SEC loses “unprecedented” offer to share Volkswagen’s secret documents
- SEC tried to share with US and overseas agencies
- VW said the ruling would reveal confidential information
- The judge said the SEC’s proposal would hinder the discovery
(Reuters) – The US Securities and Exchange Commission lost an offer to share Volkswagen AG‘s confidential documents with other government agencies after a federal judge in San Francisco rejected the motion as “unprecedented” on Thursday.
The agency sued the German automaker and its former CEO Martin Winterkorn in 2019 on charges of defrauding US bondholders in connection with the automaker’s diesel emissions scandal.
US judge Jacqueline Scott Corley on Thursday turned down the SEC’s offer to amend a protection order to allow it to pass information received from Volkswagen in the litigation to US and foreign regulators.
Corley said such an order would make defendants “even more reluctant” to produce confidential documents in cases “because they are preparing documents not just for the current litigation, but potentially for any company the SEC wishes to share information with – even overseas Governments ”. . “
The company’s attorney, Robert Giuffra of Sullivan & Cromwell, said Friday that Volkswagen was happy with the verdict. An SEC spokesman declined to comment beyond what the agency has filed on the case.
The authority had argued that Volkswagen had designated “almost every page of every document” as confidential and that the disclosure of the information to government agencies did not violate the purpose of the order to protect Volkswagen’s trade secrets.
Volkswagen had said the spin-off would undermine the protection order and expressed concern that the information would ultimately end up in the hands of German litigants or competitors.
Under the SEC’s proposal, the agency would have notified Volkswagen if it intended to share documents and the company could try to block them in court.
Corley said the agency should instead ask the court to remove the confidential label from any documents it believes should not be shielded.
The case is SEC v Volkswagen Aktiengesellschaft et al., US District Court, Northern District of California, No. 19-01391.
For the SEC: Daniel Hayes, Eric Phillips, Kevin Wisniewski
For VW: Robert Giuffra Jr, Sharon Nelles, Suhana Han, and others at Sullivan & Cromwell
For Winterkorn: Gregory Joseph, Peter Jerdee and Christopher Stanley by Joseph Hage Aaronson
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