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Court grants financial news web site access to depositions

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  1. Court Access

    NMU         SECOND CIRCUIT         Secret Courts         Dec 6, 2001    

Court grants financial news web site access to depositions

  • A federal appellate court affirmed changes in a lower court’s protective order over records in a New York Stock Exchange lawsuit, a ruling that gives TheStreet.com access to some previously sealed court documents.

A federal appellate court recently granted an online financial news service access to previously sealed deposition papers in a case involving the New York Stock Exchange and the Securities and Exchange Commission.

The Nov. 29 ruling in New York Stock Exchange v. TheStreet.com by the U.S. Circuit Court of Appeals in New York City (2nd. Cir.) clarified the standards under which a federal court may alter a protective order to keep records sealed. The court noted that while there is a presumption against access to documents that are subject to a protective order, a court can allow release if the documents were not submitted in reliance upon that order. Here, the court noted, the deposition testimony sought was taken before the sealing order was made, and thus the party could not have relied on it.

The controversy arose in a civil suit filed by the SEC against several brokers accused of buying and selling stocks ahead of placing orders for clients. In that case, Judge Jed Rakoff of the Southern District Court of New York Rakoff granted a protective order giving the parties the right to designate in good faith “confidential information” that should not be filed in court unless necessary.

The stock exchange asked for some testimony to be made confidential, after it learned that reporters had acquired the deposition of its chairman, Richard A.Grasso Financial news web site TheStreet.com intervened in March 2001, arguing that the public had a right to the testimony because it involved a government agency. A district court found that the interests promoted by the news service had not been adequately represented at the time of the initial sealing order, and unsealed the testimony in April.

The Second Circuit upheld the release of the documents.

Judge Jose A. Cabranes agreed that the court should refrain from changing an order unless it could show “some extraordinary circumstances or compelling need” to release it, but that standard only applies if the parties have reasonably relied on order in divulging information.

(New York Stock Exchange v TheStreet.com) HP


© 2001 The Reporters Committee for Freedom of the Press

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