Securities Law Section



Message from the Chair

Section Chair: 


 
Charles Niemeier
Williams & Connolly LLP
Washington, D.C.

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The Federal Bar Association - Securities Law Section is a proud sponsor of the virtual museum and archive of the history of financial regulation at www.sechistorical.org. While the museum is free and accessible to everyone at all times, the Section will highlight specific material and information within the museum on securities law issues in the coming months, providing current and prospective Section members with unique insight and context.      

            The Government in the Sunshine Act was enacted to make government operations more transparent. Signed into law in 1976 by President Gerald Ford, the Sunshine Act requires that independent federal agencies hold most types of meetings in full view of the public. Over sixty government agencies, including the SEC, are subject to the law. A number of SEC commissioners and staff have noted how it has affected their working relationships.

            A.A. Sommer, Jr. recalled a very harmonious pre-Sunshine Act working relationship under Chairman Ray Garrett. “At that time, we didn’t have the Government Sunshine Act so we really developed a high measure of collegiality.” He continued, “We didn’t have to give notice of a hearing or open our meeting to outsiders, and the result was a very collegial Commission.” During his testimony before the Senate Committee on Government Operations, Chairman Garrett cited these working relationships as potential casualties of the Act.

            In addition to eroding the collegial environment, the Act may have put more power in the hands of chairmen. Daniel Goelzer observed that, with the Sunshine Act in place, a Chairman was limited in meeting with his or her fellow commissioners, but still free to meet privately with staff. As a result, the Chairman enjoyed an outsized role in setting the staff’s agenda. Paul Roye remembered that, as a staff member, he felt like he worked more for the Chairman. “It’s your job to carry out the Chairman’s wishes and his approach to dealing with the issues. You’re pretty much an advocate for the Chairman with the other Commissioners.”

            Even with the requirement that Commission discussions be held in public view, Irving Pollack said there were still ways around the rules. “You’ve got the surface of ‘open’ in the Sunshine, but you still have this being done in some other way than in open discussion, because they’re going to do them by memorandum or something else that’s going to serve.”

            Despite critics of the law, there were those at the SEC who saw benefits in the Sunshine Act. Edward Fleischman commented, “If you want to make things public, and there is a good reason for wanting to make things public, for getting sunshine into the process, then you can do so, and you can do so without losing the benefit of talking one-to-two or one-to-three.”

            Whatever the view of its efficacy, the Sunshine Act is still law today, and agencies have had to adapt to its challenges. As John Olson explained, “Basically these folks are operating under constant scrutiny in a way that people in the private sector are not, which causes them to sometimes seem cautious. They also have a responsibility for consistency, for even-handedness and for understanding that whatever they’re doing is going to be second guessed. Until you spend time dealing with folks in that situation, you don’t fully understand how challenging it can be.”

 

Resources

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Section ByLaws


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