Richard M. Gelb, Esq. v. Office of the Secretary of the Commonwealth - Securities Division (SPR 20160474)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division Shawn A. Williams Supervisor ofR ecords August 4, 2016 SPR16/474 Mr. Erick G. Cipau, Esq. Secretary of the Commonwealth Securities Division One Ashburton Place, 1i h Floor Boston, MA 02108 Dear Attorney Cipau: I have received the petition of Richard M. Gelb, Esq., appealing the response of the Massachusetts Securities Division (Division) to a request for public records. G. L. c. 66 § 1O (b ); see also 950 C.M.R. 32.08(2). Specifically, Attorney Gelb requested copies of: (1) all documents which support the allegations contained in an Administrative Complaint which is currently pending before the Division (Action): and (2) all documents concerning the transactions which are the subject of the Action that the Division obtained from NYLife Securities LLC, Eagle Strategies LLC and New York Life Insurance Company. In a response dated June 23, 2016 the Division denied his request in its entirety citing to Exemption (f), the investigatory exemption to the Public Records Law and the Nonpublic Records and Information Regulation. G. L. c. 4, §7 (26)(f), 950 C.M.R. 14.413. In a letter dated August 3, 2016 the Division clarified its response to withhold the responsive records pursuant to the Massachusetts Uniform Securities Act (Act) and the Non Public Information section of the Registration of Securities, General Provisions Regulation (Regulation) as they operate by way of Exemption (a), the statutory exemption to the Public Records Law, and Exemption (f). G. L. c. 4, §7 (26)(a), (f); G. L. c. 110A, § 412; 950 C.M.R. 14.413. The Public Records Law The Public Records Law strongly favors disclosure by creating a presumption that all governmental records are public records. G. L. c. 66, § 10(c); 950 C.M.R. 32.08(4). "Public records" is broadly defined to include all documentary materials or data, regardless of physical form or characteristics, made or received by any officer or employee of any town of the Commonwealth, unless falling within a statutory exemption. G. L. c. 4, § 7(26). OneAshburton Place, Room 1719, Boston, Massachusetts 02108 · (617) 727-2832 ·Fax (617) 727-5914 www.sec.state.ma. us/pre

Mr. Erick G. Cipau, Esq. SPR16/474 Page 2 August 4, 2016 It is the burden of the records custodian to demonstrate the application of an exemption in order to withhold a requested record. G. L. c. 66, § 10(c); see also District Attorney for the Norfolk Dist. v. Flatley, 419 Mass. 507, 511 (1995) (custodian has the burden of establishing the applicability of an exemption). Right ofA ccess Please note that the personal status of a party does not afford any greater right of access to the requested information than other persons in the general public. The Public Records Law does not distinguish between requesters. Access to a record requested pursuant to the Public Records Law rests on the content of the record and not the circumstances of the requester. See Bougas v. Chief of Police of Lexington, 371 Mass. 59, 64 (1976). Exemption (a) In its August 3 letter the Division explained it is withholding the records pursuant the Act and the Regulation as they operate by way of Exemption (a), of the Public Records Law. Exemption (a), known as the statutory exemption, permits the withholding of records that are: specifically or by necessary implication exempted from disclosure by statute. G. L. c. 4, §7 (26) A governmental entity may use the statutory exemption as a basis for withholding requested materials where the language of the exempting statute relied upon expressly or necessarily implies that the public's right to inspect records under the Public Records Law is restricted. See Attorney General v. Collector of Lynn, 377 Mass. 151, 54 (1979); Ottaway Newspapers, Inc. v. Appeals Court, 372 Mass. 539, 545-46 (1977). This office cannot order disclosure of records if a statute mandates nondisclosure. General Chemical Corp. v. Department ofEnvironmental Quality Engineering, 19 Mass. App. Ct. 287 (Mass. App. Ct. 1985). When used in the Act and the Regulation, unless the context otherwise requires, Rule or Rules refers to 950 CMR 10.00 through 14.413. The term "secretary" refers to "the state secretary or the secretary of the commonwealth." The term "Division" "means the Securities Division in the Office of the State Secretary." 950 C.M.R. 14.401. The Act provides in pertinent part The secretary may from time to time make, amend, and rescind such rules ... as are necessary to carry out the provisions of this chapter.

Mr. Erick G. Cipau, Esq. SPR16/474 Page 3 August 4, 2016 G. L. c. I lOA §412 The Regulation provides in pertinent part The Division will generally not publish or make available to any person matters that are: investigatory materials necessarily received or compiled out of the public view by employees of the Division, the disclosure of which materials would probably so prejudice the possibility of effective law enforcement that such disclosure would not be in the public interest; interfere with enforcement activities undertaken or likely to be undertaken by the Division or any federal, state, local or foreign governmental authority, any professional association, or any securities industry self-regulatory organization; disclose investigative techniques and procedures. 950 C.M.R. 14.413(A) The term "investigatory materials" as used in 950 CMR 14.413(A) includes, but is not limited to, all documents, records, transcripts, evidentiary materials of any nature, correspondence, related memoranda, or work product concerning any examination, any investigation (whether formal or informal), or any related litigation, which pertains to or may disclose, the possible violation by any person of any provision of any statute, rule, or regulation administered by the Division, by any other federal, state, local or foreign governmental authority, by any professional association, or by any securities industry self-regulatory organization. The term "investigatory materials" also includes all written communications from, or to, any person complaining or otherwise furnishing information respecting such possible violations, as well as all correspondence or memoranda in connection with such complaints or information. 950 C.M.R. 14.413(B) In its August 3 letter the Division explained that the records responsive to Attorney Gelb's request fall squarely within the definition of"investigatory information" set forth in the Regulation. The subject matter of the requested records is currently part of an active administrative hearing process, and is being adjudicated before a Presiding Officer. The records related to it are "investigatory materials" obtained out of the public view and the disclosure of which would interfere with enforcement activities. The disclosure of the responsive records would reveal the investigative techniques of the Division and unduly prejudice the Division's ability to pursue appropriate enforcement actions of future violations of the Act. As noted in the Division's August 3 letter the judicial discovery process and the Public Records Law are two distinct and independent avenues for gaining access to records. The

Mr. Erick G. Cipau, Esq. SPR16/474 Page 4 August 4, 2016 Massachusetts Supreme Judicial Court has held that material exempt from disclosure under the Public Records Law may be available to certain parties through discovery. Commonwealth v. Wanis, 426 Mass. 639 (1998). Records requesters believed to possess a unique right of access may wish to review this alternative when seeking records that are exempt from disclosure under the Public Records Law. Conclusion As a result of the responses by the Division, I find the Division has met its burden of specificity in explaining the applicability of its regulatory and statutory bases for denying access to the responsive records. Accordingly, I decline to opine upon the Division's Exemption (f) claim. cc: Mr. Richard M. Gelb, Esq.