SEC says not out to create a fear psychosis in the minds of investors

Right of Reply
Following is the Securities and Exchange Commission statement in reply to the front page article in the Daily FT of 19 June 2012 under the heading “Top Government politico among investors summoned by SEC via ‘fiery’ notice”.

SEC notes with grave concern the inaccuracy and the misleading nature of the above caption as no politician has been summoned by notice ‘fiery’ or otherwise to the SEC. What we have done is to seek written information from individuals including a politician in the course of routine investigations by the SEC. 
Your article has also referred to a purported paragraph picked from letters sent out to persons who have been summoned to appear in person to the SEC where Section 46 (A) (4) of the SEC Act has been sited and we wish to categorically state that this has not been a recent adoption as implied in your article but is a standard letter used by the SEC since 2004.
The SEC views your comments made in reference to the contents of the letter as creating a fear psychosis, as an attempt on your part to blow matters out of proportion and an interference with conducting of investigations by the SEC. Your article attempts to create public opinion in favour of your subjective views. The SEC is surprised as to your timing in commenting now on a standard format of a letter that has been used since 2004. The SEC in discharging its duties as the capital market regulator has the power to inquire and investigate   into instances of suspected violations of the securities law that interferes with the integrity of the market. Therefore the SEC may consider where necessary to call upon persons to appear before it to give evidence in person or merely request for information in writing when carrying out investigations. The SEC categorically states that it is not out to create a fear psychosis in the minds of investors nor the public. The SEC reiterates that it will not prejudge any matter and whatever enforcement action that it takes ultimately will be only after a strict examination of the evidence and the law.
Articles such as the one referred to, amount to an obstruction to the performance of the duties of the Commission. The SEC cautions once again the Daily FT to be impartial, responsible, objective and accurate in its reporting and to refrain from commenting or furthering the objectives of persons who are deliberately setting out to obstruct the functioning of the SEC by bringing disrepute to the Commission, its Members and staff.
It may be a matter of interest to note that in terms of Section 51(1)(c) that any person who wilfully obstructs any Member of the Commission or an Officer of the Commission in the performance of its duties under the provisions of the SEC Act shall be guilty of an offence and the SEC will not hesitate to pursue action under this Section if the need arises.

Editor’s Note:
SEC confirms that a politician is among those being investigated. Daily FT is aware that the politician is a Government MP, hence reference to “top Govt. politico”.
The Daily FT article also emphasised that summoning is part of SEC’s core role. Whilst highlighting concerns of some investors and analysts, the article did categorically say tough action by the SEC is likely to be cheered by good governance activists and those who trade fair.
The Daily FT article also said, quoting others, that the format of letter is standard, though we maintain that the tone of the latest round of letters was different.
Whilst denying SEC allegations Daily FT stands by its story though it had diverse views, which may not necessarily be the same as that of the SEC.
SEC must also respect the fact that the Daily FT as an independent newspaper provides a forum for all shades of opinion, some which at times even the editorial staff may not agree with personally yet publish in the best interest of our readers who have divergent views on an issue.