PRCM Advisers LLC v. Two Harbors Investment Corp.
- Lewis Kaplan
- 1:20-cv-05649
- U.S. District Court · Southern District of New York
- 2
In PRCM Advisers v. Two Harbors, Judge Kaplan ordered exhibits containing SEC-investigation testimony to remain sealed.
The ruling affected the plaintiffs’ Exhibits 2–4 and Two Harbors Investment Corp., which had produced the exhibits and sought to keep them sealed. It also limited public access to those exhibits.
What happened
In PRCM Advisers LLC v. Two Harbors Investment Corp., Two Harbors asked the court to keep Exhibits 2–4 under seal. The exhibits contained testimony by three of Two Harbors’ independent directors during a Securities and Exchange Commission investigation and had been produced in discovery under a protective order.
Two Harbors argued that the public-access presumption was overcome because testimony from SEC proceedings has historically been kept private, and public access would not significantly help the SEC’s work. It also cited the SEC’s policy that information obtained during investigations is generally confidential and not public unless disclosure is authorized.
Judge Lewis A. Kaplan ordered the exhibits to remain under seal. The court’s endorsement states “So ordered”; the opinion does not separately use the word “granted.”
The detailed version
- PRCM Advisers LLC v. Two Harbors Investment Corp. · No. 1:20-cv-05649
- Lewis Kaplan
- Sept. 12, 2022
Background
Two Harbors Investment Corp. asked the court to keep Exhibits 2–4 under seal. The exhibits were attached to the plaintiffs’ September 6, 2022 opposition letter and consisted of excerpts from testimony that three of Two Harbors’ independent directors gave to the Securities and Exchange Commission during the SEC’s formal investigation. Two Harbors said it had produced the documents in discovery and designated them confidential under the case’s protective order.
Sealing request
Two Harbors relied on the presumption that the public may access judicial documents and the rule that sealing is permitted only when necessary to protect a higher value and narrowly tailored to that purpose. It argued that the presumption was overcome here because testimony given in SEC proceedings has historically been nonpublic under the cited regulations. It also argued that public access to SEC proceeding transcripts does not play a significant positive role in the SEC’s operations.
Two Harbors further cited the SEC Enforcement Manual’s statement that information obtained or generated during investigations or examinations should generally be presumed confidential and nonpublic unless disclosure has been specifically authorized. Based on those points, it asked the court to allow Exhibits 2–4 to remain under seal.
Ruling
Judge Lewis A. Kaplan endorsed the request with the words “So ordered” and dated the endorsement September 12, 2022. The result was that Exhibits 2–4 remained under seal. The text does not separately state that the request was “granted.”
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.