James B. Eubank v. Secretary of the Commonwealth- Securities Division (SPR 20230836)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division Manza Arthur Supervisor of Records May 11, 2023 SPR23/0836 Carlos Carrion, Esq. Enforcement Attorney Massachusetts Securities Division One Ashburton Place, 17th Floor Boston, MA 02108 Dear Attorney Carrion: I have received the petition of James B. Eubank, Esq. and Holly Busler of Beasley Allen, appealing the response of the Securities Division (Division) to their request for public records. See G. L. c. 66, §10A; see also 950 C.M.R. 32.08(1). On December 13, 2022 and March 23, 2023, Attorney Eubank requested the following records: All documents and communications relating to TelexFree, Inc., its founders and officers, and other entities or individuals affiliated therewith, containing information regarding the alleged TelexFree Multi-Level Marketing scheme, TelexFree 's operations, and the handling of funds by TelexFree, including, but not limited to: 1. Any and all documents and communications stored on the laptop of [named person] which laptop was seized by authorities during the investigation of the TelexFree Scheme; 2. Any and all financial records or data collected from TelexFree or others as part of the investigation of the TelexFree Scheme; 3. Any and all documents and communications used as exhibits in any proceeding against any person or entity arising out of the TelexFree Scheme; and 4. Any and all transcripts of hearings or depositions related to the TelexFree Scheme. The Division responded on March 28, 2023. Unsatisfied with the response, Attorney Eubank petitioned this office and this appeal, SPR23/0836, was opened as a result. 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

Carlos Carrion, Esq. SPR23/0836 Page 2 May 11, 2023 The Division’s March 28th Response In response to this request, the Division cited Exemptions (a) and (f) of the Public Records Law to withhold requested records regarding Request Number 2. The Division further responded that with regard to Request Numbers 1 and 3, the Division is not in possession of any documents or communications. With regard Request Number 4, the Division stated that it “provided you with a copy of the docket for the TelexFree matter.” 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 Att’y Gen. v. Collector of Lynn, 377 Mass. 151, 154 (1979); Ottaway Newspapers, Inc. v. Appeals Court, 372 Mass. 539, 545-546 (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. In its response, the Division cited “950 C.M.R. 14.413 (‘Section 14.413’) [which] lists certain records and information deemed nonpublic under G.L. ch. 110A, the Massachusetts Uniform Securities Act” to withhold the requested records. The Division stated as follows: 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

Carlos Carrion, Esq. SPR23/0836 Page 3 May 11, 2023 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. (B) The term "investigatory materials" as used in 950 CMR 14.4 I 3(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. To the extent the Division claims the requested records are exempt pursuant to G. L. c. 110A and 950 C.M.R. 14.413 under Exemption (a) of the Public Records Law, the Division may permissibly withhold said records. Consequently, I decline to opine on the applicability of Exemption (f). Conclusion Accordingly, this appeal is now closed.

Carlos Carrion, Esq. SPR23/0836 Page 4 May 11, 2023 Sincerely, Manza Arthur Supervisor of Records cc: James B. Eubank, Esq.