| NEW YORK/WASHINGTON, July 31
NEW YORK/WASHINGTON, July 31 A U.S. Securities
and Exchange Commission watchdog conducted an extensive,
months-long investigation to find out who had leaked information
that appeared in two Reuters stories published last autumn, but
it was unable to identify the sources, according to a report of
the probe seen by Reuters on Thursday.
The SEC's Office of Inspector General (OIG) started the
investigation after Reuters published information about the
regulator's decision, taken in a closed-door meeting on Sept.
12, 2013, to settle its probe into JPMorgan Chase & Co's
massive London Whale trading loss.
The investigation started after Reuters reported on Sept.
17, 2013 that the regulator had approved its portion of a $700
million civil settlement with JPMorgan in a split vote. The
story also said that two of the five commissioners had recused
themselves from the decision.
The SEC made its decision public on Sept. 19, 2013. About a
week later, Reuters reported further non-public details about
why one of the commissioners, Michael Piwowar, had voted against
In its report, dated March 5, the watchdog said it
interviewed as many as 53 SEC employees, including Chair Mary Jo
White, SEC commissioners and other top officials, during the
An OIG official said its inspectors don't consider issues of
press freedom when carrying out their investigations, and that
the probe was launched at White's request. "Our office doesn't
really differentiate where the information went," said Raphael
Kozolchyk, the watchdog's legislative and public affairs
The SEC declined to comment on the OIG's probe and report.
CNBC earlier reported on its contents.
Piwowar raised concerns about the leaked information with
White, according to the OIG report. White and Piwowar could not
immediately be reached for comment.
Reuters Editor-in-Chief Stephen Adler said: "It's the job of
journalists to report vigorously on the workings of government,
and to provide readers with news that some may prefer to keep
secret. It is in that spirit that Reuters covers the SEC and
other agencies of the U.S. government, and we plan to continue
to do so while protecting the confidentiality of our sources."
The investigation is the latest example of the Obama
administration's aggressive moves to try to plug leaks of
non-public information to the media. Last year, the Justice
Department was criticized for examining reporter emails and
phone records without first notifying the press outlets.
Attorney General Eric Holder later met with news media
executives and agreed to revise policies for dealing with the
press in national security cases.
Besides the interviews with SEC staff, the OIG reviewed
email records of 39 employees, obtained the attendance roster
for the closed-door meeting and manually reviewed employees'
It also obtained building access logs for September and
October to find out when four Reuters reporters had visited the
agency's headquarters. The OIG sought to interview the reporters
involved in the two stories, but they declined its request.
Kozolchyk said the OIG does not disclose the costs of
individual investigations, but that the watchdog did not hire
any extra staff or outside investigators for the probe.
One advocate for government transparency and press freedom
said officials should be allowed to guard some secrets, such as
those regarding national security and sensitive information
about publicly traded companies. That includes the details of
secret meetings by SEC commissioners, said Michael Smallberg, an
investigator for the Project On Government Oversight, a watchdog
"I don't see anything egregiously wrong with this
investigation," he said.
However, a report last year by the Committee to Protect
Journalists, a New-York based advocacy group for journalists,
criticized the Obama administration for prosecuting media leaks,
excessive use of classified documents and increased government
surveillance of reporters and their sources.
(Reporting by Paritosh Bansal in New York and Jason Lange in
Washington; Editing by Martin Howell)