Wiand v. Wells Fargo Bank, N.A.
981 F. Supp. 2d 1214
M.D. Fla.2013Background
- Receiver is court-appointed for six hedge funds that lost about $168 million in a Ponzi scheme run by Nadel (1999–2009).
- Receiver sues Wells Fargo for alleged failures to comply with federal banking regs and bank procedures enabling the Ponzi scheme.
- Wells Fargo withheld documents under the SAR privilege; in camera review was ordered for documents not clearly SARs or referencing SAR decisions.
- SAR privilege is disputed: Wells Fargo argues SAR privilege covers SARs and related detection materials; Receiver argues it covers only SARs and direct references, not internal investigations.
- Court reconsiders arguments, reviews privilege log, and classifies Bank Documents into categories for privilege analysis.
- The order requires Wells Fargo to disclose certain Bank Documents within 14 days, with redactions as specified and exceptions for specific pages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the SAR privilege cover internal bank materials? | Receiver contends only SARs and underlying facts, not internal investigations, are privileged. | Wells Fargo asserts the SAR privilege extends to materials prepared to detect and report suspicious activity, even if no SAR was filed. | Bank Documents not under SAR privilege are disclosed; some exempted pages stay protected. |
| Which Tabbed Bank Documents are protected or must be disclosed? | Documents are responsive and relevant; many should be produced. | Certain documents are protected as evaluative or internal reports; others are transactional data not privileged. | Tab 1 (000001–000004 except redacted final paragraph), Tab 3 (000018–000020), Tab 4 (000026–000065), Tab 5 (000066–000517 with highlighted portions), and Tab 2 attachment (00005, 00007) require or may require disclosure depending on type; redactions and an additional attachment review are ordered. |
| Is any attachment or page exempt from disclosure? | Attachments and transactional data are generally not privileged and should be produced. | Attachments may be privileged if containing evaluative content. | Attachment at Tab 2 (00005 and 00007) may be produced if unprivileged; if asserted as privileged, must be submitted for in camera review. |
| What redactions are required in disclosure? | Minimal redaction should preserve discovery. | Redactions may be required for evaluative content under SAR privilege. | Redact specified lines on Tab 4 (000029, 000043, 000044, 000056, 000060, 000063) and final paragraph on Tab 1; other redactions permitted as noted. |
| What is the allowable scope for disclosure timing and process? | Disclosures should occur promptly; no undue delay. | Disclosures must follow court order and allow review for privilege. | Wells Fargo must disclose identified documents within 14 days, subject to redactions and further in camera review as ordered. |
Key Cases Cited
- In re Grand Jury Investigation, 842 F.2d 1223 (11th Cir. 1987) (burden on party asserting privilege; privilege narrowly construed)
- United States v. Suarez, 820 F.2d 1158 (11th Cir. 1987) (privilege should be construed narrowly; disclosure favored)
- Cotton v. PrivateBank & Trust Co., 235 F.Supp.2d 809 (N.D.Ill. 2002) (underlying documents may be disclosed; SAR privilege not absolute)
- Whitney Nat’l Bank v. Karam, 306 F.Supp.2d 678 (S.D.Tex. 2004) (SAR privilege is an unwaivable confidentiality privilege)
- Freedman & Gersten, LLP v. Bank of Am., 2010 WL 5139874 (D.N.J. 2010) (SAR privilege does not cover ordinary-course internal investigations)
- Weil v. Long Island Sav. Bank, 195 F.Supp.2d 383 (E.D.N.Y. 2001) (supporting documentation not covered by SAR privilege)