Lawyers Seek to Have SSB Tapes ExcludedLawyers Seek to Have SSB Tapes Excluded

David A. Gaffen

Taped recordings of conversations in one of Salomon Smith Barney's Atlanta offices have become important evidence in various suits by WorldCom employees against the brokerage firm, as well as by two former brokers who sued Smith Barney. Now, one lawyer in the WorldCom litigation wants them excluded.

Tew Cardenas, a Miami law firm, has filed to have the tapes excluded from evidence because they were recorded without both parties' knowledge. While Georgia, where the calls originated, requires only one party's consent, some of the states where clients live require two-party consent. “We believe it's a violation,” says Brett Traband of Tew Cardenas. The firm represents a Florida investor with a $5 million claim against Smith Barney and former broker Phil Spartis.

Jeff Liddle of Liddle & Robinson, who represents fired brokers Spartis and Amy Elias, says the tapes should be included. He contends the evidence on the tapes will exonerate his clients and hurt Traband's case. The motion to exclude the tapes was postponed in August.

The tapes first came to light during the investigation of claims filed by dozens of WorldCom employee/shareholders against Smith Barney and several brokers, including Spartis and Elias, who have countersued Smith Barney. The NYSE has been investigating activities in the Atlanta office.

Some brokers, including Spartis, were aware of the taping system. Not all the lines in the office were recorded, according to Traband. Some, but not all the tapes provided to Registered Rep., include intermittent beeps, an indication that the call is being taped. That's irrelevant, says Traband, because a beep alone does not equal consent. Furthermore, there are no “This call may be recorded” messages on the calls.