SECURITIES AND EXCHANGE COMMISSION v. JOHN A. FURUTANI,
Civil Action No. CV 04-1775-GAF (MANx) (C.D. Cal.)
On March 16, 2004, the Securities and Exchange Commission filed an application with the United States District Court for the Central District of California for an order to enforce an investigative subpoena served on John A. Furutani, an attorney representing The Hartcourt Companies, Inc., a Utah corporation headquartered in Pasadena, California. Furutani is an attorney at the law offices of Furutani & Peters, LLP, which is also located in Pasadena. The Commission's subpoena sought documents and testimony from Furutani concerning, among other things, whether he sold Hartcourt securities while in possession of material nonpublic information. Furutani refused to fully comply with the Commission's subpoena based on several objections, including the attorney-client privilege and attorney work-product doctrine.
The Commission alleges that Furutani sold at least 40,000 shares of Hartcourt common stock between May 8, 2003, when the Commission staff informed him of its intention to file a complaint against Hartcourt, and May 27, 2003, when the complaint was actually filed in SEC v. The Hartcourt Companies, Inc., Civil Action No. 03-3698-LGB (PLAx) (C.D. Cal.). In its application, the Commission asserts that the attorney-client privilege and work-product doctrine do not protect the documents and testimonial responses sought by the Commission and that none of Furutani's other objections provide a valid justification for his failure to comply. The Commission requested that the Court order Furutani to show cause why he should not comply with the subpoena. A hearing on the Commission's application has not yet been scheduled.