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Cypen & Cypen
NEWSLETTER
for
OCTOBER 7, 2004

Stephen H. Cypen, Esq., Editor

Never Forget - September 11, 2001

1. MOST DOCUMENTS SEIZED BY POLICE DEPARTMENT ARE PUBLIC RECORDS WHEN INVESTIGATION IS NO LONGER ACTIVE:

Local police departments routinely seize documents, such as forged checks, pornography and stolen cash, that are evidence in ongoing criminal investigations and subsequent prosecutions. At conclusion of the investigation, how is disposal of these documents to be handled? The answer depends upon whether such documents are public records subject to disposal restrictions imposed by Chapter 119, Florida Statutes (Public Records Law) or whether they are simply evidence that may be disposed of consistent with practices and procedures used for disposal of other non-documentary evidence (like drugs or other contraband). As a general rule, any public record made or received in connection with the official business of any public body is subject to examination and duplication. So, documents received by a police department in connection with its official business fall within the definition of public record. However, Section 119.07(3)(b), Florida Statutes, exempts from public disclosure criminal intelligence information and investigative information, so long as it is deemed to be active. Thereafter, any materials seized by a police department that perpetuate, communicate or formalize knowledge and are part of a criminal investigation are public records subject to the retention schedule adopted by the municipality and approved by the Division of Library and Information Services of the Department of State. One exception relates to obscene materials: they are to be destroyed in accordance with a specific statutory procedure. AGO 2004-51 (September 24, 2004).

2. FLORIDA ATTORNEY GENERAL QUESTIONS DELETION OF ASSISTANT CITY ATTORNEY’S NAME FROM BOARD MINUTES:

A Community Services Advisory Board held a public meeting, at which an assistant city attorney appeared, stated her presence for the record and provided legal advice. After the chairman prepared a report of the meeting as required by city ordinance and submitted it to the mayor and city council, the assistant city attorney informed him that her name was exempt from the Public Records Law and that all copies of the report would have to be redacted to have her name removed. She did not, however, state the basis for her contention that her name was exempt from the provisions of Chapter 119, Florida Statutes. In response to a request for an advisory legal opinion, the Attorney General made reference to the breadth of Chapter 119, Florida Statutes, and the specific exemptions -- none of which appeared apt. After referring to Section 119.07(2)(a), Florida Statutes, which requires the custodian of a public record who contends that it is exempt from inspection state the basis therefor (including statutory citation to the exemption), the Attorney General stated “you may wish to discuss this matter with the city attorney’s office to determine on what basis the assistant city attorney is claiming an exemption.” We can hardly wait to hear the answer. Informal Attorney General Advisory Legal Opinion dated September 22, 2004.

3. PSLRA ACCOMPLISHES ITS PURPOSE:

In the old days, lead-plaintiff status in class actions was usually accorded to the plaintiff first filing an action. In 1995, however, the Private Securities Litigation Reform Act became law. Now, lead-plaintiff status typically goes to the party with the largest potential loss -- as a rule, an institutional investor. Well, despite some recent yellow-journalism to the contrary, PSLRA seems to be working. Of the $9.4 Billion recovered in security settlements since its passage, institutional investors have received about 30% of that amount. In 2003, the median settlement amount was $10 Million for cases in which the lead plaintiff was an institutional investor as opposed to $5.5 Million in cases where no institutional investor served as lead. Enough said.

4. HOW TO MAKE PARTICIPANT COMMUNICATIONS EFFECTIVE:

PlanSponsor has an article on how to make participant communications more effective. Remember, employees are taking time from their work and their lives to attend a retirement plan meeting. Here are five meeting essentials that will make it worthwhile for them and for you:

1. Make your managers your retirement plan advocates. Have managers send electronic or interoffice meeting invitations -- mandatory, if possible.

2. Tell your service providers your plan’s “pain points.” What do you hear (good and bad) from your employees about the retirement plan?

3. Have the tools ready so employees can take action. Have what other equipment or documentation is necessary for employees to make desired changes.

4. Assume each employee has unique investing attitudes. Offer investing services according to how each employee feels about retirement saving and planning.

5. Insist on metrics. With all the research and work that go into your retirement plan meeting, don’t you want to know the results?

All in all, very sound advice.

5. THE HERITAGE FOUNDATION’S TOP 10 MYTHS ABOUT SOCIAL SECURITY REFORM:

In the interest of balanced reporting, we present the Heritage Foundation’s Top 10 Myths About Social Security Reform. Founded in 1973, the Heritage Foundation is a research and institutional institute -- a “think tank” -- whose mission is to formulate and promote conservative public policies. Arguments against Social Security Personal Retirement Accounts (PRAs) rest in part on the following myths:

Myth #1: We cannot afford to reform Social Security. Establishing a PRA system would cost between $1 Trillion and $2 Trillion -- far more than just continuing the current system. Fact: In the long run, establishing PRAs would cost about $20 Trillion less than funding the current Social Security System.

Myth #2: The Social Security trust fund contains assets that make Social Security secure for the next 40 years. Fact: The Social Security “trust fund” is essentially a bookkeeping system through which the government lends money to itself.

Myth #3: The Social Security system can be fixed by implementing modest changes, including raising the retirement age, making the wealthy pay Social Security taxes on all of their income or creating faster economic growth. Fact: According to the Social Security administration, the current system will require a total of $27 Trillion (in constant 2004 dollars) more revenue than it will receive in taxes over the next 75 years.

Myth #4: Introducing Social Security personal retirement accounts would result in reducing benefits for existing retirees and those close to retirement. Fact: For now, Social Security is collecting more than enough money both to pay full benefits to current retirees and those about to retire and to fund PRAs.

Myth #5: Repealing the Bush tax cuts would save Social Security. Fact: Bush tax cuts do not directly affect Social Security’s finances.

Myth #6: Personal Retirement Accounts would incur high administrative costs that would eliminate any potential benefits. Fact: Developing a simple personal retirement account system with very low administrative costs would be simple.

Myth #7: Unlike stock market investments, today’s Social Security is guaranteed and risk-free. Fact: The current Social Security system is not risk free. Future generations may be unwilling to pay the sharply-rising costs of the current Social Security System.

Myth #8: Recent volatility in the stock market proves how dangerous PRAs would be. Fact: PRAs would be invested in more than just stocks. Further, because retirement investing would take place over decades, longer-term gains will more than make up for periods of stock losses.

Myth #9: Lower-income and minority workers are better off with the current Social Security System. Fact: Personal Retirement Accounts would allow lower-income and minority workers to earn more on their Social Security investments and could create assets that could be passed on to their families.

Myth #10: Introducing PRAs would reduce Social Security’s disability benefits. Fact: PRAs could easily be designed to avoid changing disability benefits.
We don’t write this stuff, Folks, we just report it.

6. TOP 10 MOST COMMON MISTAKES OF THE AFFLUENT INVESTOR:

Investment Management Consultants Association, Inc. lists the top 10 most common mistakes of the affluent investor:

Mistake #1: Treating investments like a part-time job, not a business.

Mistake #2: Not having an asset allocation strategy.

Mistake #3: Trying to time the market.

Mistake #4: Letting emotions drive investment decisions.

Mistake #5: Ignoring the biggest risk of all -- understanding how much income you’ll need.

Mistake #6: Expecting any manager’s investment approach to work all the time.

Mistake #7: Hiring managers solely by the numbers.

Mistake #8: Getting caught up in the relative performance game.

Mistake #9: Not knowing when to fire a manager.

Mistake #10: Not having an investment management consultant.

We would say that the above mistakes are common to all investors.

Copyright, 1996-2004, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


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