Securities & Exchange Commission v. Yorkville Advisors, LLC
2014 U.S. Dist. LEXIS 72090
| S.D.N.Y. | 2014Background
- SEC filed suit on Oct 17, 2012 alleging Yorkville fraud and false investor statements related to convertible debentures, stock, and notes.
- Case designated for the Pilot Project on Oct 31, 2012, shaping complex civil-case management in SDNY.
- Defendants served a broad First Request for Production on Dec 18, 2012; SEC objected to some requests on privilege grounds.
- SEC produced privilege logs on Jan 25, 2013 and Feb 15, 2013, asserting multiple privileges (work product, law enforcement, deliberative, attorney-client, informant).
- Defendants moved to compel production, alleging logs were inadequate under Rule 26(b)(5), Local Rule 26.2, and Pilot Project rules.
- Court found January 25 and February 15 logs inadequate, ordered revisions, and later considered a Revised Privilege Log (Feb 10, 2014) with additional privileges (including SAR-related protections).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the initial privilege logs compliant with Rule 26(b)(5) and Local Rule 26.2? | SEC argued logs were sufficient under rules and Pilot Project. | Logs are inadequate, failing to specify subject matter, authors, recipients; logs impede privilege assessment. | Initial logs deficient; waiver risk recognized; partial relief granted only for non-privilegeable items. |
| Does the Revised Privilege Log cure the deficiencies and preserve asserted privileges? | Revised log provides additional detail and supports privileges. | Revisions are untimely and incomplete; newly claimed privileges (common interest, Act, MOU, Exchange Act) are untimely. | Revisions untimely; SAR privilege treated as non-waivable; other new claims rejected for timeliness; overall partial waiver finding. |
| Did SEC waive privilege by failing to timely produce proper indices and comply with discovery rules? | No waiver; revised log vindicates privilege assertions. | Failure to timely provide compliant privilege logs constitutes waiver except for SARs. | Waiver found for most privileges; SARs privilege preserved; waiver applies to non-SARs. |
| Should SARs receive a separate, non-waivable privilege treatment, and can they be distinguished from supporting documents? | SARs deserve statutory protection under 31 U.S.C. § 5318(g)(2) and 31 C.F.R. § 1023.320(e)(2). | SARs privilege should be narrowly applied; supporting docs may remain discoverable. | SARs privilege non-waivable and applicable; supporting documents may be discoverable, with caveats. |
Key Cases Cited
- United States v. Constr. Prods. Research, Inc., 73 F.3d 464 (2d Cir. 1996) (deficient privilege logs require detailed descriptions)
- Strougo v. BEA Assocs., 199 F.R.D. 515 (S.D.N.Y. 2001) (waiver due to inadequate privilege log descriptions)
- Chase Manhattan Bank, N.A. v. Turner & Newall PLC, 964 F.2d 159 (2d Cir. 1992) (failure to comply with privilege disclosure rules may waive privilege)
- In re Grand Jury Subpoena Dated December 18, 1981 & January 4, 1982, 561 F. Supp. 1247 (E.D.N.Y. 1982) (three conditions for work product protection)
- In re The City of New York, 607 F.3d 923 (2d Cir. 2010) (law enforcement and deliberative process privilege scope and balancing)