August 17, 2011 The Honorable Mary Schapiro y n Chairman U.S.

Secu urities and Exchange Co E ommission Washing gton, DC 205 549 airman Scha apiro: Dear Cha M Flynn, a thirt teen year vet teran of the I recently received a letter regarding Mr. Darcy F ange Commission (SEC). Mr. Flynn alleges that SEC staff h destroyed n t has d Securities and Excha over 9,00 files related to Matter Under Inv 00 rs vestigation (M MUI). As yo know, a M is the f ou MUI first step the SEC takes when credible information about a po S w e ossible secur rities law vio olation is received. These reco may con . ords ntain critical information that could be extremely useful in l n y piecing to ogether com mplex cases, even if not im e mmediately pursued. Further, Mr. Flynn claims that the SE has destro F s EC oyed files re elated to MU even in UIs extremely important cases such as the investi y a igation of Be ernard Mado Goldman Sachs trad off, n ding in AIG cr redit default swaps in 20 financia fraud at W t 009, al Wells Fargo a Bank of America in 2007 and and 2008 and insider trading inv 8, r vestigations at Deutsche Bank, Lehm Brothers and SAC a man s, Capital. If Mr. Flynn allegation are correc the intent ns ns ct, tional destru uction of at le 9,000 M east MUIs would ap ppear to grea handicap the SECs ability to cre patterns in complex cases and c atly p eate s x calls into ques stion the SEC ability to properly re Cs o etain and cat talog docume ents. n r. legations, I would appre w eciate answer to the foll rs lowing quest tions: In light of Mr Flynns all 1. Has the SEC routinely de H estroyed MU and if so why? UIs, o, 2. Is the SEC no concerned that destroy les s ot d ying these fil may have harmed fu uture in nvestigations If not, ple s? ease explain why not? n 3. Is it possible for the SEC to retrieve any of this in s a nformation? 4. Is Mr. Flynn correct that the SEC has destroyed M s t s MUIs related to Bernard Madoff, d d Goldman Sac Wells Fa G chs, argo, Bank of America, Deutsche Ba o ank, Lehman Brothers, a n and SAC Capital? If so, pleas explain why. ? se w

5. Is it current SEC policy to destroy an files relate to MUIs i the investi s S o ny ed if igation does not pr rogress to a formal order approved by the Comm r b mission? 6. What is the SECs unders W S standing of its legal oblig i gations to m maintain and archive reco ords re elated to MU and how is the SECs policy and practice con UIs d nsistent with those h ob bligations?

Thank you fo your coope T or eration and attention in t matter. I would app a this preciate a response by August 31, 2011. If you have an questions please con 3 f ny s, ntact Chris Lu ucas on my staff at (202) 224-5225. 2

Sincerely,

Charles E. G Grassley Ranking Me ember Committee on the Judic ciary