United States District Court, District of Columbia
TANYA S. CHUTKAN, District Judge.
This matter is before the Court on Defendant Securities and Exchange Commission's Motion to Dismiss, ECF No. 8. For the reasons discussed below, the motion will be granted.
This civil action proceeds as one brought by a single plaintiff, John Bravata, under the Privacy Act, see 5 U.S.C. 552a, against the Securities and Exchange Commission ("SEC"). To better understand the substance of Plaintiff's claim, it is helpful to review the criminal and civil proceedings brought against him:
Defendants John Bravata and Richard Trabulsy operated BBC Equities, LLC and Bravata Financial Group, LLC. BBC Equities and Bravata Financial solicited contributions from individuals, representing that the funds would be invested and specific returns would be realized.... [A]pproximately 440 individual investors transferred to BBC Equities and Bravata Financial funds totaling $52, 943, 630. None of the defendants was a registered securities broker or dealer at the time.
The records of the corporate defendants reveal that the returns paid out to (or reinvested for) earlier investors came not from proceeds earned by the companies' investments, but rather from funds contributed by later investors. The records also show that the investors' money was used by the individual defendants to purchase several personal luxury items.
SEC v. Bravata, 3 F.Supp. 3d 638, 644 (E.D. Mich. 2014), appeal docketed, No. 14-1350 (6th Cir. Mar. 25, 2014). The "type of investment structure" in which Plaintiff engaged "is commonly known as a pyramid or Ponzi scheme." Id. at 643. A jury convicted him on "one count of conspiracy to commit wire and mail fraud, and fourteen counts of wire fraud, " and Plaintiff is serving concurrent sentences of 240 months' incarceration on each count. Id. at 650.
In addition, Plaintiff was ordered to pay restitution of $44, 533, 437.86. Id. As a result of subsequent civil proceedings brought by the SEC against Plaintiff, he must "disgorge the $5, 201, 494.89 that [he] received as proceeds of the BBC Equities scheme, plus $1, 251, 074.02 in prejudgment interest, " id. at 662, and pay a total fine of $1, 820, 000, id. at 663. Appeals of the criminal convictions are pending. See United States v. Bravata, No. 13-2380 (6th Cir. filed Oct. 15, 2013); United States v. Bravata, No. 13-2591 (6th Cir. filed Nov. 25, 2013).
In May 2014, Plaintiff submitted to the SEC a document titled "FINAL NOTIFICATION OF VIOLATIONS OF COMMONLAW JURAL RIGHTS & SEC LAWS & REGULATIONS REGARDING CLASSIFICATIONS OF UNREGULATED PERSONS" and Certification of Identity. Statement of P. & A. in Support of the Sec. & Exch. Comm'n's Mot. to Dismiss, ECF No. 8-1 ("Def.'s Mem."), Ex. A (emphasis in original). Plaintiff opined that the SEC's "records contain harmful, injurious, inaccurate records" pertaining to him, and he declared his "right [to] demand... disclosures of all... records and files for inspection, " particularly those that "wrongly and improperly" classified him as [an] unregistered broker'" who is subject to and had violated certain provisions of the Exchange Act. Id., Ex. A.
Staff directed Plaintiff's Privacy Act request to the SEC's Office of Freedom of Information and Privacy Act Operations. Def.'s Mem. at 6. The SEC acknowledged receipt of the submission in writing and assigned the matter a tracking number (Request No. 14-00067-FOPA). Compl., Ex. 4 (Letter to Plaintiff from Office of FOIA Services, SEC, dated June 9, 2014) (exhibit number designated by the Court). Its response to Plaintiff in relevant part stated:
Please be advised that the Certificate of Identity letter you provided is not acceptable for SEC purposes. In accordance with SEC requirements, to verify your identity you must include the first-party authorization necessary for continued processing. Please note that under the Privacy Act, 5 U.S.C. § 552a(b), "[n]o agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains....
In order to obtain the subject records, you must adhere to the SEC's regulation at 17 C.F.R. § 200.303 pertaining to the release of records under the Privacy Act. For information concerning this regulation, please see the attached document.
Unless we receive an appropriate statement executed by yourself which expressly identifies the records requested, we cannot process your request. In addition, please provide a copy of your photo identification in order for this office to verify your identity.
Further, your request is unclear as to which records you are seeking from the SEC. Under 17 C.F.R. § 200.303(a)(1) "[e]ach request by an individual... for access to any record pertaining to the individual that is maintained by the SEC in a system of records, shall include such information as will assist the SEC in identifying those records as to which the individual is seeking information or access. Where practicable, the individual should identify the system of records that is the subject of his request by reference ...