A federal trial judge in Washington today refused to put the brakes on the effort by U.S. securities regulators to squeeze audit documents from a Deloitte unit in China.
U.S. District Judge Gladys Kessler adopted the recommendation of a magistrate judge who'd determined the subpoena enforcement proceeding, which tests the scope of the power of the U.S. Securities and Exchange Commission to grab documents abroad, should no longer be subject to a stay order.
"It has been more than twenty-two months since the SEC first sought these documents from Deloitte," Kessler said in her ruling. "Obviously, a thorough, comprehensive investigation only gets more difficult with the passage of time."
Lawyers for Deloitte Touche Tohmatsu CPA Ltd., represented by teams from Sidley Austin and Latham & Watkins, fought to keep the case on ice as the securities agency’s lawyers negotiated with counterparts in China to try to obtain the documents.