The eDiscovery Resource Center™ is Bloomberg BNA’s comprehensive research solution for litigators and in-house counsel who require authoritative guidance on the handling,...
Dec. 14 — A company president who may have engaged in a Ponzi-type scheme can't assert Fourth Amendment or marital privilege protections to avoid handing over e-mails, the U.S. District Court for the District of Columbia held Dec. 9.
In November 2014, the U.S. Securities and Exchange Commission began investigating the activities of FX & Beyond Corp., including those of the company's president Steve H. Karroum, who the SEC believed may have engaged in a Ponzi-type scheme. The SEC issued a subpoena to Karroum for documents or data related to his investment and financial activities. Karroum eventually handed over documents, but did not produce any e-mails with investors.
The court ultimately ordered the parties to propose a production protocol. The court rejected Karroum's proposals and issued an order adopting the SEC's proposed protocol, which specified that Karroum must agree to allow his internet service provider to turn over his e-mails. Karroum objected.
Karroum argued the Fourth Amendment barred production of his e-mails stored by his ISP. The court was not swayed by this argument however, noting the SEC's original subpoena required Karroum himself—not the ISP—to turn over the e-mails, and the D.C. Circuit has held that administrative subpoenas constitutes reasonable searches.
Karroum also asserted the marital privilege, but that privilege does not protect e-mails sent through a defendant's work e-mail account.
“In any event, resolving the contours of the marital privilege is unnecessary here because the SEC's protocol includes a ‘privilege review team' of attorneys unrelated to the investigation who will ensure that ‘communications between Karroum and his wife…will be removed from the production…,” the court explained.
District Judge James E. Boasberg wrote the order.
Derek S. Benten of the SEC represented the SEC. Allred, Bacon, Halfhill and Young PC in Fairfax, Va., represented Karroum.
The full text of SEC v. Karroum is available at http://www.bloomberglaw.com/public/document/SEC_v_Karroum_No_15590_JEBDAR_2015_BL_403811_DDC_Dec_09_2015_Cour
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)