UPDATE 2: Law Professor FINRA NAC Member Files Defamation Complaint

FINRA Supports NAC Members, Chris Brummer During Online Harassment

For Release: 

Friday, June 26, 2015

Washington - FINRA commends Georgetown Law Professor Chris Brummer and other National Adjudicatory Council (NAC) members for their ongoing contributions to FINRA's mission despite online attacks.

Prof. Brummer and several other NAC members and FINRA staff have been the target of a number of disparaging online attacks. The attacks followed a decision by a NAC appellate panel, which upheld a disciplinary action that barred two individuals from working in the securities industry. The SEC has denied a motion by the two individuals to stay their bar from associating with any FINRA firm while the case is on appeal, pending before the SEC.

Prof. Brummer has filed a lawsuit in state trial court in New York against the individual behind the defamatory website and the firms that own it. The lawsuit, filed in the Supreme Court of New York - No. 153583/2015, alleges "a retaliatory internet defamation campaign against FINRA, the FINRA panelists who issued the decision, and members of the advisory council that upheld it," including Brummer.

Plaintiff Blummer alleges three causes of action: Defamation Per Se, Defamation, and Intentional Infliction of Emotional Distress. Christopher Brummer, Plaintiff, v. Benjamin Wey, FNI Media LLC, and NYG Capital LLC d/b/a New York Global Group, Defendants ( Supreme Court of the State of New York, New York County, File No. 153583/2015, April 22, 2015).  

"SEC Declines To Stay FINRA Bars Pending Appeal" (BrokeAndBroker.com Blog, March 11, 2015)

PRELIMINARY STATEMENT 

Plaintiff‘s Complaint is an attempt to chill the free speech rights afforded by both the United States and New York State Constitutions to individuals who voice their opinions in protest of unjust decisions, matters of public concern, and the individuals responsible for such injustice. In Plaintiff‘s capacity as a member of FINRA‘s National Adjudicatory Council, a panel of 14 people who review appeals from the decisions of FINRA to discipline brokers, Plaintiff undisputedly co-authored a 36-page decision, available to the public on FINRA‘s website, in which Plaintiff affirmed FINRA‘s lifetime ban from the securities industry of two African-American stockbrokers who had never previously been the subject of any disciplinary proceedings based upon the testimony of a convicted felon and a witness who changed her story several times during FINRA‘s investigation. Plaintiff, a limited-purpose public figure, now attempts to silence an internet website called theBlot.com that (1) expressly disclaims to its readers that it prints sensationalist and opinionated contents, and (2) is allegedly owned and controlled by Defendants, including Defendant Wey, who has successfully petitioned to compel FINRA to remove references to him that FINRA improperly included in its original decision to ban these brokers. Yet as a matter of well-settled law decided by both the Court of Appeals and the First Department, the content that these authors have posted to the Blot, a well-known and self-described repository of opinions, cannot state a claim for defamation as a matter of law

SUMMARY OF ALLEGATIONS 

Plaintiff alleges that Defendants own and control a self-styled "sensationalist" internet website called "TheBlot.com" (the "Blot"). In addition to describing its style as "sensationlist: the Blot also disclaims to its readers on its "About Us" page that it is a website on which third party users, including internet journalists, post their own "opinionated content" on, among other things, matters of public concern. A copy of the Blot‘s "About Us" page, a link to which is contained on every other page of the Blot, including the Posts attached to the Complaint is attached to the Wipper Aff. as Ex. B. The Blot also self-styles to readers that its own motto is sex, scandal, sarcasm, and sensationalism. It features pictures of individuals satirically posted, who feel they were "wronged" and who are "pouring out their opinions" and "complaints." 

Plaintiff‘s defamation claims are based solely upon statements contained three internet posts on the Blot, dated January and February 2015, which, on their face were by three separate individuals, Noah Zuss, whose Linkedin.com profile page and other personality profile pages are attached to the Wipper Aff. as Ex. C and Thomas Greenfield, and Sam Patterson (the "Posts"). (Compl. Ex. A, C, D, E.) Plaintiff alleges that Defendants published these three Posts to the Blot as part of a larger series of posts that retaliated against Plaintiff and other members of FINRA‘s regulatory and disciplinary arm for the decisions they wrote in 2013 and 2014, all of which are publicly available on FINRA‘s website, banning for life two African-American stockbrokers, William Scholander and Talman Harris who prior to that proceeding had unblemished records as brokers. (Compl. ¶ 43.) 

Plaintiff alleges that, in retaliation for his writing a December 2014 decision, the Blot began publishing content about him one month later, just as it had published content about FINRA and its judges who were involved in the original decision to ban Mr. Scholander and Mr. Harris. 

On their face, in a forum that is devoted to opinionated content, editorials, and sensationalism, the Posts express the authors‘ opinions that Messrs. Scholander and Harris are innocent and the ban was unjust, not least of which because FINRA‘s judicial panel, Plaintiff included, Maureen Gearty, who undisputedly changed her sworn testimony several times during FINRA‘s investigation and who was closely associated with Ronen Zakai, a person who is presently serving a sentence in prison after his conviction for 11 felonies. (Compl. ¶ 11,16.) In addition, the authors of the Posts also express their opinions about the various individuals at FINRA who participated in and coauthored the decisions made publicly available on FINRA‘s website resulting in the lifetime ban. The Posts discuss the publicly available information about their close associations, such as Plaintiff‘s employment by the Milken Institute, an institute associated with and controlled by Michael Milken, an individual known for his felony conviction for securities fraud, Milken‘s lifetime ban from the securities industry and for being the subject of a recent investigation probing a suspected violation of that ban. 

Because the content of the Posts about Plaintiff are unquestionably protected opinions about a public figure in the arena of investor protection and the discipline of licensed securities brokers, the Complaint avoids a substantive discussion of the statements that allegedly defamed Plaintiff until paragraph 33. Prior to that, Plaintiff details statements published on the Blot about other people at FINRA. Underscoring the fact that Plaintiff, a law professor, knows that the Blot‘s statements about him are protected opinions, his citations to statements on the Blot that discuss him are far less detailed that those about his associates. The Complaint‘s discussion of the Blot‘s statements is bulleted, quoted in full, and discussed in depth. But when Plaintiff moves on to discussing statements alleged to be about him and his role in this public controversy, his allegations abruptly shift from the detailed discussion contained in the previous allegations about others to a hodgepodge of soundbites, partial sentences and fragments from the Posts. (Id. ¶ 27.)

Plaintiff‘s blunderbuss of statements from the Blot in the 13 paragraphs of his complaint purporting to discuss statements that defame him can be distilled to four categories: 

(i) Name-calling, including statements Plaintiff characterizes as "Race baiting," both in the text of the posts to the Blot and in text superimposed onto satirical pictures of him, calling Plaintiff an "Uncle Tom," a "racist," a "vacuum brain," an "abuser," a "failure," "worthless academic," and a "bookworm" who can‘t "survive a day in real life." (Compl. ¶¶ 34-35.) 

(ii) Loose and imprecise assertions, made after a fulsome discussion of the author‘s basis for making them, which conclude that "Plaintiff ruined the lives of innocent black men," "many investors lost their life savings thanks to Chris Brummer‘s endorsement [of the Milken Institute]," Plaintiff was "implicated in a fraud," and that Plaintiff "messed with another man‘s wife;" (Id. ¶¶ 34-36, 42.) 

(iii) Quotes attributed to Plaintiff but which, according to Plaintiff, were "fabricated" and never spoken by him; (Id. ¶ 35) and 

(iv) Statements about Plaintiff‘s close associates, such as Michael Milken who the Blot accurately describes as "a criminal" and Charles Senatore who the Blot states was "caught on tape lying.:

In addition to alleging defamation based upon statements that are, as a matter of law, opinions of the author, Plaintiff‘s own Complaint pleads ample facts to demonstrate that he is a public figure for purposes of the publicly available decision he authored banning Mr. Harris and Mr. Scholander as well as for many other related matters. Yet the Complaint makes only a conclusory assertion that the statements were made with actual malice. Plaintiff parrots the legal standard for actual malice, but fails to specify any facts demonstrating that the author of these statements knows any of them to be false. Plaintiff also fails to allege facts demonstrating that any of the Defendants is the author of those statements.

SUMMARY OF ARGUMENT 

As demonstrated infra in Section I, all of Plaintiff‘s claims must be dismissed because (i) all of the statements posted on the Blot are constitutionally protected statements of opinion and (ii) many of the statements are not about Plaintiff at all. 

As demonstrated infra in Section II, Plaintiff‘s defamation claims must be dismissed because Plaintiff is a limited purpose public figure who has failed to plead actual malice with specificity. As demonstrated infra in Section III, Plaintiffs‘ claims against Defendants, who are the alleged "publishers," are immune under the Communications Decency Act of 1996 because Plaintiff fails to plead facts showing that any of the defendants authored these posts. 

As demonstrated infra in Section IV, Plaintiffs‘ third cause of action for Intentional Infliction of Emotional Distress fails because its allegations are duplicative of the defamation claims and the conduct alleged does not satisfy the legal standard for extreme and outrageous conduct. 

Finally, as demonstrated infra in Point V, at a minimum, Defendant Wey must be dismissed from this lawsuit because Plaintiff failed to serve him in accordance with CPLR 308(2).

• Brummer
• FINRA
• NAC
• Wey
• Defamation
• BrokeAndBroker
• Bill Singer