The Securities and Exchange Commission

[thepennyking]

SEC Internet Search System-Levitt to be Named in Suit

Washington, DC, April 5, 2000 -- Securities and Exchange
Commission Chairman Arthur Levitt today issued the following
statement on the SEC's Request for Proposal for an automated
Internet search system:

In recent weeks, there has been considerable interest in
the Commission's Internet enforcement program and our
Request for Proposals for an automated Internet search
system. Some are concerned that the Commission intends
to monitor private Internet communications. These
concerns appear to be based on a misunderstanding about
what we seek to do. I want to make clear that the SEC
has never had any intention of intercepting or monitoring
private transmissions, including conversations taking
place in chat rooms or on e-mail, in the pursuit of
Internet fraud.

There may have not been any intention to conduct such actions but the SEC has conducted not only interception and monitoring of private transmissions, including conversations taking place in chat rooms or via email, but has engaged in such searches and seizures of information without warrants and direct contravention of the Constitution of the United States.

Commission staff, as permitted by law, access only
electronic materials that are "readily accessible to the
general public," both when conducting investigations and
when engaging in other Commission business. The RFP
simply seeks the ability to automate and customize these
same searches of public sites that are already accessible
to the general public through commercial search engines.
This is no different, in both manner and scope, than
finding a newspaper article with the aid of a tool that
helps you do so more quickly and exactly.

The above is a false and misleading statement. Private emails intercepted or gained by surruptitious entry are not generally accessable to the public.

The RFP was carefully drafted to require that the
contractor chosen respect the privacy of non-public
communications conducted over the Internet; it expressly
states that the "[c]ontractor shall access data posted or
disseminated on publicly accessible web sites and news
and message servers." In addition, the RFP bars the
contractor from using a system that would access private
materials on the Internet such as "private email
correspondence, transactions or communications."

That may be what the RFP said but it is not what is currently practiced by the SEC.

Historically, the Commission has taken great pains to
respect and protect the privacy of all persons with whom
it deals. We work hard to ensure compliance with
constitutional and statutory privacy protections,
including the Privacy Act and the Electronic
Communications Privacy Act. We take these obligations
seriously when we monitor the Internet just as we do in
any other context.

The great pains will soon become apparently more painful.

During the past few years, the Commission has taken
significant steps to protect investors from securities
fraud on the Internet. I regard these efforts as vital
to ensuring the fairness and integrity of our markets.
We will continue to undertake these efforts mindful and
respectful of fundamental privacy rights.

The above is a false and misleading statement as such significant steps failed or neglected to act in the face of the cases of many firms which have stolen billions (not millions) from the American public including the NYSE, NYSE listed firms, and the mutual fund industry.

Arthur Levitt is being named in a case against the SEC as it relates to negligence and for false and misleading public statements on behalf of the SEC to the general public, giving investors false senses of assurance when dealing with the regulation of the "Truth in Securities Laws".