The Securities and Exchange Commission has turned down a congressional request to disclose why it dropped an investigation into whether The Bear Stearns Cos. Inc. hurt investors by improperly determining the value of complex debt securities, according to a report in The Wall Street Journal.
Earlier this month, Sen. Charles Grassley, R-Iowa, asked the inspector general of the SEC to probe the reasons why the agency's enforcement division did not bring a case against New York-based Bear Stearns in December for improperly valuing mortgage-related products.
SEC Chairman Christopher Cox replied to Mr. Grassley in a letter dated April 16 stating that the SEC "does not disclose" the existence or non-existence of an investigation unless it was made a matter of public record, the Journal said.
At the center of the case is a move by the SEC to abort an enforcement case into activities at Bear Stearns several months before the company imploded in March and was acquired for a fire sale price by JPMorgan Chase & Co. of New York.
"Given the later collapse and federally backed bailout of Bear Stearns, Congress needs to understand more about this case and why the SEC ultimately sought no enforcement action," Mr. Grassley wrote in the letter.
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