officer position.32 Once all the recommendations are fully 

implemented, we believe that the Commission’s FOIA processes will be 

strengthened. 

We are disappointed that the Office of General Counsel (OGC) has only partially 

concurred with recommendations 333 and 5. We believe that both these 

recommendations are crucial to ensuring that the public is able to obtain 

documents under FOIA in a transparent, complete and timely manner. 

Recommendation no. 3 provides that where the SEC denies a request under 

FOIA, documented evidence should be provided to certify that there was a 

document-by-document review to segregate responsive materials. We believe 

that it is important that the SEC complies with both the letter and spirit of the 

FOIA. Performing a document-by-document review is a necessary step to 

properly withhold documents and to facilitate identification of segregable 

documents. As discussed in the report, although President Obama issued a 

Memorandum to the Heads of Executive Departments and Agencies on January 

21, 2009 directing FOIA to be administered with a “presumption in favor of 

disclosure,” the current SEC practices have the effect of creating a presumption 

of withholding. It is also worth noting that in OGC’s comments to this report, it 

acknowledges that its position that a document-by-document review is not 

necessary if an agency establishes categories of documents, has also been 

rejected by a federal court. OGC continues to maintain this position even after 

our review, and after this same federal court criticized the SEC for deliberately 

stalling in fulfilling its obligations under FOIA in a published decision. 

 

32 We note that the assertion that the Chief FOIA Officer position has been occupied continuously 

with senior-level staff is not entirely correct; the first assigned Chief FOIA Officer was not a senior 

officer. While subsequent Chief FOIA Officers may have been at the senior level, the major issue 

of the finding was that the position did not have sufficient support from the Commission to 

effectively function as a Chief FOIA Officer.

Review of the SEC’s Compliance with FOIA September 25, 2009 

33 While recommendation no. 3 was directed to the Office of the Chairman, it was responded to 

by the Office of General Counsel. 

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With respect to recommendation no. 5, we are disappointed that OGC is 

unwilling to enforce a clear separation of roles and responsibilities under the 

FOIA, and will continue its practice of having the same personnel who counsel 

staff during the initial FOIA request process later evaluating the appeal decision, 

notwithstanding the conflict. While the Administrative Procedure Act provisions 

may not strictly apply in a technical sense, the administrative principle of putting 

in place safeguards to limit the authority and actions of staff to ensure 

accountability, impartiality, and objectivity are particularly applicable to FOIA, and 

we fear that continuing this practice will compromise the FOIA process and 

deprive FOIA requesters from receiving an impartial and unbiased review during 

an appeal. 
Audit Requests and Ideas

The Office of Inspector General welcomes your input. If you would like to 

request an audit in the future or have an audit idea, please contact us at: 

U.S. Securities and Exchange Commission 

Office of Inspector General 

Attn: Assistant Inspector General, Audits (Audit Requests/Ideas) 

100 F Street, N.E. 

Washington D.C. 20549-2736 

Tel. # 202-551-6061 Freedom of Information Act (FOIA) 

Fax # 202-772-9265 

Email: oig@sec.gov 

Hotline To report fraud, waste, abuse, and mismanagement at 

Commission, contact the Office of Inspector General at: 

Phone: 877.442.0854 

Web-Based Hotline Complaint Form: 

 www.reportlineweb.com/sec_oig