The federal judge hearing the dispute between the Securities and Exchange Commission and the billionaire Hunt family of Texas has put off a decision in the case until next week after the Hunts raised new objections to the SEC's investigation of their silver trading.
U.S. District Court Judge Robert Porter in Dallas gave the SEC until next Monday to respond to the Hunts' latest effort to stop the 13-month-old SEC probe.
On Monday attorney's for the Hunts asked Judge Porter to halt the investigation permanently because of alleged abused by government investigators.
The Hunts' lead lawyer, Ivan Irwin of Dallas, said the government probe had been tainted by an "infusion of illegality" that he called a "poison for which the only antidote may be to forbid the investigation itself."
For more than a month, three law firms representing the wealthy Texas clan have been maneuvering to stop the wide-ranging SEC probe of the silver-buying spree that sent the price of the metal from $10 an ounce to $50 back again.
Government investigators have subpoened records from most of the nation's biggest banks and brokerage houses in an apparent effort to show that stockholders, customers and the public at large were threatened by the Hunts' silver speculation.
Targets of the investigation include the three best-known members of the Hunt family, the brothers Nelson Bunker, W. Herbert and Lamar Hunt, and several of their relatives.
Last month the Hunts went to court to try to stop the probe, contending that SEC investigators had violated provisions of the Right to Financial Privacy Act, a recently enacted federal law guaranteeing the secrecy of personal financial matters.
What appeared at first to be technicalities have turned into land mines for the SEC, which has been put on the defensive by a counterattack that forced government attorneys to admit they had not complied with some provisions of the privacy act.
SEC lawyers argued Monday that the federal courts do not have the authority under the financial privacy statute to permanently halt the investigation, which has been stalled temporarily since the Hunts sued the SEC.
Attributing the violations of the law to the inexperience of young lawyers, the SEC argued in court Monday that the agency had taken steps to correct its errors. Agency attorneys in effect said they were willing to accept a court order not to violate the Hunts' privacy rights in the future and argued that acceptance of such an order ought to end the dispute.
But the Hunts' lawyers surprised the SEC by raising new objections that the government probe was "not a legitimate law enforcement inquiry."