`[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



                          OVERSIGHT OF THE SEC

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________


                             JUNE 22, 2023

                               __________


       Printed for the use of the Committee on Financial Services

                           Serial No. 118-35





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                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

53-201 PDF                WASHINGTON : 2024










                 HOUSE COMMITTEE ON FINANCIAL SERVICES

               PATRICK McHENRY, North Carolina, Chairman

FRANK D. LUCAS, Oklahoma             MAXINE WATERS, California, Ranking 
PETE SESSIONS, Texas                     Member
BILL POSEY, Florida                  NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri         BRAD SHERMAN, California
BILL HUIZENGA, Michigan              GREGORY W. MEEKS, New York
ANN WAGNER, Missouri                 DAVID SCOTT, Georgia
ANDY BARR, Kentucky                  STEPHEN F. LYNCH, Massachusetts
ROGER WILLIAMS, Texas                AL GREEN, Texas
FRENCH HILL, Arkansas, Vice          EMANUEL CLEAVER, Missouri
    Chairman                         JIM A. HIMES, Connecticut
TOM EMMER, Minnesota                 BILL FOSTER, Illinois
BARRY LOUDERMILK, Georgia            JOYCE BEATTY, Ohio
ALEXANDER X. MOONEY, West Virginia   JUAN VARGAS, California
WARREN DAVIDSON, Ohio                JOSH GOTTHEIMER, New Jersey
JOHN ROSE, Tennessee                 VICENTE GONZALEZ, Texas
BRYAN STEIL, Wisconsin               SEAN CASTEN, Illinois
WILLIAM TIMMONS, South Carolina      AYANNA PRESSLEY, Massachusetts
RALPH NORMAN, South Carolina         STEVEN HORSFORD, Nevada
DAN MEUSER, Pennsylvania             RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin          RITCHIE TORRES, New York
ANDREW GARBARINO, New York           SYLVIA GARCIA, Texas
YOUNG KIM, California                NIKEMA WILLIAMS, Georgia
BYRON DONALDS, Florida               WILEY NICKEL, North Carolina
MIKE FLOOD, Nebraska                 BRITTANY PETTERSEN, Colorado
MIKE LAWLER, New York
ZACH NUNN, Iowa
MONICA DE LA CRUZ, Texas
ERIN HOUCHIN, Indiana
ANDY OGLES, Tennessee

                     Matt Hoffmann, Staff Director

              Subcommittee on Oversight and Investigations

                   BILL HUIZENGA, Michigan, Chairman

PETE SESSIONS, Texas                 AL GREEN, Texas, Ranking Member
ANN WAGNER, Missouri                 STEVEN HORSFORD, Nevada
ALEXANDER X. MOONEY, West Virginia   RASHIDA TLAIB, Michigan
JOHN ROSE, Tennessee, Vice Chairman  SYLVIA GARCIA, Texas
DAN MEUSER, Pennsylvania             NIKEMA WILLIAMS, Georgia
ANDY OGLES, Tennessee









                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 22, 2023................................................     1
Appendix:
    June 22, 2023................................................    21

                               WITNESSES
                        Thursday, June 22, 2023

Barbero, Megan, General Counsel, U.S. Securities and Exchange 
  Commission (SEC)...............................................     4

                                APPENDIX

Prepared statements:
    Barbero, Megan...............................................    22

              Additional Material Submitted for the Record

Barbero, Megan:
    Written responses to questions for the record from 
      Representative Huizenga....................................    25
    Written responses to questions for the record from 
      Representative Sessions....................................    29








 
                          OVERSIGHT OF THE SEC

                               ----------                              


                        Thursday, June 22, 2023

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 9:02 a.m., in 
room 2220, Rayburn House Office Building, Hon. Bill Huizenga 
[chairman of the subcommittee] presiding.
    Members present: Representatives Huizenga, Sessions, 
Wagner, Rose, Meuser, Ogles; Green, Garcia, and Williams of 
Georgia.
    Ex officio present: Representative Waters.
    Chairman Huizenga. The Subcommittee on Oversight and 
Investigations will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time.
    Today's hearing is entitled, ``Oversight of the SEC.''
    I now recognize myself for 5 minutes to give an opening 
statement. Article I, Section 1 of the United States 
Constitution vests, ``all legislative powers,'' in Congress. 
However, even after the landmark decision in West Virginia v. 
EPA, some agencies continue to act well outside the bounds that 
Congress instructed them to follow.
    Inherent in those constitutional powers is the power to 
conduct oversight. The Supreme Court has held and reaffirmed 
that Congress has the power to conduct oversight to, ``secure 
needed information in order to legislate.'' Let me remind 
everyone paying attention this morning that our subcommittee 
should and will continue to conduct oversight where needed.
    And with all due respect to Ms. Barbero, it is not up to 
the General Counsel's Office or SEC Chair Gensler to decide 
what those investigations will be. Ms. Barbero, ultimately the 
buck stops with you, and Chair Gensler as well. And as chief 
legal officer, it is your job to make sure the SEC complies 
with our requests.
    Given your extensive experience sitting on this dais, I 
frankly suspect that you would never have allowed an agency to 
stonewall Congress or you or your bosses the way that it 
appears it has been done for the last 6 months.
    But let's not for a second pretend that this 
unresponsiveness has always been the case for the SEC. Under 
Chair Gensler, the SEC's unresponsiveness to committee requests 
has been extremely slow and limited in comparison to that of 
previous Chairs. Where past Chairs have been quick to respond 
to Congress, in contrast, Chair Gensler, and by extension, you, 
have continued to miss deadlines, offer no accommodations, and 
blame staff shortages, budget deficiencies, and bureaucratic 
obstacles.
    When committee staff received documents claiming to be, 
``responsive,'' as the Chair put it a couple of weeks ago, the 
SEC either failed to acknowledge the questions actually being 
asked or provided mostly publicly-available documents. To put 
this in perspective, let me provide you with some statistics. 
For our request in the SEC's climate disclosure rule, 80 
percent of all of the documents that you produced to date are 
publicly available. In fact, a portion of those documents were 
previously provided to Freedom of Information Act (FOIA) 
requesters.
    But wait, it gets worse. In response to the committee's 
request to better understand the charges against former FTX CEO 
Sam Bankman-Fried, 100 percent of the documents that you 
provided are publicly available.
    And to be sure, the SEC's slow and limited responses to 
congressional requests isn't for a lack of resources or 
experience. The SEC oversees 24 national security exchanges, 9 
credit rating agencies, 7 registered clearing agencies, and the 
activities of 29,000 registered agencies--including investment 
advisers and broker-dealers--that collectively employ over 1 
million people in the United States.
    To imply that they cannot respond to Congress in a timely 
manner is an insult to our institution, and frankly, 
embarrassing for yours.
    It should be noted that during the failure of multiple 
banks which they oversee and while working to manage the 
fallout, the Federal Reserve, the FDIC, and other regulators 
have been perfectly capable of providing important documents, 
testimony, and access to documents.
    The SEC is an outlier. Under Chair Gensler, the SEC has 
prioritized rewriting every corner of our capital markets, 
proposing 46 rules since the start of his tenure, many with 
far-reaching implications that will upend decades of precedence 
and have little economic analysis to justify their existence.
    Under Chair Gensler, the SEC has prioritized regulation-by-
enforcement in the name of protecting investors. Under Chair 
Gensler, the SEC has completely ignored its mission to promote 
capital formation, instead opting to create confusion that will 
ultimately hurt innovation and entrepreneurs who seek access to 
our markets.
    At today's hearing, you will hear of countless instances 
where Chair Gensler and his staff have failed to respond to 
Member inquiries, often with complete disregard to the 
questions being asked. These aren't unique requests that have 
come from myself or Chairman McHenry; these issues have 
persisted on both sides of the aisle.
    Ms. Barbero, this hearing could have and should have been 
avoided. But what other choice do we have when the SEC, your 
boss, and you, by extension, continue to be uncooperative and 
unresponsive?
    In May, I sent you a letter which indicated that this 
committee was prepared to take the necessary steps to get the 
information we have sought as part of our constitutional right, 
our obligation I would say, to provide oversight of the 
Executive Branch. Rest assured that if these obstructions 
continue, we will be seeing many more of your colleagues before 
our subcommittee in the future.
    So, I look forward to hearing your testimony today. I hope 
that you will be open and transparent with us. And I yield back 
the balance of my time.
    The Chair now recognizes the ranking member of the 
subcommittee, the gentleman from Texas, Mr. Green, for a 5-
minute opening statement.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Chairman, the Republican hearing memo has styled this 
hearing as, ``Oversight of the SEC.'' Given the Republican 
overreach we have seen, and I dare say we will see today, a 
better title for this hearing would be, ``Republican 
Micromanagement of the SEC Run Amok.''
    The same Republicans who recently could not manage to pass 
a rule--something that had not happened since I have been in 
Congress, I might add--to bring bills to the Floor of the House 
of Representatives are attempting to micromanage the SEC, which 
has a Chair, along with four other Commissioners, six 
Divisions, and 36 central and regional offices, together with 
approximately 4,500 employees.
    While we could be spending this time focusing on the many 
issues that are thwarting American families in their efforts to 
achieve economic security, Committee Republicans would rather 
use this hearing to micromanage an agency tasked with 
monitoring and addressing bad behavior on Wall Street.
    From the global financial crisis of 2008, to the recent 
collapses of cryptocurrency firms because of criminal activity 
or negligence, we have seen time and time again that our 
constituents are well-served by an active SEC. Instead of 
seeking to empower the SEC to do its job more effectively, 
Committee Republicans are attempting to micromanage the SEC's 
ability to go after bad actors.
    Micromanagement run amok by House Republicans is putting at 
risk the SEC's ability to regulate the likes of FTX and other 
bad actors who destroy investors' dreams with ignoble schemes.
    If my dear colleagues had a sincere desire to properly 
manage, we would have invited the head of the SEC here today; 
he is the person who is best capable. The current witness is 
very capable, but Chair Gensler has been chosen to be the lead 
person. He is the person who is the most capable of addressing 
the many concerns that may be raised. But I invite all who are 
watching or within the sound of my voice to pay close attention 
and you will witness micromanagement. You will witness 
micromanagement run amok as the SEC makes every attempt to 
fulfill the requests that have been made. Let's let this be a 
hearing and not an inquisition.
    I yield back the balance of my time.
    Chairman Huizenga. The gentleman yields back.
    And just for clarification, the Securities and Exchange 
Commission Chair was here on April 18th. His last appearance 
prior to that was October of 2021. It took 17 to 18 months for 
him to appear in front of this committee. We have been trying 
to get him to appear more often. And if you can help get him 
here, I would love that help.
    Mr. Green. I would like to answer your question and ask for 
equal time.
    I will help you. I have no problem working with you. You 
and I met and agreed that we would work together. I would like 
to see us do that. So, let's work together. And let's try not 
to micromanage an agency that is designed to be the cop on the 
beat.
    Chairman Huizenga. We are going to let Ms. Barbero open 
with her testimony. And I would suggest maybe we send a joint 
letter requesting his appearance.
    With that----
    Mr. Green. If I may respond? Since you have addressed me, I 
will respond. Why not send a joint letter that we can agree 
upon, not a joint letter that is a take it or leave it?
    I yield back.
    Chairman Huizenga. With that, Ms. Barbero, you are 
recognized to give an oral presentation of your testimony. And 
without objection, your written statement will be made a part 
of the record. You are now recognized for 5 minutes for your 
oral remarks.

 STATEMENT OF MEGAN BARBERO, GENERAL COUNSEL, U.S. SECURITIES 
                 AND EXCHANGE COMMISSION (SEC)

    Ms. Barbero. Good morning, Chairman Huizenga, Ranking 
Member Green, and members of the subcommittee. Thank you for 
inviting me to testify today. I know that my testimony is 
provided in my official capacity as the Commission's General 
Counsel, but does not necessarily represent the views of the 
Commission, the Commissioners or other members of the staff.
    The Securities and Exchange Commission is an independent 
Federal agency headed by a bipartisan, five-member Commission 
which is charged with a three part mission: protecting 
investors; maintaining fair, orderly, and efficient markets; 
and facilitating capital formation. The agency's work is 
critical to the functioning of the U.S. and global economies, 
as well as the financial well-being of millions of American 
households.
    Since I started at the agency nearly 2 years ago, I have 
been in awe of the dedicated staff who show up every day ready 
to serve the public in pursuit of the agency's three-part 
mission. Today, I have the privilege of appearing before you as 
the SEC's General Counsel, a position I have held since 
February of this year. As General Counsel, I am the agency's 
chief legal officer, responsible for advising the Chair, the 
Commissioners, and staff throughout the agency on a variety of 
legal matters that touch on all aspects of the SEC's 
activities.
    Serving as the SEC's General Counsel is a tremendous honor. 
And I am fortunate to be able to observe firsthand the 
incredible contributions of my Office's nearly 150 talented and 
diverse employees. The staff has impressed me daily with their 
expertise, dedication to the mission, and incredible sense of 
camaraderie and teamwork. The Office of the General Counsel 
(OGC) is generally organized into four groups: our appellate 
group; the general litigation group; the legal policy group; 
and the adjudication and oversight group.
    The appellate litigation group represents the Commission in 
the Federal courts of appeal in certain bankruptcy matters and 
in conjunction with the Solicitor General in the U.S. Supreme 
Court. The general litigation group provides legal advice to 
agency management on a broad range of issues and defends the 
Commission in civil and administrative litigation relating to 
the performance of the Commission's official function.
    The legal policy group provides legal and policy analysis 
and advice to the Commission and staff across the agency on 
enforcement and regulatory matters. Within the adjudication and 
the oversight group, the adjudication staff advises and assists 
the Commission in issuing opinions in administrative 
enforcement proceedings and appeals from decisions by self-
regulatory organizations.
    The oversight and investigations staff advises and assists 
the Commission with a variety of functions, including 
responding to congressional correspondence and oversight 
inquiries. The dedicated oversight function is a recent 
addition to the Office and reflects a decision by the agency to 
hire a specialized team of attorneys to improve the 
Commission's oversight response capabilities, among other 
things.
    I appreciate that I am here today because of this 
committee's interest in the Commission's work in responding to 
oversight inquiries. I am familiar with the Commission's recent 
inquiries and I want to assure you that my team and others are 
working diligently to respond to the committee's requests. We 
are committed to working with committee staff to provide the 
committee with the information that it has requested.
    The creation of OGC's oversight team and the resources we 
have dedicated to it, including at the highest levels within 
OGC, reflect that commitment. I share Chair Gensler's respect 
for this committee. Our work at the Commission is made better 
every day by input from individuals outside of our building, 
including investors, issuers, the entities we regulate, and 
this committee and its members.
    Thank you for the opportunity to testify today and for the 
committee's continued support of the SEC, its mission, and its 
people. I am happy to answer any questions you may have.
    [The prepared statement of Ms. Barbero can be found on page 
22 of the appendix.]
    Chairman Huizenga. The gentlelady yields back.
    We are now going to turn to Member questions and I will 
recognize myself for 5 minutes. And Ms. Barbero, I want to dive 
right in.
    Is it true that the SEC employees in the Office of 
Legislative and Intergovernmental Affairs have prior experience 
in congressional oversight and investigations?
    Ms. Barbero. Thank you for the question. Just to clarify, 
that is not my office, but----
    Chairman Huizenga. I understand.
    Ms. Barbero. ----yes, that is correct.
    Chairman Huizenga. Okay. And is it true that the SEC 
employees in the Office of the General Counsel have prior 
experience in white collar litigation and congressional 
investigations?
    Ms. Barbero. I think that question refers to the oversight 
function that we have recently stood up, and yes, they do have 
significance.
    Chairman Huizenga. Yes, okay. These aren't trick questions. 
It is just yes or no.
    So, it is safe to say the SEC has hired some good staff who 
know the ins and outs of congressional oversight, and certainly 
you have been at this for a long time. Yet, frankly, we have 
not received substantive responses to most of our requests. And 
it seems like you and the rest of the SEC staff are well-versed 
in congressional oversight and responsibilities are very well-
equipped.
    We know you have a great, stellar reputation for being a 
very, very good lawyer, a tough lawyer. And you know how to 
respond to congressional requests because you certainly have 
put those out in your previous capacities. But some might 
suspect that the SEC is using your congressional oversight 
experience as a weapon to block us at every turn, and I 
sincerely hope that is not true. But on February 10th of this 
year, we sent a request related to Sam Bankman Fried's charges 
with a deadline of February 24th. Are you familiar with that 
request?
    Ms. Barbero. I am familiar with that request.
    Chairman Huizenga. It is my understanding that your Office 
does an initial assessment within 24 to 36 hours of first 
receiving a letter, is that correct?
    Ms. Barbero. I don't know the exact timeline, but they are 
reviewed expeditiously, as soon as we receive requests in our 
Office.
    Chairman Huizenga. We will expand it to a generous 24 to 48 
hours, okay? On what day did your Office begin to actually 
search for documents and communications responsive to our 
February 10th request?
    Ms. Barbero. Thank you for the question, because my Office 
is committed to responding to that request and the committee's 
other outstanding requests and we take all of those requests 
in----
    Chairman Huizenga. Do you know what date you started that 
process?
    Ms. Barbero. I know that each request is reviewed 
expeditiously. I can say with respect to that particular 
request, that staff engaged with your staff to understand the 
committee's priorities.
    Chairman Huizenga. Hold on. It was not before the deadline, 
because during the first conversation between committee staff 
and your Office, which happened to be a week after the 
deadline, your staff was asking questions, and attempting to 
narrow the scope of the request in order to start a search for 
the documents. Are you familiar with the briefing that the 
Division of Enforcement provided to the committee?
    Ms. Barbero. Yes, I am aware we offered that.
    Chairman Huizenga. Okay. In your professional opinion, do 
you think a briefing about how the SEC and the Justice 
Department work together is sufficiently responsive to our 
request for records and communications?
    Ms. Barbero. Thank you for the question. I do think that 
the briefing is responsive and the reason is that the request 
looks at and is asking for information about a parallel 
investigation conducted by our staff at the SEC and the 
Department of Justice (DOJ).
    Chairman Huizenga. So, am I now supposed to send all of our 
SEC inquiries to the Department of Justice?
    Ms. Barbero. Congressman, we have been responsive to your 
staff with respect to the documents.
    Chairman Huizenga. That is not my question. You are telling 
me that while you can't answer anything, and you were slow to 
start--you seem to acknowledge that--you now had to kick it 
over to DOJ. Are you familiar with the production your team 
made at the briefing on March 15th? That is a yes-or-no 
question.
    Ms. Barbero. The 232 pages of documents that staff 
produced?
    Chairman Huizenga. Yes.
    Ms. Barbero. Yes, I am familiar with that.
    Chairman Huizenga. Yes. Do you think it is responsive or a 
productive use of anyone's time to print public complaints in 
your own enforcement manual and treat it as if it is responsive 
to our request? Is that a good use of your very-qualified, 
highly-paid staff? Because it is not of mine.
    Ms. Barbero. Many of the committee's requests, including 
the FTX request, are broad and encompass----
    Chairman Huizenga. You are stalling now. Let's turn to 
February 22nd, the climate-related request. Are you familiar 
with that request? Yes or no?
    Ms. Barbero. Yes, I am.
    Chairman Huizenga. Yes. Okay. The SEC produced 29,000 pages 
pulled straight from the public comment file. One of your 
productions even included a letter that I sent to the Chair 
congratulating him on his chairmanship. Are aware that to date, 
80 percent of the documents in response to our climate request 
are publicly available? I will let you answer, then my time is 
up. You are aware that 80 percent of it is publicly available?
    Ms. Barbero. As our rulemakings are conducted in the public 
view, they are very transparent. The documents produced are 
responsive to the requests and we are working on reviewing----
    Mr. Huizenga. Okay. I am going to take that as a, yes.
    Ms. Barbero. ----internal priorities.
    Chairman Huizenga. My time has--I will try to be as 
respectful of everybody's time. That was a stalled out, 
``yes.''
    With that, per tradition, the ranking member of the 
subcommittee defers to his members. And the gentlewoman from 
Texas, Mrs. Garcia, is now recognized for 5 minutes.
    Ms. Garcia. Thank you. And that is Ms. Garcia.
    Thank you for being here with us today, Ms. Barbero. And I 
wanted to first start by just giving you a chance to finish 
answering the question that was asked about the March document 
request. You are a lawyer, and I am a lawyer, and I was used to 
getting a lot of interrogatories and document requests, and I 
was quite bombarded. And it wasn't a lawyer gone amok like this 
investigation.
    Oversight groups are used to amok with so many requests. Is 
your statement here today that you did comply and were 
responsive to that March request?
    Ms. Barbero. If I could just clarify the question, if it is 
the February proposed climate request that Chairman Huizenga 
had asked about, I very much appreciate the opportunity to 
answer that, and we have been responsive.
    My staff has collected over 2.7 million documents 
internally from 53 different custodians in response to that 
request. They are in the process of working with committee 
staff to identify priorities and reviewing and producing on a 
rolling basis the internal documents that the committee staff 
have prioritized. So yes, I do believe we have been very 
responsive, and I have instructed staff to continue to work 
with the committee on that request.
    Ms. Garcia. Right. And 2.7 million seems like a lot--that 
even beats some of the major personal injury trials that have 
occurred all over this country. How long have you been in your 
position?
    Ms. Barbero. I have been the General Counsel since February 
1st.
    Ms. Garcia. February 1st. And have you ever seen this kind 
of constant and somewhat obtrusive document requests made by a 
congressional committee?
    Ms. Barbero. We do have, in addition to the climate request 
for which we have collected 2.7 million--and that is not pages 
of documents, just to be clear; that 2.7 million is the number 
of documents--we have also collected on the order of 700,000 
documents in response to the committee's request about digital 
assets. We have provided briefings, and staff has answered 
interrogatories. We have certainly done everything we can do to 
be responsive and respect the committee's oversight priorities.
    Ms. Garcia. Can you explain some of the burdens the agency 
faces when responding to these document requests?
    Ms. Barbero. When we get a document request, one of the 
first things we have to do when we get the request is scoping 
interviews with agency personnel across the various Divisions 
and Offices in the agency to determine who might have 
information that is responsive to the interrogatories or who 
may have responsive documents. And those interviews take time.
    We then need to collect the documents. When the documents 
are collected, they have to be reviewed by our staff and keyed 
up for production, and then, part of the reason why the 
production to date has been public documents is that those do 
not require a Commission vote for us to turn them over, so we 
are able to more quickly provide responsive information that is 
in the public record. But we then need to tee up for the 
Commission to vote to release internal records to the committee 
in response to the request. So, it is a significant process and 
undertaking.
    Ms. Garcia. Right. As the, ``the cop on the beat,'' who is 
it within your organization that decides which requests need 
referrals to the Justice Department? Is it you or someone from 
the Commission?
    Ms. Barbero. It is our Enforcement Division generally that 
would be working with the Department of Justice on a parallel 
investigation, and working on collecting information and facts 
and working with Justice, that is the Division of Enforcement.
    Ms. Garcia. I, for one, want to thank you for the good work 
that you and Chair Gensler have done in enacting common-sense 
regulations and policies, despite this investigation gone amok 
and despite this document request gone amok because I think it 
is important work that you are doing for consumers and 
investors.
    And I want to just ask you, is there anything we can do in 
Congress to further improve the work that you are doing at the 
SEC?
    Ms. Barbero. Thank you, Ms. Garcia, for your support, which 
is very much appreciated by me, and I feel comfortable saying 
on behalf of the Chair and the Commission, we really appreciate 
this committee's support and commitment to the agency. I will 
just say thank you.
    Ms. Garcia. Thank you.
    And Mr. Chairman, it looks like my time has run out. I 
yield back.
    Chairman Huizenga. Ms. Garcia yields back.
    With that, Mr. Sessions from Texas is recognized.
    Mr. Sessions. Mr. Chairman, thank you very much.
    Ms. Barbero, welcome to the subcommittee. Is it true that 
you deal with civil litigation?
    Ms. Barbero. The SEC handles civil, not criminal 
litigation.
    Mr. Sessions. Thank you.
    Chair Gensler evidently met with major, major, major 
Democratic donor, Sam Bankman-Fried. Where was that meeting 
held?
    Ms. Barbero. I don't have any of the details relating to 
that meeting, but I would be happy to get back to you with any 
information if you have specific questions.
    Mr. Sessions. Thank you very much. As a matter of fact, I 
do have some. I would like to go to one of the basic tenets of 
what the SEC is there for, and that is the formation of 
capital. And the concern I have, and I am going to speak here 
for a minute so that we are very clear, because I have said 
this to Chair Gensler point blank in the Full Committee, that I 
believe the SEC has weaponized their discretion that they use 
against the formation of capital.
    My father served as Director of the FBI during the time of 
President Reagan, President Herbert Walker Bush, and President 
Bill Clinton. When he first came to the FBI, the FBI, by and 
large, had an operational way of doing business where they 
would investigate, investigate, and investigate and go around 
people and then, at some point, indict them. And it was very, 
very, very difficult for people who were under investigation to 
engage the FBI for months and months and months and months.
    And my father, as a result of his service as U.S. Attorney 
to the Western District of Texas and Chief Judge of the Western 
District of Texas attempted to and did change that policy. And 
that policy is one that I would like you, as General Counsel--I 
have already tried to go to Chair Gensler and it fell on deaf 
ears. I believe that where there is someone who's under 
investigation, where you have requested documentation, that 
that person, if they hire competent legal counsel, I believe 
that competent legal counsel should be able to work with the 
SEC on the most in-depth questions that could materialize.
    And instead, what happens is the SEC comes and weaponizes 
themselves to come in and give no feedback, no information, 
just ask for information without regard for any filing millions 
of dollars of assets that perhaps they have up. And they use 
their discretion and they hide behind someone and they hide 
behind this, their purity, well, we are the SEC. Rather than 
allowing someone to engage them on a professional basis, who is 
a member of the bar, and a court could hold them accountable 
for their behavior.
    And I want you to know that I find it unprofessional and 
disingenuous that this Administration would have a Chair of the 
SEC meet with a man--perhaps we are going to find out where he 
met with him--only to find out that personal access and yet 
someone who has millions of dollars and who is being handled by 
that agency for a long period of time for the Chair to tell me, 
upon investigation, Congressman, we are not going to say 
anything, we have an average of 214 days before we generally 
engage someone, before we say something. That is just an 
average. And I find that very unprofessional.
    And I intend and I have been trying to engage and will 
engage the law to say that whomever it is, if the SEC is going 
to go and investigate someone, they are entitled to what I 
believe is the Bill of Rights, to some bit of opportunity to 
have professional counsel to handle that and engage your 
agency.
    I just want you to know that I find the answers that have 
come out of the SEC wholly unprofessional, and that the actions 
that they take are to hold people at bay rather than allow 
them--if you get in trouble, you ought to be able to get out.
    Thank you very much. I yield back.
    Chairman Huizenga. The gentleman's time has expired.
    The gentlewoman from Georgia, Ms. Williams, is now 
recognized for 5 minutes.
    Ms. Williams of Georgia. Thank you, Mr. Chairman. And thank 
you, Ms. Barbero, for joining us today.
    I walked in and didn't expect it to be a hostile situation 
in here. So, my apologies for some of the ways that you're 
being questioned today. But I sit on this committee to make 
sure that the most-marginalized people in our society have a 
champion when it comes to financial and economic policy in 
Congress.
    I am here to make sure that my constituents have access to 
affordable housing and credit, that consumers are protected 
from predatory actors in financial markets, and to work towards 
closing the racial wealth gap, and unfortunately, my home City 
of Atlanta leads the nation in the racial wealth gap.
    The SEC's role in protecting investors is essential to this 
work because the financial system needs to work for everyone no 
matter their ZIP Code. This is especially true in Atlanta, 
which boasts a vibrant culture of innovation, sustained 
economic growth, and leading academic institutions--all of the 
landmarks and hallmarks of a thriving economy.
    But again, we still have a lot of work to do. And even when 
people in my district get a good job or start a business, we 
know that people of color are more likely to be targeted by 
financial scams or to lack sound investment advice, and there 
needs to be a transparent, safe, and equitable environment for 
all people to invest in and grow their wealth, not just those 
who have access to an expensive financial adviser.
    And this is where the SEC comes in. Each part of the SEC's 
mission: protecting investors; ensuring fair, orderly, and 
efficient markets; and facilitating capital formation helps 
level the playing field for marginalized people who are looking 
to invest their hard-earned money. And each of these duties is 
a full-time job and I am sure you are well aware of that.
    We have seen time and time again that the Majority of this 
committee is focused on slowing down the important work that 
the SEC is doing through excessive investigations and document 
requests.
    Ms. Barbero, the SEC has continued to comply no matter how 
overreaching. And I understand that the Office of the General 
Counsel plays an important role in answering these requests, so 
thank you. But I worry that these excessive and overreaching 
requests are exposing my constituents to harm by taking 
precious time away from the other functions of your Office, 
functions that are crucial to the SEC's core mission that I 
just mentioned.
    Ms. Barbero, can you expand on the role the adjudication 
oversight group plays in the broader operation of your Office 
and the SEC in general?
    Ms. Barbero. Thank you for the question. The oversight and 
adjudication group within my Office plays multiple functions 
and roles within the Office, the adjudication group assists the 
Commission in decision-making in preparing its opinions. The 
oversight and investigations group works closely with attorneys 
and staff across my Office and the Commission.
    Currently, that group is fully engaged in responding to 
working with the committee to ensure that we can respond to the 
committee's various oversight requests. That is a new function. 
I am very proud that we stood up that group and that we have 
very talented staff in the group to be able to respond quickly 
and efficiently to oversight requests.
    But I would also note, as you noted in your question, that 
the group works with lots of other attorneys and staff across 
our agency who perform, in the ordinary course of their duties, 
rulemaking functions, enforcement functions, and legal policy 
work. And the oversight group does look to them for their 
substantive expertise in responding to interrogatories.
    Ms. Williams of Georgia. It sounds like you all are doing a 
lot with this group, which leads me to my next question: How do 
large-scale investigations and document requests, even these 
very broadly overreaching ones from the Majority of this 
committee impact the group's ability to pursue those other 
functions that you just mentioned?
    Ms. Barbero. We do try very hard to prioritize the work 
that the group is doing, so when the group and other staff 
across the agency are prioritizing responding to oversight 
requests, which very much is a priority for us right now, that 
is time that otherwise would be spent on rulemaking, 
enforcement, and other functions. But we are committed to 
responding to the oversight requests and staff is working hard 
to do that.
    Ms. Williams of Georgia. Thank you.
    Proper congressional oversight is necessary to make sure 
that our government works for the American people. But I think 
that the time and resources used on these disruptive and 
overreaching requests would be better spent maintaining a safe 
and fair financial environment for our constituents so that we 
can all thrive.
    Thank you. And I yield back the balance of my time.
    Chairman Huizenga. The gentlelady's time has expired.
    The gentleman from Tennessee, Mr. Rose, who is also the 
Vice Chair of this subcommittee, is now recognized for 5 
minutes.
    Mr. Rose. Thank you, Chairman Huizenga, for holding the 
hearing. And Ms. Barbero, thank you for you being here with us 
this morning.
    Ms. Barbero, as Chairman Huizenga mentioned, the SEC has 
produced thousands of pages of nonsubstantive documents to the 
committee. And a portion of those documents were previously 
produced under the Freedom of Information Act to other 
individuals. Ms. Barbero, the Commission has rules that allow 
the release of non-public information to FOIA requesters, 
correct?
    Ms. Barbero. That is done through a delegated authority, so 
it is the Commission's authority that is delegated to 
principally the FOIA Office and ahead of the FOIA Office.
    Mr. Rose. So yes, you can release non-public information.
    Ms. Barbero. Through a Commission action on delegated 
authority, assuming that all of the legal requirements for FOIA 
are satisfied, yes.
    Mr. Rose. Isn't it true that the Commission's FOIA rules do 
not require a Commission vote prior to the release of each set 
of non-public information to every FOIA requester?
    Ms. Barbero. That is true, but the reason it is true is 
because the way the Commission has structured its delegation of 
authority under FOIA, assuming the requirements of FOIA are 
met, the FOIA offices are authorized by the Commission to 
handle those requests and produce those documents.
    Mr. Rose. Isn't it true that the Commission's rules allow 
the Chair to authorize the Office of the General Counsel or the 
Office of Legislative Affairs to send an action memo asking the 
Commission to approve the release of responsive, non-public 
information to the committee on a rolling basis?
    Ms. Barbero. That is both true and what I--where we are 
going in terms of responding on a rolling basis. The committee 
has prioritized internal emails. Those would go through an 
action memo to a vote of the Commission for production to the 
committee on a rolling basis.
    Mr. Rose. Given that that is true, why hasn't the Office of 
the General Counsel or the Office of Legislative Affairs 
started that process?
    Ms. Barbero. We have, in fact, started that process. We 
worked closely with staff on the committee to understand the 
committee's priorities. I understand those priorities are 
13,000 Division of Economic and Risk Analysis (DERA) emails.
    Mr. Rose. Just to clarify, you have proactively asked for 
permission from the Commission to start releasing that non-
public information on a rolling basis. You have initiated that 
process.
    Ms. Barbero. Thank you for the opportunity to clarify that. 
It is the end of the process. We have to collect the emails, 
and review the emails in order to advise the Commission about 
voting to release those documents. So, that process is ongoing. 
And we will continue to work with committee staff as we are 
making those productions to continue to understand the 
priorities.
    Of course, I can't sit in here and commit to what the 
Commission will do or how they will vote when that goes up to 
them. I only have control over our part of the process within 
the Office of the General Counsel, but yes, that is the 
process.
    Mr. Rose. So, you are saying you have to look at the emails 
before you proactively ask the Commission to authorize a 
release on a rolling basis? You are going to have to assess 
every one of these documents before you proactively ask the 
Commission; only after you have reviewed all of the documents, 
would you seek their approval for you to release documents as 
you come to them?
    Ms. Barbero. Thank you for the question. My role as the 
General Counsel is, of course, to provide all five of our 
Commissioners with my best legal advice and the legal advice of 
my Office. And we do that through gathering the facts, 
understanding the facts, and then advising the Commission----
    Mr. Rose. We see that FOIA requests get blanket approval 
but not Congress?
    Ms. Barbero. I understand the distinction between FOIA and 
the oversight requests. For the FOIA Office to release 
documents, the statutory requirements under FOIA have to be 
satisfied. There is the delegation of authority to the FOIA 
Office. It has in fact allowed us to produce documents to this 
committee that otherwise would be non-public documents.
    Mr. Rose. And as we have seen, you are giving us documents 
that have already been produced publicly. I would just strongly 
encourage you in your next meeting with Chair Gensler to get 
him to approve the release of non-public, responsive 
information to the committee on a rolling basis. And he should 
know that what the SEC has provided to the committee so far is 
not enough.
    Mr. Huizenga. The gentleman's time has expired.
    Mr. Rose. And I would ask that we put in the record a memo 
from 2001 to 2002.
    Chairman Huizenga. A memo from 2001 to 2002. Without 
objection, it is so ordered.
    Mr. Rose. Thank you.
    Chairman Huizenga. With that, the ranking member of the 
Full Committee, the gentlewoman from California, Ms. Waters, is 
recognized for 5 minutes.
    Ms. Waters. Thank you very much.
    Ms. Barbero, there has been an ongoing and extensive 
comment period for the SEC's proposed climate-related 
disclosure rule, which would require U.S. publicly-traded 
companies to disclosure annually how their businesses are 
assessing, measuring and managing climate-related risk. This 
rule would include disclosing greenhouse gas emissions as a 
measure of exposure to climate-related risk.
    Has the SEC received comments or any other indications that 
the information that the proposed climate rule would require to 
be disclosed is, in fact, materially important for making 
investment decisions in a company? If so, would you please 
identify those comments?
    Ms. Barbero. Thank you. We received a record number of 
comments in response to the climate proposal. And any number of 
those comments are supportive of the proposal and the exposure 
of greenhouse gas emissions.
    In terms of specific comments and what specific commenters 
have raised, we would be happy to get back to you if there is a 
question on that, that we can answer. But again, we have 
received a record number of comments, and staff are actively 
reviewing and processing those comments as we move forward to 
any final rule that would be adopted by the Commission on the 
climate risk disclosures.
    Ms. Waters. Thank you. I think that clarifies my question. 
Let me move on, Ms. Barbero.
    As you know, last Congress I initiated a bipartisan 
investigation into the collapse of FTX, which Chairman McHenry 
has continued in this Congress. It is my understanding that the 
SEC is concerned that some of the materials requested by 
Committee Republicans would prejudice the parallel ongoing 
criminal prosecutions, as well as its civil enforcement action 
of Sam Bankman-Fried and possibly other FTX employees.
    I recognize that there is a delicate balance between 
providing Congress the information it needs and being careful 
not to negatively impact any ongoing investigation or 
enforcement action. I believe the members of the committee are 
sensitive to that potential problem and want to seek a 
resolution that accommodates both the concerns of the Executive 
Branch and the information needed by Congress.
    Therefore, it is important for us to understand what 
efforts are being made by the SEC to provide as much 
information as possible to Congress without creating a problem 
for Executive Branch enforcement actions. Please tell us how 
the SEC is balancing the legitimate enforcement concerns with 
this obligation to provide Congress with information? And when 
do you expect to resolve this matter?
    Ms. Barbero. Thank you for the question. And that is very 
much what we have endeavored to do in terms of providing the 
committee with the information that it needs and balancing the 
important interests that we, and I assume the Department of 
Justice, have in not releasing information that could prejudice 
the criminal trial, which is scheduled to begin in just a few 
short months, in October.
    We have worked closely with the committee to provide a 
briefing by experienced staff from the Division on Enforcement 
on how we work with DOJ in parallel investigations. We have 
provided a timeline on the FTX matter. We have provided the 
documents that we could publicly release.
    The challenge here in balancing the concerns is that 
committee staff has identified as the priority the Commission's 
action memo, which is the very document that contains the 
information that could prejudice our civil enforcement action 
and the parallel criminal investigation. And that really is the 
challenge. But I would certainly invite the committee to reach 
out to DOJ directly. They have equities as well in the criminal 
case and have their own information as well. So, I think that 
is an avenue that could be pursued.
    Ms. Waters. I would like you to continue with your work as 
you have defined it. I am concerned that some of the 
Republicans are basically following the leadership of the past 
President of the United States, and they want to defund the 
Department of Justice. So, I want you not to be concerned.
    Chairman Huizenga. The gentlelady's time has expired.
    Ms. Waters. And I yield back the balance of my time.
    Chairman Huizenga. The gentlelady's time has expired.
    With that, the gentleman from Pennsylvania, Mr. Meuser, is 
recognized for 5 minutes.
    Mr. Meuser. I want to thank the Chair very much. And thank 
you, Ms. Barbero.
    I think we should all be able to agree that just because an 
agency is run and directed by Democrats appointed by the Biden 
Administration, that doesn't automatically mean they are doing 
a wonderful job. As a matter of fact, that is the whole reason 
for this Oversight and Investigations Subcommittee.
    Ms. Barbero, unfortunately, the circumstances that led to 
your appearance today are troubling. Chairman Gensler has shown 
a pattern of incomplete responses that is completely 
unacceptable. Yet, the SEC's interaction with my office over 
the last few months exemplified this.
    In March of this year, I was made aware of issues 
surrounding a merger between a certain special purpose 
acquisition company (SPAC) and its target company. On March 
28th, a letter was sent requesting a briefing. And we had that 
briefing--on April 21st, 24 days after the initial request, the 
SEC did in fact meet with us. The briefing was helpful. 
However, there were many questions that went unanswered. On 
April 24th, my staff emailed the SEC requesting written 
responses to specific questions. On the 26th, a confirmation 
was made, and the SEC requested a formal letter, which was sent 
that same day. The letter requested that the SEC provide 
responses by May 5th.
    On May 8th, the SEC said they were finalizing the letter 
and would expect completion on May 12th. On May 12th, we were 
informed that it would be the following week. And the following 
week, on May 23rd, I asked for a call with the Office of 
Legislative Affairs at the SEC, because there was a serious 
delay happening.
    I finally received, on May 27th, a response that only 
raised more questions. On June 1st, I personally sent an email 
to the SEC staff. And on June 13th, my staff sent follow-up 
questions. And again, to this day, we have yet to receive a 
response from your agency to these questions.
    Can you appreciate why I am a little bit critical and a 
little bit dubious as to whether or not you are even attempting 
to handle this particular request properly?
    Ms. Barbero. Thank you, Congressman, for the question. I am 
aware of the back and forth that you referenced and the 
timeline. If there are specific questions that I am able to 
answer, I can do that or we can get back to you with 
information.
    Mr. Meuser. I will ask a couple of specific questions. On 
average, an S-4 review takes 130 days. Prior to you folks being 
there, it was 100 days. Would you say that 401 days is a little 
long, a little bit of an outlier, a little unusual, a little 
special, maybe deliberately special, deliberately targeted?
    Ms. Barbero. In terms of the S-4 process, I know there has 
been a significant increase, that your question referenced, in 
the average number of days. I know there has been an increase 
in the number of S-4 forms filed that has contributed, I 
understand, in part to that increase.
    Mr. Meuser. Respectfully, 401 days--the average is 130. You 
are aware that that length of time can kill a SPAC, and SPACs 
are owned by millions of individual investors? They will lose 
their money because you refuse to have any review or response, 
yea or nay, on a standard S-4 application--401 days.
    And here's a little bit of data to help out, in 2021, there 
were 11, over 340 days. That is when I asked for these 
questions, 60 days ago--11 out of over 1,000. In 2022, there 
was only one that was over 340 days out of over 1,000. Okay. 
Now, it is 401 days with no response. Do you think that is 
reasonable?
    Ms. Barbero. I understand that our Directors of our 
Division of Corporation Finance and our Enforcement Division 
have provided some----
    Mr. Meuser. I'm sorry, ma'am. What does a citizen need to 
do to get a response to a standard question that should be run-
of-the-mill, standard operating procedure for you?
    Ms. Barbero. There are any number of reasons why review of 
an S-4 may take longer than average in any particular case. I 
can't talk about a specific review or a specific issue.
    Mr. Meuser. I am going to have to follow up again and maybe 
I can get an answer. I will yield the remainder of my time to 
the Chair.
    I yield back.
    Chairman Huizenga. I appreciate that. I want to revisit 
where Mr. Rose was going and follow up.
    Are you aware that your staff has informed committee staff 
that it will take 10 weeks to review an initial tranche of 
documents that are responsive to a single question? By the way, 
that was narrowed down, and even then, they will not be ready 
to produce it to the committee?
    Ms. Barbero. I don't know the specifics----
    Chairman Huizenga. Ten weeks.
    Ms. Barbero. But I do know the review depends on the number 
of documents, and this is----
    Chairman Huizenga. Ten weeks. Okay. Are you aware that 
previously, the Commission and the SEC Chair did not have to 
review or vote on every single document released, but rather 
gave blanket authority, much like the FOIA that you so aptly 
described, to committee staff to provide necessary documents?
    Ms. Barbero. I am aware of----
    Chairman Huizenga. You are aware of that?
    Ms. Barbero. ----the other models of providing authority.
    Chairman Huizenga. Time has expired--excuse me. I do want 
to submit for the record an additional action memo that dates 
back to the Enron era, which shows that there was this blanket 
authority given to release information to a congressional 
inquiry, and I will submit that for the record, without 
objection.
    Mr. Green. No objection.
    Chairman Huizenga. With that, the ranking member of the 
subcommittee, the gentleman from Texas, Mr. Green, is 
recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. Madam General Counsel, 
would you explain to us whether you have other committees that 
send you requests, or whether you have many Members sending you 
requests?
    Ms. Barbero. We sometimes receive requests from Members, 
but the requests we have been discussing today have come from 
the committee, from the Majority of the committee.
    Mr. Green. And you do have Members who will ask for 
information as well?
    Ms. Barbero. That does sometimes occur, yes.
    Mr. Green. And have you tried as best as you can with the 
resources you have--and they aren't many, I confess--to satiate 
the desires of the members of the committee who are asking for 
information?
    Ms. Barbero. We are very committed to providing the 
committee with the information that it needs. We respect the 
committee's oversight priorities and oversight interests, and I 
am really proud of my staff who have worked tirelessly to 
respond to the committee's requests.
    Mr. Green. Let me move on to another subject. If time 
permits, I will come back to this, but in 2003, investors and 
banks with $136 trillion in assets under management requested 
thousands of companies to disclose climate-related information 
for their investing and financing decisions. I have many 
colleagues, my Republican colleagues, who claim that climate-
related information is not material to investors.
    Why is disclosure of climate-related information material 
to investors, Madam General Counsel?
    Ms. Barbero. Our disclosure rules at the SEC are aimed at 
providing investors with the information that they need to make 
informed investment and voting decisions. That information can 
change over time, and it often does. It relates to developments 
in the market, and to risks that companies are facing and our 
registrants are facing.
    And as we have heard from investors, many companies are 
providing information about climate-related risks, but we don't 
currently have that information in a comparable form that is 
useful to investors.
    That is what we have heard from investors. And climate-
related risks can be just as important to businesses, to the 
nature and health of businesses as other things we might 
traditionally think about, like physical assets or material 
contracts. And the climate-related risk disclosure proposal 
that's out there walks through in detail the reasons why the 
Commission voted for the proposal and believes that the 
disclosures are necessary to the protection of investors and 
the public interest.
    Mr. Green. Is it safe to say that it is about investor 
protection, Madam General Counsel?
    Ms. Barbero. It is about investor protection. That is a 
core piece of our mission and a core piece of our disclosure 
requirements.
    Mr. Green. And to this end, do you make every effort to 
acquire this intelligence so that you can share it with these 
investors who are going to suffer as a result of climate 
change, whether or not my colleagues believe that it exists?
    Ms. Barbero. We have received, as I mentioned earlier in my 
testimony, a record number of comments from members of the 
investing public, issuers and other interested members of the 
public on our climate rule, and we are taking all of those 
comments into account as we think about and the staff prepares 
recommendations for the Commission on how to move forward with 
any finalization of the climate rule.
    Mr. Green. Earlier, when you gave your testimony, you 
indicated that a large number of documents--would you repeat 
that number for the record, please?
    Ms. Barbero. In response to this committee's request to the 
Commission, my staff have collected 3.3 million documents. And 
as I mentioned earlier, that is not pages of documents; that is 
3.3 million documents.
    Mr. Green. I would leave you with, this is not oversight; 
this is overreach run amok.
    Thank you. I yield back.
    Chairman Huizenga. The gentleman yields back. The 
gentlewoman from Missouri, Mrs. Wagner, who is also the Chair 
of our Capital Markets Subcommittee, is recognized for 5 
minutes.
    Mrs. Wagner. Thank you, Mr. Chairman.
    Ms. Barbero, what is your role in drafting responses to 
congressional inquiries?
    Ms. Barbero. I oversee the staff in the Office of the 
General Counsel who work on oversight and investigations. That 
staff works closely with our Office of Legislative and 
Intergovernmental Affairs (OLIA), the Office that handles 
interactions with the Hill.
    Mrs. Wagner. How big is your staff?
    Ms. Barbero. I have about 150----
    Mrs. Wagner. Yes or no, do you have final approval of the 
SEC responses to letters from Members of Congress?
    Ms. Barbero. I would have final----
    Mrs. Wagner. Yes or no?
    Ms. Barbero. I wish I could answer yes or no, but it 
depends on whether the letter is coming from me under my 
signature or whether it is a letter coming from----
    Mrs. Wagner. Who has the final approval?
    Ms. Barbero. If the Chair is sending a response, it would 
be Chair Gensler who would have that approval. If his staff is 
sending responses or another officer is sending a response----
    Mrs. Wagner. Thank you, Ms. Barbero. What factors do you 
consider when deciding to simply submit our letters to the 
comment file of rulemaking instead of providing substantive 
responses?
    Ms. Barbero. In responding to the committee's request, the 
staff correctly prioritized information that we could produce 
quickly and that was responsive to the request. Because our 
rulemakings are conducted in the public view in a transparent 
fashion, the comment file is, in fact, the record that the 
Commission considers in finalizing the rule.
    For inquiries about the climate rule, that administrative 
record, that is the key information that the Commission is 
considering in deciding how to finalize the rule.
    Mrs. Wagner. Thank you, Ms. Barbero. Many of the letters my 
colleagues and I have sent to the SEC include very specific 
questions, but receive very generic responses. Are there 
internal policies or regulations that dictate how the SEC can 
respond to these letters? And if not, how is that determination 
made and by whom?
    Ms. Barbero. A lot of thought goes into how to respond to 
those. My staff will consult with subject matter experts across 
the agency----
    Mrs. Wagner. They are very generic responses. One response 
to Mr. Huizenga was one paragraph long. Please proceed.
    Ms. Barbero. I don't know offhand the particular response 
to Mr. Huizenga. It depends on--I had in mind our responses to 
the seven interrogatories, which are quite detailed, and are 
done and prepared in consultation with subject matter experts 
across the Commission.
    Mrs. Wagner. Okay. Ms. Barbero, what is a reasonable 
timeframe for your Office to respond to congressional 
correspondence?
    Ms. Barbero. We engage with the committee right away when 
we receive correspondence.
    Mrs. Wagner. In a reasonable timeframe?
    Ms. Barbero. The reasonable timeframe is to engage, and if 
you are----
    Mrs. Wagner. Days? Months?
    Ms. Barbero. I know that this answer may not give you 
comfort, but it does depend on what the congressional inquiry 
is and what the----
    Mrs. Wagner. Okay. Let me move on. Chairman McHenry and I 
sent a letter on April 13th regarding the SEC's failure to 
focus on capital formation in its rulemaking agenda. In that 
letter, we included the response deadline of April 27th. The 
SEC responded to our letter just 2 days before your testimony 
here on June 20th. The letter from the Chair of the Full 
Committee included six questions, none of which were answered.
    What is it about this particular letter that took you over 
2 months to answer?
    Ms. Barbero. As is the case with all of the letters we 
receive, there is a process. What we are aiming to do in 
getting back to the committee is ensuring that we can provide 
accurate information, that we have consulted with the 
appropriate expert in the Commission----
    Mrs. Wagner. You didn't answer the questions with accurate 
information but, as I said, with generic responses. You don't 
answer the questions. And I have to say, Ms. Barbero, it was 
very disappointing to receive your one-paragraph response to 
the letter Mr. Huizenga and I sent on April 17th regarding the 
legal authority for the SEC's regulatory agenda. One paragraph. 
You are telling me you are doing this in-depth study and this 
work, and you have 150 lawyers, and this is the kind of 
response we receive. It is wholly, wholly inadequate.
    I yield back, Mr. Chairman.
    Chairman Huizenga. The gentlelady's time has expired.
    I do appreciate the witness being here today.
    The Chair notes that some Members may have additional 
questions for this witness, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to this witness and to place her responses in the record. Also, 
without objection, Members will have 5 legislative days to 
submit extraneous materials to the Chair for inclusion in the 
record.
And with that, the hearing is adjourned.
[Whereupon, at 10:08 a.m., the hearing was adjourned.]

                       A P P E N D I X

                        June 22, 2023


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