Supreme Court, New York County, New York,Special Term, Part I.
Gerald GUTTERMAN, Plaintiff,v.Louis J. LEFKOWITZ, in his capacity as Attorney General of the State of NewYork and the People of the State of New York, Defendants.
Nov. 18, 1977.
In an action arising out of plaintiff's appearance at an examination held under the Martin Act concerning the offering and sale of limited partnership interests, plaintiff sought a declaration as to his right to record testimony at the examination. The Supreme Court, New York County, Oliver C. Sutton, J., held that plaintiff had no right to make a tape recording of the testimony or to have such testimony taken down verbatim by a certified court reporter.
Declaratory judgment rendered.
Securities Regulation 274349Bk274 Most Cited Cases
In examination held under Martin Act concerning offering and sale of limited partnership interests, witness was not entitled to make tape recording of testimony or to have such testimony taken down verbatim by certified court reporter. CPLR 3001; General Business Law § § 352, 352 et seq., 352, subd. 5. *583 **667 Dreyer & Traub, Samuel Kirschenbaum, New York City, for plaintiff.
Louis J. Lefkowitz, Atty. Gen. of the State of New York, Attorney pro se and for defendant People of the State of New York, Mark Tipperman, New York City, for defendants.
OLIVER C. SUTTON, Justice:
Defendants move for declaratory relief, pursuant to CPLR 3001 determining the rights of the parties in this action.
Plaintiff voluntarily appeared at an examination, held pursuant to GBL 23- A (Martin Act) concerning the offering and sale of limited partnership interests in John Adams Partners Ltd. Plaintiff is affiliated with the offering firm, City Associates. He was accompanied by his attorney. At the commencement of the examination, the Assistant Attorney General present read a formal statement to plaintiff advising him of his rights and duties under the law. Plaintiff through counsel then made a formal demand that he be permitted to have a record of the testimony, either through use of a tape recording device or through receipt of a copy of testimony taken by certified court reporter. The Assistant *584 Attorney General denied those requests, as well as a request for a copy of the formal statement read to plaintiff, but he permitted the taking of notes. Plaintiff and defendants agreed to suspend the investigatory examination of plaintiff pending a judicial resolution of the parties' rights and duties.
In the complaint, a declaratory judgment is sought determining whether, under the circumstances presented: (i) defendants were required to provide plaintiff with a **668 copy of the formal statement read to plaintiff; (ii) defendants were required to permit plaintiff to make a tape recording of the testimony of the witness; and (iii) defendants were required to permit plaintiff to have the testimony taken down verbatim by a certified court reporter and to be provided with a written transcript thereof. Plaintiff also seeks an injunction to effectuate compliance with the declaration. Defendants move for a declaratory judgment that plaintiff has failed to state a legal right to any of the relief sought, or in the alternative, for an order dismissing the complaint for failure to state a cause of action. General Business Law 352(5) mandates absolute secrecy during the course of all investigations conducted pursuant to GBL Article 23-A (The constitutionality of GBL. Article 23-A has been upheld in Dunham v. Ottinger, 243 N.Y. 423, 154 N.E. 298). A hearing conducted under the Martin Act is investigatory and not adjudicative in nature. (Kanterman v. Lefkowitz, 76 Misc.2d 743, 350 N.Y.S.2d 516). A witness at an examination conducted pursuant to GBL 352 has no right to a transcript of his examination (Sanborn v. Goldstein, Sup., 118 N.Y.S.2d 63, app. dism. 284 App.Div. 879, 135 N.Y.S.2d 924). The Assistant Attorney General clearly has the power under GBL 352(5) to refuse a request to tape record this examination. As to the "warning" statement; a copy thereof has been attached to the present papers by the Attorney General.
The parties' rights are declared to be as follows: Defendants are not required to permit plaintiff to make a tape recording of the testimony of the witness and defendants are not required to permit plaintiff to have the testimony taken down verbatim by a certified court reporter.
400 N.Y.S.2d 667, 92 Misc.2d 583
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