Securities And Exchange Commission v. Richman
- Charles Breyer
- 3:21-cv-01911
- U.S. District Court · Northern District of California
- 3
In Securities and Exchange Commission v. Richman, Judge Beeler denied the defendants’ motion to quash subpoenas and ordered financial-record production.
The defendants and the subpoenaed financial institutions—Bank of America, J.P. Morgan Chase Bank, and Fidelity Brokerage Services—were affected. The order required production of the defendants’ financial records to the Securities and Exchange Commission.
What happened
In Securities and Exchange Commission v. Richman, the Securities and Exchange Commission subpoenaed Bank of America, J.P. Morgan Chase Bank, and Fidelity Brokerage Services for the defendants’ financial records from July 1, 2018, onward. The defendants asked the court to cancel the subpoenas, arguing generally that the requests were irrelevant and repetitive.
The court found the records relevant because they could show transfers of the defendants’ assets overseas and could help determine remedies in the alleged securities-fraud case, including possible financial penalties, repayment, or an asset freeze. The court also found that the subpoenas were not repetitive and that the defendants had not shown a specific risk of harm requiring a protective order.
Judge Laurel Beeler denied the defendants’ motion to quash the subpoenas and ordered production of the financial records.
The detailed version
- Securities And Exchange Commission v. Richman · No. 3:21-cv-01911
- Charles Breyer
- Oct. 25, 2021
Background
The Securities and Exchange Commission served three subpoenas under Federal Rule of Civil Procedure 45 on Bank of America, J.P. Morgan Chase Bank, and Fidelity Brokerage Services. The subpoenas requested financial records for the defendants’ accounts from July 1, 2018, to the present. The defendants moved to quash, meaning to cancel, the subpoenas. They generally argued that the requests were irrelevant and duplicative.
The defendants initially filed the motion to quash on September 13, 2021. The court dismissed that motion without prejudice and directed the parties to use the joint discovery-letter process required by the court’s standing order. The parties later submitted a joint discovery letter brief.
Analysis
The court denied the motion to quash. It held that the requested records were relevant to the Securities and Exchange Commission’s claims and requested remedies in the underlying case. The Commission is seeking permanent injunctions, repayment of money, and civil penalties for alleged securities fraud. The court specifically found that records showing transfers of the defendants’ assets overseas were directly relevant.
The court also held that the information could assist the Commission in determining whether additional relief might be appropriate, including a possible pre-judgment asset freeze. Such a freeze can prevent a defendant from moving or dissipating assets while the case is pending so that potential equitable remedies remain available.
The court rejected the defendants’ argument that the subpoenas were duplicative. It noted that the Commission had not previously requested the defendants’ account information from Bank of America or J.P. Morgan Chase Bank. The court also declined to issue a protective order. A protective order limits discovery when a party shows good cause and identifies specific harm or prejudice. The court found no such harm here, noting that the Commission already possessed the information and was seeking the records directly from the banks to establish their authenticity.
Disposition
Judge Laurel Beeler denied the defendants’ motion to quash the subpoenas and ordered production of the financial records.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.