Category: News

Supreme Court: No Protection for Pre-Miranda silence without Fifth Amendment Invocation

Posted on by Liam Mennitt

The Supreme Court has ruled in a 5-4 decision that unless a criminal suspect expressly invokes the Fifth Amendment right to remain silent during pre-Miranda questioning, the suspect’s silence may be admissible evidence at trial. The majority of the court agreed that the privilege is not “self-executing,” and that those defendants who desire its protections “must claim it.”

Before Genoveno Salinas’ trial and conviction for a double murder committed in Houston, Texas in 1992, police had visited the house of Salinas’, the prime suspect in the case, and seized a shotgun that was believed to be the weapon used in the crime. Police subsequently questioned Salinas’ in the police station, but neither arrested him nor read him his Miranda rights before the interrogation began. Both Salinas and the prosecution agreed that the questioning was voluntary, and that Salinas was free to leave at any time.

However, Salinas was eventually asked a question for which he chose not to respond. The officer asked whether a ballistics report from the shotgun shells found at homicide would match the results for the shotgun taken from Salinas’ house – and to this question he fell silent, without expressly invoking his Fifth Amendment Right. The prosecution later used this silence as a means to establish an inference of guilt, while the defendant argued that using his silence as evidence against him was a violation of his constitutional rights.

While the Court’s five conservative-leaning Justices joined in the decision to allow the silence to be used as evidence, Justice Thomas’ concurring opinion went one step further. He argued that even if Salinas’ had expressly invoked his Fifth Amendment right to remain silent, his non-responsiveness to the officer’s question would still have been admissible nonetheless. This rationale was based on an originalist interpretation of the Constitution, under the theory that admission of this evidence would still not have compelled the defendant to act as a witness against himself. This narrow interpretation of the protections afforded by the Fifth Amendment was also supported by Justice Scalia.

The dissenting opinion, written by Justice Breyer, rejects both approaches taken by the majority, arguing instead that the privilege does not need to be directly related to “testimony,” but rather applies in any situation where a defendant is attempting to avoid divulging incriminating information about oneself. However, the majority of the Court agreed with the Texas Supreme Court, and upheld the lower court’s decision to admit the silence as evidence of Salinas’ guilt.

Although the scope of this decision is limited to the field of criminal law, the effect that it will have on cases of defendants pleading the Fifth Amendment in non-criminal proceedings has yet to be seen. If the same principles of law are someday applied to other forums of legal disputes, such as administrative proceedings, lawyers and their clients may soon find themselves re-evaluating the process by which they can claim the Fifth Amendment and still be afforded the protections that they have come to expect from it.

Pastore & Dailey Represent Joint Lead Arranger in $110 Million Lending Transaction

Posted on by Liam Mennitt

Pastore & Dailey successfully represented Stamford, Connecticut based client Bank Street Group LLC in its role as joint lead arranger for a $135 million senior secured financing closed by Alpheus Communications, LLC on Friday May 31, 2013.  The financing comprised a $110 million term loan, $15 million delayed draw term loan and $10 million revolving credit facility.  The financing solution also affords up to an additional $40 million in an accordion feature under certain conditions.  The financing allows Alpheus to refinance its existing debt and creates a solid foundation for future growth.  Alpheus is a leading provider of metro and regional fiber networking and data center solutions serving carrier and enterprise customers in Texas.

 

Pastore & Dailey Wins Motion to Dismiss for National Financial Services Client

Posted on by Liam Mennitt

Recently a Memorandum of Decision was issued granting a Motion to Dismiss in an action involving one of Pastore & Dailey’s financial services clients.  Below is a summary of the well written decision by Judge Spatt.

The plaintiff alleged claims under the Fair Debt Collection Practices Act (“FDCPA”) and the New York General Business Law § 349, as well as common law causes of action.  On behalf of the defendant, a major national credit provider, we filed a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted, which was granted by the court.

The District Court first addressed whether the defendant qualified as a debt collector under the FDCPA, and found that it did not.  The FDCPA prohibits deceptive and misleading practice by “debt collectors” and defines debt collectors as those engaged in “any business the principal purpose of which is the collection of any debts.”  Creditors, however, are defined as “any person who offers or extends credit creating a debt or to whim a debt is owed.”  The defendant is a creditor under the statute and the FDCPA limits its application to debt collectors.

The distinction between debt collectors and creditors under the FDCPA has one exception however; it is referred to as the “false name” exception.  The false name exception is when a creditor attempts to collect its own debt by using “any name other than his own which would indicate that a third person is collecting or attempting to collect such debts.”  15 U.S.C. § 1692a(6).  This would mean a creditor could be liable under the FDCPA if they were to use a pseudonym or alias in attempting to collect their debts.

The plaintiff attempted to assert that the defendant’s conduct fell under the false name exception because under the facts proffered by the plaintiff, the defendant allegedly held themselves out to be someone else in communicating with a third party.  The court rejected this theory of liability.

The false name standard has been found to be whether “the least sophisticated consumer would have the false impression that a third party was attempted collect the debt.”  Maguire v. Citicorp Retail Services, 147 F.3d 232, 236 (2d Cir. 1998).  It was apparent that the defendant never utilized a false name in communicating with the consumer plaintiff, and under the Maguire standard, a court must look to the communications with the debtor to determine whether the false name exception applies. Defendant’s communications with the debtor were not misleading or under a false name.

Thus, the Court concluded that Defendant was not a debt collector under the FDCPA, despite the false name exception, and accordingly granted our Motion to Dismiss the FDCPA causes of action.

After granting our Motion on the above grounds, The District Court also considered the additional reasons asserted for why the Plaintiff’s claims failed.  Even if our client was considered a debt collector, Plaintiff’s claims under Section 1692e of the FDCPA failed because the communications from Defendant’s offices were nothing more than attempts to learn the correct contact information for Plaintiff’s attorney, rather than any false representations or deceptive attempts to collect a debt.  The District Court found our position meritorious as to Plaintiff’s claims under Sections 1692e(9) and(10), stating that even if the defendant were a debt collector, those claims would be dismissed for failure to state a claim.  The Court found that “once again the Plaintiff has failed to provide any authority for the theory that a debt collector can be liable for communications made to a party that is not the debtor, even though tangentially related to the collection of the debt.” (Memorandum of Decision, p. 13).

The District Court declined to address any of the state or common law causes of action.

DECD Small Business Express Program Financing Transaction

Posted on by Liam Mennitt

In April 2013, Pastore & Dailey’s transactional team successfully concluded a combination grant and loan financing transaction on behalf of a New Haven based manufacturer serving the aerospace industry.  The transaction was completed in connection with the recently established State of Connecticut Department of Economic and Community Development (DECD) Small Business Express Program which seeks to provide the maximum return on investments to state taxpayers in the form of job creation and capital investment.  The DECD funding will play a key role in the expansion and modernization of our client’s manufacturing facility located in New Haven, Connecticut as well as the creation of a number of new full-time jobs in Connecticut.

Michele F. Martin to Join P&D

Posted on by Liam Mennitt

MICHELE MARTIN TO JOIN PASTORE & DAILEY LLC AND OPEN GAINESVILLE, FLORIDA OFFICE

STAMFORD, Conn., Apr. 30, 2013 Michele Martin, former Counsel at Smith, Gambrell & Russell, LLP announced that she would join Pastore & Dailey LLC, a law firm with offices in Stamford, and Glastonbury, Connecticut and New York City. She will lead the firm’s Florida office 8763 SW 27th Lane, Gainesville, Florida.

Ms. Martin will practice in all areas of consumer litigation defense.  She joins partners Joseph M. Pastore III, William M. Dailey and Paul Dehmel as well as attorneys Leanne M. Shofi, Susan Bysiewicz, Michael Zamat, Dennis Bishop, Jennifer Shufro, Sam Ottensoser, Stephen A. DeBernardis and law clerk Katherine Leisch.

Ms. Martin concentrates her practice in all aspects of consumer litigation defense. She has extensive experience in representing defendants throughout the country both in individual and class actions cases. Such cases have involved alleged violations of the Fair Debt Collection Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA) and the Fair Credit Reporting Act (FCRA) and similar state law claims as well as claims alleging deceptive trade practices and invasion of privacy. Ms. Martin also counsels clients to ensure compliance with debt collection laws including the drafting and maintenance of compliance plans.

Ms. Martin also works with employers in matters involving employment-discrimination litigation and general labor and employment law advice. She has successfully resolved employment discrimination cases, including collective actions under the Fair Labor Standards Act and claims concerning disability accommodation, age discrimination, sex discrimination, race discrimination and FMLA. She has successfully filed and argued motions for summary judgment for employers in state and federal courts around the country.

In addition, Ms. Martin has counseled and litigated matters pursuant to the Florida Condominium Act and the Florida Homeowners’ Association Act. Ms. Martin has represented condominium associations, homeowners’ associations as well as developers.

Ms. Martin received her J.D. from the University of Florida in 1999. She received her Master’s and Bachelor’s degrees in Accounting from the University of Florida in 1999 and 1996, respectively. Ms. Martin is a board qualified C.P.A and a member of The Florida Bar. Ms. Martin is admitted to practice in the Southern, Middle and Northern Districts in Florida.

Ms. Martin’s list of civic participation includes serving as a volunteer attorney for Jacksonville Legal Aid, serving on the Fourth judicial Circuit’s Pro Bono Committee, serving as a board director for Jacksonville’s Youth Crisis Center and serving as a member of the Florida Planned Development Rules Writing Committee. Ms. Martin is also a member of the Association of Credit and Collection Professionals.

About Pastore & Dailey LLC: The attorneys at Pastore & Dailey LLC have extensive experience representing clients in connection with litigation and regulatory matters involving FINRA and the Securities and Exchange Commission, among other regulatory bodies.  The firm’s attorneys have represented local, national and international clients in litigation, administrative proceedings and corporate matters. The firm practices out of 4 offices nationally. To learn more, visit www.psdlaw.net.

 

Media Contact:

Johnna Vitti

203.658.8462

JVitti@psdlaw.net

Michele Martin

352.672.6763

MMartin@psdlaw.net

 

Susan Bysiewicz Joins P&D

Posted on by Liam Mennitt

Susan Bysiewicz to Join Pastore & Dailey LLC and Open Hartford Area Office

HARTFORD, Conn., Mon. January 14 –Susan Bysiewicz, former Secretary of the State of Connecticut, announced that she would join the newly founded Pastore & Dailey LLC, a law firm with offices in Stamford and New York City. She will lead the firm’s Hartford area office at 180 Glastonbury Boulevard in Glastonbury. Ms. Bysiewicz, a corporate lawyer, joins partners Joseph M. Pastore III, Leanne M. Shofi  and William M. Dailey as well as attorneys Paul Dehmel, Michael Zamat, Dennis Bishop, Jennifer Shufro, Ryan McLeod, Sam Ottensoser and law clerks Katherine Leish and James Healy.

Ms. Bysiewicz will practice in the areas of corporate law and finance, banking, securities, and contract negotiation. Ms. Bysiewicz served for twelve years as Secretary of the State, and Chief Business Registrar, registering Connecticut’s more than 300,000 corporations. Prior to her public service, Ms. Bysiewicz practiced corporate law at White and Case in New York City, Robinson and Cole in Hartford, and the Aetna Life Insurance Company.

Prior to serving as Connecticut’s 72nd Secretary of the State from 1999-2011, Ms. Bysiewicz served as a State Representative for the 100th Assembly District, including the towns of Middletown, Durham and Middlefield. She is admitted to practice law in New York and Connecticut. She is a graduate of Yale College and Duke Law School. She lives in Middletown with her husband David and her three children.

“I am looking forward to providing business clients with creative and effective solutions to complex businesses and legal issues, and to working with a highly professional, talented and ethical team of lawyers committed to serving their clients,” Bysiewicz said.

“We are pleased to have Susan join our growing firm.  She is a talented attorney and a wonderful person.  We are also pleased to open our new office in the Hartford area, which will be our third office in the Northeast,” Joe Pastore said.

About Pastore & Dailey LLC: The attorneys at Pastore & Dailey LLC have extensive experience representing clients in connection with litigation and regulatory matters involving FINRA and the Securities and Exchange Commission, among other regulatory bodies.  The firm’s attorneys have represented local, national and international clients in litigation, administrative proceedings and corporate matters.  To learn more, Click Here

Media Contacts:

Gina Gibbons

847.987.0526

rgibbons@psdlaw.net

Susan Bysiewicz

203.658.8454

sbysiewicz@psdlaw.net

Joseph Pastore

203.658.8454

jpastore@psdlaw.net

 

Also mentioned in the CT Law Tribune on January 15, 2013.

 

Joseph M. Pastore III Named Super Lawyer, 2012

Posted on by Liam Mennitt

P&D Partner Named 2012 New York Super Lawyer

In September of 2012, Joseph M. Pastore III was named to the 2012 New York Super Lawyers list as one of the top attorneys in New York in the areas of Business Litigation and Securities & Corporate Finance.

Mr. Pastore focuses his practice on the financial services, insurance and reinsurance, and technology industries. He represents multinational companies before self-regulatory organizations, state boards and federal agencies. His clients include major securities industry companies and large and small hedge and venture funds.

Super Lawyers are chosen through a multi-phase selection process that includes a statewide survey of lawyers, independent research evaluation of candidates and peer reviews by practice area. The top lawyers from nearly 70 practice areas are selected for Super Lawyers. Super Lawyers lists are published nationwide and in city and regional magazines across the United States.

Success Systems Inc. v. Tammerica Lynn et al.

Posted on by Liam Mennitt

In a recent decision, handed down on October 10, 2012, the U.S. District Court of Connecticut denied a motion to vacate a judgment, which judgment was initially entered in our client’s favor in April 2010.  The lawsuit was originally filed by our client in the U.S. District Court of Connecticut in 2006.  After the defendant failed to appear and after a hearing in damages, the Court finally entered the judgment in 2010.  We then successfully registered the judgment in the District of Massachusetts (in an effort to collect on the judgment via seizure or property and assets).  Subsequently, the defendant sprang to life and filed motions to vacate the judgments in both the District Court of Connecticut and the District Court of Massachusetts.  Because the District of Connecticut was the original court, Massachusetts deferred taking action until the District Court of Connecticut rendered its decision.  The District Court of Connecticut ordered discovery and ultimately, a hearing on the merits.  After discovery closed and on the eve of the hearing, we filed a motion to compel the production of certain documents and information due to the defendant’s evasiveness throughout the discovery process.  The Court ultimately granted the motion to compel in full and awarded all attorneys’ fees in preparing and filing the motion.  After the hearing, Judge Donna Martinez denied defendant’s motion to vacate, giving our client yet another victory in the years long legal battle to recover monies rightfully owed to it.

SEC Gains Subpoena Power

Posted on by Liam Mennitt

August 2009

The SEC Enforcement Division (Enforcement or the Division) recently announced a series of changes to its authority and structure that will make the Division more autonomous and quicker to act in its investigations. The changes look to make the Division more agile in all levels of its investigations – from the handling of tips that start investigations to the litigating of fully developed investigations. Based on these institutional changes – coupled with the Division’s and the SEC’s pronounced desire to be more “effective” – we advise clients to take note of these developments and prepare for a tougher, more aggressive regulator.

ENFORCEMENT STAFF’S NEW SUBPOENA POWER

To mandate document production and testimony from securities industry participants (indeed, anyone) in a given investigation, Enforcement attorneys generally need to have in place a “formal order of investigation” for the matter. Until now, to obtain that formal order, staff had to craft a convincing summary of a case; obtain approval from Enforcement management for the presentation of the formal order to the five commissioners themselves; and then delicately wait for a review by and meeting of those commissioners to grant the formal order of investigation in a case. In our experience, such procedures could stall the progress of an investigation for several months – even in cases where a respondent may be willing to cooperate with the Enforcement staff, but for legal reasons needed staff to present them with a subpoena before they could comfortably do so.

That logjam in the process has now been removed. On August 5, 2009, the SEC amended its rules to delegate to the Director of Enforcement the authority to issue formal orders of investigation (SEC Release No. 34-60448). Furthermore, in a speech that day, the new Director of Enforcement, Robert Khuzami, announced that he would soon be delegating that authority to senior officers throughout the Division. To emphasize the change this means for Enforcement investigations, we quote Khuzami himself:

Thus, Staff will no longer have to obtain advance Commission approval in most cases to issue subpoenas; instead, they will simply need approval from their senior supervisor. This means that if defense counsel resist the voluntary production of documents or witnesses, or fail to be complete and timely in responses or engage in dilatory tactics, there will very likely to be a subpoena on your desk the next morning. [Emphases added.]

BEEFING UP STAFF

Enforcement has recently been adding trial attorneys with the express purpose of presenting a more imposing presence to respondents in its investigations. As Khuzami stated, “It is imperative that we convey to all defendants in SEC actions that we are prepared to go to trial and we will win, as evidenced by our eight trial wins since April…. “The Division has also recently tripled its paralegal and support personnel so as to free investigators to perform more “front-line” work and to relieve them from routine administrative burdens.

STREAMLINING THE INVESTIGATIVE PROCESS

In an effort to expedite cases, the Division is streamlining both its management structure and its investigative process, as follows (among other things):

  • Redeploying “branch chiefs” from their current mid-level managerial functions to conducting investigations again, resulting in a flatter structure and more front-line decision-making.
  • Delegating the power to approve all routine case decisions from the national Deputy Director to the Division’s senior officers located throughout the country.
  • Shortening the required length and detail of internal memoranda that recommend specific Enforcement actions (so-called Action Memos), reducing the number of reviews they must undergo and shortening the time of those reviews.
  • Severely limiting the availability of “tolling agreements” (wherein respondents agree to “toll” (i.e., pause) the application of a statute of limitations in a matter in return for more time from Enforcement staff to respond to staff requests and a delay by staff in making formal filings in the case).
  • Creation of an “Office of Market Intelligence” to be responsible for the collection, analysis, risk-weighing, triage, referral and monitoring of the hundreds of thousands of tips, complaints and referrals that the SEC receives each year.
  • Hiring the Division’s first Chief Operating Officer, who will take over the Division’s technology, project management and the collection and distribution of funds obtained in Enforcement cases.

NEW SPECIALIZED INVESTIGATION UNITS

Enforcement will soon be establishing specialized units of select attorneys, staff and resources to focus on practices, transactions, products, markets and regulatory regimes. Each will have a Unit Chief and will be staffed across the country, receiving focused, advanced training. The Division will also be hiring experts from industry for these units. The five units currently planned are:

  • Asset Management Unit – €¨To focus on investment advisors, investment companies, hedge funds and private equity funds and look for violations in relation to disclosure, valuation, portfolio performance, due diligence and diversification, transactions with affiliates, misappropriation, conflicts of interest and others.
  • Market Abuse Unit€¨ – To focus on large-scale market abuses and complex manipulation schemes by institutional traders and market professionals, among others, and look for violations in relation to markets, equities, debt securities and derivatives, and across different markets, products, corporate announcements and other market events.
  • Structured and New Products Unit€¨ – To focus on complex derivatives and financial products, including CDS, CDOs and securitized products, looking for violations typically masked by the complexity of the products, the limited availability of trading information and the prevalence of private offerings.
  • Foreign Corrupt Practices Act Unit€¨ – To focus on U.S. companies bribing foreign officials for government contracts and other business, working more closely with foreign counterparts and taking a more global approach to these violations.
  • Municipal Securities and Public Pensions Unit – €¨To focus on offering and disclosure issues, tax and arbitrage-driven activity, unfunded or underfunded liabilities and “pay-to-play” schemes (in which money managers and advisors pay kickbacks and give other favors in return for the right to sub-advise the funds).

INCENTIVIZING COOPERATION

Khuzami is a former federal prosecutor, so it is natural for him to state that he deems it “critical” that Enforcement increase its incentives to individuals to cooperate in investigations. He has announced four initiatives in that regard (all still works-in-progress):

  • Enhance Individuals’ Cooperation€¨ – Establish and announce standards to evaluate cooperation by individuals in enforcement actions.
  • Criminal Immunity€¨ – Seek authority for the Division Director to submit immunity requests to the Department of Justice.
  • Non-Target/Subject Assurances – €¨Explore ways to provide witnesses in the appropriate cases with verbal assurance early on in a case that Enforcement does not intend to file charges against them.
  • Deferred Prosecution Agreements€¨ – Recommend to the Commission that the SEC enter into Deferred Prosecution Agreements, in which Enforcement agrees to forego an enforcement action against an individual or entity subject to full cooperation, a waiver of statutes of limitations and/or compliance with certain undertakings.

Some of these plans and initiatives are already in place. Others are in progress, and the rest are still in the conceptual stage. Some of these changes will make investigations more difficult for respondents, but others will accrue to some respondents’ benefit.

Regardless, clients should take heed that the Enforcement Division – indeed, the SEC as a whole and all other financial regulators – is undergoing changes that will make it more proactive and vigorous in its evaluations of and judgments about professionals in the securities industry.