In re Banc of California Securities Litigation,

RESPONSE

C.D. Cal.February 11, 2019

ATTORNEYS AT LAW LOS ANGELES CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LATHAM & WATKINS LLP Manuel A. Abascal (Bar No. 171301) manny.abascal@lw.com Brian T. Glennon (Bar No. 211012) brian.glennon@lw.com Kristen M. Tuey (Bar No. 252565) kristen.tuey@lw.com 355 South Grand Avenue, Suite 100 Los Angeles, CA 90071-1560 Tel: (213) 485-1234 Fax: (213) 891-8763 LATHAM & WATKINS LLP Michele D. Johnson (Bar No. 198298) michele.johnson@lw.com Andrew R. Gray (Bar No. 254594) andrew.gray@lw.com 650 Town Center Drive, 20th Floor Costa Mesa, CA 92626-1925 Tel: (714) 540-1235 Fax: (714) 755-8290 Attorneys for Defendant Steven A. Sugarman UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA IN RE BANC OF CALIFORNIA SECURITIES LITIGATION CASE NO. SACV 17-00118 AG (DFMx) consolidated with SACV 17-00138 AG (DFMx) DEFENDANT STEVEN SUGARMAN’S SUPPLEMENTAL RESPONSE TO DEFENDANT BANC OF CALIFORNIA, INC.’S STATUS REPORT REGARDING APPLICATIONS TO FILE UNDER SEAL Judge: Honorable Douglas F. McCormick This Document Relates to: ALL ACTIONS Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 1 of 14 Page ID #:19901 ATTORNEYS AT LAW LOS ANGELES 1 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mr. Sugarman hereby files a supplemental brief that supersedes his prior brief on this matter. This brief responds to Banc of California, Inc.’s (“Banc”) February 8, 2019 filing, in which Banc updated and changed several prior decisions. This brief summarizes the current and final state of Mr. Sugarman and Banc’s positions on the disputed requests to seal documents. The background on the filings is as follows. On January 31, 2019, this Court ordered the parties to meet-and-confer regarding several applications to file documents and exhibits under seal, and to submit a joint status report that sets forth which of the applications are opposed, partly opposed, or unopposed. See Dkt. No. 498 (requesting the status of Dkt. Nos. 301, 325, 360, 367, 406, 409, 416, 421, 432, 436, 438, 443, 448, 454, 457, 462, 468, 475, 476, 481, 485). Mr. Sugarman attempted to meet and confer with Banc, but as explained in his February 7, 2019 filing (Dkt. No. 503), Banc did not return Mr. Sugarman’s emails until noon on the day that the report was due. See Dkt. Nos. 503, 504. Accordingly, Mr. Sugarman submitted a status report on his own behalf. Id. Around the same time Mr. Sugarman submitted his status report, Banc sent to Mr. Sugarman a draft of a proposed joint report. See Declaration of Whitney B. Weber ¶¶ 2-3. Then, after Mr. Sugarman provided Banc with his additions to the joint report, Banc sent after midnight to Mr. Sugarman a revised draft that substantially changed Banc’s position with respect to many of the sealing applications. Id. ¶¶ 4-5; see also Dkt. No. 508. Mr. Sugarman requested time to review and further respond to Banc’s edits (id. ¶ 6), but Banc proceeded instead to file its own status report, setting forth its new position with respect to the sealing applications (Dkt. No. 508). Mr. Sugarman understood that the Court wanted the parties to prepare a joint submission; therefore, on February 10, 2019, Mr. Sugarman provided further edits to Banc in an effort to submit a joint status report, but Banc declined to file the report jointly. Weber Decl. ¶¶ 7-8. Accordingly, and in light of Banc’s changed position with respect to the sealing applications, Mr. Sugarman submits this Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 2 of 14 Page ID #:19902 ATTORNEYS AT LAW LOS ANGELES 2 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 supplemental statement, together with a revised Appendix A, which provides Mr. Sugarman’s final and updated response to Banc’s latest position on sealing and which supersedes Mr. Sugarman’s prior filing. * * * Mr. Sugarman is opposed to the wholesale sealing documents in this action, which Banc has sought to do throughout this litigation to date. Though Banc has now decreased the number of documents that it seeks to keep under seal, a majority of its requests remain improper. In particular, Banc’s effort to seal the documents relating to Halle Benett is a wholly improper attempt to cover up and further misrepresentations that were made to investors. Banc’s counsel, who also represents Halle Benett individually and for that reason from hereon will be referred to as “Banc’s and Benett’s counsel,” has a conflict in advocating for the sealing of Mr. Benett’s employment records when Benett lied to Banc and caused Banc to falsely represent to investors and the public the nature of those records. The Court’s Protective Order should not be used to further and to cover up such misstatements to investors, and Banc’s and Benett’s effort to seek this Court’s assistance in such a cover up should be rejected. As the Ninth Circuit explained in Kamakana, 447 F.3d at 1179-80, to maintain records under seal at this stage of the litigation, a party must make a “particularized showing” that there is “good cause” to preserve the secrecy of materials. Banc cannot make this showing with respect to most of documents that it still seeks to maintain under seal because Banc has already made those matters public. The narrowing of Banc’s requests to seal demonstrates only its inconsistent and unfair definition of “confidentiality” and its inappropriate efforts to cover up misconduct. Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 3 of 14 Page ID #:19903 ATTORNEYS AT LAW LOS ANGELES 3 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A. This Court Should Not Be Used To Further and To Cover Up Misrepresentations to Investors Banc’s and Benett’s counsel argue that Halle Benett’s separation agreement is confidential business information that merits protection. This argument is flatly incorrect and rebutted by Banc’s own securities filings, which repeatedly and publicly describe Mr. Benett’s separation agreement—except that they do so falsely. Banc’s and Benett’s counsel now ask this Court to assist it in covering up and perpetuating this fraud by sealing from the public the truth regarding Mr. Benett’s separation agreement and thus allowing Banc’s false statements to go uncorrected. Banc’s Annual Report on Form 10-K contains the following public description of Mr. Benett’s separation agreement: Halle J. Benett, a director of the Company and the Bank, was employed as a Managing Director and Head of the Diversified Financials Group at Keefe, Bruyette & Woods, Inc. until August 31, 2016 and is entitled to receive compensation for certain deals that close subsequent to August 31, 2016 that he originated or actively managed (none involving the Company or the Bank). In addition, Mr. Benett has agreed to provide unpaid consulting services to Keefe, Bruyette & Woods, Inc., for a small number of transactions (none involving the Company or the Bank) through December 31, 2016. See Banc of California, Inc., Annual Report (Form 10-K), at 174 (Feb. 28, 2018).1 The documents Banc’s and Benett’s counsel are seeking to seal prove this statement to be false. They show, among other things, that: (a) Mr. Benett was entitled to receive more than compensation for certain deals, (b) Mr. Benett was entitled to receive compensation for deals involving Banc, and (c) Mr. Benett’s work was not “unpaid” nor “consulting,” but rather was paid business generation for multiple transactions. 1 Banc’s Annual Report on Form 10-K is available on the SEC’s website, https://www.sec.gov/Archives/edgar/data/1169770/000116977018000004/banc- 12312017x10k.htm. Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 4 of 14 Page ID #:19904 ATTORNEYS AT LAW LOS ANGELES 4 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Annual Report is not the only time Banc publicly described Halle Benett’s separation agreement. In 2017, proxy advisory firm Glass Lewis advised Banc shareholders to withhold voting in favor of Mr. Benett’s re-election as a Banc director because they were concerned about Mr. Benett’s conflict of interest with Keefe, Bruyette & Woods, Inc. (“KBW”). In other words, the public markets were suspicious of Mr. Benett for the same reasons that Mr. Sugarman had attempted to blow the whistle on before his resignation. Instead of investigating the matter, Banc again made misrepresentations to investors about Mr. Benett’s separation agreement with KBW. Banc’s General Counsel, John Grosvenor, drafted and published a letter supporting Mr. Benett and making the following public description of Mr. Benett’s separation agreement: In connection with your “Withhold” recommendation you referred to Mr. Benett’s status as an “affiliated” director under the internal polices of Glass Lewis by virtue of his previous employment as a managing director and the head of diversified financials with Keefe Bruyette and Woods, Inc. (“KBW”), one of the investment banking firms that participated in certain public offerings of the Company’s securities. During 2016, KBW received approximately $2.4 million in fees primarily in connection with its services as one of several Lead Book-Running Managers in the Company’s February 2016 offering of Series E Preferred Stock depositary shares and the Company’s March 2016 offering of Common Stock. KBW also received fees relating to the services it provided in connection with the Company’s sale of its equipment leasing specialty finance business in October 2016. In each of these transactions, the engagement of KBW was approved by the Board with disclosure of Mr. Benett’s relationship and based upon the assessment that the terms of the engagement were fair, reasonable and customary for transactions of the type involved, and that the participation of KBW, an investment banking firm specializing in the financial services sector, was necessary, appropriate and in the best interests of the Company in order to achieve the desired objectives of the transactions. Mr. Benett did not participate in the deliberations regarding the engagement of KBW or as a member of any pricing committee in connection with the foregoing offerings. Nor did Mr. Benett personally work on any of these transactions as a KBW employee. As part of that independent review and approval, assurances were obtained that Mr. Benett would receive no direct personal Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 5 of 14 Page ID #:19905 ATTORNEYS AT LAW LOS ANGELES 5 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 or financial benefit due to the Company’s engagement of KBW, which the Company confirmed directly with KBW. Assurances were also obtained that, following the termination of his employment with KBW on August 31, 2016, Mr. Benett would not be entitled to receive compensation from KBW other than for certain transactions that were consummated after that date and which he originated or actively managed prior to that date (none involving the Company), which the Company confirmed directly with KBW. It is the Company’s position that the nature of Mr. Benett’s status as an “affiliated” director arises solely as a result the Board’s determination that the Company’s interests were best served by reliance upon the specialized expertise and market presence of KBW in the financial services sector and not as a result of Mr. Benett’s incidental affiliation. As noted above, Mr. Benett did not personally work on any transaction involving the Company as a KBW employee and the Company confirmed directly with KBW that he would receive no direct personal or financial benefit as a result of the Company’s engagement of KBW. Moreover, it is the Company’s understanding that the amounts paid to KBW, a wholly owned subsidiary of Stifel Financial Corp. (“Stifel”), during 2016, 2015 and 2014 represented less than 1% of Stifel’s consolidated total revenues for those years, a level that may be deemed to be sufficiently “immaterial” under Glass Lewis’ 2017 U.S. Policy Guidelines to adequately moderate the concern about Mr. Benett’s “affiliated” status. Based upon the foregoing, we respectfully submit that the attributes of “affiliation” that might otherwise create concern as to the independence of a director are not applicable to Mr. Benett under these circumstances. Banc of California, Inc., Proxy Statement (Schedule 14A) (May 30, 2017).2 Like the Form 10-K, this document was filed publicly. Again, this public description of Mr. Benett’s separation agreement with KBW is false – and the documents Banc’s and Benett’s counsel seek to seal would clearly bring to light the falsity of these representations. Banc’s and Benett’s counsel cannot credibly argue that Mr. Benett’s separation agreement is “confidential” when Banc has repeatedly (and falsely) described this agreement in detail to the public. 2 Banc’s Proxy Statement is available on the SEC’s website, https://www.sec.gov/Archives/edgar/data/1169770/000119312517186683/d394427 ddefa14a.htm. Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 6 of 14 Page ID #:19906 ATTORNEYS AT LAW LOS ANGELES 6 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 It is shocking that Banc’s and Benett’s counsel are asking this Court to cover up such misconduct. Banc’s counsel should have (a) withdrawn from representing Mr. Benett, (b) conducted an investigation of his misrepresentations, (c) disclosed to the public the true and accurate facts regarding Mr. Benett’s separation agreement, and (d) withdrawn and corrected these incorrect public statements about Mr. Benett’s separation agreement. Instead, Banc’s counsel continues to represent Mr. Benett and aggressively requests that documents impeaching Banc’s public statements be covered up. This request to seal is only the latest effort to hide facts from discovery—the prior ones being, among other things, (a) Banc’s and Benett’s counsel repeatedly objecting to discovery, (b) Banc’s and Benett’s counsel forcing Mr. Sugarman to file multiple motions to compel, (c) Benett destroying portions of his separation agreement to cover up his fraud, and (d) Banc’s and Benett’s counsel walking out of Mr. Benett’s deposition when his fraud was brought to light. Perhaps most shocking is that Banc’s and Benett’s counsel have designated the Benett documents as “Attorney’s Eyes Only,” which would prevent the documents from being shown to Banc’s own Board of Directors, internal legal counsel, internal auditors, and external auditors. If Banc and Benett’s counsel maintain this designation, it will result in this Court’s Order being used to prohibit any disclosure of Benett’s fraud to Banc’s own Board of Directors, internal auditors, internal legal counsel, external auditors, shareholders, and perhaps even regulators and law enforcement. While Mr. Benett may wish for such a cover up, Mr. Sugarman strongly objects to any use of the Court’s power to prevent these documents from being shown to Banc’s independent directors, internal audit, internal and external counsel, and any regulators. Mr. Sugarman, who continues to have a significant economic interest in Banc, vehemently objects to any request to use this Court’s power to perpetuate a cover up. Mr. Sugarman requests that (a) the request to seal the Benett documents Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 7 of 14 Page ID #:19907 ATTORNEYS AT LAW LOS ANGELES 7 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 be denied, (b) that the documents relating to Halle Benett not be designated as Attorney’s Eyes Only or Confidential, but rather have no confidentiality designation at all, and (c) that the Court clarify that the Benett documents (and any other documents for that matter) can be provided by any party to law enforcement or regulatory agencies at any time without notice to any other party. The specific documents at issue are: App’x A at Dkt. No. 443 (Mr. Sugarman opposes the sealing of Dkt. Nos. 444-3, 444-4); App’x A at Dkt. Nos. 448, 454 (Mr. Sugarman opposes the sealing of Dkt. Nos. 449-1, 449-4, 449-6, 449-7, 449-12); App’x A at Dkt. Nos. 462, 468 (Mr. Sugarman opposes the sealing of Dkt. No. 463-1). B. Mr. Sugarman Opposes Sealing Documents Relating to the Governance Committee’s Investigation Banc has made public numerous facts regarding the Banc’s Governance Committee investigation of purported ties between Jason Galanis and Banc. This investigation was the subject of (a) the October 18, 2016 press release, (b) the January 23, 2017 press release announcing WilmerHale’s preliminary findings, (c) the February 9, 2017 press release announcing WilmerHale’s findings, (d) the Seabold Amended Answer, and (e) numerous court filings. Banc now seeks to seal the Governance Committee minutes and other materials which clearly show that the Governance Committee initiated and oversaw an investigation. See App’x A at Dkt. Nos. 406, 409 (Mr. Sugarman opposes the sealing of Dkt. Nos. 407-2, 407-3, 407-4, 407-6, 407-7, 407-13, 407-14, 407-15, 407-16, 407-17); App’x A at Dkt. Nos. 448, 454 (Mr. Sugarman opposes the sealing of Dkt. Nos. 449-2, 449-3, and Exhibit 7 to the Gray Declaration). Banc’s effort to seal only some documents relating to this matter but not others is improper and reflects an effort to control the public narrative about the facts. Either the Governance Committee investigation was public, in which case Banc should have never publicized any facts about it, or it was not, in which case all material facts should be published. Banc cannot pick Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 8 of 14 Page ID #:19908 ATTORNEYS AT LAW LOS ANGELES 8 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and choose which documents on this subject matter it wants to make public in order to advance its media interests. For example, Banc seeks to seal a January 18, 2016 email from Governance Committee director Jonah Schnel to Winston attorney David Aronoff instructing him to provide a report to the disinterested directors regarding the alleged Galanis ties. See App’x A at Dkt. Nos. 406, 409 (regarding Dkt. No. 407-5). This email directly contradicts Banc’s claim that the October 18, 2016 press release was false. Banc has attempted to hide this document from discovery from inception: (a) it did not originally produce it, (b) Mr. Sugarman obtained it from Winston’s production, (c) Mr. Sugarman had to repeatedly ask Banc to produce the document, and even identifying it specifically and engaging in motion practice to force the Banc to produce it. WilmerHale never produced this document, refused to acknowledge its existence by claiming it was “work product” to reveal what documents they reviewed, and WilmerHale never showed the document to Mr. Schnel (their client) during their breezy 30 minute interview of him. Banc’s effort to seal this document has no basis whatsoever in the law or in confidentiality. Banc is simply preventing the public from obtaining any documents that contradict Banc’s public narrative about the Governance Committee investigation and the October 18, 2016 release. Mr. Sugarman also notes that Banc’s counsel also represented Mr. Schnel in his deposition and the effort to seal this document is yet another attempt to prevent embarrassing facts from coming out about Mr. Schnel. There is absolutely no basis to argue that the facts in this email are “confidential.” C. Mr. Sugarman Opposes The Sealing of WilmerHale’s Interview Memoranda Discovery has shown that WilmerHale’s investigation was biased against Mr. Sugarman. Banc’s Special Committee members did not review documents, did not speak to witnesses, were conflicted, and had never seen key documents undermining WilmerHale’s findings. WilmerHale aggressively questioned Mr. Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 9 of 14 Page ID #:19909 ATTORNEYS AT LAW LOS ANGELES 9 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sugarman and Mr. Aronoff for hours about the Governance Committee investigation, but spent only fifteen minutes with Jonah Schnel, the director who was designated to oversee the Winston investigation on behalf of the disinterested directors and who directed Aronoff to report to the Committee. WilmerHale did not show Mr. Schnel any key documents and allowed Mr. Schnel and Mr. Grosvenor to compare notes on their recollections in WilmerHale’s presence so the conversation could be covered by attorney-client privilege, which Banc and WilmerHale has expansively interpreted to prevent scrutiny over their work. The public is entitled to know these facts. Banc’s claim that the facts are confidential is again unfounded—Banc publicly announced that WilmerHale had conducted an investigation at the direction of a Special Committee, and announced its preliminary and final findings in public documents. Either the matter is confidential—in which case the Banc should have never announced WilmerHale’s findings—or not, in which case it cannot selectively seal documents that undermine WilmerHale’s findings. See App’x A at Dkt. Nos. 406, 409 (Mr. Sugarman opposes the sealing of Dkt. Nos. 407-2, 407-3); App’x A at Dkt. Nos. 448, 454 (Mr. Sugarman opposes the sealing of Dkt. No. 449-3). Mr. Sugarman specifically objects to the sealing of Eric Holoman’s deposition transcript. Mr. Holoman served on the Special Committee but resigned because he was uncomfortable with how the Committee had morphed and become a vehicle to take over the Banc. Mr. Holoman testified that the Special Committee members discussed which one of them would take Mr. Sugaman’s job as Chief Executive Officer. Mr. Holoman testified that the Special Committee never gave notice of its meetings, did not have Agendas, did not take minutes and did not take votes – it was perpetually in meetings and expanded its scope to essentially take over the Banc’s governance and operations. None of these facts are “confidential”—the Special Committee, WilmerHale, Mr. Sugarman’s resignation, and Mr. Holoman’s failure to continue Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 10 of 14 Page ID #:19910 ATTORNEYS AT LAW LOS ANGELES 10 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 as a director have all been publicly disclosed by Banc. Banc solely seeks to hide from investors any negative information about the misconduct of its directors in their effort to take over the Banc and retaliate against Mr. Sugarman. The public is entitled to have all relevant facts, not just those that Banc, Benett, and their media consultant want to be unsealed. D. Mr. Sugarman Opposes The Sealing of Motions Mr. Sugarman opposes Banc’s effort to seal discovery motions. Banc has aggressively sought to prevent public disclosure of various facts. See App’x A at Dkt. Nos. 406, 409 (Mr. Sugarman opposes the sealing of Dkt. No. 407-1); App’x A at Dkt. Nos. 416, 421 (Mr. Sugarman opposes the sealing of Dkt. No. 417-1); App’x A at Dkt. No. 443 (Mr. Sugarman opposes the sealing of Dkt. No. 441-1). The public is entitled to know of Banc’s efforts to avoid transparency. E. Summary Facts and subject matters are either confidential or they are not. Banc cannot publicize information about a subject matter and then claim that inconsistent information about the same subject matter is confidential. The Protective Order is not designed to enable a party to present biased or incomplete information to the public. Indeed, it is clear that for a majority of the documents that Banc continues to request be under seal, it seeks to do so only in order to prevent its (or its agents’) credibility from being undermined. See, e.g., Dkt. No. 421 at 3-4. That Banc’s statements may not have been fully accurate is certainly embarrassing for Banc. But it is well-settled that “[m]ere embarrassment to a corporation” is not a reason to seal a document (see Nevro Corp. v. Boston Sci. Corp., 312 F. Supp. 3d 804, 805 (N.D. Cal. 2018)), and the public should have access to these documents. Further underscoring Banc’s inconsistent positions is the fact that it now asks the Court to seal three documents to the November 9, 2018 Bosley Declaration that it never sought to seal in the first instance. See App’x A at discussion of Dkt. Nos. 406, 409 (explaining that Banc never sought to seal Dkt. Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 11 of 14 Page ID #:19911 ATTORNEYS AT LAW LOS ANGELES 11 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nos. 407-13, 407-15, or 407-16, Exhibits 18, 20, and 21 to the Bosley Declaration). These documents—and other iterations of them (see App’x A at Dkt. Nos. 325, 328 (regarding Dkt. No. 198-4))—should not be sealed. Mr. Sugarman recognizes that there may be a basis for not making public certain documents. For that reason, Mr. Sugarman does not oppose the sealing of transcripts of testimony where the testimony was provided in connection with a nonpublic government investigation (or a document that provides a description of such testimony). Likewise, Mr. Sugarman does not oppose sealing documents that contain settlement discussions, or an individual’s personal financial or health- related information—unless, as is the case with Mr. Benett’s compensation from KBW, those facts have already been made public by Mr. Benett or Banc (and are required to be made public by various laws and regulations).3 Mr. Sugarman believes that “litigation is a public process,” and the “public has the right to know what the litigation is about.” Nevro, 312 F. Supp. 3d at 805. For this reason, Mr. Sugarman requests that the Court deny Banc’s request to seal documents listed in Appendix A where the sealing is opposed. Throughout this litigation, Mr. Sugarman has taken the consistent position that the documents Banc seeks to maintain under seal should be made public. This statement hereby supersedes Mr. Sugarman’s prior filings and seeks to unseal even more documents than Mr. Sugarman previously sought to unseal. The chart below summarizes Mr. Sugarman’s position with respect to each of documents that Banc continues to seek be sealed. 3 Consistent with these principles, Mr. Sugarman does not oppose the sealing of four documents that are the subject of sealing motions. See App’x A at Dkt. Nos. 301, 314 (no opposition to sealing Dkt. No. 302-1); App’x A at Dkt. Nos. 360, 367 (no opposition to sealing Dkt. No. 361-3); App’x A at Dkt. Nos. 406, 409 (no opposition to sealing Dkt. No. 407-13); App’x A at Dkt. Nos. 432, 436 (no opposition to sealing Dkt. No. 433-5). Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 12 of 14 Page ID #:19912 ATTORNEYS AT LAW LOS ANGELES 12 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sealing Application / Request Docket Number(s) Docket Number Sought To Be Sealed Sealing Opposed? Description of Document to Be Sealed 301, 314 302-1 No Sugarman’s Privilege Log of 157 documents on Banc’s clawback list 325, 328 198-4 Yes Email from Sugarman to John Grovesnor 360, 367 361-3 No Aronoff SEC testimony 406, 409 407-1 Yes Portions of Sugarman’s Motion to Compel WilmerHale 407-2 Yes Winston Notes re Grosvenor 407-3 Yes Winston Notes re Grosvenor 407-4 Yes Notes of Winston’s conversation with Schnel 407-6 Yes Winston memo re Schnel 407-7 Yes Winston Memo re Grosvenor 407-12 No Grosvenor SEC testimony 407-13 Yes Email from Sugarman to John Grovesnor 407-14 Yes Winston Notes re Galanis 407-15 Yes Winston’s 1/25/16 PPT to Gov. Committee 407-16 Yes Winston outline for meeting with Board re internal Galanis investigation 407-17 Yes Winston memo re internal investigation on Galanis 416, 421 417-1 Yes Sugarman’s Reply brief in support of Motion to Compel WilmerHale 432, 436 433-5 No Letter designated as a confidential settlement communication 443 444-1 Yes Joint Stipulation re Banc’s Motion for a Protective Order re Depositions 444-3 Yes Benett deposition transcript 444-4 Yes Holoman deposition transcript 448, 454 449-1 Yes Benett deposition transcript 449-2 Yes Gov. Committee meeting minutes 449-3 Yes Gov. Committee meeting minutes Yes Minutes from special Board meeting 449-4 Yes Stifel-Benett Separation Agreement 449-6 Yes Benett-KBW email Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 13 of 14 Page ID #:19913 ATTORNEYS AT LAW LOS ANGELES 13 CASE NO. SACV 17-00118 AG (DFMx) STEVEN SUGARMAN’S SUPP STATEMENT TO STATUS REPORT RE APPLICATIONS TO SEAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Sealing Application / Request Docket Number(s) Docket Number Sought To Be Sealed Sealing Opposed? Description of Document to Be Sealed 449-7 Benett-KBW email 449-12 Yes Video of Benett deposition 462, 468 463-1 Yes Stifel-Benett Separation Agreement Dated: February 11, 2019 LATHAM & WATKINS LLP By: /s/ Manuel A. Abascal Manuel A. Abascal Attorneys for Defendant Steven A. Sugarman Case 8:17-cv-00118-AG-DFM Document 512 Filed 02/11/19 Page 14 of 14 Page ID #:19914