Angry in the Great White North
SEC Investigation: The importance of transparency
Saturday, January 07, 2006 at 07:51 AM

Read other posts by Steve Janke published by the National Post
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From CTV:

The U.S. Securities and Exchange Commission is reviewing last November's alleged income trust leak and may launch an investigation, the regulator revealed in an e-mail sent to NDP Finance Critic Judy Wasylycia-Leis.

The e-mail was written Thursday by Ann H. Sulzber [sic], special counsel to the SEC.

"We are taking your complaint very seriously, and have referred it to the appropriate people within the SEC," Sulzber [sic] writes, and refers to a telephone conversation with Wasylycia-Leis from the previous week.

Sulzber [sic] adds that "the SEC generally conducts its investigations on a confidential basis and neither confirms nor denies the existence of an investigation unless we bring charges against someone involved … As a result, we will not be able to provide you with any future updates on the status of your complaint or of any pending SEC investigation."

The special counsel is Ann Suzlberg, not Sulzber (the Toronto Star got the spelling correct). She works for the Division of Enforcement.

So by my count, there are three simultaneous investigations ongoing into the Income Trust scandal.

But recall that on December 22, this blogger had confidential information that the OSC had initiated an investigation. So by my reckoning, Paul Martin and Ralph Goodale knew for two weeks that the OSC had concerns.

Did they announce the investigation in order to assure the investment community and Canadians at large that the regulatory mechanisms that ensure that Canadian markets operate in a fair and open manner were themselves working?

Of course not:

The next hallmark of the rule of law is transparency.

Transparency is particularly important in financial sector regulation and supervision because of the need for confidence in the system.

Who spoke these words of wisdom? Finance Minister Paul Martin, at Cambridge University in England, on July 12, 1999.

I guess transparency matters only some of the time. At other times, it is important to be evasive and opaque.

How can you tell when? I don't know. Even those rulese are not all that transparent.

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