In the underlying securities case, which Kessler oversaw, AIG agreed to the final judgment in Washington federal district court in November 2004 with the SEC without admitting or denying the allegations, rooted in transactions between AIG and PNC Bank. The company agreed to give up $46.3 million in profit in the SEC civil action. DOJ entered a deferred prosecution agreement with AIG that same month in federal district court in Pennsylvania.
The terms of the deal with the SEC required AIG to hire an independent consultant to, among other things, keep tabs on the work of AIG's "transaction review committee." The committee was tasked with reviewing transactions that "involved heightened legal or regulatory risk because of the dangers of questionable accounting by counterparties," AIG lawyers said in court papers.
Wheeler argued in the D.C. Circuit today that the reports are judicial records stemming from Kessler's court order. Kessler, Wheeler said, incorporated the expected filing of the reports into the final judgment against AIG. Kessler retained ongoing supervision of AIG after the entry of the consent decree against the company. Wheeler said in court that Kesslers reliance on the reports, in resolving the case against AIG, was both forward and backward looking.
In court papers, Wheeler said the reports are important to "understanding the countrys ongoing economic struggles and the efficacy of the regulatory and judicial mechanisms used to ferret out and monitor corporate wrongdoing."
"They are important specifically to understanding the role of AIG (which is years after its bailout still majority-owned by the U.S. government) and its counterparties in the run-up to the financial crisis. Yet they are shielded entirely from public view," Wheeler wrote in a brief in the D.C. Circuit.
The "ultimate point" of public access to court records, Wheeler wrote, isn't to relitigate a case but to let the public see what happened in a case. "Whether the records show that AIG is the best pupil in the class or in need of continued remedial attention is irrelevant to the strong public interest in disclosure of these materials," Wheeler said.
The D.C. Circuit didn't immediately rule this morning.
This article originally appeared as a post on The BLT: The Blog of LegalTimes.