United States District Court, S.D. New York
For SHERYL WULTZ individually, as personal representative of the Estate of Daniel Wutz, and as the natural guardian of plaintiff Abraham Leonard Wultz, YEKUTIEL WULTZ individually, as personal representative of the Estate of Daniel Wultz, and as the natural guardian of plaintiff Abraham Leonard Wultz, AMANDA WULTZ, ABRAHAM LEONARD WULTZ minor, by his next friends and guardians Sheryl Wultz and Yekutiel Wultz, Plaintiffs: David Boies, II, LEAD ATTORNEY, Boies, Schiller & Flexner LLP, Armonk, NY; Robert Joseph Tolchin, LEAD ATTORNEY, Brooklyn, NY; Robert Joseph Tolchin, LEAD ATTORNEY, Robert J. Tolchin, Esq., New York, NY; Jaime David Sneider, Lee Scott Wolosky, Boies, Schiller & Flexner LLP, New York, NY; Marilyn C. Kunstler, Boies, Schiller & Flexner, LLP(NYC), New York, NY; Olav A. Haazen, Boies, Schiller & Flexner LLP(Westchester), Armonk, NY.
For Bank Hapoalim B.M., Movant: Carol M. Goodman, LEAD ATTORNEY, Herrick, Feinstein LLP, New York, NY.
For Bank of China Limited, Defendant: Lanier Saperstein, LEAD ATTORNEY, Allen & Overy, LLP, New York, NY; Alan Todd Dickey, PRO HAC VICE, Patton Boggs LLP (DC), Washington, DC; Daniel Warren Beebe, Daniel Poul Goldberger, Eric Benjamin Epstein, H. Alex Iliff, Mark Stephen Sullivan, Neil Edwin McDonell, William G. Primps, Zachary Warren Carter, Dorsey & Whitney LLP, New York, NY; Elissa Judith Glasband, James Edward Tyrrell, JR., Patton Boggs, LLP(NJ), Newark, NJ; Geoffrey R Sant, Morrison & Foerster LLP (NYC), New York, NY; Mitchell Rand Berger, Patton Boggs LLP (DC), Washington, DC.
For Office of the Comptroller of the Currency, Interested Party: Peter Chadwell Koch, LEAD ATTORNEY, Office of The Comptroller of The Currency, Washington, DC.
GABRIEL W. GORENSTEIN, United States Magistrate Judge.
Following a series of letters from the parties (Docket ## 553, 579, 582, 657, 683, 690), the Court held a hearing on October 23, 2014 at which the parties discussed the production of documents withheld by defendant Bank of China Limited (" BOC" ) based on regulations governing " Suspicious Activity Reports," commonly known as " SARs." At this hearing, the Court rejected BOC's assertion that the regulations barred production of the documents at issue. See Order, filed Oct. 24, 2014 (Docket # 693). We now provide additional background for our ruling.
31 U.S.C. § 5318(g)(2)(A)(i) provides in pertinent part as follows:
If a financial institution or any director, officer, employee, or agent of any financial institution, voluntarily or pursuant to this section or any other authority, reports a suspicious transaction to a government agency . . . neither the financial institution, director, officer, employee, or agent of such institution (whether or not any such person is still employed by the institution), nor any other current or former director, officer, or employee of, or contractor for, the financial institution or other reporting person, may notify any person involved in the transaction that the transaction has been reported . . . .
Various banking authorities have issued regulations implementing this statute. BOC has relied on the regulations promulgated by the Office of the Comptroller of the Currency, see Letter from Lanier Saperstein, dated July 24, 2014 (Docket # 579) at 1 n.1, which appear in 12 C.F.R. § 21.11. These regulations go beyond the statute by barring disclosure to anyone, not just a " person involved in the transaction." They provide in relevant part:
(k) Confidentiality of SARs. A SAR, and any information that would reveal the existence of a SAR, are confidential, and shall not be disclosed except as authorized in this paragraph (k).
(1) Prohibition on disclosure by national banks. (i) General rule. No national bank, and no director, officer, employee, or agent of a national bank, shall disclose a SAR or any information that would reveal the existence of a SAR.
12 C.F.R. § 21.11(k)(1). Additionally, the regulations contain a " rule of construction," which states:
Provided that no person involved in any reported suspicious transaction is notified that the transaction has been reported, this paragraph (k)(1) shall not be construed as prohibiting . . . [t]he disclosure by a national bank, or any director, officer, employee or agent of a national bank of . . . [t]he ...