Professional Documents
Culture Documents
RACHEL STROM
DAVIS WRIGHT TREMAINE LLP
1251 Avenue of the Americas, 21st Floor
New York, NY 10020
Tel: (212) 402-4069
Fax: (212) 379-5244
Email: rachelstrom@dwt.com
ANDREW GREENE,
DEFENDANTS’ MEMORANDUM
OF POINTS AND AUTHORITIES
v. IN SUPPORT OF MOTION FOR
SUMMARY JUDGMENT -against-
---------------------------------------------------------X
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TABLE OF CONTENTS
Page
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TABLE OF AUTHORITIES
Page(s)
FEDERAL CASES
Chau v. Lewis
771 F.3d 118 (2d Cir. 2014) ........................................................................................ 14, 23, 24
Davis v. Costa-Gavras
654 F.Supp. 653 (S.D.N.Y. 1987) ............................................................................... 13, 19, 23
DiBella v. Hopkins
403 F.3d 102 (2d Cir.2005) ............................................................................................. 5, 6, 14
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Hayes v. Sweeney
961 F.Supp. 467 (W.D.N.Y. 1997) .......................................................................................... 24
Howard v. Antilla
294 F.3d 244 (1st Cir. 2002).....................................................................................................13
Nichols v. Moore
396 F. Supp. 2d 783 (E.D. Mich. 2005) ..................................................................................18
Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC
813 F.Supp.2d 489 (S.D.N.Y. 2011) ....................................................................................... 24
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STATE CASES
Batra v. Wolf
No. 0116059/2004, 2008 WL 827906 (Sup. Ct. N.Y. Cty. March 14, 2008).......................... 19
Pontarelli v. Shapero
231 A.D.2d 407, 647 N.Y.S.2d 185 (1st Dep’t 1996) ............................................................. 24
Randall v. Demille
No. 20923/1999, 1992 WL 12664916 (Sup. Ct. N.Y. Cty. September 23, 1992) ................... 22
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FEDERAL STATUTE
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I. PRELIMINARY STATEMENT
After the Court ruled on Defendants’ Motion to Dismiss, the only remaining claim was
for public figure libel per se. In order to avoid summary judgment, he has to present
constitutionally required “clear and convincing evidence” that the fictional character Nicky
Koskoff in the film The Wolf of Wall Street (“the Film”) was of and concerning Plaintiff, that the
depiction of Koskoff (the “Statement”) was libelous per se of Plaintiff, that the supposedly
implied imputation of Koskoff’s conduct to Plaintiff differed so materially in its gist and sting
from Plaintiff’s own conduct that it was substantially false, and that each Defendant had made
the Statement with the subjective state of mind known as “actual malice” in the constitutional
sense. The record before the Court demonstrates that Plaintiff has no more evidence that
Koskoff was of and concerning him than he had in his opposition to the original Motion to
Dismiss, that most of the challenged statements are not libelous per se, and that Plaintiff’s only
approach to proving falsity is to rely upon blanket denials that avoid the irrefutable evidence of
his participation in pervasive criminality and debauchery at Stratton during the time in which
Plaintiff was one of the three members of the Board of Directors, head of Corporate
Underwriting, the person in charge of insuring compliance with the SEC injunction against
Stratton’s boiler room practices, and the person identified by Stratton in its regulatory filings as a
“control person.” Plaintiff simply has no evidence that any Defendant had a subjective
understanding that Nicky Koskoff was going to be understood reasonably to be Andrew Greene,
nor can Plaintiff demonstrate that any Defendant intended that the Film would make any
statement of and concerning Andrew Greene. Defendants wanted to make a dramatization that
spoke to larger truths than whether or not a particular employee at Stratton was or was not a good
person. That is why the filmmakers chose to give the characters in the Film (other than the
1
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Belforts) made-up names that were concocted to avoid any misimpression that the individual
characters were real people. The various artists responsible for the content of the Film did not
intend to say anything about Andrew Greene or the other Stratton employees because the Film
did not have any intention of being literally true. It attempted to capture social and artistic truths
about human nature, an era in American history, and an economic system. Because the First
Amendment gives Defendants the breathing space they need to create such works, summary
judgment is required.
public figure, was libeled through the portrayal of the character Nicky Koskoff in Martin
Scorsese’s 2013 film The Wolf of Wall Street (the “Film”). Order, 9/30/15, Dkt. 25.
Because the Film was a valid exercise of First Amendment rights regarding an issue of
public interest, was published without actual malice in the constitutional sense, was not of and
concerning the Plaintiff, and even if it were construed to be of and concerning the Plaintiff,
This case, and this Motion, have a voluminous record that imposes a burden upon this
Court. Plaintiff has alleged that 33 passages in the Film constitute libel per se. Yet, when
Defendants complied with local rules by serving their Rule 56.1 Statement ON July 28, 2017
(Dkt.69-2) pointing out the absence of Plaintiff’s evidence and setting forth extensive relevant
facts, and responding to each of the 33 claims with supporting evidence, Plaintiff1 failed to
1
Plaintiff has been a member of both the California bar and the New York bar. As such, he is
charged with a higher degree of legal knowledge than non-lawyers, and with the ethical duties
2
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comply with the Court’s rules for Rule 56.1 counter-statements and refusing to provide a
promptly pointed out Plaintiff’s non-compliance (Dkt. 69), the Court held a hearing at which it
expressly ordered Plaintiff on December 18, 2017 to file a rules-compliant Rule 56.1 counter-
statement on or before January 2, 2018. Dkt. 71. Plaintiff ignored the Court’s order and once
again filed a non-compliant document, Dkt. 72, which, instead of addressing the paragraphs of
the Rule 56.1 Statement, merely provided incomplete editorial commentary on the paragraphs of
the declarations upon which Defendants are relying. Plaintiff ignores the fact that he had the
burden to identify the evidence that would meet his burden of proof. Plaintiff’s failure to comply
with L.R. 56.1, even when ordered by the Court to remedy a plainly defective filing, is an
evasive and dilatory tactic calculated to make the Court’s consideration of the instant motion
A party’s “failure to respond or contest the facts set forth by the defendants in their Rule
56.1 statement as being undisputed constitutes an admission of those facts, and those facts are
accepted as being undisputed.” Jessamy v. City of New Rochelle, 292 F.Supp.2d 498, 504
(S.D.N.Y.2003) (quoting NAS Elecs., Inc. v. Transtech Elecs. PTE Ltd., 262 F.Supp.2d 134, 139
(S.D.N.Y.2003)). Plaintiff simply refuses to deflate his claim’s nuisance value by reducing its
complexity and filing a 56.1 statement with the Court that states, candidly and truthfully, that
Plaintiff has no evidence sufficient to sustain his claim, or any portion of it. Plaintiff’s decision,
responding to each numbered paragraph in the statement of the moving party” followed by
set forth in the New York Rules of Professional Conduct: “An attorney is an officer of the legal
system with special responsibility for the quality of justice . . . . As an officer of the legal system,
each lawyer has a duty to uphold the legal process; to demonstrate respect for the legal system . .
. and to promote . . . the administration of justice.” NYRPC, Preamble.
3
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citations to admissible record evidence, L.R. 56.1(b)(d), is gamesmanship, pure and simple. The
Court is therefore entitled to accept Defendants’ stated facts as admissions. See, e.g., Topalian v.
Hartford Life Ins. Co., 945 F.Supp.2d 294, 301 n.2 (E.D.N.Y. 2013).
regarding invasion of privacy, and two regarding defamation. Dkt. 25; Greene v. Paramount
Pictures Corp., 138 F. Supp. 3d 226, 230–31 (E.D.N.Y. 2015). One defamation claim alleged
that defendants acted with actual malice (Dkt. 2 at 11), while the other claim asserted that
defendants were merely negligent. (Id. at 12). On Defendants’ Motion to Dismiss, this Court
dismissed the three privacy claims with prejudice. The Court then dismissed Plaintiffs’
defamation claim based on the negligence theory but granted “Plaintiff leave to replead [the
claim] to assert a libel claim based on gross negligence.” Dkt. 25; Greene, 138 F.Supp.3d at
237. Plaintiff elected not to re-plead the claim, thus this case has been litigated as one
defamation claim in which Plaintiff must establish that Defendants acted with “actual malice or
acted with reckless disregard as to the truth or falsity of the statements.” Dkt. 25 ¶ 60.
A court shall grant summary judgment “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). The Court may find a genuine dispute “where the evidence is such that a
reasonable jury could decide in the non-movant’s favor.” Delaney v. Bank of Am. Corp., 766
F.3d 163, 167 (2nd Cir. 2014). “Only disputes over facts that might affect the outcome of the
suit under the governing law will properly preclude the entry of summary judgment.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Consideration
of summary judgment motions must also be “mindful . . . of the underlying standards and
burdens of proof,” Pickett v. RTS Helicopter, 128 F.3d 925, 928 (5th Cir. 1997), since the
4
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“evidentiary burdens that the respective parties will bear at trial guide district courts in their
determination of summary judgment motions.” Brady v. Town of Colchester, 863 F.2d 205, 211
Here, it is Plaintiff who has the burden of proof to demonstrate with clear and convincing
evidence that the statements of which he complains were “of and concerning” him, that they
were libelous per se, that they were substantially false, and that each Defendant as to whom
liability is to be imposed made the statements with actual malice in the constitutional sense, i.e.,
with knowledge of falsity or reckless disregard as to whether the statement was true or false. See
Celle v. Filipino Reporter Enterprises, Inc., 209 F.3d 163, 176 (2d Cir. 2000).
In cases “. . . where the [non-movant here, Plaintiff] will bear the burden of proof on an
issue at trial, the moving party [here, Defendant] may satisfy its burden by pointing to an absence
Credit Mgmt. Corp., 758 F.3d 473, 486 (2nd Cir. 2014). Once the moving party who does not
bear the underlying burden of proof offers evidence that the non-moving party has failed to
establish his claim, it is up to the non-movant to offer evidence sufficient to permit a trier of fact
Mission, Inc. v. NY Times Co., 842 F.2d 612, 622 (2d Cir. 1933). See Kahl v. Bureau of National
Affairs, Inc., 852 F.3d 106, 116 (D.C. Cir. 2017). A public figure libel plaintiff must
demonstrate falsity by clear and convincing evidence. See DiBella v. Hopkins, 403 F.3d 102, 111
(2d Cir.2005). The Second Circuit has stated that “(1) the uniform view of the New York
Appellate Divisions, (2) the majority view of other jurisdictions (both state and federal), (3) the
fact that the clear and convincing evidence standard has already been incorporated into the New
5
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York Pattern Jury Instructions, and (4) scholarly writing in this field” constitutes “significant and
persuasive evidence from which to conclude that the New York Court of Appeals would hold
that falsity must be proved by clear and convincing evidence.” DiBella, supra, 403 F.3d at 115.
In addition, defendants are held “to a standard of substantial, not literal, accuracy.” Law Firm of
Daniel P. Foster, P.C. v. Turner Broadcasting Sys., 844 F.2d 955,959 (2d Cir. 1988).
Summary judgment is therefore warranted if no reasonable jury could find by clear and
convincing evidence that the statements at issue were made with actual malice, and are
substantially false. See Anderson, supra, 477 U.S. at 252 (holding that “the inquiry involved in a
ruling on a motion for summary judgment ... necessarily implicates the substantive evidentiary
standard of proof that would apply at the trial on the merits”). This is “a demanding standard, the
most rigorous burden of proof in civil cases.” Matter of Westchester Cnty. Med. Ctr. on Behalf of
O’Connor, 72 N.Y.2d 517, 534 N.Y.S.2d 886 (1988). In order to meet the standard of “clear and
convincing” evidence, plaintiff must come forward with evidence that establishes a high degree
of probability that the fact has been shown. Chenango Mut. Ins. Co. v. Charles, 235 A.D.2d 667,
(“Stratton”), a securities company that was founded in 1986, and that by 1993 had become the
center of numerous public controversies relating to its corporate securities underwriting and
retail boiler room operations. Beginning in 1993, Andrew Greene, a lawyer with virtually no
legal experience, placed himself into the vortex of Stratton’s controversial operations by (1)
becoming Stratton’s General Counsel, (2) joining the three-member board of directors of
Stratton; (3) joining the board of Steve Madden Ltd. at a time when it was about to have its
initial public offering of securities underwritten by Stratton; (4) becoming head of the Corporate
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Finance Department at Stratton; (5) taking primary responsibility for Stratton’s compliance with
an injunction that the SEC had obtained against Stratton’s infamous retail boiler room practices;
and (6) accepting Stratton’s regulatory designation of him as “control person” for Stratton in a
In hindsight, it’s clear that Stratton was on a pathway to self-destruction. Shortly after
Greene left the company in 1996, it was barred from the securities industry by the National
Association of Securities Dealers. While Greene was there, Stratton failed to comply with the
SEC injunction for which Greene had compliance responsibilities. Its founders, Jordan Belfort
and Daniel Porush, were indicted, arrested and pled guilty to securities fraud crimes in
connection with 14 underwritings that took place while Greene was the head of Corporate
Finance. Many of its employees were indicted, convicted, and/or subject to securities industry
censure.
After Jordan Belfort was released from prison, he wrote two memoirs, The Wolf of Wall
Street, published in 2007, and Catching The Wolf of Wall Street, published in 2009. In both
works, he vividly described Plaintiff’s role in Stratton’s corporate culture, and in connection with
securities law violations. In particular, Belfort described in significant detail the way in which
widespread use of drugs and prostitutes by Stratton employees, including Plaintiff, fostered a
culture of hedonistic lawlessness that anesthetized the many co-conspirators at Stratton from
exercising judgment that might have caused them to withdraw from the criminality that pervaded
In 2007, film producer Warner Brothers acquired the film rights for the unpublished book
The Wolf of Wall Street and entered into agreements with Leonardo DiCaprio and Martin
2
Reference to “SOF” are to the paragraphs in the Statement of Material Facts contained within
Defendants’ Rule 56.1 Statement re-filed with this Memorandum.
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Scorsese to render services as lead actor and director of the Film. Screenwriter Terence Winter
was hired, and began writing the screenplay in July 2007. Winter was not only a professional
writer, he was a lawyer, and he conducted detailed research, including interviews of people
Winter decided to create a character called Andy Cohen who combined elements from
Stratton employees Elliot Loewenstern and Andrew Greene, and an outside CFO named Gary
Kaminsky who had been instrumental in the Swiss money laundering scheme. SOF ¶74. Late in
2012, production company Red Granite decided to change the name of the composite character
from Andrew “Wigwam” Cohen to Nicky “Rugrat” Koskoff. One of the producers of the film
Nobody involved in producing or distributing the Film believed that the Koskoff
character, as portrayed in the Film, was likely to be reasonably attributed to Andrew Greene.
The style of the Film was not that of a documentary. Nicky Koskoff was portrayed as one of the
original Stratton brokers when the firm was founded in the 1980s. Plaintiff was not a broker nor
was he one of the original Stratton brokers. Plaintiff has never been known by the nickname
“Rugrat,” and was only known to Jordan Belfort at Stratton by the nickname “Wigwam.” After
the film was released, several friends of Plaintiff’s believed that the Nicky Koskoff character,
due to his toupee and his glasses, and his status as a lawyer for Stratton, was based upon Andrew
Greene. However, their deposition testimony reluctantly acknowledged that they either did not
believe that the Film accused Andrew Greene of doing the things Plaintiff complains of, or that
Andrew Greene had done the things that the Nicky Koskoff character did. SOF¶88.
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judgment, must demonstrate actual malice in the constitutional sense, which requires either
knowledge by a defendant that the film made a false statement of and concerning Greene, or
reckless disregard by such defendant as to such falsity. Reckless disregard can only be
established if plaintiff produces evidence that such defendant intended to avoid the truth,
evidence that the defendant entertained serious doubts as to the truth of his publication, or
evidence that the defendant acted with a high degree of awareness of a defamatory statement’s
probable falsity. St. Amant v. Thompson, 390 U.S. 727, 31, 88 S.Ct. 1323, 20 L.Ed.2d 262
(1968). Even then, plaintiff must provide specific facts to support a claim of actual malice with
clear and convincing evidence. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505,
91 L.Ed.2d 202 (1986). See Palin v. New York Times Company, 264 F.Supp.3d 527, 536
(S.D.N.Y. 2017).
Union, 466 U.S. 485, 511, 1045 S.Ct. 1949, 80 L.Ed.2d 502 (1984) (“there is a significant
difference between proof of actual malice and mere proof of falsity”); Contemporary Mission,
Inc. v. New York Times Co., 842 F.2d at 621 (accord). Actual malice must be shown as to all
elements of a libel claim, including the “of and concerning” requirement. See Lake Havasu
Estates, Inc. v. Readers Digest Ass’n, Inc., 441 F.Supp. 489, 492-93 (S.D.N.Y. 1977) (private
figure plaintiff had similar name to subject of defendant’s article, summary judgment granted to
defendants because there was no evidence that private figure plaintiff could meet the private
figure standard that they were grossly irresponsible in failing to avoid confusion with plaintiff).
Consequently, Greene is required to provide admissible evidence, as to each defendant, that the
defendant either knew that a reasonable observer would identify, or was subjectively aware that
Greene would probably be identified, as the fictional character Nicky Koskoff. Dworkin v.
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Hustler Magazine, Inc., 867 F.2d 1188, 1194-95 (9th Cir. 1989) (applying NY law) (“If a speaker
knowingly publishes a literally untrue statement without holding the statement out as true, he
may still lack subjective knowledge or recklessness as to the falsification of a statement of fact
required by New York Times [v. Sullivan].”). New Times, Inc. v. Isaacks, 146 S.W.3d 144, 163
(Tex. 2004) (actual malice standard requires court to ask “did the publisher either know or have
reckless disregard for whether the article could reasonably be interpreted as stating actual
facts?”); Restatement (Second) of Torts §564, cmt. f (constitutional actual malice standards
apply to “of and concerning” requirement). Here, there is no evidence that any Defendant
subjectively knew or was aware that the Koskoff character would be identified as Greene.
when it persuaded Warner Brothers to acquire the underlying motion picture rights, and it
assisted in initial stages of development of the Film, and provided the services of Leo DiCaprio.
SOF ¶68. It did not write the screenplay, or direct, or edit the Film. It played no role in
determining the content of any aspect of the character depicted in the motion picture as Nicky
Koskoff. SOF ¶¶101-106. It had no reason to believe that the Film made any false and
defamatory statements of and concerning Plaintiff, and therefore lacked actual malice.
nor produced it. It simply acted as distributor of the Film in the United States and selected other
territories based upon warranties that had been made to it by the production company that the
Film would not violate the rights of third parties. Paramount had no reason to believe that the
Distributors who did not author a publication will ordinarily not be found to have actual
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malice because the essence of the revolution in libel law ushered in by New York Times Co. v.
Sullivan, 376 U.S. 254, 280, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) is that the actual malice
inquiry looks to the defendant’s state of mind at the time of publication: “...the inference of
actual malice must necessarily be drawn solely upon the basis of the information that was
Square Press, Inc., 91 F.3d 1501, 1508 (D.C.Cir.1996) See Zeran v. Am. Online, 129 F.3d 327,
331 (4th Cir. 1997) (Distributor cannot be held liable for defamatory statements without proof
SOF ¶¶107-109. The Film was created as a Martin Scorsese project based upon events seen
from the point of view of Jordan Belfort, and no reasonable person would perceive it as
journalism or a documentary. No attempt was made to have any characters that would
reasonably be understood as a specific Stratton Oakmont employee other than Jordan Belfort and
his father Max Belfort. Joey McFarland, Red Granite’s Vice Chairman, met with Jordan Belfort
on at least five occasions discussing the factual background for the Film’s stories. He also read
news stories and magazine articles corroborating Belfort’s account. He read the book The Wolf
of Wall Street at least twice, and the 2009 sequel Catching the Wolf of Wall Street both before
and after Red Granite acquired rights to it. He spoke to the screenwriter, Terence Winter, who
explained the reasons why Winter had made names for characters inspired by multiple people
who conveyed the atmosphere of Belfort’s financial empire, but who were not characters with a
single real-life analog. McFarland also reinforced his beliefs in the book’s accuracy by
discussing the book with Belfort’s former security consultant Bo Dietl, and discussing the
portion of the Film relating to Steve Madden with Steve Madden, who made no objection to his
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McFarland believed that the portrayals of Andrew Greene in both the books The Wolf of
Wall Street and Catching the Wolf of Wall Street were accurate, and that Andrew Greene was a
participant in, and an enabler of, securities fraud, and participated in the illicit drugs and sex that
Red Granite decided to change the names of many characters in the draft screenplay, and
changed the name of the composite character to be played by the character actor PJ Byrne from
Andrew “Wigwam” Cohen to Nicky “Rugrat” Koskoff. McFarland did not believe that the
Nicky Koskoff character would reasonably be interpreted as Andrew Greene. SOF ¶77-78.
McFarland supervised the vetting process for the Film. He believed that members of the
viewing public would, either by reading the Film’s disclaimer and/or by watching the style and
content of the Film, come to believe that there was no real person who was depicted by Nicky
Koskoff aka Rugrat. He also believed that, even if someone mistakenly believed that Koskoff
was not a fictional character, but instead depicted a real person, such a viewer would think that
The uncontradicted evidence establishes that there is no clear and convincing evidence
that Red Granite had the subjective knowledge or recklessness as to the publication of a false and
defamatory statement of fact, required by the free speech guarantees of the United States
Constitution.
“[R]eckless conduct is not measured by whether a reasonably prudent man would have
published, or would have investigated before publishing. There must be sufficient evidence to
permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his
publication.” St. Amant v. Thompson, supra, 390 U.S. at 731. A publisher cannot subjectively
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know it is conveying a false implication unless, in the first instance, if knows that it is conveying
that implication. Dodds v. Am.Broad. Co., 145 F.3d 1053, 1064 (9th Cir. 1998) (“[A]ll the courts
of appeal that have considered cases involving defamation by implication have imposed a similar
actual intent requirement.”). See Vinas v. Chubb Corp., 499 F.Supp.2d 427, 437 (S.D.N.Y.
2007) (“[F]or such ‘defamation by implication’ claims, plaintiffs typically have to show that
defendants affirmatively intended such implication.”). Red Granite believed that the books’
accurate, and still attempted to avoid referring to real individuals, apart from the Belforts. Telling
that story with changed fictional names and composite characters allowed it to entertain and
inform a public that needs to be better informed about how our securities markets function.
Telling the Belfort story required the selection of event and detail that made composite
characters necessary.
Greene is attempting to second-guess the Film’s creative process. He wants the Court to
apply an “objective” test for actual malice, which is contrary to law. Plaintiff must prove
subjective actual malice. Bose Corp. v. Consumers Union of U.S., Inc., supra, 466 U.S. at 511 n.
30; Howard v. Antilla, 294 F.3d 244, 254 (1st Cir. 2002) (that defendant “should have foreseen”
the interpretation is insufficient); Newton v. National Broadcasting Co., Inc., 930 F.2d 662, 680
(9th Cir. 1990) (same). There is no clear and convincing evidence of “actual malice” by Red
Granite.3
3
No inference of actual malice can be drawn from the failure to interview Greene. Red Granite
did not even believe Koskoff was a portrayal of Greene. They had no reason to contact him, nor
did they have any reason to believe that Greene was a reliable source for factual information.
See Davis v. Costa-Gavras, 654 F.Supp. 653, 657 (S.D.N.Y. 1987) (failure to contact plaintiff
does not give rise to inference of actual malice).
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FALSITY
As a public figure, Plaintiff must prove falsity with convincing clarity. DiBella v.
Hopkins, 403 F.3d 102 (2d Cir. 2005). Plaintiff cannot prove falsity where the underlying
statement is substantially true, i.e., the “gist or substance of the challenged statement” is true.
Chau v. Lewis, 771 F.3d 118, 129 (2d Cir. 2014). Where the published statement has no worse
effect than the literal truth, libel is not proven. Guccione v. Hustler Magazine, 800 F.2d 298, 302
(2d Cir. 1986). The accuracy of the report should be assessed on the publication as a whole, not
isolated portions of it. Law Firm of Daniel P. Foster, P.C. v. Turner Broadcasting Sys., Inc., 844
F.2d 955, 959 (2d Cir. 1988). Plaintiff’s claim of falsity is also subject to the “subsidiary
meaning doctrine,” pursuant to which minor inaccuracies sued upon are not actionable when they
v. Time Warner, Inc., 932 F.Supp. 589, 593 (S.D.N.Y. 1996). Nor can Plaintiff complain of false
statements that add no increment of harm to that caused by non-actionable statements. Id.
Notwithstanding the implausible blanket denials of the Plaintiff, certain facts about
Stratton Oakmont, Andrew Greene, and the Steve Madden money laundering conspiracy are
undeniably true.
Greene spent the three years after law school working as an officer and salesman for his
brother’s California companies, in which Greene sold Ponzi scheme tax shelters. The Ponzi
scheme collapsed after Plaintiff had left the California companies, by which time he was at
Stratton. In 1993, three years after his bar admission, and with virtually no legal experience, he
joined Stratton as its General Counsel, one of its three directors, and was soon appointed head of
Corporate Finance, assigned as supervisor of Stratton’s unsuccessful attempts to comply with the
SEC injunction against its boiler room practices, and designated by Stratton as one of its “control
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During the almost three years that he was there, Stratton engaged in “boxing the stock” in
numerous corporate underwritings supervised by Greene’s department. SOF ¶17. “Boxing the
stock” was an elaborate scheme by which a significant fraction of the company’s stock was
acquired by Stratton insiders prior to the underwriting at a small fraction of the IPO price, and
illegal agreements were made among (1) foreign securities buyers with secretly relaxed resale
requirements, (2) conspiratorial “flippers” who immediately sold their IPO stock back to Stratton
for a small profit, and (3) conspiratorial “rat holes” who held stock for a longer and more
profitable period as secret nominees for Stratton insiders, all supported by a Stratton boiler room
operation to keep the stock price elevated after the IPO. SOF ¶53. From 1993 to 1996, Stratton,
as controlled by Andrew Greene, continued on the illegal path set by its founders Jordan Belfort
During the time that Greene was at Stratton with the responsibility to oversee compliance
with the SEC injunction against its boiler room practices, Stratton failed to comply. SOF ¶22.
One transaction best exemplifies Greene’s lack of business ethics—the IPO of Steve
Madden Ltd. and its illegal escrow agreement calculated to avoid the restrictions on Belfort’s
stock ownership imposed by the NASD as a condition of its approval of the underwriting. In
December, 1993, the initial public offering of Steve Madden Ltd. took place, with Stratton as
lead underwriter. Greene owed fiduciary duties to both Stratton, as its underwriting employee
and General Counsel, and also to Madden Ltd., because he had been appointed to the Board of
Directors of Madden Ltd. Madden Ltd.’s founder, Steven Madden, was a childhood friend of
Stratton’s Daniel Porush, and acted as a secret nominee “rat hole” on numerous initial public
offerings handled by Stratton, funneling a portion of his profits back to Stratton insiders. When
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Stratton sought approval of the NASD in order to underwrite the Madden Ltd. IPO, the NASD
refused unless Stratton insiders, instead of receiving more than two million shares in Madden
Ltd. stock, would receive no greater than 4.9 percent of the outstanding common stock. SOF
¶¶36-45.
Stratton then entered into a conspiracy with Steven Madden to mislead the NASD and
public investors as to Madden Ltd.’s compliance with the 4.9 percent limit. SOF ¶¶37-45. More
than 1 million shares of Madden Ltd. stock were secretly placed into escrow on behalf of Jordan
Belfort in the name of his company, BOCAP, and Greene agreed to act as escrow agent, to
receive a $250,000 escrow agent fee.4 SOF ¶43. After Greene had left Stratton, Steve Madden
and Jordan Belfort in 1996 engaged in a lawsuit over the disposition of the escrowed stock,
eventuating in a settlement between them by which Madden paid Belfort for the stock. While
the dispute was ongoing, in 1996, Greene went to Jordan Belfort and persuaded Belfort to give
him a $250,000 check, the amount of Greene’s escrow agent fee. Belfort wrote the check on his
Two years later, in 1998, when Greene filed his Chapter 7 bankruptcy, he disclosed the
$250,000, not as a taxable escrow agent fee, but as a non-taxable loan from Jordan Belfort’s wife
Nadine. Cox Decl. Ex. 17 at 27. Greene has no evidence of any loan transaction between
Madden was later indicted and pled guilty to money laundering in connection with the
escrowed stock transactions. SOF ¶¶35, 45. In fact, the indictment of Madden identified the
escrow agent on the transaction (Greene’s solely held company, Farmstead Consulting) as an
unindicted co-conspirator. SOF ¶45. So how does Greene attempt to explain the $250,000
4
The escrow agent was Farmstead Consulting, Greene’s solely owned corporation of which he
was the sole employee.
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check that he received? He doesn’t. The reason for the transaction and the circumstances in
which he received a quarter of a million dollars are simply swallowed in Greene’s vast capacity
But Greene also cannot explain why, if he was a paragon of ethical securities practice, he
went right back into business with Jordan Belfort in 1996. After Greene left Stratton, Greene
attempted on Belfort’s behalf to obtain Stratton’s customer list for his new employer, JB Sutton.
That is not how a libel plaintiff claiming to have been falsely accused of complicity in
money laundering meets his burden of proof to show substantial falsity by clear and convincing
evidence.
Greene could not possibly have been unaware of what was happening at Stratton.
However much Greene might claim lack of knowledge of wrongdoing, the moral and legal
culpability of “control persons” such as Greene for Stratton’s misdeeds is codified in §20(a) of
The statute provides “every person who, directly or indirectly, controls any person liable
under any provision of this chapter or of any rule or regulation thereunder shall also be liable
jointly and severally with and to the same extent as such control person to any person to whom
such control person is liable, unless the controlling person acted in good faith and did not
directly or indirectly induce the act or acts constituting the violation of cause of action.”
“Society cannot afford to have individuals wield the power of thousands without
personal responsibility. It cannot afford to let its strongest men be the only men who are
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As for Greene’s knowledge of, and participation in, the illicit drugs and sex lifestyle of
Stratton, that has been confirmed by such unrebutted evidence as Greene’s attendance at
Belfort’s prostitute-filled 1991 Las Vegas bachelor party, his participation in Stratton’s
prostitute-filled due diligence junkets, and his involvement with prostitutes in connection with
his subordinate and former college roommate, Bud Clarke. SOF ¶¶62-63. Greene’s admitted
use of illegal drugs on a social basis with his Stratton co-conspirators Belfort and Porush, SOF
¶¶47, 58-59, 62, 79, established the poor judgment and indifference to law that are the gist and
The Film referred to Koskoff’s arrest for an unstated crime that Plaintiff claims was
either money laundering or drug-related. But the gist and sting of the statement about Koskoff
are not that Koskoff had been arrested, the reputational harm Plaintiff claims derives from the
implication that Koskoff had done a bad act giving rise to the arrest. And given Plaintiff’s
admissions of frequent illegal drug use, his role as principal of an unindicted co-conspirator in
the Madden money laundering indictment, and his involvement as a control person in Stratton’s
pervasive underwriting and boiler room illegality, Plaintiff cannot prove that the gist and sting of
an arrest was not substantially true. See Nichols v. Moore, 396 F. Supp. 2d 783 (E.D. Mich.
2005) (statement that plaintiff was arrested after the Oklahoma City Bombing, when actually he
had only been held as a material witness, is substantially true); Rouch v. Enquirer & News of
Battle Creek, 440 Mich. 238, 266-67, 47 N.W.2d 205 (Mich. 1992) (statement that plaintiff was
charged with sexual assault, when actually he had only been arrested, but not arraigned, is
substantially true).
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PLAINTIFF
As the Court has already noted, claims of “libel by fiction” such as those made by Greene
are “counter-intuitive.” Greene v. Paramount Pictures Corp., 138 F.Supp.3d 226, 234-35
(E.D.N.Y. 2015).
Plaintiff “. . . assert[s] simultaneously that the [Film] is ‘about’ [him] . . . to the extent
that there are similarities between the Plaintiff and the fictional character but ‘could not be
about’ the Plaintiff because, in real life, he or she would never do the scandalous things ascribed
to the character.” Welch v. Penguin Books USA, Inc., No. 21756-90, 1991 NY Misc LEXIS 225
at *6 (Sup. Ct. Kings Cty. Apr. 3, 1991). Consequently, application of the “of and concerning”
element in libel and fiction cases in New York requires Plaintiff to show “that the description of
the fictional character is so closely akin to her that a [viewer], knowing the real person, would
have no difficulty linking the two.” Carter-Clark v. Random House, Inc., 17 A.D.3d 241, 241,
793 N.Y.S.2d 394 (1st Dep’t 2005); Davis v. Costa-Gavras, 654 F.Supp. 653, 655, 658 (S.D.N.Y.
1987). See Batra v. Wolf, No. 0116059/2004, 2008 WL 827906 (Sup. Ct. N.Y. Cty. March 14,
2008) (“[T]he identity of the real and fictional personae must be so complete that the defamatory
material becomes a plausible aspect of the real-life plaintiff or suggestive of the plaintiff in
The record is undisputed that the character named Nicky Koskoff was a fictional
composite inspired by at least three people who worked for or did business with Stratton—Elliot
Loewenstern, a childhood friend of Belfort’s who joined Stratton at the outset as a broker,
Andrew Greene, and Gary Kaminsky, an outside CFO with a horrible hair piece, who was
involved in encouraging Belfort to open Swiss bank accounts and who ultimately was arrested in
Florida on unrelated charges. SOF ¶¶56-57, 74-75. The vast majority of the people who saw the
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film no doubt thought that Nicky Koskoff was a fictional character. For those people who may
have thought that Nicky Koskoff was a real character, there would be no reason for them to think
that there was not an actual person named Nicky Koskoff who was being portrayed. Plaintiff’s
theory is thus reduced to the claim that he was defamed because some people both knew that
Nicky Koskoff was a fictional name, and also somehow “knew” that Koskoff was portraying
Greene, and only Greene. But in order to do that, these people would have to ignore the raucous
black comedy, over-the-top style of the Film, and ignore the fact that Greene, unlike Koskoff,
was not one of the first people hired by Belfort, but only joined the company seven years later.
Such a person would have to ignore the fact that, had Greene actually been arrested as Gary
Kaminsky had been arrested, his post-Stratton career would have been entirely different.
manner that is fatal to that portion of his claim. Plaintiff is able to locate witnesses with whom
he is personally acquainted who testify that they recognize Nicky Koskoff as Andrew Greene.
But when Plaintiff is claiming defamation of a relatively minor character such as Nicky Koskoff,
he has a problem: witnesses have little or no specific recollection of what Koskoff actually did in
the Film, apart from being associated with the many disreputables employed by Stratton. So
Greene’s former colleague Norman Arnoff testified that “probably” the Nicky “Rugrat”
character resembled Andrew Greene more than any other person that was involved at Stratton
Oakmont, though he understood that there were attributes of other people that had been
incorporated in the character. Arnoff Dep. 62:3-20. Stacy Rettinger, Greene’s fiancée,
remembered seeing the character Nicky Koskoff in the film, knew that he was Jordan Belfort’s
sidekick, but didn’t remember anything about the action of what the character did. Rettinger
Dep. 29:3-14. She didn’t know whether Koskoff was a dishonest person, and it did not appear to
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her that the character did anything illegal. Rettinger Dep. 29:3-14; 31:20-32:9. Mark Corrao,
designated by Plaintiff as a witness, claimed that he recognized Andrew Greene by virtue of the
wig, but did not recall that the Film depicted the Rugrat character as committing any crimes,
being arrested for any crimes, nor did the Film lower his opinion of Greene. Corrao Dep. 27:7-
25. Howard Gelfand, who worked at Stratton, testified that when he saw the Film, he did not
think that Andrew Greene had actually engaged in the acts performed by the Koskoff character.
When asked to characterize the portrayal of Rugrat in the Film, he said “I think that it was a bit
far-fetched, as my previous testimony said. I don’t think he was the drug monger, prostitution
monger that most of the other guys were.” Gelfand Dep. 44:20-45:6. Similarly, Norman
Kaufman, an attorney who worked with Greene when Greene was at Stratton, testified that, when
he saw the Film, it did not lower his opinion of Andrew Greene because he did not believe that
Greene had done the things that the Koskoff character did. Ross Portenoy testified that the
character that he thought was Andy Greene “was not the Andy Greene that I knew that worked at
The only people that Plaintiff can find who will identify Nicky Koskoff as Andrew
Greene are people who, when they saw the Film, did not believe that Andrew Greene did any of
the bad things that Nicky Koskoff did. There is no evidence that anyone thought that the
portrayal of Nicky Koskoff was “of and concerning” Andrew Greene in the sense that they
believed both that (1) Koskoff was a portrayal of Andrew Greene, and (2) Andrew Greene
The burden of demonstrating “of and concerning” “. . . is not a light one.” Carlucci v.
Poughkeepsie Newspapers, Inc., 57 N.Y.2d 883, 885, 456 N.Y.S.2d 44 (1982). Even in cases
where specific and unique characteristics of a fictional character match a plaintiff, courts have
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found the “of and concerning” requirement not met. See Springer v. Viking Press, 90 A.D.2d,
316, 319, 457 NYS 2d 246 (1st Dept. 1982). “[F]or a defamatory statement or statements made
about a character in a fictional work to be actionable the description of the fictional character
must be so closely akin to the real person claiming to be defamed that a [person who viewed the
purportedly defamatory work] knowing the real person, would have no difficulty linking the two.
at 242. The similarities have to be specific and unique. See Springer, 90 AD 2d at 320
(“superficial similarities are insufficient as is a common first name.”) In Springer, the court
found that the novel was not “of and concerning” the plaintiff even though the fictional character
used the same first name and there was significant similarity of “physical height, weight and
build, incidental grooming habits and recreational activities” between plaintiff and a character
portrayed as a prostitute. In Carter-Clark v. Random House, Inc., supra, 196 Misc.2d 1011,
1012-15, 768 N.Y.S.2d 290 (Sup. Ct. N.Y. Cty. 2003), the plaintiff librarian’s claim was
dismissed despite declarations from persons acquainted with her claiming to recognize a
portrayal of plaintiff where plaintiff had some physical similarities to a character appearing in a
roman-a-clef inspired by Bill Clinton, and plaintiff, like the character in the novel, worked at a
library in Harlem visited by a southern governor running for president. See Randall v. Demille,
No. 20923/1999, 1992 WL 12664916 (Sup. Ct. N.Y. Cty. September 23, 1992) (dismissing claim
where plaintiff and character were both redheads, accomplished painters of mansions on Long
Island’s Gold Coast, raised in similar mansions, “avid horsewomen” known for riding white
horses, and belonged to a Gold Coast organization called the Gazebo Society).
Furthermore, the tone and content of the Film undermine any claim that subsidiary
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characters such as Nicky Koskoff could be reasonably intended to portray any real person. The
Film is not by any stretch a documentary. It uses dark comedy, tells the highly subjective story
of an individual who was shown to be using large quantities of drugs, and tells his story in a way
that emphasizes the subjective nature of his perspective, such as by showing Belfort in a scene in
which his memory of the car he drove changed from white to red. Viewers watching films such
as this understand that films that purport to be based upon a true story often “utilize simulated
dialogue, composite characters, and a telescoping of events occurring over a period into a
composite scene or scenes.” Davis v. Costa-Gavras, supra, 654 F.Supp. at 658. Reasonable
viewers of the Film could not understand that the filmmakers were saying that everything
. . induces an evil opinion of one in the minds of right-thinking persons, and . . . deprives one of .
. . confidence and friendly intercourse in society.” Karedes v. Ackerley Grp, Inc., 423 F.3d 107,
113 (2d Cir. 2005). It is not enough to demonstrate that publication is annoying or unflattering.
“Not all (or even most) maligning remarks can be considered defamatory.” Chau v. Lewis, 771
F.3d 118, 127. In Chau, for example, a court found that it was not defamatory to say of a money
manager that he “would rather have $50 billion in crappy [collateralized debt obligations] than
none at all, as he was paid mostly on volume,” and that he wanted to “short” anything that the
manager was buying.” That is because “[t]o be actionable . . . the statement must do more than
cause discomfort or affront; the statement is measured not by the sensitivities of the maligned,
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but the critique of reasonable minds that would think the speech attributes odious or despicable
characterizations to its subject.” Id. Plaintiff must not only show that the statements are
defamatory, he is alleging a subset of defamation called libel per se, pursuant to which the
defamatory statement must be “(1) a statement charging an individual with a serious crime; (2) a
statement that tends to injure another in his or her trade, business, or profession; (3) a statement
that claims an individual has a ‘loathsome disease;’ or (4) a statement imputing unchastity to a
woman.” Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, 813 F.Supp.2d 489,
550 (S.D.N.Y. 2011) (quoting Liberman v. Gelstein, 80 N.Y.2d 429, 435, 590 N.Y.S.2d 857
(1992). Libel per se requires that a statement be libelous on its face and without regard to
extrinsic facts. Pontarelli v. Shapero, 231 A.D.2d 407, 647 N.Y.S.2d 185 (1st Dep’t 1996).
Out of Greene’s 33 allegations of defamation, only four invoke “. . . the exceptional case
of a per se defamatory statement . . .” Cortes v. Twenty-First Century Fox America, Inc., 2018
constitute libel per se are numbers 19 (launching of Stratton IPOs was illegal), 24 (involvement
in money laundering), 32 (use of illegal drugs such as cocaine), and 33 (arrest, impliedly for
either money laundering or drugs). The rest of the allegations involve legal conduct between
consenting adults that portrays Koskoff as vulgar or foolish or surrounded by vulgar, foolish,
defamatory only when accompanied by some aggravating factor, such as the suggestion that the
conduct is habitual, or that the person is “a drunk.” Hayes v. Sweeney, 961 F.Supp. 467, 481
(W.D.N.Y. 1997); Alvarado v. K-III Magazine Corp., 203 A.D.2d 135, 136-37, 610 N.Y.S.2d
5
Plaintiff’s allegation 27 alleges that Koskoff is depicted as engaged in “sexual harassment” of a
stewardess. However, in the Film, the Koskoff character is trying to extricate the flight attendant
from Belfort’s unwanted advances. See Film, at 1:40:27.
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241, 243 (1st Dep’t 1994); Morrison v. New Syndicate Co., 247 A.D. 397, 401, 287 N.Y.S. 451
The stringent requirements of libel per se eliminate from the case the many objections
smoking, monkeys in a chaotic boardroom, brokers having their heads shaved, etc. The only
claims that meet this high standard are those that relate to illegal securities practices, illegal drug
use, and prostitution. Those are subject to summary judgment because they are substantially
true, because they are not of and concerning Plaintiff, and because there is no convincingly clear
that is not genuinely in dispute. In this action, the only two elements of special damages alleged
by Plaintiff—the termination of his employment at Advantage Hyundai, and the end of his
engagement to Ms. Rettinger—cannot genuinely be claimed to be the result of the Film. Plaintiff
was fired for attendance reasons unrelated to the Film, Twomey Affidavit, ¶¶2-7. And the Film
was not a cause of the decision by Ms. Rettinger to end her relationship with Greene. Rettinger
Depo. 42:6-44:22. Plaintiff has no evidence of special damage caused by the Film.
X. CONCLUSION
Our Constitution’s commitment to free speech is tested every time those who speak on
public issues are haled into court by a public figure. In order for filmmakers to create works
inspired by real events, the “breathing space” for speech that New York Times v. Sullivan found
in its insistence upon a subjective actual malice test is essential. Greene cannot meet the
daunting burden that our law imposes on public figure libel plaintiffs. Judgment should be
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and
LOUIS P. PETRICH
VINCENT COX
LEOPOLD, PETRICH & SMITH, P.C.
Attorneys for Defendants
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CERTIFICATE OF SERVICE
I hereby certify that on February 5, 2018, the foregoing document was served in
accordance with the Federal Rules of Civil Procedure, and/or the Eastern District’s Local Rules
for service via CM/ECF (except for the physical DVD exhibit, which was served by U.S. Mail)
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