It’s a big week for Judge Rakoff — he heard version 2.0 of the Bank of America/SEC settlement discussion and now has ruled on an initial discovery issue in the Galleon/SEC case.
The wiretap argument was kind of an interesting one — the Galleon defendants, facing a concurrent criminal case, had in their possession the tapes containing the wiretapped conversations created by the FBI in its investigation.
But the FBI’s fellow government agency, the SEC did not have access to those tapes in their criminal case (besides of course those the US attorney’s office inadvertently sent the the SEC — ooops!).
The Galleon defendants argued that they would not turn over the tapes to the SEC in the civil case without a court order. Rakoff gave that order yesterday, in an order that noted no such order was necessary.
In civil cases, pre-trial discovery requires turning over to the other party anything they ask for that is non-privileged and relevant to the case. Taped conversations between defendants relating to the exact issues of the case would seem to fall safely in that category.
Zachery Kouwe for The New York Times noted that Rakoff’s order said the defendants could not cite any authority that a court order would be required to turn over the tapes and that, “The notion that only one party to a litigation should have access to some of the most important non-privileged evidence bearing directly on the case runs counter to basic principles of civil discovery in an adversary system.”
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