course of thirty years he built his business to a book a business of about six hundred fifty clients he's still in virginia he's always maintaining his license to sell insurance and is seeking basically to get it back his is his book a business he collected the client information confidential whether those were taken from him as well he have the hard copies and provided the hard copy to the defense is just part of the discovery litigation has always maintained he has his own  are all right so maybe i understand that computer databases are more convenient to work with but in what sense is he denied access to th work product of his because if he converted then information to an electronic database which was necessary for his business he began to coordinate all of his well the company that maintains the data isn't him you know it's the other company right and they were instructed by interactive to after he was no longer affiliated with interactive financial they were instructed to terminate his access write the company red tail databases like a storage company right number i am i right that at the time he at the time his affiliation with interactive financial ends in the wake of these allegations of a ponzi scheme and all the rest of it interactive financial says to this maintainer of the database redtail terminate his access don't let you know change the password how do they do it you know terminate his taxes that's my understanding of what happened which is why this whole lawsuit came about right there is as one of one of the main reasons you know right so and then the other thing you know the district judge grants summary judgment with respect to the particular items on the database that deal with financial services the investment same information for the securities clients and these clients all the ten also have insurance products but we have this as you see regulation s p in the district court read that as preventing actually is telling interactive going to key is no longer entitle to have access to this red tail database because he's not anymore feel like he's now if he's just like a third party out there in the world who's not affiliated with that's in the final rule privacy of consumer financial permission probably going to by the f c c a comment to that specifically excludes insurance insurance related investments and that is precisely the kind of information that we will stevens have been collecting but the regulation s p prevents a registered investment advisor from disclosing any non public first of all information about a consumer to a nonaffiliated third party and after  the defendants ninety percent of the client companies are from a should be collected no man that's why i asked you about the hard copies because the registered investment advisor isn't allowed to give this database to him under a regulation s p and they don't know whether that hurts him and you know how much money would cost him to go to a different database company to translate the hard copies again into a computer record et the fact is that the there is no disclosure because you can make i if he had no right to take his access away from the retail database anymore than they had the right to actually physically go into his office and take his hard copy files well i mean i mean even if the clients and trusted him with the current confidential information we're talking about what the interactive financial  company can do with this data and to take the data and to give it to a nonaffiliated third party is what the regulation addresses as i read the regulation it doesn't care who generated the data it doesn't care who owned it it cares about whether you're an affiliated party or you're not and he's not anymore after he's been after his relationship ends with this company if i missed a step back when you're under the the business model that i think he had with this independent advisory representatives was one where you really had about there was forty representatives you had over forty different filing systems either faith had its own probably system it didn't even rely you look at the case law those cases involve the transfer of information to say i'm not affiliated party who never had the right to the information again with all of the gave that information to leland stevens he already had the customer's consent to have that information just because he became nonaffiliated person under regular speed that doesn't mean that there he didn't from reg s p just because they may also have securities investments that doesn't mean that he didn't have the right to have that information as an insurance agent all the tin maintained that the property at issue in this case is information on the red tail database i f a as the investment advisor had a contract with red tail technologies to provide database management services mr stevens was able to use the redtail database because he received codes that were unique to the i f a red tail relationship there are two categories of information that are on the database there's i think line information and there's not i  financial institutions to protect information about their clients the securities and exchange commission and two years later in two thousand and one passed regulation espied which as a default requires that a financial institution that's regulated by the data came to be white why isn't it a little artificial if he actually has all of this data in hardcopy well the there are two issues number one to the next financial case which is a case brought by the f c c it specifically states that who generated the information who has the relationship with the clients is not the issue the issue is whether or not the firm can disclose nonpublic personal information about clients the issue about him maintaining hard copies  maintained hard copies when he left that's not the issue that's before this court to show us before this court is whether i have faith was permitted to disclose that information on the dead of base to stevens and the answer is that he wasn't that it wasn't says if i remember simply by issuing an instruction to red tail to terminate his access correct and that's also consistent with the compliance manual that mr stevens signed the compliance manual states which reflected and i face the investment client information with insurance certainly so in addition to the ifi client information there were there were also there were there was a category of the comingled there was i if a client had also had insurance and then he also put not i if a client so that was dealt with by the jury but the comingled cases he talks about the regular speed somehow having an exception for clients that also had insurance that's not correct regular speed doesn't apply to insurance clients because the f c c doesn't regulate insurance companies gramm leach slot bliley require the states which do regulate insurance companies to pass regulations that govern insurance information so insurance is covered it's just not covered by regulation as if we had a situation where someone who was a independent contractors mr stevens was as opposed to a employee was able to to get that information in a sense we would have regulatory chaos we would have financial institutions unable to convey to their clients what information is going to be protected and what's not  protected if we if i if a which has employees and also has independent contractors if an employee leaves the information is protected but if i'm from if a independent contractor leaves the information is not protected there would be regulatory chaos but even if that were the case that would be something that i a faith would have to disclose in its privacy policy one of the requirements under reg s p pursuant to graham which bliley is that to the extent that a financial institution seeks to share information with or not affiliate it has to disclose those categories of information to the clients well it also has to jump through several through changes that have to go back to the the clients and allow disclose right right we have a rule that says we don't disclose that we had some rule that said we're going to disclose insurance information we're going to disclose to independent contractors i f a would have to have an it's privacy policy this is what we disclose and clients this is how you opt out of that disclosure and this is then it has to have a step by step process that explains the mechanics of opting out to make sure that to the extent that a client doesn't want anything disclose it doesn't get disclosed but you never reach that point because you've got the simpler policy correct we don't we don't share nonpublic personal information about clients and i guess the other critical move is that you take the position that once somebody is not working for you anymore you know affiliated with you anymore they are a nonaffiliated third party that's correct it doesn't matter when the information if they were affiliated when they put the information system correct and that's the definition under regulation espied because once you're not controlled by shared control etc with the financial institution you are not an affiliate and one of the interesting cases that we see that the f c c brought is the santos case which came out in march of this year in that case literally involved a representative who formally serviced the client accounts that representative was out of the business and the current representative of the firm shared information just to help obtain useful ideas on how to manage those accounts the s e c said no we don't care that that representative prior we service those clients he's not affiliated and you can't share that information a question about the jury instruction there was this back and forth about the demand correct element for a conversion case which we didn't talk about in the main argument but maybe we'll are there any title seven case it gives a a window during which maybe an amicable resolution can take place before it degenerates into litigation and that leads me to your first question which was the run are are a number of cases that have been dismissed for failure to make and to make a demand a series of cases out there and so the question is why would those cases exist were a complaint to satisfy the demand element now the district court as i recall in the supplemental instruction when he said a lawsuit isn't going to do it also reminded the jury that there's a futility exception right to the demand requirement correct and that's that's one of mr stevens arguments that well to the extent that i needed and make a demand it would have been futile so there's an exception will that that's not relevant to this appeal because yes that was in the original jury instruction and the been in judge can only reminded the jury of that the the one case that mr stevens relies upon is in the neil automotive case and that was a memorandum order it was not dealing with whether a complaint satisfied the demand element is an issue in the case in fact in that memorandum order and also in another published decision in the case it discussed twice that there was a pre litigation demand in that case that case also denied the plaintiff for a motion for judgment on the pleadings so there was not any in depth analysis other than just to make the statement that case the mcneil automotive case relied on the par versus rock for the par versus rock for though is not a conversion case it did mention the word conversion in the last paragraph of the case but that case was a post great depression case that dealt with a bank in receivership and the receiver made a distribution to m that was a customer when it should have made a distribution to an individual who was a customer and that case dealt with the interest when interest begins to be calculated the municipality has to pay at the at the very end of the case it said well there the the earliest it could have been calculated is when the demand was made and we see this when the complaint was so this one which occupied interest there was no in depth analysis it's important in reviewing the case law into reg s p to be aware that the issue is not with the representative or the entity that they were presented to us with it is the issues with the disclosure that information to third parties that never had the right to the information to begin with but actually mr rosenberg is saying that's not the case at the f c c is very focused on who has the information and to whom interest whether it's an insider an outsider because consumers have this right to opt out of disclosures there are all sorts of rights that can't be administered if it's read the way you're talking about it well mr rosenberg departed and did not have any rights to that information which is very different than the situation that leland stevens was in again he collected he alone collected the information for all the clients i think didn't collect the confidential information for a single client so the logic of your position news that investment of a financial advisor needs to figure out who collected each piece of information in its system and permit disclosure to the collector or even if the collector has long since left and gone on to work for three different companies or has you know went up and federal prison or  otherwise just not there anymore because that doesn't look like but as he says to me and this is where the confusion is the i o c has the right to a system of information to keep it and keep it confidential or debate someone on red tail or tail i mean i feel we had five employees they have forty independent advisors each have responsibility for their own systems and i think what a fundamentally gets down to is that just as leo stevens had the right to maintain the confiden l information in the hard copy files he had that he had collected as an insurance agent just because information became electronic that doesn't mean that somehow he lost rights to that information i mean i have had no rights to deny him access to the redtail database any more than they have the rights to go into virginia and take in the whole you know they were the ones who had the contract with red tail he didn't have a separate but you know he had a he had a separate contravene which i he actually intervention agreement with  we just had to deny him access to the i f a files they had no responsibility for his hard copy files or his files he had as as as and as an independent insurance representative of the company that actually had you wouldn't brought this lawsuit so he wants a transfer of information so to speak just to avoid the word disclosure to happen and so that is in fact what the case is about but will basically what