SEC Order. Moreover, the IC also testified that he did not believe that the Report was complete in the absence of Findings and he surmised that Stratton's counsel would complain if there was no factual support for the Recommendations.
The Court agrees with the IC that the Report is more complete with the inclusion of the Findings. It is undeniably in the interests of justice for a litigant to understand the foundation for the actions taken against it. In fact, it is highly commendable that the IC devoted a substantial amount of his Report to explain why he took the actions he did. The Findings clearly assist in a determination that the Recommendations are, indeed, appropriate. In fact, in the absence of Findings, there is a strong possibility that Stratton would have asserted that many of the Recommendations lacked a factual foundation.
Nonetheless, just as Stratton is accountable for its mandatory obligations under the SEC Order, the SEC must similarly be held to the words of its bargain. Cf. United States v. Western Elec. Co., 282 U.S. App. D.C. 271, 894 F.2d 430, 434 (D.C. Cir. 1990) ("Construction of a consent decree is governed by ordinary principles of contract law"). Although the SEC Order can be construed to authorize the inclusion of Findings in the published Report, the better interpretation is that it does not. The Report was to "detail the policies, practices and procedures specified in" Subsection "b". Notably, Subsection "b" only addresses the policies with which Stratton should comply in the future. The IC's review of the existing policies, practices and procedures at Stratton (upon which his Findings are based) is authorized by Subsection "a". The SEC Order does not authorize the IC to publish the results of his Subsection "a" review of the existing policies, practices and procedures at Stratton in the Report; the reference to Subsection "a" in Subsection "b" is merely to the "matters set forth in" Subsection "a", i.e., the seven enumerated areas of investigation.
Accordingly, the Findings and any other references in the Report to the Findings must be stricken from the Report before it may be released publicly. Nothing in this opinion, however, shall be construed by the IC as a license to modify the Recommendations (save for the deletion of any references to the Findings) or by Stratton as an excuse to fail to implement all of the Recommendations forthwith. To ensure that the Recommendations are "appropriate", the Findings shall be included in a sealed appendix which is not to be disseminated to the public.
For the reasons expressed above, it is hereby
ORDERED that Defendant Stratton Oakmont, Inc., and its officers, agents, servants, employees, attorneys, and those persons in active concert or participation with it who receive actual notice of this order by personal service or otherwise, and each of them, be and hereby are permanently enjoined from, directly or indirectly, violating the Securities and Exchange Commission's March 17, 1994 Order as set forth in the Order Instituting Public Administrative Proceedings, Making Findings and Imposing Remedial Sanctions, issued by the Securities and Exchange Commission on that date in In the Matter of Stratton, Oakmont, Inc., Jordan Belfort, Kenneth Greene and Daniel Porush, A.P. File No. 3-8321
; it is
FURTHER ORDERED that, if the SEC or the Independent Consultant intend to disseminate the Report publicly, they must produce a new Report that does not include the Findings or any references to the Findings. The Findings may be included as a sealed appendix to the Report that is not to be released to any entity other than the SEC, the Independent Consultant, Stratton or Stratton's counsel absent the agreement of the parties; and it is
FURTHER ORDERED that all documents filed under seal in this action shall remain under seal.
IT IS SO ORDERED.
February 28, 1995
JOYCE HENS GREEN
United States District Judge