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United States v. Blaszczak

United States District Court for the Southern District of New York

March 29, 2018, Decided; March 29, 2018, Filed

S1 17-cr-0357 (LAK)

Opinion

 [*738]  MEMORANDUM OPINION

Lewis A. Kaplan, District Judge.

Defendant Robert Olan, one of four defendants in this alleged insider trading case, seeks an order requiring the prosecution to review for Brady material certain information in the possession of the Securities and Exchange Commission ("SEC").

Facts1

history and thus provides the minimal background necessary to decide the motions.

In July 2013, the SEC initiated an informal inquiry into the conduct underlying this case. It opened a formal investigation in November 2013. Between July 2013 and November 2014 it issued around 56 subpoenas and regulatory demands for documents.2

In November 2014, the SEC referred this matter to the United States Attorney's Office ("USAO") for criminal investigation.3 The USAO then started to investigate, and an FBI investigation began in January 2015.4

Once the criminal investigation began, the USAO and SEC conducted 39 witness interviews in tandem. [**2] 5 The USAO and SEC representatives told the witnesses who were interviewed simultaneously by both that the agencies' investigations were separate and that the interviews were conducted together only as a matter convenience.6 The agencies told each witness also that, if there were to be a proffer agreement, the witness would enter into a separate agreement with each agency.7 In addition, the USAO and FBI interviewed or contacted witnesses around 21 times without SEC involvement.8 The SEC provided the USAO with all the documents it obtained during its investigation, but the USAO acquired additional documents through grand jury subpoenas that were not shown to the SEC.9

At the conclusion of the investigations, the USAO did not ask the SEC, nor the SEC the USAO, to bring particular charges or to sue or charge a particular defendant, although each advised the other of its intentions.10 The USAO sought and  [*739]  obtained a grand jury indictment11 that charged Olan and others.12 The Commission, after receiving an action memorandum13 from the enforcement staff, authorized and filed a civil enforcement action against all of the defendants in this case except Olan.14 Its complaint, filed the day after [**3]  the indictment was unsealed, alleges violations of the securities laws. The indictment charges Olan and his co-defendants with securities fraud, but also with conversion of government property and wire fraud.15

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308 F. Supp. 3d 736 *; 2018 U.S. Dist. LEXIS 53417 **; 2018 WL 1547092

UNITED STATES OF AMERICA, -against- DAVID BLASZCZAK, et al., Defendants.

Prior History: United States v. Blaszczak, 2018 U.S. Dist. LEXIS 41009 (S.D.N.Y., Mar. 12, 2018)

CORE TERMS

memorandum, documents, interviews, exculpatory, obligations, suppression, disclosure, witnesses, arm, cases

Criminal Law & Procedure, Discovery & Inspection, Brady Materials, Duty of Disclosure, Brady Claims, Securities Law, Regulators, US Securities & Exchange Commission, Administration & Establishment, Authorities & Powers