[Federal Register Volume 67, Number 142 (Wednesday, July 24, 2002)]
[Notices]
[Pages 48497-48498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18646]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. PA-32; File No. S7-27-02]


Privacy Act of 1974; Amended System of Records for Enforcement 
Files

AGENCY: Securities and Exchange Commission.

ACTION: Notice of amended system of records.

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SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, as amended, 5 U.S.C. 552a, the Securities and Exchange Commission 
gives notice of the amendment of its system of records for Enforcement 
Files (SEC-42) to clarify its routine uses with respect to disclosures 
related to the collection of amounts ordered to be paid in civil and 
administrative proceedings, to incorporate a statement regarding 
disclosure to consumer credit reporting agencies, to update statutory 
and regulatory references in certain routine uses, to update addresses 
of system administrators, and to identify exemptions from disclosure 
that have been claimed for this system of records under the Privacy 
Act.

DATES: Comments must be received by August 23, 2002. The amendments 
will take effect September 2, 2002 unless the Commission receives 
comments that would require a different determination.

ADDRESSES: Please send three copies of your comments to Jonathan G. 
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, 
NW, Washington, DC 20549-0609. You may also send your comments 
electronically to the following electronic address: [email protected]. All comments should refer to File No. S-27-02 and, if 
sent electronically, should include this file number on the subject 
line. Comment letters will be available for public inspection and 
copying at our Public Reference Room, 450 Fifth Street, NW, Washington, 
DC 20549. If sent electronically, comment letters will also be 
available on our Web site http://www.sec.gov.

FOR FURTHER INFORMATION CONTACT: Kenneth H. Hall, Assistant Chief 
Counsel, Division of Enforcement, Securities and Exchange Commission, 
450 5th Street, NW, Washington, DC 20549-0809, (202) 942-4635.

SUPPLEMENTARY INFORMATION: The Commission has amended its system of 
records for the files maintained by the Division of Enforcement. The 
information in the system is obtained and used for purposes of the 
Commission's investigations and actions to enforce the federal 
securities laws. The information in the system is used in conjunction 
with the collection of amounts ordered to be paid in enforcement 
actions, a function that is a necessary component of litigation. 
However, the Debt Collection Act, as amended by the Debt Collection 
Improvement Act of 1996, requires agencies to publish a notice 
identifying each system of records from which information may be 
disclosed to consumer credit reporting agencies (i.e., consumer credit 
bureaus). The Office of Management and Budget has indicated that this 
notice should take the form of an insert to existing systems of 
records. See OMB, Privacy Act of 1974; Guidelines on the Relationship 
of the Debt Collection Act of 1982 to the Privacy Act of 1974, 48 FR 
15556, 15558 (April 11, 1983). The Commission has thus incorporated a 
statement regarding consumer credit reporting into the system of 
records for Enforcement Files.
    The Commission has also revised the routine uses for Enforcement 
Files to clarify that disclosure may be made in connection with certain 
debt collection procedures that are mandatory for federal agencies. A 
routine use has thus been adopted which specifically states that 
disclosure may be made when the Commission seeks to collect by offset, 
i.e., the withholding of amounts otherwise payable by the government to 
a debtor. Administrative offset, authorized by the Debt Collection Act, 
31 U.S.C. 3716, is the most general form of such withholding, and 
applies to most amounts that may be payable to a debtor. Tax refund 
offset, authorized by 31 U.S.C. 3720A, authorizes the withholding of 
federal income tax refunds to satisfy a debt owed to the government. 
Salary offset, authorized by 5 U.S.C. 5514, authorizes the withholding 
of a portion of the wages due to a federal employee. The routine use 
also indicates that disclosure may be made in connection with 
administrative wage garnishment, a procedure by which the Commission 
may direct a non-federal employer to withhold a portion of an 
employee's wages to satisfy a debt owed to the government. In addition, 
notice is given that disclosure may be made to other persons, including 
other federal agencies and private collection agents, who assist in the 
collection of amounts owed as a result of enforcement actions.
    The Commission has adopted technical amendments to other routine 
uses. Four of the existing routine uses (those numbered 11, 12, 15 and 
17) refer to the definition of ``federal securities laws'' which has 
been moved from Section 21(g) of the Exchange Act to Section 3(a)(47); 
this reference has been updated. Two of the routine uses (those 
numbered 7 and 12) contain incorrect references to the re-codified 
Rules of Practice, and those references have been updated.
    The Commission has updated the addresses of the following system 
administrators: the Commission's Records Officer; the Regional 
Directors for the Northeast Regional Office, the Southeast Regional 
Office, the Central Regional Office, the Pacific Regional Office and 
the Midwest Regional Office; and the District Administrators for the 
Philadelphia District Office, the Fort Worth District Office, and the 
Salt Lake District Office.
    The Commission has also added a statement identifying the 
exemptions that have been claimed for this system of records. The 
Privacy Act includes provisions that generally require an agency to: 
notify an individual, upon request, of the existence of information 
contained in a record pertaining to the individual; permit access to 
such record and permit amendment or correction of such record; make 
available to an individual an accounting of disclosures to third-
parties; publish the sources of information in the system; and screen 
records to ensure that only such information is maintained about the 
individual as is necessary and relevant to a required purpose of the 
Commission. See 5 U.S.C. 552a(c)(3), (d), (e)(1), (e)(4)(G), (H), (I), 
and (f). The Privacy Act permits an agency, by rule, to claim exemption 
from these provisions for any system containing ``investigatory 
material compiled for law enforcement purposes'' if disclosure would 
interfere with the conduct of investigations. 5 U.S.C. 552a(k)(2). The 
Commission has claimed exemptions from these provisions for its 
Enforcement Files system of records. 17 CFR 200.312(a)(1).
    Accordingly, SEC-42 is amended to read as follows:

[[Page 48498]]

SEC-42

SYSTEM NAME:

    Enforcement Files.
* * * * *

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES:

* * * * *
    7. In connection with proceedings by the Commission pursuant to 
Rule 102(e) of its Rules of Practice, 17 CFR 201.102(e).
* * * * *
    11. In connection with their regulatory and enforcement 
responsibilities mandated by the federal securities laws (as defined in 
Section 3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 
78c(a)(47)), or state or foreign laws regulating securities or other 
related matters, records may be disclosed to national securities 
associations that are registered with the Commission, the Municipal 
Securities Rulemaking Board, the Securities Investor Protection 
Corporation, the federal banking authorities, including but not limited 
to, the Board of Governors of the Federal Reserve System, the 
Comptroller of the Currency, and the Federal Deposit Insurance 
Corporation, state securities regulatory or law enforcement agencies or 
organizations, or regulatory law enforcement agencies of a foreign 
government, or foreign securities authority.
    12. To any trustee, receiver, master, special counsel, or other 
individual or entity that is appointed by a court of competent 
jurisdiction or as a result of an agreement between the parties in 
connection with litigation or administrative proceedings involving 
allegations of violations of the federal securities laws (as defined in 
Section 3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 
78c(a)(47)) or the Commission's Rules of Practice, 17 CFR 201.100-900, 
or otherwise, where such trustee, receiver, master, special counsel or 
other individual or entity is specifically designated to perform 
particular functions with respect to, or as a result of, the pending 
action or proceeding or in connection with the administration and 
enforcement by the Commission of the federal securities laws or the 
Commission's Rules of Practice.
* * * * *
    15. Inclusion in reports published by the Commission pursuant to 
authority granted in the federal securities laws (as defined in Section 
3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(47)).
* * * * *
    17. To any person who is or has agreed to be subject to the 
Commission's Rules of Conduct, 17 CFR 200.735-1 to 735-18, and who 
assists in the investigation by the Commission of possible violations 
of the federal securities laws (as defined in Section 3(a)(47) of the 
Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(47)), in the 
preparation or conduct of enforcement actions brought by the Commission 
for such violations, or otherwise in connection with the Commission's 
enforcement or regulatory functions under the federal securities laws.
* * * * *
    23. To any governmental agency, governmental or private collection 
agent, consumer reporting agency or commercial reporting agency, 
governmental or private employer of a debtor, or any other person, for 
collection, including collection by administrative offset, federal 
salary offset, tax refund offset, or administrative wage garnishment, 
of amounts owed as a result of Commission civil or administrative 
proceedings.

DISCLOSURE TO CONSUMER REPORTING AGENCIES

    When the Commission seeks to collect a debt arising from a civil 
action or administrative proceeding, it may disclose the following 
information to a consumer reporting agency: (i) Information necessary 
to establish the identity of the debtor, including name, address and 
taxpayer identification number or social security number; (ii) the 
amount, status, and history of the debt; and (iii) the fact that the 
debt arose from a Commission action or proceeding to enforce the 
federal securities laws.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING 
AND DISPOSING OF RECORDS IN THE SYSTEM:

* * * * *

SYSTEMS MANAGERS AND ADDRESSES:

    Director, Division of Enforcement, Securities and Exchange 
Commission, 450 Fifth Street NW, Washington, DC 20549-0801; Records 
Officer, Securities and Exchange Commission, 6441-D General Green Way, 
Alexandria, VA 22312; Regional Director, Northeast Regional Office, 233 
Broadway, New York, NY 10279; District Administrator, Boston District 
Office, 73 Tremont Street, Suite 600, Boston, MA 02108-3912; District 
Administrator, Philadelphia District Office, The Curtis Center, 601 
Walnut Street, Suite 1120 E., Philadelphia, PA 19106-3322; Regional 
Director, Southeast Regional Office, 801 Brickell Avenue, Suite 1800, 
Miami, Florida 33131; District Administrator, Atlanta District Office, 
3475 Lenox Road, N.E., Suite 1000, Atlanta, GA, 30326-1232; Regional 
Director, Midwest Regional Office, 175 West Jackson Boulevard, Suite 
900, Chicago, IL 60604; Regional Director, Central Regional Office, 
1801 California Street, Suite 1500, Denver, CO 80202-2648; District 
Administrator, Fort Worth District Office, 801 Cherry Street, Unit 
18, Fort Worth, TX 76102-6882; District Administrator, Salt 
Lake District Office, 50 South Main Street, Suite 500, Salt Lake City, 
UT 84144-0402; Regional Director, Pacific Regional Office, 5670 
Wilshire Boulevard, 11th Floor, Los Angeles, CA 90036-3648; and 
District Administrator, San Francisco District Office, 44 Montgomery 
Street, Suite 1100, San Francisco, CA 94104.
* * * * *

EXEMPTIONS CLAIMED FOR THE SYSTEM:

    Under 5 U.S.C. 552a(k)(2), this system of records is exempted from 
the following provisions of the Privacy Act, 5 U.S.C. 552a: (c)(3), 
(d), (e)(1), (e)(4)(G), (H), and (I), and (f). These exemptions are 
contained in 17 CFR 200.312(a)(1).

    By the Commission.

    Dated: July 18, 2002.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-18646 Filed 7-23-02; 8:45 am]
BILLING CODE 8010-01-P