Important files shredded by SEC

Arab Herald Friday 16th September, 2011

The US Securities and Exchange Commission has revealed it destroyed documents relating to preliminary investigations of major banks and the Bernard Madoff case.

The documents, supposedly destroyed under a former agency policy, related to thousands of probes, into Bank of America, Goldman Sachs, Wells Fargo and Madoff.

While there have been allegations that the documents were destroyed purposely, Enforcement Director for the SEC, Robert Khuzami, has said the documents were only discarded when investigators decided a formal probe wasn't warranted following preliminary findings.

He said the agency didn't accept that current or future investigations would have been harmed under the document destruction policy, as electronic information that had been retained would allow staff to connect the information between current and closed matters.

The agency's latest policy requires all documents to be retained whether they are part of a preliminary probe or a formal investigation.