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Mega Bank Said 2004 NYBD Letter Prevented Showing Docs Now Agencies By Nov 6

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source

SDNY COURTHOUSE, Oct 26– Mega International Commercial Bank passed information about its P&G Auditors to Navigant, and an allegedly absolute privilege for bank regulatory documents is being cited and now "documented," if only with a partially redacted 2004 interpretative letter of the then-NYSBD. Inner City Press is on the case, which still has the potential to simply disappear into settlement world.

   U.S. District Court for the Southern District of New York Judge J. Paul Oetken asked to see the documents at issue.

 But Mega Bank's lawyer from Gottesman, Wolge, Secunda said that would not be possible, without angering the NYS Department of Financial Services.

  Judge Oetken said, one week to convince me otherwise with case law, or turn over the documents in three weeks. Or settle. A number was floated by the parties but Inner City Press due to recent unclarity is still not publishing it.

 Late on May 22 Mega's lawyer filed a 2004 letter: "2004 NY Bank. LEXIS 14 State of New York Banking Department August 31, 2004 Reporter 2004 NY Bank. LEXIS 14 * Subject: Re: Outsourcing of Bank Human Resources and Payroll Functions Core Terms outsource, service provider, payroll, administrative duty, national bank, general supervision, bank's board, third party, confidential, supervisory, underwrite, interview, lease, opine Request By: [*1] [REDACTED BY THE AGENCY] Reply Staff Letters and Memoranda Supervisory Procedure G 101 Dear Mr. []: Your letter of November 21, 2003 to Superintendent of Banks Taylor has been referred to me for reply. Let me begin by apologizing for the delay in responding to your letter. In part, this delay resulted from our need to review this matter with several of our supervisory divisions in the Department. ... we conclude that it is permissible under the Banking Law for a State-chartered bank [*3] to enter into an agreement whereby the bank would outsource the administrative duties of its Human Resources and Payroll departments to an independent service provider. The bank and the independent service provider entering into such an outsourcing agreement will be subject to certain conditions. First, the bank must provide the Banking Department with prior written notice of its intention to enter such an outsourcing agreement. Second, the bank's board of directors must continue to retain and exercise general supervision over the affairs of the bank. Third, the independent service provider must agree that the Superintendent has the right to examine all of its records and material, use the equipment and interview its employees. And fourth, the independent service provider must agree that it is bound by the limitations of Banking Law Section 36(10), with respect to confidential supervisory and examination material, and provide the Department with a description of how it will ensure the confidentiality of such material. I trust the foregoing is responsive to your inquiry. Should you have any further questions please feel free to contact me at (212) 709-1649. Sincerely yours, Written By: Jay [*4] Kane Assistant Counsel."

  Then in August, this: "ORDER terminating [43] Letter Motion for Discovery; granting [47] Letter Motion to Stay ; granting [49] Letter Motion for Extension of Time to Complete Discovery. Without prejudice to the authority of the Court to order parties to produce documents for in camera inspection, and in the interest of conserving judicial resources and deferring to agency expertise, Defendant's motion to stay the part of the May 15, 2020, Order regarding the production of materials withheld as confidential supervisory information is granted. Plaintiff may seek review of these materials through the appropriate administrative procedures, and Defendant is instructed to cooperate fully with Plaintiff and the appropriate agencies to facilitate Plaintiffs exercise of its administrative remedies. Plaintiff's motion to extend the time to complete discovery to February 5, 2021, is also granted. Plaintiff shall file a status letter regarding the agencies' review on or before September 15, 2020. The Clerk of Court is directed to close the motions at Docket Numbers 43, 47, and 49. SO ORDERED. (Discovery due by 2/5/2021.) (Signed by Judge J. Paul Oetken on 8/20/2020)."

 Now on October 26, this Order: "In its September 15, 2020 status letter, Plaintiff contended that Defendant had yet to “provide[] any documents” to the pertinent agencies tasked with identifying confidential supervisory information (“CSI”). (Dkt. No. 52 at 2.) Defendant’s separate status letter, dated September 30, 2020, did not rebut Plaintiff’s contention. (See generally Dkt. No. 54.) Recalling its August 20, 2020 Order directing Defendant “to cooperate fully with Plaintiff and the appropriate agencies,” and mindful of the fact that discovery is set to close on February 5, 2021, (Dkt. No. 51), the Court directs Defendant to produce all responsive documents that Defendants believe contain CSI to the pertinent agencies no later than November 6, 2020. The parties shall file a joint status letter regarding the agencies’ review on or before November 20, 2020. SO ORDERED. Dated: October 26, 2020 New York, New York, J. PAUL OETKEN  United States District Judge"

The case is P&G Auditors and Consultants, LLC v. Mega International Commercial Bank Co., Ltd, 18-cv-9232 (Oetken).


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