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Wednesday, December 6, 2023
Courthouse News Service
Wednesday, December 6, 2023 | Back issues
Courthouse News Service Courthouse News Service

Records of AIG Securities Fraud Probe Stay Sealed

(CN) - American International Group need not give the press access to confidential records relating to an independent review of its transactions, the D.C. Circuit ruled.

After the Securities and Exchange Commission charged AIG with securities violations in 2004, the bank had to adopt reforms that would prevent future violations. AIG entered into a consent decree requiring it to disgorge assets for a victim restitution fund, establish a transaction-review committee, and hire an independent consultant to review its policies and past transactions. The decree required the consultant to prepare reports of the findings and conclusions.

A federal judge declared the independent review reports confidential, and ruled they could be disclosed only "for good cause shown," as determined by the court.

In 2011, Sue Reisinger, a reporter for Corporate Counsel and American Lawyer magazines, sought access under the Freedom of Information Act to the consultant's reports, asserting common law and First Amendment rights of access.

Despite opposition from AIG and the Securities and Exchange Commission, the court ordered public disclosure of redacted copies of the reports.

The D.C. Circuit reversed after finding that the reports are not judicial records subject to the right of access and do not pertain to monitoring judicial conduct.

Reisinger failed to persuade the three-judge panel that the role those reports played in deciding the AIG case, or in justifying the court's decisions, made them qualify as judicial records.

"The IC [independent consultant] reports are not judicial records subject to the right of access because the district court made no decision about them or that otherwise relied on them," Judge Janice Brown wrote for the court.

Neither the federal court's order protecting the confidentiality of the reports, nor the one ordering their disclosure are relevant in deciding the issue of access rights, the Feb. 1 ruling states.

What's more, the independent consultant had no relationship with the court, and no specific obligations under the consent decree, the three-judge panel noted.

"AIG concedes that if the district court is one day called upon to enforce the consent decree, and the IC reports' contents are relevant, the reports may become judicial records," Brown wrote. "But that day has not yet arrived."

The court also rebuffed arguments that the reports became public documents when they were provided to the government. A transfer of that nature is insufficient to warrant disclosure, according to the ruling.

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