Scott Pham v. Secretary of the Commonwealth- Securities Division (SPR 20200671)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division Rebecca S. Murray Supervisor of Records May 5, 2020 SPR20/0671 Jeffrey W. Watts, Esq. Massachusetts Securities Division McCormick Building One Ashburton Place, 17th Floor Boston, MA 02108 Dear Attorney Watts: I have received the petition of Scott Pham of Buzz Feed News appealing the response of the Securities Division (Division) to a request for public records. G. L. c. 66, § 10A; see also 950 C.M.R. 32.08(1). Specifically, on February 3, 2020, Mr. Pham requested the following categories of records: “[1] All correspondence between the Division and the respondents in 2013 investigation and consent order of World Capital Markets, Inc & WCM777, INC [2] All investigative documents related to the 2013 investigation of ‘World Capital Markets, Inc & WCM777, INC’ [3] The ‘spreadsheet’ of Massachusetts residents referred to on page 6 of the 2013 consent order [4] The Respondents’ offer letter referred to by page 6 of the 2013 consent order [5] The report submitted to the Division detailing the funds reimbursed pursuant to the order, as described in the 2013 consent order.” Mr. Pham limited the request to “. . . records created between January 1, 2012 and January 1 2015.” The Division responded on March 19, 2020, denying access to responsive records pursuant to Exemptions (a) and (f) of the Public Records Law. G. L. c. 4, § 7(26)(a), (f). Unsatisfied with the Division’s response, Mr. Pham petitioned this office and this appeal, SPR20/0671, 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.M.R. 32.03(4). “Public 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

Jeffrey W. Watts, Esq. SPR20/0671 Page 2 May 5, 2020 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). 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. If there are any fees associated with a response a written, good faith estimate must be provided. G. L. c. 66, § 10(b)(viii); see also 950 C.M.R. 32.07(2). Once fees are paid, a records custodian must provide the responsive records. The Division’s March 19th response In its March 19, 2020 response, the Division asserts that the records are exempt pursuant to Exemption (f) and cites the language of the statute. The Division further states that similar to Exemption (f), . . . 950 MASS. CODE REGS. 14.413 (‘Section 14.413’) lists certain records and information deemed nonpublic under MASS. GEN. LAWS ch. 110A, the Massachusetts Uniform Securities Act. Section 14.413 states, in relevant part, that the Division will generally not publish or make available: (A) 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. This subparagraph restricts the production of such materials which would: (1) 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; (2) deprive a person of a right to a fair trial or an impartial adjudication; (3) constitute an unwarranted invasion of personal privacy; (4) disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, confidential information furnished only by the confidential source; (5) disclose investigative techniques and procedures; or (6) endanger the life or physical safety of law enforcement personnel.

Jeffrey W. Watts, Esq. SPR20/0671 Page 3 May 5, 2020 (B) 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. The Division asserts “[y]our request seeks records related to a Division investigation, and consequently the Division deems records responsive to your request to be 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. As such, the Division will not produce the requested records.” 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.” 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.

Jeffrey W. Watts, Esq. SPR20/0671 Page 4 May 5, 2020 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. Reasonable description of records sought In its response, the Division states Additionally, in your correspondence dated February 3, 2020, you requested the following materials: All correspondence between the Division and the respondents in 2013 investigation and consent order of World Capital Markets, Inc & WCM777, INC. Please note that 950 MASS. CODE. REGS. 32.06(1)(b) states the following: [R]equests for public records shall include a reasonable description of the requested record to the records access officer so that he or she can identify and locate it promptly. Your request for records did not include a reasonable description of the requested record to the records access officer that would allow for the records access officer to identify and locate it promptly. As such, the Division will not produce the requested records. In response to the Division’s claim, Mr. Pham states the following:

Jeffrey W. Watts, Esq. SPR20/0671 Page 5 May 5, 2020 I argue that my request was a reasonable description, given the circumstances. The consent order described several letters sent between the agency and the subject. Where possible, I did in fact name those letters and requested them. In my original request, I asked for the following in part: ● The “spreadsheet” of Massachusetts residents referred to on page 6 of the 2013 consent order ● The Respondents’ offer letter referred to by page 6 of the 2013 consent order ● The report submitted to the Division detailing the funds reimbursed pursuant to the order, as described in the 2013 consent order These documents are clearly described and their existence is acknowledged by the agency in its own consent order. Any correspondence not covered by the above list is likely to be small in volume and easily findable. Please be aware that the request must reasonably describe the records sought. See G. L. c. 66, § 10(a)(i). In a recent case, the Superior court found that under the Public Records Law “[t]he reasonable description requirement contemplates that a requesting party will identify documents or categories of documents with sufficient particularity that government employees will be able to understand exactly what they are looking for, and then make a prompt production.” See Jaideep Chawla v. Dept of Revenue, Suffolk. Sup. No. l 784CV02087, at 2 (January 23, 2019). The court further indicated “[r]equests for documents that are articulated with very broad language that calls upon non-lawyer administrative personnel to interpret the scope of what is sought, and then make fine judgments about what documents are and are not sufficiently ‘related’ to the category of materials requested, will not satisfy this statutory standard.” (emphasis in original). Id. Accordingly, although Mr. Pham states in his appeal petition that “. . . [a]ny correspondence not covered by the above list is likely to be small in volume and easily findable[,]” I find it is unclear which specific records Mr. Pham seeks in Item 1, requesting, “[a]ll correspondence between the Division and the respondents in 2013 investigation and consent order of World Capital Markets, Inc & WCM777, INC” (emphasis added). Mr. Pham may wish to modify and/or clarify his request in order to reasonably describe the requested records. This office encourages the parties to communicate further to enable the Division to provide the requested public records. G. L. c. 66, § 10(a)(i); see also G. L. c. 66, § 10(b)(vii) (an agency shall suggest a reasonable modification of the scope of the request or offer to assist the requestor to modify the scope of the request if doing so would enable the agency to produce records sought more efficiently and affordably). Based on a conversation between a Public Records Division staff attorney and a Division representative, it is my understanding that the Division intends on providing a supplemental response to Mr. Pham. Accordingly, the Division is ordered to provide Mr. Pham with a response to his request in a manner consistent with this order, the Public Records Law and its Regulations as

Jeffrey W. Watts, Esq. SPR20/0671 Page 6 May 5, 2020 soon as practicable. It is preferable to send an electronic copy of this response to this office at pre@sec.state.ma.us. Mr. Pham may appeal the substantive nature of the Division’s response within ninety days. See 950 C.M.R. 32.08(1). Sincerely, Rebecca S. Murray Supervisor of Records cc: Scott Pham