Parallel Proceedings in Securities Enforcement Actions: The Growing Trend Against Automatic Grants of Government Requests for Stays of Civil Cases.

November 1, 2010

Parallel proceedings — criminal and civil cases in progress at the same time, against the same defendant, for conduct arising out of the same facts — have become especially commonplace in securities enforcement cases. Often, when parallel proceedings are pending, the government will move to stay discovery in the civil enforcement case until the criminal case is concluded. While historically such stays have been routinely granted, more recent cases, particularly in New York, suggest that the courts will more closely scrutinise these requests. Instead of issuing a blanket stay, a court may decide to allow civil discovery to proceed, subject to the government’s right to object to particular discovery requests that directly and actually threaten the integrity of the criminal case.

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