Opinion
00 Civ. 4385 (KMW) (GWG)
December 18, 2002
REPORT AND RECOMMENDATION To the Honorable Kimba M. Wood
The Securities and Exchange Commission ("SEC") brings this action against a number of defendants alleging violations of the securities laws. One of the defendants, Frederick W. Wall, has moved pro se for summary judgment. For the reasons stated below, the motion should be denied.
I. INTRODUCTION
This case arises from a scheme to sell fake securities of non-existent companies to the public. After an investigation, the United States Attorney's Office brought criminal charges relating to the scheme. Wall was charged as a defendant in that prosecution and ultimately pled guilty to a charge of conspiracy to violate the securities laws. See Transcript of Hearing before the Honorable Denny Chin, dated December 11, 2000 ("Plea Tr.") (reproduced in Declaration of Meaghan Cheung, dated September 16, 2002 ("Cheung Decl."), Ex. D). Subsequently, the SEC brought this civil enforcement action seeking a permanent injunction against future violations of the securities laws and disgorgement of any ill-gotten gains. Wall is the only defendant remaining in the case.
A. Factual Background
In ruling on the motion for summary judgment, the Court views the evidence in the light most favorable to the SEC and draws all inferences in the SEC's favor. See, e.g., Sologub v. City of New York, 202 F.3d 175, 178 (2d Cir. 2000). The Court considers only evidence that would be admissible at trial. See, e.g., Nora Beverages, Inc. v. Perrier Group of Am., Inc., 269 F.3d 114, 123 (2d Cir. 2001).
In 1997, Bruce M. Follick began a scheme to sell worthless stock through private placement offerings for fraudulent companies. See Deposition of Bruce M. Follick, dated April 9, 2001 ("Follick Dep.") (reproduced in Cheung Decl. Ex. A), at 14, 65-66. These companies included First Fidelity Financial Corporation, Exchange Online, Inc., First Commerce Corporation, and Amerivest Online, Inc. Id. at 65-66, 73. All of these entities were used as fake investment vehicles to solicit money fraudulently from unsuspecting individuals. Id.
Follick had met Wall when they worked together at a brokerage firm named Malone and Associates. See Deposition of Frederick W. Wall, dated March 21, 2000 ("Wall Dep.") (reproduced in Cheung Decl. Ex. B), at 33; Follick Dep. at 14. Follick recruited Wall to work as part of his operation. Wall Dep. at 33-34, 39; Follick Dep. at 15-16, 18-19. Wall claims that he believed he was hired to establish a legal and legitimate brokerage, he did not know of the illegal activities, and that he quit when he discovered the fraud. See Wall Dep. at 34, 39, 109-10. In response, the SEC has offered evidence showing Wall had knowledge that the operation was fraudulent. See Plea Tr. at 13-14, 21-23; Follick Dep. at 27-29, 61-70, 77. For example, Wall discussed with Follick material misrepresentations made by sales persons while attempting to lure victims. See, e.g., Follick Dep. at 27-29, 68. Wall referred to the First Fidelity scheme as "a scumbag, crim [sic], fraud operation." Follick Dep. at 67. In addition, during his plea allocution Wall admitted that he had participated in an "illegal operation." Plea Tr. at 13. He stated he knew that the securities being sold were "bogus, just fronts"; that "[t]hey weren't actual ongoing entities"; and that he was aware that false statements were being made to "[m]embers of the public" to induce them to purchase stock. Id. at 14. Wall also stated he knew of the illegality prior to leaving the firm. Id. at 14, 21-23.
Wall was the President of First Fidelity Equities and worked with other entities involved in the illegal operation. Follick Dep. at 29; Wall Dep. at 41, 48. Wall opened one of the office locations each day, Follick Dep. at 33, supervised the salespersons and their respective solicitations, id. at 19, 21-22, 25-29, 34, 38-43, and had access to and control over bank accounts used in the scheme. Id. at 45-48; Wall Dep. at 52-57. Wall recruited salespeople to solicit investments in the various entities involved. Follick Dep. at 20. The salespersons knowingly made false representations about the offerings, claiming that they were legitimate investments in reputable companies. Follick Dep. at 42-43, 60-64. Follick testified that Wall knew the statements were false and were being used to solicit investments in fraudulent or non-existent companies. Follick Dep. at 61-68. He also testified that Wall provided scripts to salespeople used in connection with the sales of securities that contained misrepresentations about the securities being offered. Follick Dep. at 42.
In addition to supervising the phone solicitations, Wall was involved in the drafting of documents used to perpetuate the fraud. Wall helped to write various private placement memoranda and proofread corrected drafts. Follick Dep. at 30-32; Wall Dep. at 95. Wall also signed documents on behalf of First Fidelity entities that were eventually filed with various regulatory organizations. Plea Tr. at 19; Follick Dep. at 20-21; Wall Dep. at 48-50. In addition, Wall deposited and withdrew customer funds from bank accounts used in the scheme. Follick Dep. at 36-39, 45-48; Wall Dep. at 53-57, 86-87, 89. Wall distributed monies from these accounts to himself, Follick and salespersons. Follick Dep. at 39, 47-48; Wall Dep. at 57, 86-88.
B. The Criminal Case
Follick was arrested by the FBI in December 1998. Wall thereupon withdrew most of the remaining funds from the First Fidelity Equities account and continued to run the scheme for a time. Follick Dep. at 71-75. In either December 1998 or January 1999, Wall notified Follick that he wanted to cease his involvement with the First Fidelity entities. Follick Dep. at 70-71; Wall Dep. at 109-10.
In June 2000, Wall was arrested on charges relating to his role in the First Fidelity scheme. Wall entered a guilty plea on December 11, 2000, to one count of conspiracy to commit securities fraud. See Plea Tr. at 7, 23.
C. Proceedings in this Case
The SEC brought this action on June 14, 2000, alleging violations of a number of the securities laws. It names a number of people and companies, including Wall, as defendants. The suit requests that the defendants be permanently enjoined from any further violations of the securities laws, barred from serving as part of a company that sells registered securities, and disgorged of any financial gains realized through the scheme. See Complaint, filed June 14, 2000, at 21.
Wall, proceeding pro se, has moved for summary judgment. While his papers are extraordinarily confusing, it does not appear that Wall contests that the operation for which he worked operated illegally under the securities laws. Instead, he appears to claim to be entitled to summary judgment because: (1) he did not personally solicit customers in the scheme; (2) he did not know the scheme was intended to defraud and did not possess the required mental state necessary to find a violation of the securities laws; (3) testimony offered by the SEC is perjured; (4) his rights against double jeopardy are being violated; (5) there was prosecutorial misconduct in the criminal prosecution against him; and (6) disgorgement is improper because there is a separate tax action pending against him. See Motion for Summary Judgment — Memorandum of Law, filed August 9, 2002 ("Wall Mem."), at 1-12.
II. DISCUSSION A. Summary Judgment
Standard Summary judgment is appropriate only when no genuine issues of material fact are disputed and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Burt Rigid Box, Inc. v. Travelers Prop. Cas. Corp., 302 F.3d 83, 90 (2d Cir. 2002). "Whether a fact is material depends on the substantive law of the claim and '[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.'" Burt Rigid Box, 302 F.3d at 90-91 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
The moving party bears the burden of "informing the district court of the basis for its motion" and identifying the facts that "it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. If the moving party meets its initial burden of demonstrating the absence of a genuine issue as to the material facts, the non-moving party may avoid summary judgment only by introducing evidence that could allow a jury to find in its favor.
Burt Rigid Box, 302 F.3d at 91; Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995).
B. The SEC's Claims
The SEC brought this action alleging that Wall violated Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a) ("Section 17(a)"), Section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78j(b) ("Section 10(b)"), and Rule 10b-5 as promulgated by the SEC, 17 C.F.R. § 240.10b-5 ("Rule 10b-5"). See Complaint, ¶ 5 The complaint also seeks relief under Section 15(a) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78o(a) ("Section 15(a)"), which creates penalties for those who sell securities without previously registering with the SEC. See id. at 18-20.
Section 17(a) and Section 10(b), including the rules promulgated by the SEC thereunder, aim to prevent the establishment of a rigged or fraudulent market for securities. See U.S. v. Stein, 456 F.2d 844, 850 (2d Cir.), cert. denied, 408 U.S. 922 (1972). Section 17(a) makes it unlawful for a seller of securities, either directly or indirectly,
(1) to employ any device, scheme or artifice to defraud; or
(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.15 U.S.C. § 77q(a). Section 10(b) prohibits any person from using "any manipulative or deceptive device or contrivance in contravention of [SEC] rules and regulations. . . ." 15 U.S.C. § 78j(b). Rule 10b-5, as promulgated by the SEC, thus makes the prohibitions of Section 17(a) applicable to any person, not just sellers of securities. See 17 C.F.R. § 240.10b-5. In order to prove Wall violated Section 10(b) and Rule 10b-5, the SEC must show that Wall (1) in connection with the sale of a security, (2) made a material misrepresentation or used a fraudulent device, and (3) acted with scienter. See SEC v. First Jersey Sec., Inc., 101 F.3d 1450, 1467 (2d Cir. 1996), cert. denied, 522 U.S. 812 (1997). To establish that Wall violated Section 17(a) the SEC must prove the same elements but need not prove scienter to establish a violation of subsections (2) or (3) of Section 17(a). See Aaron v. SEC, 446 U.S. 680, 701-02 (1980); accord SEC v. Monarch Funding Corp., 192 F.3d 295, 308 (2d Cir. 1999).
To prove Wall acted with scienter, the SEC must show Wall at a minimum acted with knowledge about the illegality of his actions. See Herman MacLean v. Huddleston, 459 U.S. 375, 383-84 (1983). Scienter may be proved by demonstrating an intentional deception, manipulation or fraudulent scheme. See Ernst Ernst v. Hochfelder, 425 U.S. 185, 193 n. 12 (1976).
The SEC does not have to establish that Wall personally solicited any of the potential investors in the scheme. In actions brought by the SEC, "any person that knowingly provides substantial assistance to another person in violation of a provision of [15 U.S.C. Chapter 2B, which includes § 10(b)], or of any rule or regulation issued under this chapter [including Rule 10b-5], shall be deemed to be in violation of such provision to the same extent as the person to whom such assistance is provided." 15 U.S.C. § 78t(f); see SEC v. U.S Envtl., Inc., 155 F.3d 107, 113 (2d Cir. 1998), cert. denied, 526 U.S. 1111 (1999). This statute was enacted in 1995 — prior to the conduct at issue in this case. It represents, for actions brought by the SEC, a 7 codification of the Second Circuit's rule that liability may be imposed "not only on persons who made the fraudulent misrepresentations but also on those who had knowledge of the fraud and assisted in its perpetration." First Jersey, 101 F.3d at 1471. Similarly, a defendant may be found liable under section 17(a) based on aiding and abetting. See generally SEC v. Coven, 581 F.2d 1020 (2d Cir. 1978) (affirming judgment under section 17(a) based on aiding and abetting theory), cert. denied, 440 U.S. 950 (1979).
C. The SEC's Evidence Against Wall
The SEC has presented sufficient evidence to allow a jury to find that Wall violated the relevant sections of the securities laws. First, the SEC's evidence shows that Wall participated in an operation that sold investment securities and that he recruited and supervised the salespeople who solicited the fraudulent investments. See Follick Dep. at 19-22, 24-29; Deposition of Ronald Ferlisi, dated April 4, 2001 ("Ferlisi Dep.") (reproduced in Cheung Decl. Ex. C), at 32.
Testimony reflects that the salespeople Wall supervised made material misrepresentations to investors about the legitimacy of the securities they were selling. See Follick Dep. at 61-65; Ferlisi Dep. at 32-33. The SEC's evidence further shows that Wall played a role in the scheme by paying out commissions to salespeople who solicited the fraudulent investments. See Follick Dep. at 39, 47-48; Ferlisi Dep. at 26.
The SEC has also offered evidence sufficient to establish the scienter element. Wall admitted at his plea allocution that he knowingly participated in an illegal scheme, see Plea Tr. at 21, and that he continued to participate even after discovery of the illegality. See id. at 22-23.
The SEC's evidence also shows that Wall intentionally participated in the scheme despite his acknowledgment from the beginning that it was a "fraud operation." Follick Dep. at 67. This evidence would allow a jury to conclude that Wall voluntarily participated with full knowledge of the fraudulent nature of the scheme, thus meeting the scienter element. See U.S. Envtl., 155 F.3d at 111 ("knowledge of the proscribed activity is sufficient scienter under § 10(b)") (citations omitted); SEC v. Lorin, 76 F.3d 458, 460 (2d Cir. 1996) (per curiam) (holding defendants liable who "knew of the manipulation agreement and knowingly participated in carrying it out").
With respect to the Section 15(a) claim, that provision makes a defendant liable if he or she participates in the sale of securities without properly registering with the SEC. See SEC v. Milan Capital Group, Inc., 2000 WL 1682761, at *8 (S.D.N.Y. Nov. 9, 2000). The SEC has adduced evidence that shows Wall spoke directly to investors, see Follick Dep. at 21-22, 40, received and deposited solicited funds, see id. at 37, and was involved in drafting false documents used to solicit investors. See id. at 30-31. In addition, Wall has admitted that his licenses to sell securities expired while he was working as part of the scheme. See Wall Dep. at 49. These activities are sufficient to prove a violation of Section 15(a). See, e.g., Milan Capital, 2000 WL 1682761, at *8.
D. Wall's Arguments in Favor of Summary Judgment
Wall makes a number of claims that he believes entitle him to summary judgment. Each is addressed below.
1. Participation
Wall alleges he cannot be held liable for violations of the securities laws because he "did not sell or deal with any members of the public." Wall Mem. at 2. Specifically, Wall states that he did not sell any "false" shares of stock in this scheme or during his entire experience in the securities industry. See Affidavit of Fred Wall, dated July 23, 2002 (reproduced in Wall Mem. Ex. 10. 20), at 1. In addition, Wall states that the Assistant United States Attorney from his criminal case told him that "we know you did no sales." Affidavit of Fred Wall, dated July 23, 2002 (reproduced in Wall Mem. Ex. 16.30), at 1.
Wall's argument is rejected. Liability for the fraudulent sales may be imposed upon Wall if he knowingly "provide[d] substantial assistance to another person" violating the relevant securities laws. 15 U.S.C. § 78t(f); accord First Jersey, 101 F.3d at 1471. As described previously, the SEC has adduced admissible evidence that Wall provided such assistance.
2. Knowledge and Scienter
Wall next claims that he did not know of the fraud until right before he quit his job. See Wall Mem. at 3-4. Wall testified that Follick told him he was being hired for a legal operation, see Wall Dep. at 34, and that he decided to leave only after the offices were raided. See id. at 109-10. The SEC, however, has produced evidence that Wall knew of the fraudulent character of the First Fidelity scheme "[f]rom the very beginning . . . from the very first — from the onset."
Follick Dep. at 67. Moreover, while not admitting to knowing of the illegality from the start, Wall admitted at his plea allocution that he continued to participate after learning of the illegal nature of the scheme. See Plea Tr. at 14, 22-23.
Wall offers a lie detector test as evidence he did not know of the illegality of the operation. See Letter to Frederick Wall from Priority Investigations, Inc., dated November 20, 2000 (reproduced in Wall Mem. Ex. 58.I), at 1-3. Without addressing the question of whether such evidence is admissible, see U.S. v. Messina, 131 F.3d 36, 42 (2d Cir. 1997) ("we have not decided whether polygraphy has reached a sufficient state of reliability to be admissible . . ."), cert. denied, 523 U.S. 1546 (1998), the SEC has provided contrary evidence showing that Wall had the requisite scienter. A jury would be entitled to credit the SEC's evidence notwithstanding the lie detector results.
Wall also makes use of his contention that he did not personally make sales to argue that the SEC cannot prove that he had the requisite scienter. Wall Mem. at 4. Issues regarding proof of scienter are usually inappropriate bases for a grant of summary judgment. See In re Kidder Peabody Sec. Litig., 10 F. Supp.2d 398, 415 (S.D.N.Y. 1998) ("Whether a plaintiff can establish scienter usually cannot be decided on summary judgment.") (citing Wechsler v. Steinberg, 733 F.2d 1054, 1058-59 (2d Cir. 1984)); In re Columbia Sec. Litig., 155 F.R.D. 466, 479 (S.D.N.Y. 1998) ("Resolution of the question of scienter . . . generally requires examination of a witness's demeanor and credibility and is thus inappropriate for disposition on summary judgment.") (citation omitted); see also Press v. Chemical Inv. Servs. Corp., 166 F.3d 529, 538 (2d Cir. 1999) ("The Second Circuit has been lenient in allowing scienter issues to withstand summary judgment based on tenuous inferences.") (citations omitted). The same is true in this case.
A defendant's scienter may be proved by circumstantial evidence. Huddleston, 459 U.S. at 390 n. 30. The SEC has offered such evidence demonstrating that Wall knew of the illegal nature of the scheme. For example, Follick testified that Wall knew of the falsity of the statements made by sales persons, see Follick Dep. at 61-65, as well as the falsity of the private placement memoranda. See id. at 65-67. In addition, Wall allegedly referred to the scheme as a "fraud operation," see id. at 67, indicating he was participating in acts he knew to be illegal.
Moreover, at his plea allocution, Wall admitted to participating in an illegal scheme. See Plea Tr. at 13 ("I was receiving salary money from an illegal operation."); id. at 14 (admitting to seeing "false statements" being made to "[m]embers of the public."); id. at 22-23 (admitting to knowing of the scheme's illegality but continuing to participate). Such evidence could support a jury's finding that Wall acted with scienter and summary judgment is therefore inappropriate.
3. Wall's Claims of Perjury
Wall's primary contention is that because Follick has committed perjury, summary judgment should be granted. See Wall Mem. at 6-9. In an attempt to prove Follick perjured himself, Wall points to affidavits that purportedly contradict some of Follick's deposition testimony. See Affidavit of Theodore L. Rosten, dated June 1, 2001 (reproduced in Wall Mem. Ex. 6.9-1), at 1; Affidavit of Fred Wall, dated July 23, 2002 (reproduced in Wall Mem. Ex. 6. 11), at 1. Wall's attack on Follick's credibility, however, is unavailing because "[a]ny assessments of credibility and all choices between available inferences are matters to be left for a jury, not matters to be decided by the court on summary judgment." Azrielli v. Cohen Law Offices, 21 F.3d 512, 517 (2d Cir. 1994).
4. Wall's Double Jeopardy Claim
Wall argues that this suit is barred by the Double Jeopardy clause because the Government previously brought criminal charges against him. See Wall Mem. at 9-10. The Double Jeopardy clause, however, does not prevent the prosecution of a civil enforcement action brought by the SEC subsequent to a criminal prosecution. See, e.g., SEC v. Palmisano, 135 F.3d 860, 864-66 (2d Cir.), cert. denied, 525 U.S. 1023 (1998); SEC v. Bilzerian, 29 F.3d 689, 696 (D.C. Cir. 1994).
5. Prosecutorial Misconduct
Wall also claims improper conduct by the prosecutor in his criminal case, the SEC, the Mafia, and District Judge Denny Chin, who presided over his criminal case. See Wall Mem. at 11-12. Putting aside his vague and unsupported suggestions of improper collusion among these parties to secure his criminal conviction, Wall claims more specifically that trial transcripts have been altered to hide any evidence of improper statements made to him by the Assistant United States Attorney who prosecuted him, see id. at 11; that the SEC told him more time would be added to his sentence if he filed a civil case, see id.; that the SEC misled him in various other ways, including statements it made relating to Follick's wealth and assertions that Wall's filing a "motion to vacate" would be illegal, see Affidavit of Fred Wall, dated July 23, 2002 (reproduced in Wall Mem. Ex. 28.54), at 1; that the SEC broke a verbal agreement to settle the instant civil case, see Wall Mem. at 11; and that statements made by Judge Chin show an alignment of the judicial forces against him, see Defendant [sic] Abuse Ethics Violation Report, undated (reproduced in Wall Mem. Ex. 57), at 1-9.
The SEC responds that Wall was provided with an undoctored trial transcript in their possession. See Cheung Decl. ¶ 5. Moreover, the SEC states that they did not tell Wall that filing a motion to vacate would be illegal — though they did inquire how Wall planned to appeal the guilty plea — and did not make any of the statements Wall attributes to them relating to Follick's wealth. See id. ¶ 7. Finally, while not in a position to state what was said by the Assistant United States Attorney who prosecuted Wall, the SEC states that to the best of their knowledge, he did not act improperly. See id. at 9-11. Accepting Wall's allegations as true, their relevance to the instant motion for summary judgment is unclear. At best, Wall might be viewed as asserting a defense of "unclean hands" to preclude the SEC from prosecuting this action. "The doctrine of unclean hands is based on the principle that 'since equity tries to enforce good faith in defendants, it no less stringently demands the same good faith from the plaintiff.'" Dunlop-McCullen v. Local 1-S, 149 F.3d 85, 90 (2d Cir. 1998) (quoting 11A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Federal Practice and Procedure, § 2946, at 108 (1995)).
Generally, "the doctrine of unclean hands 'may not be invoked against a governmental agency which is attempting to enforce a congressional mandate in the public interest.'" SEC v. Rosenfeld, 1997 WL 400131, at *2 (S.D.N.Y. July 16, 1997) (quoting SEC v. Gulf Western, 502 F. Supp. 343, 348 (D.D.C. 1980)) (citations omitted). In order to raise an equitable defense such as unclean hands against a government agency, courts "have required that the agency's misconduct be egregious and the resulting prejudice to the defendant rise to a constitutional level." SEC v. Electronics Warehouse, Inc., 689 F. Supp. 53, 73 (D.Conn. 1988), aff'd, 891 F.2d 457 (2d Cir. 1989), cert. denied, 496 U.S. 142 (1990). Furthermore, "courts have permitted the defense only where the alleged misconduct occurred during the investigation leading to the suit and the misconduct prejudiced the defendant in his defense of the action." Id. (citing cases); Rosenfeld, 1997 WL 400131, at *2.
Wall's claim fails because he has not demonstrated that any of the improper actions he alleges are prejudicing him in his defense of this action. Nothing the SEC or any other Government actor is alleged to have done will prevent him from putting forth his defenses to this suit. Thus, Wall's "unclean hands" defense must fail.
6. Tax Claims/Disgorgement
Wall argues that he is entitled to summary judgment because the Internal Revenue Service ("IRS") is bringing a case against him for tax evasion. See Wall Mem. at 10; Wall Mem. Ex. 17.33 (unnumbered pages). Wall does not explain what relevance the separate tax investigation has to this case. Wall's contention seems to be that he actually never received the $51,400 that the SEC alleges he made through the scheme. See Wall Mem. Ex. 17.33 (unnumbered pages). Construing his papers as broadly as possible, Wall may be arguing that (a) he should not be taxed for this money and/or (b) he should not have to disgorge money he never received.
As for the tax issue, it is not properly before the Court because the IRS is not a party to this action. As for the possibility of disgorgement, the appropriateness of this remedy is properly determined only in the event Wall is found liable for the violations of the securities laws. To the extent Wall is arguing that disgorgement is an impermissible remedy altogether, that argument is rejected. Disgorgement of illicit profits is one of the potential remedies available to the SEC for a violation of the securities laws. See, e.g., Lorin, 76 F.3d at 461-62; SEC v. Patel, 61 F.3d 137, 139 (2d Cir. 1995).
Conclusion For the reasons stated above, Wall's motion for summary judgment should be denied.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have ten (10) days from service of this Report to file any objections. See also Fed.R.Civ.P. 6(a), (e). Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with copies sent to the Honorable Kimba M. Wood, 500 Pearl Street, New York, New York 10007. Any request for an extension of time to file objections must be directed to Judge Wood. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985).