Avalon FA, Ltd, one of the defendants named in the Securities and Exchange Commission’s enforcement action against Lek Securities Corporation for manipulation and other law violations, failed in its effort to disqualify all SEC trial counsel because they gained access to privileged communications between Avalon and its defense attorneys. According to the US federal judge presiding over the case in New York City—the Hon. Denise Cote—the US Attorneys’ Office in New Jersey inadvertently provided to the SEC documents relevant to the legal action that the SEC believed excluded potentially privileged material because of express precautions it had taken. However, because of errors by the US Attorney’s Office, potentially privileged material was provided to the SEC’s trial counsel. The trial judge ruled that the SEC’s process in handling the US Attorney-provided material evidenced its respect for the attorney-client privilege, and, in any case, Avalon did not identify any “specific way” it might be prejudiced by the SEC’s possession of potentially privileged documents. (Click here for general background regarding the Lek Securities enforcement action in the article, “US Broker-Dealer, Its CEO and a Non-US Client Sued by SEC for Layering and Other Manipulative Schemes” in the Bridging the Week edition of March 12, 2017.)