In an order dated yesterday, Judge Rakoff denied the motion of former Goldman director Rajat Gupta and convicted hedge fund manager Raj Rajaratnam to compel the SEC to produce documents concerning settlement negotiations between the SEC and cooperating witnesses:

Defendants have not demonstrated that the settlement negotiations are relevant to proving bias. Rather, what is relevant are the actual cooperation agreements themselves. The otherwise protected negotiations that led to the agreements have very limited, if any, additional probative value. This is especially true here, given the SEC’s representation that it possesses no “Wells submissions” or statements of fact from any of the witnesses, and could produce only attorney argument. Attorneys stake out adversarial positions in negotiations and engage in “puffing and posturing” in their attempt to obtain the best deal. Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 981 (6th Cir. 2003). But these posturings have only indirect and attenuated relevance, at best, to anything bearing on proof of their clients’ bias. The negotiations are not the benefit the cooperator is receiving. The best evidence of bias in a cooperator’s testimony comes from the actual agreement he struck with the SEC, not from his lawyer’s attempt to get him a good deal. Moreover, any limited additional probative value these negotiations may have is substantially outweighed by the policy concern in protecting against unnecessary intrusions into the settlement bargaining table.