On appeal from the Superior Court, Chancery Division, Middlesex County.
Petrella, Dreier and Ashbey. The opinion of the court was delivered by Ashbey, J.A.D.
On July 2, 1985, the State of New Jersey and James McLelland Smith, Chief of the Bureau of Securities, brought an action seeking, inter alia, injunctive relief and the appointment of a receiver pursuant to the New Jersey Uniform Securities Law, N.J.S.A. 49:3-47 et seq., against defendants Kobrin Securities, Inc. (KSI) and the following individual defendants: Barrett R. Kobrin (B. Kobrin), president, director and chief executive officer of KSI; Richard L. Kobrin (R. Kobrin), secretary and agent of KSI; Warren Sandy, chief financial officer and compliance officer of KSI; Armand DeAngelis, agent and vice president of KSI; Robert R. Fitzsimmons, agent and trader of KSI; Lawrence Repace, agent of KSI; Arden Brown, vice president, secretary and shareholder of KSI from August of 1981 to March of 1984; Leonard Berman, compliance officer and a financial principle of KSI from January of 1983 to March of 1984; and Peter Calcutta, agent and trader of KSI.
On August 1, 1985, Judge Skillman preliminarily enjoined KSI, B. Kobrin, and DeAngelis from engaging in the securities business in this State. Plaintiffs' application for a preliminary injunction against defendants Sandy, R. Kobrin, Fitzsimmons, Repace, Brown, Berman and Calcutta was denied. Because of the appointment of a trustee in bankruptcy (In the Matter of
Kobrin Securities, Inc., Case No. 85-03889 (D.N.J.)), plaintiffs' application seeking the appointment of a receiver for KSI was also denied. In addition, plaintiffs' application to freeze the assets of B. Kobrin and DeAngelis was denied. On September 10, 1985, Judge Skillman reconsidered and ordered the freezing of DeAngelis' assets and authorized the taking of his deposition.*fn1 On October 30, 1985, DeAngelis asserted his privilege against self-incrimination at his deposition in response to questions concerning his assets. The State moved to compel DeAngelis to provide answers, claiming that he had waived his privilege. On March 14, 1986, Judge Bachman ruled that DeAngelis had waived his Fifth Amendment privilege. In a published opinion, we held that DeAngelis' duty to answer deposition questions should be measured by the extent of his prior voluntary disclosures. State v. Kobrin Securities, Inc., 213 N.J. Super. 161 (App.Div.1986).
On April 16, 1987 a State Grand Jury returned indictments against DeAngelis, B. Kobrin and KSI, asserting twenty-one counts, varying as to each defendant, concerning the unlawful offer, sale or purchase of securities and the misapplication of entrusted property.
Following a case conference, Judge Bachman ordered the within civil proceeding placed on the inactive list as to DeAngelis and B. Kobrin on the grounds that the only way defendants could defend themselves in the civil action would be by waiving their Fifth Amendment privilege.*fn2 Cross motions were filed and on June 19, 1987, the judge ruled that the case was stayed as to all defendants but that the State had leave to move "setting forth how they intend to proceed with this matter as to each defendant." On leave granted, the State appeals from the ensuing June 30, 1987 order and we affirm.
The State contends that the trial court abused its discretion, asserting that defendants have no constitutional right to a stay of the civil action pending a related criminal action, and, that the stay frustrates the purpose of N.J.S.A. 49:3-47 et seq. (the Uniform Securities Law). In particular, the State asserts prejudice to the public because (1) the memories of witnesses will fade; (2) money the defendants allegedly fraudulently obtained will be dissipated; (3) defendants not currently enjoined from engaging in the securities business in New Jersey continue to so engage; and (4) resolution of the pending criminal proceedings will have little effect on the defendants' assertion of their Fifth Amendment rights.
Defendants B. Kobrin and DeAngelis counter by claiming that (1) to proceed in one forum at a time is most efficient; (2) under the trial court's order, the State may move to sever the case and proceed against certain defendants individually; (3) any delay was caused by the State;*fn3 and finally (4) an appeals court should be deferential to the trial court's discretion.
Other defendants assert that discovery vital to the defense of each is hampered by the lack of available testimony from B. Kobrin and DeAngelis and that each defense depends on defendant's ability to establish that defendant is secondarily liable, if at all, for the acts of co-defendants, particularly B. Kobrin and DeAngelis. Moreover, a trial without these two defendants increases the probability that other defendants will be burdened with adverse judgments that should properly be borne by B. ...