Audit faults SEC's records management practices.

• Position: GOVERNMENT RECORDS

In a public July 2012 letter to Sen. Charles E. Grassley (R-Iowa) on behalf of a former long-time Securities and Exchange Commission (SEC) official, the SEC said it had violated federal law by destroying financial records related to investigations of various financial institutions from 1993 to 2010. The 9,000 records in question pertained to the initial investigation of institutions that reportedly included Goldman Sachs, Bank of America, Morgan Stanley, and Wells Fargo.

The documents were shredded in compliance with an SEC policy in effect during that time period that stated that documents related to an inquiry that didn't become an official investigation should be destroyed. Unfortunately, that policy conflicted with federal law requiring such documents to be retained for 25 years.

SEC spokesperson John Nester told The Washington Post that the agency changed the policy in 2011, requiring employees to follow the agency's records management policy. He also pointed out the retention requirements "pertain to documents...