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The original was posted on /r/ufos by /u/frognbadger on 2024-09-26 16:39:33+00:00.
Howdy UFOs,
Today, I want to hammer down the chronology of regulations involved with financial reporting that ostensibly allow the UAP Legacy Program and other covert operations to exist without appropriate disclosure to relevant authorities or the American people. I've covered several companies and other audits in prior posts, and if you're interested in reading up on these, the links are down below. However, I will do my best to summarize pertinent information from each so this post can "live on its own". I will preface this in saying that this post does not have anything to do with UAPs directly, but as said previously, the discussion herein revolves around the legal and financial framework that allows these types of operations to exist in government and private industry, with relevant discussion on UAP disclosure events that might have correlation.
My Priors:
Strange Footnote Disclosure: SAIC and Leidos under criminal DoJ antitrust investigation
Audit of Battelle's Contract at Oak Ridge National Laboratory
The 1993 DoD SAP Administrative Due Process Audit by GAO, possible connection to Wilson-Davis memo
Also, before I really get into it, I want to give a HUGE shout-out to Catherine Austin Fitts's Solari Reports for helping me fill in the research gaps I've been working on for the past year. Her website, missingmoney.solari.com , is a treasure trove of financial and legal information on black budget programs within the federal government and private industry. If you want a better understanding of how this stuff works from a legal/financial perspective, I highly encourage you to take a look at her reports on her website going back to the early 2000s.
And with that, let's start with a question:
What laws are on the books around non-disclosure of national security information, such as UAP reverse engineering programs, in financial reporting and corporate communications?
The Securities Exchange Act of 1934; Section 13(b)(3)(A) Exemption
The Securities Exchange Act of 1934, colloquially known as "the SEC Act", was the law that formed the Securities and Exchange Commission (the SEC) in the wake of the Great Depression. This tremendously important law codified many of the financial and legal regulations that serve as the backbone for financial reporting today.
However, few are aware of specific exemptions written into the law, namely Section 13(b)(3)(A) (page 123 in link). With respect to matters concerning national security of the United States, the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate "books, records, and accounts" and maintaining "a system of internal accounting controls sufficient" to ensure the propriety of financial transactions of the preparation of financial statements in accordance with Generally Accepted Accounting Principles (GAAP).
For all intents and purposes, this was the first exemption written into law over non-disclosure of information in financial reports in matters pertaining to national security, and the ultimate power in granting the exemption was put in the hands of the President and the heads of the Executive agencies. (More on this later in the post.)
The Code of Federal Regulations
The Code of Federal Regulations (CFR) is an extensive collection of general and permanent rules and regulations published by the executive agencies of the United States government. The code is organized into 50 titles, and each governs a certain agency or aspect of agency operations. Many following the current UAP disclosure narrative will probably remember the discussions last year around security clearances and accesses for the All-Domain Anomaly Resolution Office (AARO), namely AARO having certain clearances to IC programs through Title 50. CFR Title 50 governs Intelligence Community (IC) activities, and Title 10 governs DoD activities, for example.
However, there is not a lot of discussion around similar private industry regulations, which could be important given allegations that UAP materials are being held by certain private aerospace and defense corporations. Title 17 of the CFR contains regulations issued by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). These laws help form the basis for things like financial reporting, SEC reporting requirements, and disclosure of non-financial information for corporate entities.
In May 1968, 17 CFR 240.0-6 was codified, titled:
Disclosure detrimental to the national defense or foreign policy
a) Any requirement to the contrary notwithstanding, no registration statement, report, or proxy statement or other document filed with the Commission (SEC) or any securities exchange shall contain any document or information which, pursuant to Executive order, has been classified by an appropriate department or agency of the United States for protection in the interests of national defense or foreign policy.
b) Where a document or information is omitted pursuant to paragraph (a) of this section, there shall be filed, in lieu of such document or information, a statement from an appropriate department or agency of the United States to the effect that such document or information has been classified or that the status thereof is awaiting determination. Where a document is omitted pursuant to paragraph (a) of this section, but information relating to the subject matter of such document is nevertheless included in material filed with the Commission (SEC) pursuant to a determination of an appropriate department or agency of the United States that disclosure of such information would not be contrary to the interests of national defense or foreign policy, a statement from such department or agency to that effect shall be submitted for the information of the Commission (SEC). A registrant may rely upon any such statement in filing or omitting any document or information to which the statement relates.
c) The Commission (SEC) may protect any information in its possession which may require classification in the interests of national defense or foreign policy pending determination by an appropriate department or agency as to whether such information should be classified.
d) It shall be the duty of the registrant to submit the documents or information referred to in paragraph (a) of this section to the appropriate department or agency of the United States prior to filing them with the Commission (SEC) and to obtain and submit to the Commission (SEC), at the time of filing such documents or information, or in lieu thereof, as the case may be, the statements from such department or agency required by paragraph (b) of this section. All such statements shall be in writing.
Analysis:
Paragraph (a) is the actionable clause here, as it mandates SEC registrants, basically defined as companies filing reports with the SEC, to not submit or disclose documents pertaining to sensitive information or programs classified by the President or an executive agency. This basically allows companies involved in the defense and/or intelligence industry to disclose their financial operations without getting into specifics about what those operations may entail, particularly when those operations pertain to classified projects. Ultimately, the regulation puts the legal burden on the company and the relevant classification authority (IC or DoD agencies and/or POTUS) to withhold documents from the SEC in good faith under paragraphs (b) and (d). The relevant classification authority is required to submit statements to the SEC to the effect of, "this program is classified and therefore we encourage you waive reporting requirements pertaining to this particular operation." It is not unreasonable to assume these statements to the SEC may be general or vague, depending on the nature of the program.
17 CFR 240.0-6 allows for non-disclosure of sensitive programs and information, thus decreasing the risk of inadvertent or unauthorized disclosures in financial reporting or other company communications. Soon after this regulation passed, a large swath of defense companies conducted IPOs and went public in the following years. While not an exhaustive list, here's a brief of defense companies that went public after the CFR was added (and therefore subject to SEC regulations):
CACI, October 1968
Honeywell International, January 1970
General Dynamics, January 1977
BAE Systems, February 1981 (on London Stock Exchange, but trades in US so still under SEC laws)
Northrup Grumman, December 1981
Lockheed Martin, March 1995, after Lockheed-Martin Marietta merger
AND Full Disclosure, Defense Companies who were public BEFORE 17 CFR 240.0-6:
Raytheon Company...
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