New York District Court Allows Worldwide Discovery from Spanish Bank Located in New York

Recently, the District Court in Vera v. Republic of Cuba, 2015 U.S. Dist. Lexis 32846 (S.D. N.Y. 2015), was confronted with a situation where a judgment creditor sought post-judgment discovery pertaining to the defendant’s foreign accounts “in order to decide whether to seek recognition of his judgment abroad and, if so, in which countries and against which banks.” Plaintiff served information subpoenas on several banks seeking information concerning assets of defendant located in the their branches in and outside New York in those banks international branches.

One of the banks, BBVA from Argentina, is registered with the New York Department of Financial Services as a foreign branch. The court noted that there are privileges and benefits associated with such registration and one of those rights are to participate as third parties which involve assets under their management. “When corporations receive the benefits of operating in this forum, it is critical that regulators and courts continue to have the power to compel information concerning their activities.” The court reasoned that foreign banks should not be permitted to promote the legitimacy of their business by registering in New York and then hide illicit activities. The information requested can be found by electronic searches performed in New York wherever the accounts are located to aid in the recovery of the judgment and there is no execution being sought outside the jurisdiction. Since BBVA consented to the necessary regulatory oversight, it is subject to jurisdiction requiring it to comply with the information subpoena.

BBVA has appealed the district’s court’s order to the 2d Circuit.