South Florida investor sues Nasdaq over $600,000 loss

Steven Weissman, a Cooper City lawyer, is representing himself in an unusual suit claiming that advertisements by Nasdaq influenced his decision to purchase more than $600,000 of stock in WorldCom Inc., mostly in early 2002, just before the telecom giant filed for the biggest bankruptcy in U.S. history. According to this Sun-Sentinel article: "Weissman feels emboldened by the federal court system, which he sees as an equalizer, the rare place where 'a single solitary citizen can get a fair shot taking on the titans,' he says." The case is being heard by Chief Judge Zloch.

Response to Prof. Froomkin

I know we are straying a bit from the purpose of this blog, but as I mentioned below, Prof. Froomkin and I have agreed to debate the legality of DeFede's taping of Arthur Teele. You can read Froomkin's argument here. Fortunately for Mr. DeFede, the good Professor is wrong.

For DeFede to have committed a felony under Fla. Stat. § 934.03, the State must prove beyond a reasonable doubt:

1. DeFede recorded Teele's calls, without Teele's consent.
2. DeFede did so for an illegal purpose or for commercial gain.
3. Teele had a reasonable expectation of privacy in the calls.

I don't believe the State can prove any of these elements.

First, there is no question that DeFede recorded Teele's calls, but how can the State prove that it was without Teele's consent? Perhaps when Teele started to deteriorate on the telephone, DeFede asked him if he could record the conversation. Who knows. In the typical case, the State would call the "victim" to the stand and ask whether the calls were recorded with his consent. Obviously (and unfortunately) that cannot happen in this case; the point is that the State has no way to prove lack of consent.

Second, DeFede did not record the calls for any illegal purpose or for any commercial gain. In fact, he immediately turned the tape over and explained that he recorded Teele because he was truly concerned for the man as he spoke with him throughout the day. Certainly speeding is illegal, but if the purpose of driving in excess of the speed limit was to get someone who just suffered a heart attack to the hospital, then would anyone seriously argue that you had committedd a crime? Here, DeFede panicked and hit record. The State will not be able to prove that he taped the call for some illegal purpose or for commercial gain.

Third, it would be difficult for the State to prove that Teele had a reasonable expectation of privacy in the calls. If Teele placed the call from a public place where others could hear what he was saying, then there is no question that he had no reasonable expectation of privacy. Again (and unfortunately) we just don't know and the State will be unable to satisfy its burden here. More importantly, Teele was talking to a reporter who had written about him for the past 15 years. It would be a stretch to say that he had an expectation of privacy in those calls.

In addition, DeFede could assert an affirmative defense that he was recording the calls in the ordinary course of business. For reasons Prof. Froomkin points out, this isn't the strongest of arguments, but there is some support for it. See here.

Whether DeFede committed a misdemeanor violation of the statute is less clear, but for many of the same reasons outlined above, the State will have a tough time going forward.

UPDATE -- Prof. Froomkin replies here.

Is DeFede a criminal?

Yes, according to Professor Michael Froomkin at the University of Miami School of Law. He explains here at his blog, Discourse. Professor Froomkin and I have agreed to debate the issue and I'll try to post a response -- demonstrating that DeFede did not commit a crime -- by the end of the weekend.

Journalists for DeFede

Peter Wallsten and Charlie Savage have started a blog called Journalists for DeFede. It's an open letter now signed by a number of Herald employees and others journalists asking for the Herald to reinstate DeFede. The letter argues that the taping may not have even been a violation of law, citing to this post. Any thoughts? I've written a little about DeFede's firing here.

UPDATE -- According to this Herald report, DeFede met with the State Attorney's Office today. More from the Sun-Sentinel.

Salvador Magluta news

The 11th Circuit reversed Sal Magluta's conviction for obstruction of justice through juror bribery but affirmed his conviction in all other respects. Judge Seitz initially sentenced Magluta to 205 years in federal prison. The decision has the potential to result in a whole new sentencing. Or not. The 11th Circuit explained:

"If the government elects to dismiss count 8 instead of retry Magluta on that charge, or if a retrial on that count occurs and he is acquitted, the district court shall, at its discretion, either reimpose Magluta’s sentence but with a reduction of 120 months as a result of there being no conviction for count 8, or the court may resentence Magluta on all the other counts for which he remains convicted. If the government elects to retry Magluta on count 8 and he is re-convicted of that charge, the district court shall then re-sentence him on all the counts."

Disclosure: Milt Hirsch and I wrote about the 205 sentence here.