Balancing privacy and evidentiary interests in a stock option backdating matter, the Northern District of California held on June 11, 2007 that the SEC’s interest in obtaining banking account information of defendant Gregory Reyes, ex-CEO of Brocade Communications, outweighs Reyes’ financial history privacy interests. SEC v. Reyes, No. C 06-04435 CRB (N.D. Cal. 2007).

In discovery, Reyes produced "highly redacted" information relating to his transactions. The SEC then issued subpoenas duces tecum to Merrill Lynch and Deutsche Bank, seeking information about Reyes’ accounts. Reyes responded with a motion to quash the subpoenas, arguing that he had already disclosed all information relating to his transactions in Brocade, and that his privacy interest outweighed the SEC’s interest in obtaining additional non-Brocade information.

The court denied Reyes’ motion to quash, finding that the subpoenas were "reasonably calculated to lead to the discovery" of admissible evidence pursuant to Fed. R. Civ. P. 26(b)(1). The court reasoned, and Reyes himself conceded, that the materials identified by the subpoenas were relevant to the litigation, and further found that the SEC should not be limited in its discovery to the redacted materials as circumscribed by its adversary. Indeed, there was some indication in the "materials already gathered by the SEC that Reyes m[ight] interpose as a defense to the timing of his stock options that he was able to ‘time’ the market with great skill. Significantly, the papers indicate that Reyes has suggested his fortuitous timing is not limited to the context of Brocade, but may extend to the market more generally." As a result, the court found further investigation into the records targeted by the subpoenas was justified. The court also found that Reyes’ "legitimate privacy interests" did not outweigh the SEC’s interest in obtaining evidence to refute contentions that Reyes himself had raised.