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11 Mar

NY Journalist wins lawsuit to unseal court docs tied to Bruce Bernstein Securities Fraud Case: $XSPA

UPDATE 4.2.19: After I won a lawsuit to unseal documents that showed Bruce Bernstein and Richard Abbe mislead investors and the Securities Exchange Commission in public filings another original investor in XpresSpa has filed a similar lawsuit against the $XSPA board and its executives. Swiss resident Roman Kainz filed his securities fraud suit on March 20, 2019 and added a defendant who is William Phoenix of Mistral Equity Partners LLC. The case has been deemed related by the Southern District of New York federal court to the Binns case but the defendants will have extra legal cost litigating another case. Richard Abbe of Iroquois Capital was served with the new suit at his home at 7 Kinsington Rd, Scarsdale NY 10583. Additionally, the unsealed court filings shows that Alan Schwartz, the former CEO of Bear Stearns, was involved with the original investors in XpresSpa along side Kainz and the Binns. It’s unclear if Alan was invested in the deal personally or through Guggenheim Partners the asset management firm where he is a managing director.

Original Text
Two hedge fund mangers that invest in small cap stocks have been working together to hide documents discovered in a securities fraud lawsuit from public shareholders and regulators. Last week one of the key pieces of evidence was unsealed after I won a court case brought by Bruce Bernstein of Rockmore Capital in an attempt to force me to reveal a confidential source used in my previous reporting on his alleged fraud.

The document involves private communication between Bernstein and his ex-wife who had accused him of hiding assets during their divorce. The dispute lasted only a month but forced Bernstein to turn over balance sheet records of the fund he manages called Rockmore Capital. In the divorce communication Bernstein swears he doesn’t actually have any of his own money in a $6 million debt security issued by his fund to an airport spa business called XpresSpa.

Bernstein’s statement to his ex-wife is a complete turnaround to what he told the founders of XpresSpa when he convinced them to take on debt issued by his hedge fund. That’s because the spa founders say Bernstein led them to believe it was him lending the money. Allegedly, a similar lie was repeated in public filings with the SEC when another public company Bernstein invested in, Form Holdings, wanted to merge with XpresSpa. Securities laws require Bernstein to disclose any affiliated or related parties when a proxy statement is filed with the SEC asking investors to vote on a merger with a public company. Since the days of Enron fraud laws were even expanded to tie criminal liability if you lie in proxy statements used to inform investors about who controls or has ownership in companies that are merging.

In the case of XpresSpa, investors were completely left in the dark about the role Bernstein’s buddy Richard Abbe, of American Capital Management, was playing behind the scenes to control the debt of the Rockmore note and force XpresSpa into what became the loss of millions in a disastrous merger.

While I was reporting on the XpresSpa fraud case in federal court I was sent an anonymous email with a filing I thought was currently redacted in court records. A lot of the federal case has sealed documents and redacted motions making it hard to figure out who did what. The court filing I got explained Bernstein’s ex-wife roll in sending what’s been called the ‘Sloan Letter’ (because that’s the last name of the lawyer his ex-wife used) to show her husband likely lied to regulators and shareholders. So I reported another story explaining that.

After the story ran, it appears Abbe and others encouraged Bernstein to sue me to reveal who sent me that document. They thought I had also been leaked private divorce communications and they accused the law firm suing them on behalf of the XpresSpa founders, CKR Law, or the Ex-Wife and her law firm, of leaking them to me. On top that Bernstein chose to file, on November 28 2018, what’s called a motion for pre-action discovery in NY state court, instead of filing a motion in the federal case, and demanded his name and what he was asking for be sealed. He also included a copy of the Sloan letter and said his fund had already lost one client because of my reporting on his alleged fraud. Ironically it was now Bernstein who had given me the hidden document detailing his own alleged fraud by included it in his lawsuit against me! But for four months NY state court said I couldn’t report that!

In an unusual move a state court judge agreed to seal the entire record without any of the defendant being sued having a say. I was served the lawsuit in early December and told I had to wait months to argue that the case should be unsealed. Meanwhile I am still reporting on what’s going with Abbe and Bernstein in the XpresSpa federal lawsuit. Sealing of the case meant NY state court had inflicted prior restraint against me and I couldn’t tell anyone the subjects of my reporting are trying to intimated me with litigation cost and effectively issue a subpoena on me to turn over a source identity. There was no way I was going let that happen.

Luckily once I notified the Reporters Committee for Freedom of the Press about the nature of the lawsuit, Sarah Matthews, got on the case and found me a Big Law media lawyer. Then David Bralow and Kay Murray, attorneys on the board of the Press Freedom Defense Fund started by First Look Media, worked to secure funds to help offset litigation cost and make sure I had one of the best first amendment lawyers representing me. First Look Media owns The Intercept. Getting that call from attorney Mark Bailen of Baker Hostetler and his associate Peter Shaperio, to represent me was a great sense of relief. But I knew we still had a battle. Then the case got the attention of Yale Law professor, David Schultz, who has decades of experience in litigating for the rights of journalist to bring in almost every New York major publication ( NY Times, NY Daily News, Hearst, AP, Gannett, NY Post etc..) to file what’s called an AMICUS brief. Another giant in media law, attorney Robert Balin, of Davis Wright Tremaine, also came on the AMICUS brief team and they made a fling to join my case in support our argument that as a freelance journalist I should be granted reporters privilege and not forced to reveal a source. They wrote a strong argument for the public’s right to an open judicial system demanding the whole case must be unsealed. Attorneys Robert Balin, David Bralow and David Schultz even showed up at my hearing giving me a bench of five top media lawyers to face the judge. I had a powerhouse behind me who clearly cared about the first amendment.

Bernstein and Abbe’s plan use the courts to intimidate and tie me up financially didn’t work. Instead I got a war room of litigation help and won!

Abbe, who is also the co-founder of Iroquois Capital, has been working with Bernstein for over a decade as an alleged group of undisclosed affiliates in multiple stocks with the intent to control company boards, management, and assets for the benefit of their hedge funds. In an interview with a trade publication a few years ago Bernstein boasted his funds average return was 9 Percent. Once in control, the hedge funds allegedly manipulate the stock price while gutting company cash and then discard the carcass of the company turning it into a useless shell corporation with a stock price in the pennies. The XpresSpa litigation details similar fraudulent takeover schemes in a company called Neurotrope and TapImmune.

For years, Abbe’s fund has also partnered with Barry Honig who is currently accused by regulators of running pump and dump schemes in over 70 public companies. I have previously reported Abbe’s Iroquois Capital was also named in the SEC subpoena sent to MGT Capital asking for communications from the group of Honig related affiliates. In the new amended complaint field March 8th by the SEC the regulator mentions there are other unnamed parties that helped manipulate the stock of MGT Capital during the time Iroquois co-founder Josh Silverman was on the board. It’s unclear why the SEC didn’t name Iroquois as a new defendant for their likely role in the MGT Capital pump and dump.

After I won the Bernstein lawsuit and his name became public I received a new tip from a person familiar with the situation that Bernstein and Rockmore had been through their own SEC investigation surrounding accusation that they shorted the same stocks they were doing PIPE investment with. The New York bucket shop lawyer Bernstein had hired to sue me, Peter Cane, started threatening me on Thursday after I asked if the past SEC investigation was true. Eventually attorney Cane admitted on behalf of Bernstein that the SEC had investigated but no charges were brought and the investigation ended in the summer of 2008. Cane called the investigation routine.

In my decade of reporting on securities fraud I have never seen a ‘routine’ SEC investigation. This kind of bully tactic by Cane was not a surprise. Once we got to court on March 5th, my attorneys saw what I had said from day one. This is case is about trying to discredit and intimidate me and less about trying to find out who leaked divorce documents. You can see in the court transcript below that attorney Cane began by trying to argue I was not working as a journalist when I first reported on Abbe and Bernstein but instead was being paid by Short Sellers to discredit the company. This is absolute not true and is never true in any of the reporting I have ever done here or any of the major media companies I have reported for. In the case of XpresSpa that short seller argument doesn’t even make sense. As of Friday I checked on how many shares could actually be borrowed to start a short trade on XpresSpa. The answer was only 20,000 shares. The interest to borrow those shares was as low as 9 percent. Joe Spiegel of Dalek Capital who runs a short selling fund told me, “there isn’t much demand to short XpresSpa. Sometimes borrow fees can get to 100%-200% or higher, like for Tilray. 9% shows no cares about shorting XpresSpa.”

Judge Franc Perry who presided over my case put Attorney Cane in his place pretty fast when he started the argument that I am not a journalist. Judge Perry said ‘Ms Buhl is conducting news gathering”. Judge Perry also said Cane had shown no evidence to support any other conclusion. Page 19 of the court transcript says in the eyes of New York Supreme court “the Court has not seen any evidence to show that your client is not a journalist, and for the purpose of the Court, in reading this, the Court understands that your client is a journalist, is a newsperson, under the law.” This was a strong on the record statement to the testament of my reporting work because these days you never know how judges are going to view freelance journalist who report online, especially ones running their own publications.

Judge Perry also grilled down on if the Sloan letter was even a confidential document. In the federal court case, Judge Stanton has said it will be sealed because it was part of a divorce proceeding, unless anyone can prove other wise. A notion CKR Law lawyers Rosanne Felicello and Michael Maloney have sought challenge in court documents for their clients the co-founders of XpresSpa. Given Bernstein also sued his ex-wife and the law firm she hired to see if he was hiding martial asset; they hired lawyers who showed up at my hearing. Both told the judge this letter was written after the divorce was finalized and as a result neither of them considered the letter confidential nor did they agree in writing to make it confidential. So once again Bernstein’s attorney Peter Cane had now brought forward a reason for a state court court to rule the docs a federal court judge thought should be seal shouldn’t!

If attorney Cane had never brought this action against me the documents Bernstein and Richard Abbe have worked so hard to keep hidden likely wouldn’t be front and center of a news story and available to the public for free.

XpresSpa isn’t a stock with a lot of trading volume these days. It trades on the low end tier of the NASDAQ under $XSPA. But if this group wants to start another pump and dump on the stock they have the control to do it. More importantly it’s Bernstein and Abbe’s history of hiding ownership of debt notes or even stock ownership that makes their actions newsworthy. There are so few journalist covering small cap stocks these days which is why I pick stories like these to report on with the intent to inform the investing public because history shows the SEC isn’t going to move fast to protect investors in real time.

EDITORS NOTE: I want to first thank my attorneys Mark Bailen and Peter Shaperio. They wrote incredible legal arguments and provided a zealous defense. I also want to thank New York Daily News journalist Stephen Rex Brown for reporting on my case twice and showing up for the two hour hearing. The Reporters Committee for Press Freedom and the Press Freedom Defense Fund really stepped up to help a freelance journalist and as a result we now have case law in New York that recognizes reporters privilege for freelancers and rules on how important it is to have a court system with open records. Additionally, readers who donated additional funds needed to cover reporting cost were critically to getting this story out.

Editor’s Note: This story has been updated.

Unsealed Court Document in XpresSpa fraud lawsuit:

Unsealed Bruce Bernstein Di… by on Scribd

New York Supreme Court case #655887/2018 Transcript Bernstein vs. Journalist Teri Buhl:

Bruce Bernstein vs. Journal… by on Scribd

9 Comments
18 Jan

NY Court Case putting Journalist Source Protection At Risk

UPDATE 3.4.19: The New York Daily News is reporting 16 other news organizations have joined my fight to unseal this case and to defend the reporters privilege to protect sources. On March 1st legendary media attorney David Schultz, who leads the Yale Media Freedom and Information Access Clinic, filed an AMICUS brief on behalf of The New York Times, NY Post, Newsday, NY Daily News, The Intercept, Gannett Newspapers, The parent company of the New Yorker, the AP, Hearst, Gizmode Media, First Look Media, Reporters without Borders and more journalist non profit organizations. The NYDN reported the brief centers on the importance of the public and the media’s right to an open court system. No one should be able to sue a journalist with an attempt to get access to their protected source material and then have the court keep the fact they did this quite; which is what happen to me. The AMICUS brief shows other journalist and their news publications don’t want the NY State Court to repeat these kind of rulings against the media working to inform the public. I appreciate my peers in journalism supporting my byline and the work of any freelance investigative journalist who doesn’t have powerful internal media lawyers to back them up.

The hearing to unseal this case and dismiss any action trying to force me to reveal a source is tomorrow March 5th at 2:30pm. Court Address: 80 Center Street, room 307, NYC, NY. I encourage any NYC readers and journalist to attend and show your support for an open court system.

NY Daily News story

ORIGINAL TEXT
The subject of one of my investigative stories is attempting to use the New York State court system to force me to disclose a confidential source key to my reporting on the person’s alleged wrongdoing. On top of that,at the subject’s request, a judge has temporarily allowed the lawsuit to be sealed so that I can’t make public who is trying to do this. It’s an alarming legal move that goes to the core of press freedom, free speech, and source protection in this country. My readers should know I have every intention of fight this. With over a decade of investigative reporting under my belt I have never revealed a protected source.

To fight this injustice I have been working quietly behind the scenes to secure a top first amendment lawyer to defend this case in court this month. I am doing this not just to protect myself but for the rights of all journalist working with confidential sources so that the actions demanded in this case don’t become case law that could be used against other journalists.

Today I am pleased to announce the Press Freedom Defense Fund has award me a grant to help fund this defense and Mark Bailen and Peter Shapiro of Baker Hostetler have stepped up to take the case. The case caption is: Anonymous v. Anonymous Index No. 655887/2018 (Sup. Ct N.Y. Co.) and filed in New York State Supreme Court in Manhattan.

Stay tuned for more as we fight to unseal this case.

Thanks in advance for your donation support and continued readership!

You can find court dates for this case here: http://iapps.courts.state.ny.us/iscroll/
Read more about the Press Freedom Defense Fund here: https://www.pressfreedomdefensefund.org/

2 Comments
31 Jul

Parents Host Teen Drinking Party, NCPD Makes No Arrest

Cars wrapped about half a mile down Brushy Ridge road last night as New Canaan teens threw a drinking party at 126 Brushy Ridge road. The noise was so loud from the top of the street I stopped to see if people were all right. I witnessed over half a dozen teens arriving at the party some carrying in alcohol. When I asked three boys if they were allowed to legally have this party they ran down the driveway and started yelling the cops are coming ‘run get out’. It was a mass exodus of at least 60 teens rushing to get into their cars and leave the scene. I asked a few if they were about to drink and drive but no one answered.

This boy (pictured below) started screaming and cussing at me for calling the cops and then his friends joined in. They thought it was illegal for a reporter to stand on the road and take a photo of them and kept screaming foul words ‘you can’t do that b*tch’ it’s illegal to take my photo’. The driver of the car I was with said he heard them cussing in the street for awhile expressing their frustration that my call to the NCPD had busted the party.

Officer McFadden Couldn't Find This?

Officer McFadden Couldn’t Find This?

By the time officer McFadden arrived most of the teens had left. I told the officer I saw teens leaving the party with beer and had photos. He chose not to take a statement from me. There was even the driver of the car I was with who was a witness to the teen party and angry yelling on the street.

This morning NCPD top dog Leon Krolikowski told me McFadden found that the parents WHERE home yet he saw no alcohol on the premise so no arrests were made. Yet there are two witnesses who say otherwise and the photo of the boy carrying out the beer was sent to the NCPD last night.

The home is appraised at near $1 million according to town records. I confirmed with the owner that they rent it out and are concerned these kind of parties could happen in the home. He wouldn’t give me the name of the tenant. I could not reach the tenants for comment.

A local resident, Roy Abramowitz, told me as he drove to work he still saw beer cans around the drive way this morning. But NCPD Officer McFadden couldn’t find any last night?

It’s also not clear if the teens I saw with beers in their hands were 21 or over. They sure looked young. But if they were a legal drinking age then why did so many run when word got out that the cops were coming.

Parents who host parties where people under the age of 21 are drinking (or doing drugs) can be arrested for up to a felony in Connecticut. New Canaan police just don’t seem to do the leg work to carry out that part of the law.

7 Comments
17 Jun

NCPD Top Dog Krolikowski Wanted to Arrest Officer Pickering for Assault

A criminal incident report on New Canaan police officer Fred Pickering shows NCPD second in command, Leon Krolikowski, thought there was probable cause to arrest Officer Pickering for 3rd degree assault and 2nd degree Breach of Peace. Pickering was put on paid leave in late February after a young black man, Joel Anderson, filed a complaint that he’d been the victim of racial slurs and a physical altercation by Officer Picker and a local Hockey coach Rob Benson, age 41, at a popular restaurant in New Canaan. The incident report released to today via a freedom of information request also shows Krolikowski filed an arrest warrant application for Robert Benson for Intimidation based on bigotry of bias in the 3rd degree, Threatening 2nd degree, 2nd degree Breach of Peace. On April 12th Officer Krolikowski states he asked States Attorney David Cohen to sign both arrest warrants. But New Canaan residents had to wait until June 3rd for Attorney David Cohen to decided he was not going to sign the warrants and would not prosecute either of the accused men on the behalf of Joel Anderson.

Bar witnesses, who were not part of Anderson’s party, state they saw Officer Pickering and his friend Rob Benson as the ‘aggressive’ people in the fight and some say Pickering’s group started it. Vinay Rival, a key witness who saw the fight, stated in a sworn interview with Officer Krolikowski the exchange was ‘racially charged’ and Benson towered over Anderson while he was sitting at a table asking him ‘why are you here and ‘you can’t be here’. Rival then sees Pickering come over to Joel’s table, put a clicked fist on the table and ‘say something to the effect of I’m a police officer be careful’. Rival describes what Pickering said as threatening although no specific threats where said. Rival also confirms he saw Pickering push the young black man with two hands to the chest. The incident is described as one sided in that Anderson never was aggressive or advanced on Pickering or Benson. It was Rival’s view that Pickering was intoxicated. None of the witnesses appear to remember either party calling Joel a Nigger though. Rival told Officer Krolikowski in his interview he’d never previously meet or seen the men involved in the fight.

Town records show Robert Benson lives with his family (wife Darlene Benson) in a home valued at $3mn at 66 Parish Road.

Previous press reports said Joel started the fight by calling Officer Pickering a pig but the case-incident report shows none of the eye witnesses heard Joel say this; it was only Pickering who stated that line. The core group of New Canaan friends with Pickering who were kicked out of the Tequila Mockingbird bar by bartender Jason Geane were Kevin Arnone, Robert Benson and Sean Hurley. Benson admitted to drinking at least 4 beers prior to coming to Tequila Mockingbird. The bartender stated in his police interview the group was ‘buzzed up but lucid’.

One of the things that is troubling about this report is I asked NCPD Chief Edward Nadriczny on May 29th if it was true that David Cohen was sitting on an arrest warrant application for Pickering and he emailed me back that this was ‘absolutely not true’. I told him my source was a member of the force. With the Chief’s denial I decided not to report it. Now today it appears he either didn’t understand my question or flat out lied to this reporter.

Pickering is still on paid leave while Officer Krolikowski conducts an internal affairs investigation looking at if Pickering violated conduct in the police manual. The Chief who is set to retire next week has not responded to email questions on why he told me my tip about the arrest application was not true when their own internal report shows it was.

Stay tuned for an in-depth report on the witnesses and evidence gathered in this alleged hate fight including an interview with Joel’s mother who was also a witness to some of the events.

Photo is Robert Benson March 2013

Officer Fred Pickering Case Report

2 Comments
4 Jun

States Attorney Lets NCPD Officer Fred Pickering Off after Bar Fight with Black Man

Stamford States Attorney David Cohen has finally told the town of New Canaan he will not be pressing charges against a 25 year veteran cop, Officer Fred Pickering, who was allegedly in a bar fight with a young black man. The incident happen late February and after a citizen complaint was filed by a few of the men at the bar Officer Pickering was put on paid leave. As I previously reported witnesses at the bar say Pickering came into the bar inebriated with a few of his Hockey buddies and Joel Anderson, a man Pickering has arrested before, got into a verbal altercation with Pickering’s crew that involved racial slurs directed at Joel. Anderson is in his mid-twenties, black, and was raised in New Canaan, Conn. The charges Pickering had once arrested him for in 2011 were waived.

What went on in the criminal investigation conducted by Pickering’s peers on the force is still a mystery and the police have not released their findings although several media publications have made FOI request. Fellow officers were telling town residents I spoke with that part of the States Attorney investigation involved Pickering coming into the bar drunk with a loaded gun or driving home drunk from the bar with a loaded gun in his car. An illegal move regardless of if you are a member of force. But when I fact checked the rumor with the NCPD and Pickering’s attorney they flat out denied this was part of the investigation. Which shows how lengthy drown out investigations without full transparency can sully the accused reputation. It also highlights the infighting within the New Canaan police.

Attorney Cohen and the States office told me they are not actually going to comment on the case today. The statement we see attributed to Cohen in the local papers is from communication he sent to the New Canaan police. I’d like see Cohen’s actual whole statement on the investigation and not just the part the NCPD chose to share.

NCPD said in a written press release this afternoon “Cohen said after a thorough review of all the evidence they did not find there was sufficient evidence presented to prove beyond a reasonable doubt that any specific person has committed a crime.”

Attorney Darnell Crosland, president of the Norwalk NAACP chapter who has reviewed the case with Joel Anderson, told me after hearing David Cohen’s statement about no charges, “I respect the standard of guilt must be found beyond a reasonable doubt, but that’s not the standard for finding a person culpable for a wrong doing and for making an arrest. There only needs to be a finding of probable cause. If anyone of us was subjected to what Joel was subjected to we would expect that any court in a civilized society would find probable cause and conclude absent a rational explanation that something went wrong, and that a police officer should be held to a higher standard.”

This also means Pickering’s buddy, Robert Benson, who allegedly called Joel a Nigger also isn’t getting charged for say breach of peace or a hate crime. Clearly there isn’t a community standard the New Canaan police are using for breach of peach charges because just last month they charged a 68-year old woman with breach of peace for getting into a verbal altercation at a popular New Canaan restaurant called Sole. But Pickering and his rich Wall Street buddy gets off scott-free for their role in the bar fight?

Oddly, the NCPD still isn’t giving Pickering the all-clear. Chief Nadriczny told me today they are now starting an ‘internal investigation’ into if anything in the police manual of conduct was violated by Pickering. This also mean that the officer, a father of three kids who lives in expensive New Canaan, is still going to be out on paid leave. Leave that doesn’t included the lucrative overtime our town pays these cops. A FOI request done last year shows Pickering base salary is $98,000. So that means in the three months he’s been on paid leave the town’s spent around $25,000 for David Cohen to figure out he’s not going to do anything. Talk about a waste of taxpayers’ money. On the flipside this means Pickering has not been able to have the opportunity to earn his usual pay, which was around $152k last year.

So why did the NCPD wait until now to start their internal investigation. The citizen’s complaint, which would sparked an investigation of this type was filed back in late February. It’s because it’s likely a stall tactic to slow down any attorneys Joel Anderson has who are looking at suing Pickering or the town in a civil suit. Greenwich lawyer Phil Russell had initially taken on Joel as a client on contingency for a civil rights suit but nothing was filed.

The NCPD move also delays press FOI request seeking police notes and citizen complaints in the event. And on top of that, I was told by people close to Pickering that he is also considering suing the town of New Canaan after he’s been vindicated by the State’s attorney. Talk about a total Clusterfuck. It reads like the NCPD is in way over their head and residents could be paying for their mistakes via civil suits.

Pickering’s criminal attorney, Gene Riccio, told me they are glad about State’s attorney decision to drop the case and appreciate all the people in New Canaan who supported his client. But this story is far from over, as we now wait to see what the young black man will do in a civil suit and how Pickering will respond to the actions of town officials who are keeping him out on leave.

4 Comments
23 May

NY State Court Halts Judge Shopping in RMBS Putback Cases

UPDATE 4pm: The NY Courts have now issued an official policy about their ‘One Judge’ for RMBS cases. Ironically on the same day I started asking questions about these private decision they are now public!

Orignal Text
Banks looking to judge shop in RMBS putback cases filed in New York State court are going to get shut out of the process. Apparently there are so many cases to litigate against banks, like JP Morgan and Credit Suisse selling billions of garbage mortgage securities to investors, that administrative judge Sherry Heitler has decreed all RMBS cases as of March 2013 now go to one judge. Roberta McClinton, Heitler’s law clerk, confirmed this today explaining that similar cases need to go to one judge now because it’s for ‘judicial economy’.

This news just came to light after I saw a non-public letter from Judge Heitler to JP Morgan’s outside counsel ,Andrew Cereseney and Robert Sacks, stating she appreciated JPM’s letter about their desire to have the NY AG’s civil fraud case against JP Morgan assigned to Judge Ramos but the court’s new policy is all commercial RMBS cases are now going to Judge Friedman. The problem is this doesn’t totally makes sense. The court is telling me on the record it’s for ‘judicial economy’ that like-cases go to one judge, and Judge Ramos already has the bulk of rmbs cases against JP Morgan, so why in March did the court suddenly choose to divert rmbs cases to new a judge? A judge who hasn’t seen a boat load of evidence about the ‘dogs’ and ‘sack of shit’ loans these bankers admitted, in their own emails, they were selling as safe investments to pension funds. Judge Friedman is known as a liberal ‘for the people’ judge. Judge Ramos has made comments in open court that these fraud claims by the monolines against JP Morgan are not something he is in favor of litigating.

Attorney Cereseney apparently grew a conscious after the NY AG’s case was assigned to Judge Friedman because in April he up and quit his lucrative job as partner for DeBevosie & Plimpton and joined the Securities and Exchange Commission as it’s co-head of enforcement. Robert Sacks has remained leading the dirty defense ligation of JP Morgan at banksters favorite law firm Sullivan and Cromwell.

Now here is where this gets even odder. Apparently JP Morgan’s lawyers starting circulating Judge Heitler’s letter around to other law firms that represented the banks. Judge Heitler’s PR man David Bookstaver confirmed today this letter was private and doesn’t have to be filed in the case records because it’s from an administrative judge to the lawyers involved and not from the judge on the case. Lawyers for DLJ Mortgage, a division of Credit Suisse who is also being sued for civil fraud by the NY AG, got a copy of Heitler’s letter and used it in a motion to file for judicial intervention last week. Richard Jacobson of law firm Orrick, was begging the court to give them Judge Kornreich in a billion rmbs suit filed by a trustee for aggrieved investors against Credit Suisse. The rmbs in this case is called Home Equity Asset Trust 2007-1 and was packaged by the traders at Credit Suisse; the trust is being represented by David Abrams, of Kasowitz Benson Torrres & Friedman, who is also helping the FHFA try and recover billions in rmbs fraud. Judge Heitler’s letter being circulated feels like the big bank lawyers were trying to warn each other you’d better get your motions for favored judge in cuz this legal trick is about to get shut down.

Now that some of the early RMBS putback cases are getting decided on it’s becoming clear who favors the banks and who favors the law. That’s why we are seeing big money law firms file all these ‘I have to have this Judge’ motions this year. Judge Kornreich has been ruling in favor of banks on these cases but she has also been getting over turned in appeals court. Judge Bransten has favored the investors who lost billions in RMBS and her decisions are holding up in the appeals court. It’s the wild west of case law being made in these mortgage securities lawsuits and it’s becoming clear who has the balls to make new decisions that will likely cost the banks billions in litigation payouts.

When I first saw the NY AG’s case assigned to Friedman after it was initially slotted to Ramos I thought Ramos had a conflict of interest with one of the lawyers on the case but that idea wasn’t proven. And while we now have some kind of answer from the court about the new judge assigning policy, the timing of the whole judge thing still just seems a little off.

What has become clear is now NO ONE can judge shop any RMBS cases not assigned yet. And you bet big law is about to learn everything they can about one lucky judge Marcy S. Friedman.

Judge Heitler Letter NYAG v. JPM

4 Comments
8 Mar

New Canaan Police Officer Pickering Put on Leave-State’s Attorney Investigating

On Monday, March 11th, the NCPD honored part of a media FOI request and confirmed the officer on leave is Fred M. Pickering and they are running their own internal investigation on top of the States Criminal Investigation. This was a result of media pressure on the town 1st Selectman to get the cops to follow State FOI Laws about information on public servants put on leave. There are still unanswered questions on who is leading the investigation and why it’s being done by Pickering’ peers instead of an out of town police unit.

Update 3-9-13 11:30am: At least two employees of Tequila Mockingbird have said it was Lt. Fred Pickering who was in involved in the bar fight on February 23rd. Last night I stopped by the police station to see if Pickering was on duty but he wasn’t. The desk officer told me he didn’t know when he’d be back on duty. Pickering’s voicemail doesn’t say he’s on leave but the NCPD Chief also won’t answer emails asking when his senior officer will be returning for work. Attorney Gene Riccio told me he has been hired to represent Pickering and would not comment further on his client’s role in the alleged fight. Pickering has not returned a call for comment.

The 2011 NCPD annual report shows Lt. Pickering is in the top 6 of command for the 45 person force. He stated on the local Patch site once he needs 30 years of service to retire and started the job in May 1987. Pickering and his wife Mary Beth (a soccer coach) live at 129 Gower Rd in New Canaan. The modest 4 bedroom 3.5 bath house, that he bought two years after he started the force, is appraised at near $900,000. Pickering’s published earnings for 2012 is a little over $152k plus he can earn overtime or private service pay at $65 per hour with a four hour minimum. The police have still not told the press if the officer is on paid or unpaid leave although multiple publications including this one have made FOI request to get this information that is a matter of public interest (and paid for with our tax dollars).

The concern here is how did Officer Pickering handle himself while off duty with his friends who allegedly made racial slurs at another patron in Tequila Mockingbird. One witness, Kevin Jones, told me he heard someone called Pickering a ‘Pig’ and then more name calling happen, via Pickering’s crew, and then the altercation happen.

Pickering is the brother of the director of human resources for the town Cheryl Pickering Jones. The family has a history of working in fire, police, nursing services for New Canaan with deep roots tied to town government.

We are still waiting on the town attorney to give a legal opinion on if the NCPD has to honor the press FOI request to release the officer’s name. I first reported yesterday the State’s FOI commission believes they have to release the name of a public servant on leave. If the town attorney, Ira Bloom, denies the information we are seeking under Federal and State FOI laws I will file an appeal / complaint with the State FOI commission and I hope other local publications do the same.

3-9-13 3pm: The New Canaan Advertiser is also reporting Pickering is on leave and quotes sources that say it’s a paid leave. If Pickering is on paid leave, then given that’s funded by taxpayer dollars, the NCPD has to answer our FOI request. The public deserves to know who is running the investigation, who made the decision to put Pickering on paid leave, how long he’s been on it, and I’d like to see a copy of the police union contract that could show if they had to put him on paid leave or if they had an option. We also need confirmation if his weapons and badge have been turned back in while on leave.

3-10-13: Here is some interesting case law history on how Pickering and a few other NCPD handled a controversial DUI arrest in 2004 by a women who was having a reaction to medicine. In 2008 Pickering received the Police Meritorious Duty Award for his work in Domestic Violence cases.

3-12-13: The New Canaan Advertiser is reporting the name of the man accusing Pickering. Joel L. Anderson, of 186 Lakeview Ave, had been arrested by the NCPD in 2011 for allegedly stealing pot (but his arrest record was expunged and their are no convictions against Joel). Anderson’s address at the time of his arrest was in Section 8 Low-Income housing. He and two of his buddies were outed for the alleged pot heist after they reported the guy they might have stole it from had hit their car. It’s kind of a funny story. Sources close to Pickering have told me this is not the first time 24-year-old Anderson has tried to file a complaint against Pickering but I haven’t seen a 2nd complaint. The NAACP has gotten involved at some point in the complaints against Pickering and I have to wonder why Pickering wasn’t investigated by the State’s attorney before if there was a prior complaint?

Original Text
A New Canaan, Conn. police officer was put on leave and is under criminal investigation by the State’s attorney. The NCPD release a statement today that a person complained they were hit by the off-duty officer at a popular local watering hole, Tequila Mockingbird. The complaint said a fight started when a person in the officer’s group started racial slurs. The NCPD is not releasing the name of the officer and said the event happen February 23rd.

Josh Fisher, New Canaan Advertiser Editor in Chief, asked the NCPD Chief Nadriczny if the name would be released via a FOI request. The chief said no until the investigation is complete. The name of the complainant is also not disclosed.

If something sounds fishy here you’re right it is. Why are we just getting word of this on March 8th. If a cop is put on leave that is a matter of public interest, if public coffers are being used to pay him while he is on leave that is a mater of public interest. I spoke with Attorney Valica Harmon at the State’s FOI Commission who said, “There is no basis of fact for the Police to withhold the name of an officer that has been put on leave. That’s a personal decision and separate from the State’s attorney investigation. The public has a right to know if public coffers are being used to pay this person while on leave.”

I emailed and called Chief Nadriczny at 2pm today with a FOI request explaining the above. If he doesn’t respond with a name today the State’s FOI office said I should filed a complaint with the FOI commission.

I have also asked Chief Nadriczny if ANYONE involved in the incident was arrested for breach of peace, disorderly conduct or assault. You know the charges you usually see when there is bar fight by grown men.

At 2:45pm Chief Nadriczny wrote back saying

“Ms. Buhl -This is an ongoing, active criminal investigation and our press release contains the information we will release at this time.”

I also want to know if another town is being called in to run the investigation. Can the NCPD investigating one of their own?

Remember this is the same police unit who was investigated for racial profiling with traffic ticketing writing last year by the CHRO and was also involved in accepting free alarms from New Canaan Alarm company but no one was ever charged with wrong doing or fired.

New Canaan Patch/AOL editor Michael Dinan wrote in comments on his story about the event that the Patch would not allow readers to post comments speculating who the officer is. I find that ironic since AOL/Patch is known to encourage their editors to allow all kinds of speculative comments about people in town to get the page views up.

If you’ve heard who the officer is feel free to comment here and I’ll investigate it. The NCPD is paid with our tax dollars and we have the right to transparent information from them, which we are unfortunately not getting today. Based on the NCPD Chief’s refusal to honor the press FOI request I’ll be filing a complaint.

Here is the NCPD press release from 11:45am on 3-8-13:
NCPD Press Release Dispute Investigation 03-08-13

UPDATE 4:30pm: I spoke with Ira Bloom the town attorney who said he’s looking into if he thinks the NCPD have to release the officers name. The Advertiser also spoke with the town First Selectman who said he asked Bloom to look into it and they’d have an answer on Monday. If they say no I encourage every local publication to file a FOI complaint with the State Commission as they clearly think the NCPD has to comply.

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