The opinion of the court was delivered by: Morton Denlow, United States Magistrate Judge.
MEMORANDUM OPINION AND ORDER
The following background facts are alleged in the pleadings. Loy King
settled a personal injury lawsuit via the creation of a structured
settlement agreement with SBU, Inc. ("SBU"). The agreement called for the
creation of a trust to be administered by PrivateBank. Plaintiff, Sherman
Cotton ("Cotton"), is the Independent Executor of the Estate of Loy E.
King, Jr. and Trustee of the Loy E. King, Jr. Living Trust. Pursuant to
the agreement, PrivateBank, as the trustee of the trust instrument
created by SBU, was required to make periodic payments to Cotton. In
August 1996, PrivateBank resigned as trustee and Flag Finance Corporation
("Flag") took over the duties of making payments to Cotton on SBU's
Due to its resignation, PrivateBank transferred securities intended to
fund Cotton's payments to an account at Crews & Associates, Inc.
("Crews") in the name of Flag as trustee for SBU. Subsequently, Crews
transferred securities from the Flag trustee account to an account at
CIBC World Market Corp. ("CIBC") in the name of SBU. Securities held by
CIBC were then liquidated by SUB's principal, James Gibson, and used to
purchase supermarkets, other real estate, and personal luxury items. At
some time during the preceding events, Cotton's structured settlement
payments were discontinued.
Cotton filed a complaint against PrivateBank to recover monies owed due
to the structured settlement arrangement with SBU. PrivateBank filed a
third-party complaint against CIBC alleging that CIBC knowingly permitted
the liquidation of securities from the SBU account that were to be used
solely to fund payments under structured settlement agreements.
Furthermore, PrivateBank contends that CIBC loaned money to Gibson and
SBU on margin, took a pledge of the securities in return, and ultimately
liquidated millions of dollars of earmarked securities to pay back these
margin loans. PrivateBank further contends that subsequent to this last
liquidation of funds, CIBC conducted an internal investigation and
decided to close SBU's account. This alleged investigation is the focus
of the motion at hand,
B. DISPUTED DISCOVERY REQUESTS.
On March 12, 2002, PrivateBank served a request for production of
documents upon CIBC. CIBC objected to PrivateBank's request numbers 28,
29 and 34 as follows:
Request No. 28: All documents relating to any inquiry
or investigation or review conducted by CIBC,
including by CIBC's compliance department, of any
account of SBU, Flag Finance or Gibson at CIBC at any
Response: CIBC objects to Request No. 28 on the
grounds that it is vague, overboard, unduly
burdensome, seeks documents and information protected
by the attorney-client privilege and the work product
doctrine, and is not reasonably calculated to lead to
the discovery of admissible evidence.
Response: Subject to and without waiving the foregoing
objections, pursuant to 31 U.S.C.A. § 5318(g)(2)
and 12 C.F.R. § 21.11 (k), CIBC is legally
prohibited from disclosing the existence and contents
of any suspicious activity report.
Request No. 34: All documents relating to any internal
or outside investigation, review, inquiry, examination
or audit by any person, entity or regulatory or
enforcement authority of any kind or nature (including
CIBC's inside or outside accountants or auditors or