March 22, 2010

Second Circuit affirms district court ruling that Federal Reserve must disclose bank bailout records.

As reported widely in the press, Willkie won an important appellate victory for Bloomberg News when the Second Circuit affirmed the district court's ruling that documents concerning the Federal Reserve’s emergency lending program are subject to disclosure under the Freedom of Information Act, and that the Board of Governors of the Fed wrongfully withheld such documents from Willkie client Bloomberg L.P.

Willkie argued in the district court that U.S. taxpayers need to know the terms of Fed loans because the public had become an involuntary investor in the nation’s banks as the financial crisis deepened and the government began shoring up companies with capital injections and loans. The Fed argued that the loan records were exempt from disclosure because they were confidential to the borrowers and their release might set off a run by depositors and unsettle shareholders.

After losing on summary judgment, the Fed, joined by an association of banks, appealed the decision. At oral argument, the three judge panel appeared to take a dim view of the banks' arguments that the records were exempt from disclosure. That appearance foreshadowed the court's decision, which stated: "The statute as written by Congress sets forth no basis for the exemption the Board asks us to read into it. If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute."

The Willkie team included partners Thomas Golden and Scott Rose, and associates Jared Cohen, Joshua Nahum, Rina Vazirani, and Jason Roth. Last August, The Am Law Litigation Daily named Mr. Golden "Litigator of the Week" for his lead role in handling the case in district court. 

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