A Good Way to Level the Playing Field in SEC Civil Actions

8 January 2013
In a noteworthy decision for those litigating against the U.S. Securities and Exchange Commission, a district court in Kansas recently ordered the agency to search its files and produce certain nonpublic, internal documents on the ground that such documents were relevant to whether the defendant acted with the requisite degree of scienter, his constitutional fair notice defense, and whether the injunctive relief sought by the SEC was reasonable. The decision in SEC v. Kovzan[1] is a useful reminder of the benefits of aggressively pursuing affirmative discovery against the SEC, particularly with respect to challenging the SEC’s attempts at blanket assertions of the deliberative process and work product privileges.