Helene Grossman v. Secretary of the Commonwealth- Securities Division (SPR 20200263)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division

Rebecca S. Murray Supervisor of Records

February 27, 2020 SPR20/0263 Benjamin Donovan, Esq. Enforcement Section Massachusetts Securities Division One Ashburton Place, Room 1701 Boston, MA 02108-1552

Dear Attorney Donovan:

I have received the petition of Helene Grossman appealing the response of the Securities Division (Division) to a request for public records. G. L. c. 66, § 10A; see also 950 C.MLR. 32.08(1). Specifically, Ms. Grossman requested 3 categories of records related to the following: 1) Complaints or any equivalent form for inquiries or requests for assistance to investigate a matter under the jurisdiction of the Securities Division from January 1, 2017 to the present; 2) Investigations opened by the Securities Division from January 1, 2017 to the present; and 3) all information available for investigation #2011-0005.

Previous appeals

This request was the subject of previous appeals. See SPR20/0021 Determination of the Supervisor of Records (January 21, 2020); SPR20/0153 Determination of the Supervisor of Records (February 10, 2020). In my February 10" determination I found that with respect to parts 1 and 2 of Ms. Grossman’s request, I encouraged the parties to communicate in order to facilitate producing records efficiently and affordably. With respect to part 3 of the request, I indicated that Ms. Grossman may wish to clarify the nature of her objections in order to proceed with an appeal.

Ms. Grossman provided this office additional information regarding the nature of her objections. This appeal, SPR20/0263, was opened as a result.

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, § 10A(d); 950 C.MLR. 32.03(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

One Ashburton Place, Room 1719, Boston, Massachusetts 02108 » (617) 727-2832+ Fax: (617) 727-5914 sec.state.ma.us/pre * pre@sec.state.ma.us

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Commonwealth, unless falling within a statutory exemption. G. L. c. 4 § 7(26).

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(b)(iv); 950 C.M.R. 32.06(3); see also Dist. Attorney for the Norfolk Dist. v. Flatley, 419 Mass. 507, 511 (1995) (custodian has the burden of establishing the applicability of an exemption). To meet the specificity requirement a custodian must not only cite an exemption, but must also state why the exemption applies to the withheld or redacted portion of the responsive record.

Current appeal

In its initial response dated November 25, 2019, the Division provided information about its ability to search for and identify responsive records. The Division also cited Exemption (f) of the Public Records Law, as well as 950 C.MLR. 14.413, to withhold other responsive records. G, L. c. 4, § 7(26)(a), (f). The Division provided a supplemental response on January 24" that included additional information regarding these matters. I understand the parties are communicating in order to facilitate providing records responsive to parts | and 2 of the request.

Part 3 of the request

With respect to Ms. Grossman’s request for all information available for investigation #2011-0005, you indicate “the Division stated that records related to the investigation identified by Docket No. E-2011-0005 are nonpublic investigatory materials pursuant to Section 7(26)(f) of Chapter 4 of Massachusetts General Laws and Section 14.413 of Title 950 of the Code of Massachusetts Regulations.”

Exemption (a)

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).

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 Gen. v. Collector of Lynn, 377 Mass. 151, 54 (1979); Ottaway Newspapers, Inc. v. Appeals Court, 372 Mass. 539, 545-46 (1977).

This exemption creates two categories of exempt records. The first category includes records that are specifically exempt from disclosure by statute. Such statutes expressly state that such a record either “shall not be a public record,” “shall be kept confidential” or “shall not be subject to the disclosure provision of the Public Records Law.”

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The second category under the exemption includes records deemed exempt under statute by necessary implication. Such statutes expressly limit the dissemination of particular records to a defined group of individuals or entities. A statute is not a basis for exemption if it merely lists individuals or entities to whom the records are to be provided; the statute must expressly limit access to the listed individuals or entities.

Exemption (f) Exemption (f) permits the withholding of:

investigatory materials necessarily compiled out of the public view by law enforcement or other investigatory officials 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

G. L.c. 4, § 7(26)(f).

A custodian of records generally must demonstrate a prejudice to investigative efforts in order to withhold requested records. Information relating to an ongoing investigation may be withheld if disclosure could alert suspects to the activities of investigative officials. Confidential investigative techniques may also be withheld indefinitely if disclosure is deemed to be prejudicial to future law enforcement activities. Bougas v. Chief of Police of Lexington, 371 Mass 59, 62 (1976), Redactions may be appropriate where they serve to preserve the anonymity of voluntary witnesses. Antell v. Attorney Gen., 52 Mass. App. Ct. 244, 248 (2001); Reinstein v. Police Comm’r of Boston, 378 Mass. 281, 290 n.18 (1979). Exemption (f) invites a “case-by- case consideration” of whether disclosure “would probably so prejudice the possibility of effective law enforcement that such disclosure would not be in the public interest.” See Reinstein, 378 Mass. at 289-90.

The Division asserts that 950 C.M.R. 14.413(B) defines “investigatory materials” as follows:

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.

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The Division explains “[t]he mere fact that an investigation may currently be ‘closed’ does not nullify the exemption. Furthermore, the Division may withhold confidential investigative techniques indefinitely if their disclosure would prejudice future enforcement actions. In this case, the disclosure of the requested documents would unduly prejudice the Division’s ability to pursue appropriate enforcement actions of future violations of the Massachusetts Uniform Securities Act.”

In her current appeal petition Ms. Grossman provides various reasons for her objections to the Division’s exemption claims.

In camera inspection

In order to facilitate a determination as to the applicability of the Division’s exemption claims, the Division must provide this office with un-redacted copies of a representative sample of responsive records for in camera inspection. See 950 C.M.R. 32.08(4). After I complete my review of the documents, I will return the record to your custody and issue an opinion on the public or exempt nature of the record.

The authority to require the submission of records for an in camera inspection emanates from the Code of Massachusetts Regulations. 950 C.M.R. 32.08(4); see also G.L. c. 66, § 1. This office interprets the in camera inspection process to be analogous to that utilized by the judicial system. See Rock v. Massachusetts Comm’n Against Discrimination, 384 Mass. 198, 206 (1981) (administrative agency entitled: deference in the interpretation of its own regulations). Records are not voluntarily submitted, but rather are submitted pursuant to an order by this office that an in camera inspection is necessary to make a proper finding.

Records are submitted for the limited purpose of review. This office is not the custodian of records examined in camera, therefore, any request made to this office for records being reviewed in camera will be denied. See 950 C.M.R. 32.08(4)(c).

This office has a long history of cooperation with governmental agencies with respect to in camera inspection. Custodians submit copies of the relevant records to this office upon a promise of confidentiality. This office does not release records reviewed in camera to anyone under any circumstances. Upon a determination of the public record status, records reviewed in — camera are promptly returned to the custodian. To operate in any other fashion would seriously impede our ability to function and would certainly affect our credibility within the legal community.

Order

Accordingly, the Division is ordered to provide this office with un-redacted copies of a representative sample of the responsive records without delay. The Division may provide this office with an explanation of its position regarding the applicability of the exemptions. Please be

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advised that, unlike the materials provided for in camera inspection, any such additional correspondence would be placed in the file for this appeal and would be subject to public disclosure as a public record.

Sincerely,

- Rebecca S, Mutray Llrecea Muay

Supervisor of Records cc: Helene Grossman