The SEC's internal watchdog has found that regulators should not have destroyed records related to closed preliminary probes, but the practice did not appear to hamper any investigations. SEC Inspector General David Kotz's report found that while the SEC should not have destroyed the "matters under inquiry" records in question, there was no evidence of any "improper motive" behind the policy and no investigations were harmed by it. The document retention policy, which started in 1981, called for destroying all MUI-related documents that did not become investigations. Of the 23,289 MUIs opened from October 1992 through July 2010, 10,468 of them were closed without becoming investigations. John Nester, a spokesman for the SEC, reiterated in a statement that the SEC's old document retention policy was discontinued in July 2010, and said the SEC is still working with the National Archives and Records Administration (NARA) to resolve outstanding issues. Whistleblower Darcy Flynn, an SEC attorney, first raised concerns about improper disposal of records in 2010. He took his allegations to NARA, which earlier this year issued a statement saying the SEC had in fact destroyed certain records without the proper authority. In his report, Kotz was critical of the way the SEC had initially responded to NARA's inquiry about the document destruction accusations. He said the SEC had violated federal regulations which required the SEC to provide a complete description of the records and the circumstances surrounding their destruction. Kotz said that while it does not appear that anyone made materially false statements to NARA, certain senior SEC officials should have been more forthcoming in their response to NARA's inquiries. [Reuters, 11/1/11]