In another chapter of the SEC file-destruction case, the commission's internal watchdog is investigating whether enforcement officials misled the National Archives and Records Administration by saying the SEC was "not aware" of record destruction.

The concern dates back to an Aug. 27, 2010 letter that the SEC enforcement division's assistant chief counsel sent to the NARA. In it, he wrote that his division was not aware of any instances of closed MUI records being destroyed. However, he did say that he could not say for certain that it had never happened.

The SEC Inspector General's office is now looking at the letter, among other evidence, to see if the SEC enforcement divison led the NARA astray in its investigation.

The issue at  large concerns the SEC's systematic destruction of thousands of records related to "matters under inquiry." MUIs are preliminary looks into potential violations. If an MUI was closed without spawning a full-fledged investigation, the SEC destroyed the files.

The larger concern is that the practice violates federal record-keeping laws. The SEC claims its enforcement manual distinguishes between inquiries, like MUIs, and investigations. Investigations records are kept for 25 years. The SEC believes its policies are proper.Outside of the investigation, the NARA and SEC are working together to create rules on MUI recordkeeping. [WS Journal, 8/25/11]