It’s a common scenario. Your client is arrested and charged by the government with securities fraud. Simultaneously, the Securities and Exchange Commission (SEC) files civil fraud charges relating to the same conduct. Both the government and the SEC issue press releases and hold press conferences in which they thank each other for cooperating in the investigation and charging of your client.

Shortly thereafter, the government moves to stay discovery in the SEC action. And it prevails — that is, the court overseeing the SEC action grants the government’s discovery stay request, favoring the criminal case over the SEC action.

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