Judge Thomas Griesa
Due to the timing of transactions relevant to Spanish firm Telvent GIT’s acquisition by France’s Schneider Electric, the SEC suspected that purchasers of Telvent GIT’s shares and options acted on insider information. After nearly a year and a half, the SEC has not identified the source of any material, private information relating to the transactions. The parties agree that the case should be dismissed. They dispute whether dismissal should be without prejudice. Despite finding defendants’ summary judgment motion unripe for adjudication, the court determined the SEC’s complaint should be dismissed without prejudice. The factors in Zagano v. Fordham Univ. weighed in the SEC’s favor. Given the early stage of litigation and the filing of its motion before discovery began in earnest, the court did not doubt the SEC’s diligence in bringing its motion. Further, there was no reason to think that dismissal without prejudice would substantially harm defendants’ business reputations further. The court noted that if the SEC were not able to dismiss actions without prejudice, it would be forced to significantly limit its emergency enforcement activities for fear that early emergency action would preclude it from seeking penalties later.
