This morning’s coverage of the SEC’s settlement with Wall Street self-regulator FINRA is frustrating.
We’re told that FINRA, which was run at the time by now-SEC chief Mary Schapiro, misled the SEC by altering documents it sent the commission for its oversight purposes. We’re told FINRA edited and deleted information and changed signatures on documents, the third time in eight years this has happened.
Interesting. But what was FINRA editing and deleting? We’re not told. Worse, we’re not told by the Washington Post, The Wall Street Journal, or The New York Times why we’re not being told.
Reuters does slightly better, at least acknowledging that it’s not telling us the information and giving a reason why, although it’s sixteen paragraphs in:
The SEC did not detail the content of the alterations. Wolper, who is familiar with staff minutes from his tenure at FINRA, said the minutes are usually “dull and perfunctory.”
By skipping over this detail—that the SEC didn’t say what was altered—the other papers let the SEC off the hook for not telling us what happened.
Why didn’t the SEC tell us what was altered?
The New York Times‘s coverage is particularly poor. First, it doesn’t put in the paper, and second, it doesn’t point out that the SEC’s Schapiro was head of FINRA when this happened. That’s a big miss.
The Journal is good to point that out in the third paragraph of its C2 story, and to tell us that Schapiro left before a whistleblower brought the alterations to light and that:
An SEC spokesman said Ms. Schapiro “did not participate in the decision to take the enforcement action.”
Though the Post writes this:
The SEC would not say whether Schapiro was aware of the earlier incidents or whether the SEC was notified of the events at the time.
I’m not criticizing these papers for not knowing what they don’t know. But in situations like this you have to signal to the reader what you don’t know and why you don’t know it.
Because it’s super-frustrating to have the obvious question every reader has on this story go unraised: FINRA must have had some motive to illegally alter documents just before submitting them to its regulator. What was that motive?
Moreover, why didn’t the SEC tell us what actually happened here? Maybe it’s because the changes didn’t matter much. If so, we should know that too.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.