Archegos opposes DOJ’s attempt to stay discovery in CFTC case
Archegos Capital Management, LP (ACM), the management company of the Archegos family office, disagrees with the Department of Justice (DOJ) regarding the discovery process in a lawsuit brought by the Commodity Futures Trading Commission (CFTC).
Earlier in November, the U.S. Attorney’s Office for the Southern District of New York (SDNY), moved to intervene and stay discovery in the CFTC case.
On November 17, 2022, Archegos filed its reply in opposition of the motion.
Archegos argues that the full discovery stay sought by the SDNY is unwarranted and unsupported. More than six months after a joint press conference, in which the SDNY, SEC, and CFTC announced coordinated actions against ACM, Bill Hwang, and Patrick Halligan, the SDNY now comes before this Court seeking a stay of indeterminate length of all discovery based on the pending criminal action against Archegos’ founder (Mr. Hwang) and ACM’s Chief Financial Officer (Mr. Halligan).
The grounds for the SDNY’s motion – the potential for broader discovery in civil actions than that afforded in a parallel criminal proceeding – are not novel circumstances and should have been, and likely were, anticipated and considered by the Government Parties at the time of the coordinated actions. Nevertheless, the SEC and CFTC filed their civil charges on the same day that the SDNY indicted Mr. Hwang and Mr. Halligan despite no compelling need to do so, including no statute of limitations issue.
Having received significant publicity from these closely-coordinated actions, the CFTC now “does not oppose” the SDNY’s motion for a discovery stay pending the outcome of the Criminal Case.
ACM was not named as a defendant in the Criminal Case. As ACM advised the SDNY, it has no objection to a stay of discovery during the pendency of its motions to dismiss the Civil Cases, which are in the process of being briefed.
Archegos says that any further stay of discovery is premature at this time.