Investors brought an action to recover losses stemming from liquidation of two hedge funds against the fund administrator. The defendant brought a motion to dismiss based upon the plaintiffs’ failure to preserve and produce ESI and other documents. Judge Scheindlin noted at the outset that: “By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records-paper or electronic-and to search in the right places for those records, will inevitably result in the spoliation of evidence.” In a lengthy treatment of preservation and spoliation caselaw and analysis, she ultimately concluded that the plaintiff investors’ duty to preserve electronic records was triggered by the filing of their complaint with British Virgin Islands’ Financial Services Commission; that where gross negligence was involved, both spoliation instruction and monetary sanctions were warranted; and that investors whose failure to preserve evidence amounted to mere negligence were subject to monetary sanctions. “After the final relevant Zubulake opinion in July, 2004, the following failures support a finding of gross negligence, when the duty to preserve has attached: to issue a written litigation hold; to identify all of the key players and to ensure that their electronic and paper records are preserved; to cease the deletion of email or to preserve the records of former employees that are in a party’s possession, custody, or control; and to preserve backup tapes when they are the sole source of relevant information or when they relate to key players, if the relevant information maintained by those players is not obtainable from readily accessible sources…. While litigants are not required to execute document productions with absolute precision, at a minimum they must act diligently and search thoroughly at the time they reasonably anticipate litigation.” Pension Committee v. Bank of America Securities, 685 F.Supp.2d 456 (S.D.N.Y. 2010).