House Financial Services Committee Chairman Jeb Hensarling criticized the SEC for leaks to the news media in a letter to SEC Chair Mary Jo White this week, CNBC has learned.
"Leaks emanating from closed meeting deliberations jeopardize all of the SEC's enforcement work," Hensarling, R-Tex., wrote to White in a letter dated August 18. "Entities will be less willing to engage in settlement discussions if in doing so they run the risk of the underlying facts of the case entering the public domain."
Of particular concern to Hensarling was the ability of CNBC and The Hill newspaper to obtain copies of a non-public investigative report that detailed a long running leak investigation inside the SEC. "Leaks of this magnitude are unacceptable," Hensarling wrote.
CNBC obtained a copy of Hensarling's letter Thursday from a source who declined to be named.
In other words, a congressional letter criticizing the SEC for leaks involving a report about a leak investigation was itself leaked.
At issue is a contentious investigation inside the SEC into who leaked information about the commission's then-secret session about JPMorgan's involvement with the so-called "London Whale" trades.
The inspector general of the Securities and Exchange Commission conducted an intensive, months-long dragnet in 2013 and 2014 involving phone, email and security searches to determine who inside the agencymay have been involved in the leak, CNBC first reported in July.
Investigators at the Office of the Inspector General produced a 16-page report detailing their findings in March. The document painted a picture of an SEC in which commission members were at odds with one another and investigators scrutinized their colleagues, staff and the media. It also detailed just how far the inspector general went to learn how information about a Sept. 12, 2013,executive session commission meeting about JPMorgan had apparently been given to a Reuters reporter, Sarah Lynch.
In his letter this week, Hensarling expressed concern that too many staffers are allowed to attend sensitive SEC meetings. "Attendance at closed Commission meetings should be a privilege, not a right," he wrote. "Mere intellectual curiosity is not sufficient justification for an employee to stop his work and attend a closed meeting."