Grassley: Markets Plunge Because Deficits Out of Control

Thursday, 18 Aug 2011 06:06 PM

By Martin Gould

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U.S. Senator Charles Grassley told Newsmax Thursday that he is demanding the Securities and Exchange Commission to answer allegations that the agency destroyed files from initial investigations of firms including Goldman Sachs Group Inc. (GS), SAC Capital Advisors LP and Bernard Madoff Investment Securities LLC.

Grassley, the top Republican on the Senate Judiciary Committee, also told Newsmax in an exclusive interview that Europe is dragging down the already troubled US economy because of its inability to get control over runaway debt.

The U.S. stock market is “influenced pretty much by the global economy and overnight we had stocks down in Europe and in Asia and it’s impacting our markets,” Grassley told Newsmax. “There is some bad economic news today, there was a greater filing of unemployment compensation than was anticipated, there was a reduction in house values and things of that nature, but right now what’s affecting the economy and particularly Europe not getting its sovereign debt under control, so that is the basically the problems of Greece, Italy, Portugal and Spain.”

Grassley asked SEC Chairman Mary Schapiro to explain whether the SEC routinely destroys documents related to so-called matters under investigation that don’t progress beyond the initial phase.

“It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence,” Grassley said in a statement. “If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what timeframe, and to what extent its actions were consistent with the law.”

Grassley told Newsmax that his investigation is ultimately about the retirement plans of millions of Americans.

“You probably know that before this inquiry was made that I’ve been doing a lot of investigating the oversight of the SEC because they are responsible for making sure Wall Street does things legally and it hasn’t been pursuing that and that’s a danger to middle-class’s 401(k)s and retirement plans and things of that nature, so when we received in this latest inquiry information from a whistle-blower who said that over a period of years from 1993-2009, 9,000 documents had been destroyed by the SEC.

“Presumably from their standpoint they weren’t needed any more, but maybe a violation of federal law that says what records have to be kept and not kept,” Grassley said. “But regardless of the federal law on record-keeping, you would think that if there’s wrongdoing you wouldn’t be destroying the records because they might be needed in prosecution. We sent a letter to the SEC wanting to get information on these 9,000 documents, which ones they were, when were they destroyed, why were they destroyed and I suppose a lot of other questions that are pertinent to the issue.”

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