| March 26
March 26 The U.S. Securities and Exchange
Commission on Tuesday defended a press release it had issued
about its case against an investment adviser, after a Boston
federal judge raised concerns that it could taint the adviser's
upcoming separate criminal trial on a tax matter.
The SEC's filing came after U.S. District Judge Mark Wolf
issued an order last week compelling SEC attorney Julie Riewe to
explain why her comments about investment adviser Gregg Caplitz
did not violate the court's rules prohibiting lawyers from
making "extrajudicial statements" that could taint a jury pool.
Riewe's comments were contained in a March 18 press release
saying that the SEC had obtained an emergency order to freeze
Caplitz's assets. It alleged that he and his firm used $1.1
million raised from investors for purposes other than the hedge
fund they claimed to manage.
Riewe was quoted as saying that Caplitz had "conjured up a
hedge fund to lure long-time clients" when it was "nothing more
than a slush fund to pay bills for others."
The SEC told the judge on Tuesday that this statement "was
reviewed and approved by Ms. Riewe's supervisors" and that it
would not violate the court's rules because "it does not go
beyond the public record and therefore cannot impact the
defendant's right to a fair trial."
The SEC noted that its complaint against Caplitz was public
at the time of the press release.
Wolf raised concerns about the SEC's press release because
Caplitz is a defendant in a separate criminal tax case that is
slated for trial in September in the same federal court
Legal experts say Riewe has become ensnared in a rare and
unusually strict enforcement of a local court rule that some
believe is at odds with constitutional protections for free
On the few occasions when similar rules have been enforced
by judges in the past, they tended to involve high-profile
But in this case, Wolf, who is well-known for challenging
government parties in the past, is taking the unusual step of
raising it in a civil case.
The court's rule generally prohibits lawyers from making
public statements that could interfere with a fair trial.
The SEC, in its defense of the release, said the document
served an important public interest for investors to notify them
of potential fraud, and in fact a former client of Caplitz had
even called to thank the government for its work.
In addition, the SEC added that the pending criminal case
against Caplitz involves completely different conduct pertaining
to filing false tax returns. The SEC's statement "did not
comment on any aspect of those pending tax fraud charges," the
The SEC did say, however, that it had nevertheless removed
the statement from the online version of the press release "in
light of the court's concerns."
It is unclear now how Judge Wolf will react to the SEC's
explanation of the press release.
Those who have practiced before him say he is a stickler for
rules, and can be known to give government lawyers a hard time
if he is not satisfied with the answers he receives.
Wolf had asked Riewe to file an affidavit addressing whether
she knew Caplitz was facing an upcoming criminal trial and
whether she had communicated with federal agents.
In a filing, Riewe told the judge she was aware Caplitz had
been indicted, but that neither she nor other SEC attorneys had
cooperated with agents or attorneys handling the tax matter.
However, the SEC staff has been cooperating with other
government agents concerning the conduct outlined in the SEC's
complaint, and there is a parallel criminal investigation.