SEC Destroys Papers From J. David Probe

The Securities and Exchange Commission (SEC) has destroyed the documents it collected in connection with the J. David & Co. group of businesses, according to a letter mailed by the commission to a local attorney representing former J. David investors.

Although the contents and volume of the documents remain unknown, the letter apparently indicates that the SEC is no longer investigating the now-bankrupt J. David empire.

That implication was taken in stride Tuesday by the federal prosecutor in charge of the case, but it angered Michael J. Aguirre, the attorney representing a group of investors.

“Not having the SEC involved in what is a securities case is like not having the Internal Revenue Service involved in a tax case, or not having the Drug Enforcement Administration involved in a drug case,” said Aguirre, who received the letter Tuesday.

But Asst. U.S. Atty. Robert D. Rose, who has led the federal grand jury investigation of J. David, said, “The SEC doesn’t do criminal investigations, and (SEC officials) knew we had a criminal investigation.”

The grand jury in September indicted J. David (Jerry) Dominelli, who has since pleaded guilty to four counts of tax evasion, mail and bankruptcy fraud.

The grand jury’s probe into other people connected to J. David & Co. is ongoing and includes an investigation of possible securities violations.

The SEC’s letter to Aguirre, in response to the attorney’s Freedom of Information Act request for government information concerning J. David, does not describe the type or number of documents that were destroyed.

SEC Freedom of Information Act officer Edward A. Wilson said that the commission routinely destroys documents if no formal investigation is undertaken. “If a matter . . . leads to a formal investigation, then the records are retained for 25 years,” he said.