1 00:00:02,080 --> 00:00:05,000 Speaker 1: Welcome to the Bloomberg Law Show. I'm June Grosso. Ahead 2 00:00:05,000 --> 00:00:09,719 Speaker 1: in this hour, When do campus protesters lose First Amendment protections? 3 00:00:10,000 --> 00:00:13,360 Speaker 1: Audio tapes and testimony from a former White House aid 4 00:00:13,560 --> 00:00:16,479 Speaker 1: In the second week of Trump's hush money trial, Elon 5 00:00:16,640 --> 00:00:19,960 Speaker 1: Musk's Twitter sitter case turned down by the Supreme Court, 6 00:00:20,280 --> 00:00:24,840 Speaker 1: and billionaire Binance founder Shang Panjao will be the richest 7 00:00:24,880 --> 00:00:40,600 Speaker 1: person ever to do time in a federal prison. Demonstrations 8 00:00:40,600 --> 00:00:44,440 Speaker 1: against the Israel Hamas war have wreaked havoc on college 9 00:00:44,520 --> 00:00:48,800 Speaker 1: campuses across the country, escalating in recent weeks as pro 10 00:00:48,840 --> 00:00:54,480 Speaker 1: Palestinian demonstrators refuse to remove encampments and administrators turned to 11 00:00:54,520 --> 00:00:59,080 Speaker 1: police to clear them by force, often resulting in violent clashes. 12 00:01:00,040 --> 00:01:02,920 Speaker 2: I kinda Gail Gibson, the police captain for the University 13 00:01:02,960 --> 00:01:04,080 Speaker 2: of Cowboy of other at. 14 00:01:04,760 --> 00:01:06,759 Speaker 3: And your right player has to be at my momost 15 00:01:07,200 --> 00:01:10,480 Speaker 3: break ups, and you do not do so, you may 16 00:01:10,520 --> 00:01:13,000 Speaker 3: be arrested or subject to other prospections. 17 00:01:13,440 --> 00:01:17,920 Speaker 1: At UCLA's campus in Los Angeles on Thursday, police warned 18 00:01:17,920 --> 00:01:21,720 Speaker 1: protesters for hours over loud speakers that there would be 19 00:01:21,840 --> 00:01:25,440 Speaker 1: arrests if they didn't disperse, and in the pre dawn hours, 20 00:01:25,480 --> 00:01:29,640 Speaker 1: police in riot gear confronted demonstrators in helmets and gas 21 00:01:29,720 --> 00:01:34,440 Speaker 1: masks and arrested two hundred protesters. Similar chaotic scenes are 22 00:01:34,480 --> 00:01:38,480 Speaker 1: playing out at colleges nationwide. From the White House, President 23 00:01:38,560 --> 00:01:42,440 Speaker 1: Joe Biden warned against violence and said the protests put 24 00:01:42,480 --> 00:01:47,120 Speaker 1: to the test two fundamental American principles. The first is 25 00:01:47,160 --> 00:01:50,400 Speaker 1: the right to free speech and for people to peacefully 26 00:01:50,400 --> 00:01:54,400 Speaker 1: assemble and make their voices heard. The second is the 27 00:01:54,480 --> 00:01:55,160 Speaker 1: rule of law. 28 00:01:56,240 --> 00:01:57,560 Speaker 2: Both must be upheld. 29 00:01:58,200 --> 00:02:02,240 Speaker 1: The charge situation sp like the difficulty of balancing the 30 00:02:02,360 --> 00:02:05,000 Speaker 1: right to free speech with the need to provide a 31 00:02:05,040 --> 00:02:08,920 Speaker 1: space where students feel safe joining me is constitutional law 32 00:02:08,960 --> 00:02:12,720 Speaker 1: scholar Michael Dorf, a professor at Cornell Law School, explain 33 00:02:12,760 --> 00:02:16,960 Speaker 1: what the First Amendment protects in the context of these demonstrations. 34 00:02:17,240 --> 00:02:23,640 Speaker 3: The First Amendment protects speech and other expressive activity, primarily 35 00:02:23,919 --> 00:02:29,560 Speaker 3: against government interference or where it's voluntarily undertaken, private university 36 00:02:29,639 --> 00:02:34,800 Speaker 3: interference that is based on the content of the speech. Right. 37 00:02:34,840 --> 00:02:38,920 Speaker 3: So the critical distinction is between what are sometimes called time, 38 00:02:38,960 --> 00:02:42,919 Speaker 3: place and manner restrictions. Right, you can have your rally 39 00:02:43,080 --> 00:02:45,360 Speaker 3: in this place, but not that place, at this time, 40 00:02:45,360 --> 00:02:49,760 Speaker 3: but not that time without amplification, except under certain circumstances. 41 00:02:49,800 --> 00:02:53,000 Speaker 3: Those are about how you are making your point, and 42 00:02:53,160 --> 00:02:57,960 Speaker 3: generally the government has considerable leeway to restrict that so 43 00:02:58,080 --> 00:03:02,359 Speaker 3: long as it does so reasonably. Orsu content based restrictions. 44 00:03:02,400 --> 00:03:05,680 Speaker 3: You can't have a rally for this side, but you 45 00:03:05,760 --> 00:03:07,840 Speaker 3: can have it for the other side, right, And so 46 00:03:08,000 --> 00:03:12,040 Speaker 3: that's the sort of basic principle that's operating here. The 47 00:03:12,080 --> 00:03:17,200 Speaker 3: government can restrict speech, but not based on its content, 48 00:03:17,520 --> 00:03:19,760 Speaker 3: and when it does so, it has to do so reasonably, 49 00:03:20,200 --> 00:03:24,840 Speaker 3: meaning leave open adequate alternative channels of communication and so forth. 50 00:03:25,120 --> 00:03:28,480 Speaker 1: Let me give you an example. An anti semitic chant. 51 00:03:29,040 --> 00:03:31,280 Speaker 1: Would that be protected under the First Amendment? 52 00:03:31,760 --> 00:03:33,680 Speaker 3: Strange as it may sound, the answer to that question 53 00:03:33,760 --> 00:03:38,440 Speaker 3: is yes. In most constitutional democracies the answer would be no. 54 00:03:39,120 --> 00:03:42,280 Speaker 3: But in the United States, what is sometimes called hate 55 00:03:42,280 --> 00:03:47,240 Speaker 3: speech is not unprotected in virtue of the fact that 56 00:03:47,320 --> 00:03:50,400 Speaker 3: it is hate speech. The leading case is a case 57 00:03:50,400 --> 00:03:53,360 Speaker 3: from the US Supreme Court in nineteen ninety two called 58 00:03:53,560 --> 00:03:57,800 Speaker 3: rav against City of Saint Paul, which said that the 59 00:03:57,840 --> 00:04:01,160 Speaker 3: First Amendment does not include an exception for hate speech. Now, 60 00:04:01,240 --> 00:04:05,040 Speaker 3: I should qualify that by saying that an anti Semitic 61 00:04:05,160 --> 00:04:11,440 Speaker 3: chant under certain circumstances, could be proscribable harassment. So if 62 00:04:11,480 --> 00:04:14,760 Speaker 3: you think about racial or sexual harassment at the workplace, 63 00:04:15,120 --> 00:04:18,039 Speaker 3: which is forbidden by Title seven of the nineteen sixty 64 00:04:18,040 --> 00:04:21,360 Speaker 3: four Civil Rights Act, or at a federally funded college 65 00:04:21,400 --> 00:04:24,080 Speaker 3: or university, which means just about every college and university 66 00:04:24,080 --> 00:04:28,800 Speaker 3: in the country, racial harassment is prescribed if a college 67 00:04:28,920 --> 00:04:31,400 Speaker 3: university takes federal funds. It's just what all of them do. 68 00:04:32,160 --> 00:04:36,159 Speaker 3: They're not permitted to tolerate racial harassment. And Department of 69 00:04:36,279 --> 00:04:42,239 Speaker 3: Education guidelines define anti semitism, Islamophobia, and various other forms 70 00:04:42,240 --> 00:04:44,880 Speaker 3: of hatred that you might think correlate with religion but 71 00:04:45,000 --> 00:04:48,080 Speaker 3: have some sort of ethnic and therefore racial component. It 72 00:04:48,120 --> 00:04:53,080 Speaker 3: defines those as covered by Title six. So if the 73 00:04:53,760 --> 00:04:57,680 Speaker 3: chant rises to the level of harassment, then it is 74 00:04:58,080 --> 00:05:00,960 Speaker 3: forbidden by Title six. In the universe, city is not 75 00:05:01,000 --> 00:05:05,479 Speaker 3: only permitted, but obligated to stop it. And now the 76 00:05:05,560 --> 00:05:10,320 Speaker 3: question that naturally raises is does the First Amendment contain 77 00:05:10,400 --> 00:05:15,440 Speaker 3: an exception for harassment? The Supreme Court has never decided 78 00:05:15,520 --> 00:05:18,599 Speaker 3: that question. Lower courts have assumed that the answer to 79 00:05:18,640 --> 00:05:21,799 Speaker 3: that is yes, and I think that is the correct answer. 80 00:05:21,880 --> 00:05:25,400 Speaker 3: That is to say that what is defined as harassment, 81 00:05:25,400 --> 00:05:28,599 Speaker 3: which is sort of creating a hostile environment based on 82 00:05:29,080 --> 00:05:32,839 Speaker 3: race or sex and so forth, is proscribable. That is 83 00:05:32,880 --> 00:05:35,200 Speaker 3: to say, the First Moment doesn't protect that, And you 84 00:05:35,240 --> 00:05:37,880 Speaker 3: have to ask, well, what's the reason for that. Why 85 00:05:38,040 --> 00:05:40,640 Speaker 3: is it that if there is no exception to the 86 00:05:40,640 --> 00:05:42,520 Speaker 3: First Moment for hate speech, why is it that the 87 00:05:42,560 --> 00:05:46,760 Speaker 3: government can forbid harassment that takes the form of hate speech. 88 00:05:47,160 --> 00:05:51,040 Speaker 3: The answer to that, I think is that the government 89 00:05:51,160 --> 00:05:57,440 Speaker 3: can't forbid harassment generally where harassment consists simply of saying 90 00:05:57,440 --> 00:06:02,160 Speaker 3: offensive things, but it can do so when it's targeted 91 00:06:02,720 --> 00:06:05,560 Speaker 3: in circumstances where someone can't just sort of look the 92 00:06:05,640 --> 00:06:09,719 Speaker 3: other way. So if a neo Nazi group or white 93 00:06:09,720 --> 00:06:14,600 Speaker 3: supremacists want to have a march through Charlottesville, for example, 94 00:06:14,880 --> 00:06:17,520 Speaker 3: they're protected by the First Amendment in doing so. But 95 00:06:18,000 --> 00:06:20,880 Speaker 3: if they want to do that at the workplace of 96 00:06:21,240 --> 00:06:25,560 Speaker 3: particular individuals, then those people are a kind of captive 97 00:06:25,600 --> 00:06:30,040 Speaker 3: audience at work. And the crucial question, then, I think, 98 00:06:30,120 --> 00:06:34,400 Speaker 3: for current purposes, is to what extent is a college 99 00:06:34,440 --> 00:06:37,960 Speaker 3: or university campus more like a workplace where there's a 100 00:06:38,040 --> 00:06:42,880 Speaker 3: kind of captive audience rationale for restricting what would otherwise 101 00:06:42,920 --> 00:06:48,920 Speaker 3: be offensive. But first protected speech versus more like just 102 00:06:49,080 --> 00:06:52,080 Speaker 3: the public streets and public parks and so forth. I 103 00:06:52,080 --> 00:06:54,039 Speaker 3: think that's a question to which we don't have an answer, 104 00:06:54,200 --> 00:06:56,839 Speaker 3: but it's sort of at the heart of the clash 105 00:06:56,920 --> 00:07:01,000 Speaker 3: between the First Amendment and crimination principles. 106 00:07:01,279 --> 00:07:05,200 Speaker 1: More than twenty three hundred demonstrators have been arrested across 107 00:07:05,200 --> 00:07:08,680 Speaker 1: the country so far. Let's use Colombia as an example. 108 00:07:08,720 --> 00:07:12,920 Speaker 1: And let's say that these protesters are charged. Do they 109 00:07:13,000 --> 00:07:16,560 Speaker 1: have any defense based on the First Amendment? 110 00:07:16,680 --> 00:07:22,960 Speaker 3: Say so, that's a complicated question because their right to 111 00:07:23,120 --> 00:07:28,160 Speaker 3: free speech as against Columbia is of course contractual right 112 00:07:28,200 --> 00:07:32,560 Speaker 3: because Columbia adopt free speech principles voluntarily. It's not imposed 113 00:07:32,600 --> 00:07:35,440 Speaker 3: by the First Amendment. There is a New York state 114 00:07:35,640 --> 00:07:41,320 Speaker 3: law that governs discipline for various reasons, but it doesn't 115 00:07:41,680 --> 00:07:44,960 Speaker 3: really create a free speech right if they are prosecuted. 116 00:07:45,000 --> 00:07:47,600 Speaker 3: And my understanding is a lot of people are being released, 117 00:07:47,600 --> 00:07:50,040 Speaker 3: although I don't know what's happening with the latest rounds 118 00:07:50,080 --> 00:07:52,640 Speaker 3: of arrests, I know that was true of the earlier round. 119 00:07:53,000 --> 00:07:55,200 Speaker 3: But if they are prosecuted, in order to have a 120 00:07:55,360 --> 00:08:00,800 Speaker 3: successful First Amendment defense, they would need to show that 121 00:08:01,600 --> 00:08:05,600 Speaker 3: they were being selectively prosecuted by New York State or 122 00:08:05,600 --> 00:08:09,040 Speaker 3: New York City because of their message, as opposed to 123 00:08:09,760 --> 00:08:14,200 Speaker 3: because they were engaged in criminal trespass and we're told 124 00:08:14,240 --> 00:08:16,720 Speaker 3: to leave and give an opportunity to leave. And it's 125 00:08:16,760 --> 00:08:22,800 Speaker 3: notoriously difficult to make out a successful case of selective prosecution. 126 00:08:23,200 --> 00:08:26,680 Speaker 3: And so I think the answer is very likely no, 127 00:08:27,240 --> 00:08:30,720 Speaker 3: especially because my understanding is the New York City Police 128 00:08:31,080 --> 00:08:34,400 Speaker 3: only moved in at Columbia's invitation. So even if we 129 00:08:34,520 --> 00:08:38,480 Speaker 3: think Columbia is acting because they don't like the message, 130 00:08:38,480 --> 00:08:40,480 Speaker 3: which I don't think it's established. But even if we 131 00:08:40,559 --> 00:08:43,000 Speaker 3: thought that, that doesn't mean that New York City is 132 00:08:43,080 --> 00:08:45,520 Speaker 3: proceeding because they don't like the message. As I said, 133 00:08:45,520 --> 00:08:48,719 Speaker 3: the MIPD only goes in once they're invited. You can 134 00:08:48,720 --> 00:08:50,840 Speaker 3: think of it in the following way, right, that is, 135 00:08:50,920 --> 00:08:54,600 Speaker 3: there is a law against criminal trespass. If somebody comes 136 00:08:54,600 --> 00:08:57,520 Speaker 3: into your apartment when you're not there, and then you 137 00:08:57,559 --> 00:08:59,200 Speaker 3: ask them to leave, and they refuse to leave, and 138 00:08:59,240 --> 00:09:02,520 Speaker 3: you call the comp the police come and they remove them, 139 00:09:02,760 --> 00:09:06,240 Speaker 3: doesn't matter what your reason was for calling the cups. 140 00:09:06,320 --> 00:09:08,040 Speaker 3: Maybe you didn't like that they were there. Because they 141 00:09:08,040 --> 00:09:11,319 Speaker 3: were saying things that you found offensive that wouldn't convert 142 00:09:11,520 --> 00:09:15,240 Speaker 3: the police action in removing that person into a violation 143 00:09:15,320 --> 00:09:16,160 Speaker 3: of the First Amendment. 144 00:09:16,400 --> 00:09:20,120 Speaker 1: What's the hardest part of this analysis of what the 145 00:09:20,160 --> 00:09:23,319 Speaker 1: First Amendment protects and what it doesn't. 146 00:09:23,679 --> 00:09:27,320 Speaker 3: I mean, I think the place at which you draw 147 00:09:27,440 --> 00:09:35,000 Speaker 3: the line between permissible free speech and prescribable harassment. It's 148 00:09:35,200 --> 00:09:40,199 Speaker 3: complicated by the fact that there are you know, many 149 00:09:40,240 --> 00:09:44,560 Speaker 3: participants in these encampments, and so you know, in New York, 150 00:09:44,640 --> 00:09:48,400 Speaker 3: you know, you saw Mayor Adams complaining yesterday about outside 151 00:09:48,440 --> 00:09:53,360 Speaker 3: agitators sort of infiltrating the Columbia takeover of Hamilton Hall 152 00:09:53,800 --> 00:09:58,679 Speaker 3: and the protests generally. And you know, that's an old problem, 153 00:09:59,040 --> 00:10:03,920 Speaker 3: especially on a political left, that you have movements that 154 00:10:04,040 --> 00:10:08,080 Speaker 3: attract people who have views that are sort of within 155 00:10:08,840 --> 00:10:13,880 Speaker 3: a range of sort of within a standard deviation or 156 00:10:13,920 --> 00:10:17,560 Speaker 3: two of the center of public opinion. And then you 157 00:10:17,640 --> 00:10:20,400 Speaker 3: have people who are truly radical, and not just radical 158 00:10:20,400 --> 00:10:22,319 Speaker 3: in their substance views, but in the means that they 159 00:10:22,360 --> 00:10:26,679 Speaker 3: want to use, who then attach themselves to these movements, 160 00:10:27,080 --> 00:10:30,200 Speaker 3: and that can then undercut the other folks. And so, 161 00:10:30,320 --> 00:10:32,280 Speaker 3: you know, in addition to the question of how do 162 00:10:32,360 --> 00:10:38,200 Speaker 3: you protect students who feel, in some cases justifiably threatened 163 00:10:38,240 --> 00:10:41,839 Speaker 3: by the protests without you know, shutting down people's right 164 00:10:41,880 --> 00:10:45,200 Speaker 3: to express themselves. There's also the question of how do 165 00:10:45,280 --> 00:10:49,240 Speaker 3: you separate out the people who are really engaged in 166 00:10:49,520 --> 00:10:52,920 Speaker 3: harassment or threats what have you, from people who are 167 00:10:52,960 --> 00:10:55,600 Speaker 3: just there legitimately to protest. And I think that's a 168 00:10:55,720 --> 00:10:56,920 Speaker 3: very very hard question. 169 00:10:57,559 --> 00:11:01,000 Speaker 1: There's so much that goes into this analysis, and the 170 00:11:01,040 --> 00:11:04,480 Speaker 1: Supreme Court has never drawn a line between the two. 171 00:11:05,040 --> 00:11:07,160 Speaker 3: No. I mean, so the subcuit has never faced a 172 00:11:07,240 --> 00:11:11,840 Speaker 3: case in which the issue was somebody is being charged 173 00:11:11,920 --> 00:11:15,440 Speaker 3: with the racial or sexual harassment, whether it's an employer 174 00:11:15,480 --> 00:11:18,360 Speaker 3: for failing to shut it down, whatever, and there's a 175 00:11:18,360 --> 00:11:20,400 Speaker 3: claim of free speech. On the other side, there are 176 00:11:20,440 --> 00:11:22,760 Speaker 3: lower court cases that in Supreme Ware cases that seem 177 00:11:22,800 --> 00:11:26,440 Speaker 3: to just accept that it's permissible for the government to 178 00:11:26,559 --> 00:11:31,599 Speaker 3: require private employers, private universities, et cetera, to restrict harassment, 179 00:11:31,800 --> 00:11:35,400 Speaker 3: or even public universities to restrict harassment and harassment includes 180 00:11:35,480 --> 00:11:39,760 Speaker 3: creating a hostile environment. But they don't directly address the 181 00:11:39,840 --> 00:11:43,400 Speaker 3: question of, you know, well, what if the basis for 182 00:11:43,559 --> 00:11:47,800 Speaker 3: finding that it's a hostile environment is that people are 183 00:11:48,040 --> 00:11:53,000 Speaker 3: engaged in protests that express a viewpoint but also hit 184 00:11:53,040 --> 00:11:56,439 Speaker 3: home with other people in the community. That is unexplored territory. 185 00:11:56,520 --> 00:11:59,959 Speaker 3: There's academic writing on it, but again no definitive Supreme Court. 186 00:12:00,559 --> 00:12:02,559 Speaker 1: We'll have to see how the courts handle these cases. 187 00:12:02,600 --> 00:12:05,720 Speaker 1: Thanks so much, Mike. That's Professor Michael Dorf of Cornell 188 00:12:05,800 --> 00:12:09,360 Speaker 1: Law School coming up. How's the prosecution doing in the 189 00:12:09,400 --> 00:12:12,560 Speaker 1: second week of Trump's hush money trial. I'm June Grosso 190 00:12:12,640 --> 00:12:16,360 Speaker 1: and you're listening to Bloomberg. We are appointing this till 191 00:12:16,800 --> 00:12:17,760 Speaker 1: we had a fair trial. 192 00:12:17,840 --> 00:12:19,679 Speaker 4: If we had a fair judge, I don't think it 193 00:12:19,720 --> 00:12:21,160 Speaker 4: would to be allowed. 194 00:12:20,679 --> 00:12:22,520 Speaker 2: This trial to take place. 195 00:12:23,320 --> 00:12:26,160 Speaker 1: Trying to make it a salacious He's allowing things in 196 00:12:26,800 --> 00:12:28,959 Speaker 1: that have nothing to do with this case. 197 00:12:29,080 --> 00:12:29,959 Speaker 4: Nothing to do with it. 198 00:12:30,920 --> 00:12:34,560 Speaker 1: Donald Trump once again complaining about the hush money trial 199 00:12:34,600 --> 00:12:37,840 Speaker 1: on Friday, after a week in which jurors heard first 200 00:12:37,840 --> 00:12:41,320 Speaker 1: hand accounts of the negotiations to pay off two women 201 00:12:41,559 --> 00:12:45,960 Speaker 1: to prevent damaging stories about the former president's alleged extramarital 202 00:12:45,960 --> 00:12:49,320 Speaker 1: affairs from becoming public as part of a scheme to 203 00:12:49,440 --> 00:12:53,600 Speaker 1: illegally influence the twenty sixteen presidential election, and one of 204 00:12:53,600 --> 00:12:56,360 Speaker 1: the pivotal pieces of evidence was a recording of a 205 00:12:56,400 --> 00:13:00,559 Speaker 1: meeting between Trump and Michael Cohen, his former lawyer and fixer, 206 00:13:00,960 --> 00:13:04,319 Speaker 1: shortly before the election, in which they in which they 207 00:13:04,400 --> 00:13:07,840 Speaker 1: discussed a plan to pay off an ex playboy model 208 00:13:08,080 --> 00:13:11,120 Speaker 1: who claimed to have had an affair with Trump, and 209 00:13:11,200 --> 00:13:11,719 Speaker 1: I spoke to. 210 00:13:11,640 --> 00:13:12,360 Speaker 3: Allan about it. 211 00:13:12,400 --> 00:13:14,719 Speaker 5: When it comes time to the financing, which will be. 212 00:13:16,760 --> 00:13:20,720 Speaker 3: We'll have to pay you, so'll no no no, I got. 213 00:13:21,679 --> 00:13:25,199 Speaker 1: And the last witness this week was Trump's former top aide, 214 00:13:25,360 --> 00:13:29,559 Speaker 1: Hope Hicks, who gave dramatic testimony about the campaign's panic 215 00:13:29,720 --> 00:13:33,880 Speaker 1: when explosive stories about Trump's alleged affairs leaked to the public. 216 00:13:34,200 --> 00:13:35,839 Speaker 1: Joining me for a look at the week is former 217 00:13:35,920 --> 00:13:40,280 Speaker 1: federal prosecutor Robert Mintz, a partner maccarter in English, Bob 218 00:13:40,320 --> 00:13:44,760 Speaker 1: tell us about the prosecution's strategy here, particularly in the 219 00:13:44,800 --> 00:13:46,600 Speaker 1: presentation of the witnesses. 220 00:13:47,160 --> 00:13:50,400 Speaker 2: The key witness in this case is certainly going to 221 00:13:50,440 --> 00:13:54,840 Speaker 2: be Michael Cohene, former President Trump's lawyer and fixer, who 222 00:13:54,880 --> 00:13:58,160 Speaker 2: was at the very heart of this case. What prosecutors 223 00:13:58,200 --> 00:14:00,960 Speaker 2: have done is to try to say at the stage 224 00:14:01,320 --> 00:14:04,560 Speaker 2: building up to the testimony of mister Cohen, which will 225 00:14:04,559 --> 00:14:08,080 Speaker 2: be the climactic moment of this trial without any question, 226 00:14:08,480 --> 00:14:12,480 Speaker 2: And they're trying to introduce to jurors the concept of 227 00:14:12,559 --> 00:14:15,480 Speaker 2: mister Cohen, the role that he played relative to this case, 228 00:14:15,520 --> 00:14:18,640 Speaker 2: and his relationship with former President Trump. And they're doing 229 00:14:18,679 --> 00:14:21,520 Speaker 2: that first through the remarks of people who knew him. 230 00:14:22,120 --> 00:14:24,640 Speaker 2: Now they have done it more recently by playing a 231 00:14:24,760 --> 00:14:27,800 Speaker 2: tape where they can hear mister Cohne's voice along with 232 00:14:27,840 --> 00:14:30,960 Speaker 2: former President Trump, and eventually they will hear from mister 233 00:14:31,040 --> 00:14:34,080 Speaker 2: Cohen himself. But by the time that mister Cohn takes 234 00:14:34,120 --> 00:14:37,640 Speaker 2: the stand, jurors will already be very familiar with who 235 00:14:37,680 --> 00:14:40,360 Speaker 2: he is and what his role in this case is. 236 00:14:40,400 --> 00:14:42,000 Speaker 2: From the standpoint of the prosecution. 237 00:14:42,560 --> 00:14:47,400 Speaker 1: Prosecutors love tapes, and they played a recording that Cohen 238 00:14:47,520 --> 00:14:52,400 Speaker 1: secretly made in which he's discussing with Trump financing one 239 00:14:52,480 --> 00:14:56,400 Speaker 1: hundred and fifty thousand dollars payment a few months before 240 00:14:56,440 --> 00:14:59,960 Speaker 1: the twenty sixteen election. But the tape seems to cut 241 00:15:00,160 --> 00:15:03,920 Speaker 1: both ways because he's talking about the financing and how 242 00:15:03,920 --> 00:15:07,440 Speaker 1: he's got it all under control, like he's in charge, 243 00:15:07,840 --> 00:15:10,800 Speaker 1: and that sort of squares with Trump's defense that this 244 00:15:10,920 --> 00:15:12,200 Speaker 1: was all, Michael Cohen. 245 00:15:12,560 --> 00:15:14,840 Speaker 2: Well, when we talk about the tape that was introduced 246 00:15:14,880 --> 00:15:17,120 Speaker 2: during this trial, we need to make something very clear 247 00:15:17,200 --> 00:15:20,480 Speaker 2: because it's critical to how this tape came into being 248 00:15:20,760 --> 00:15:24,280 Speaker 2: and how we'll be viewed by jurors. When prosecutors make tapes, 249 00:15:24,320 --> 00:15:28,560 Speaker 2: and you're absolutely right, prosecutors love tapes because it's a 250 00:15:28,600 --> 00:15:32,280 Speaker 2: way for them to hear from the defendants themselves. Defendants 251 00:15:32,320 --> 00:15:34,640 Speaker 2: have a Fifth Amendment right not to take the stand 252 00:15:34,680 --> 00:15:37,880 Speaker 2: in the criminal case. In most criminal cases, defendants do 253 00:15:38,000 --> 00:15:41,360 Speaker 2: not testify on their own behalf because that generally does 254 00:15:41,360 --> 00:15:44,760 Speaker 2: not end well for them. So the only way that 255 00:15:44,920 --> 00:15:48,080 Speaker 2: jurors will often hear from a defendant is by hearing 256 00:15:48,120 --> 00:15:51,800 Speaker 2: a tape in which they hear the defendant. According to prosecutors, 257 00:15:51,880 --> 00:15:55,160 Speaker 2: talking about the criminal activity. It's a way for jurors 258 00:15:55,240 --> 00:15:59,080 Speaker 2: here the voices of the co conspirators in real time 259 00:15:59,520 --> 00:16:03,240 Speaker 2: carrying out the alleged criminal scheme. So tapes are a 260 00:16:03,360 --> 00:16:07,240 Speaker 2: favorite tool of prosecutors, but typically the tape is done 261 00:16:07,400 --> 00:16:10,520 Speaker 2: under the supervision and at the direction of the FBI 262 00:16:10,640 --> 00:16:13,920 Speaker 2: or the DEA or whatever federal agency is running the case. 263 00:16:14,360 --> 00:16:18,440 Speaker 2: They get the witnesses prepared, They basically give an outline 264 00:16:18,680 --> 00:16:23,040 Speaker 2: to the witnesses about the conversation. It might be a wiretap. 265 00:16:23,120 --> 00:16:25,360 Speaker 2: That's another way the tapes are created. But here we 266 00:16:25,400 --> 00:16:29,560 Speaker 2: had an usual circumstance where Michael Cone made this tape himself. 267 00:16:29,800 --> 00:16:32,040 Speaker 2: This was years before any of this started. It was 268 00:16:32,080 --> 00:16:35,960 Speaker 2: in twenty sixteen, two months before the presidential election, and 269 00:16:36,040 --> 00:16:39,160 Speaker 2: so Cone made this tape himself. And as a result, 270 00:16:39,240 --> 00:16:42,240 Speaker 2: it's not a dream tape for prosecutors, but it does 271 00:16:42,280 --> 00:16:44,600 Speaker 2: help them in some ways and it hurts them in others. 272 00:16:45,480 --> 00:16:48,520 Speaker 1: What about the fact that Michael Cohen, a lawyer, is 273 00:16:48,640 --> 00:16:50,320 Speaker 1: taping his own client. 274 00:16:50,840 --> 00:16:53,040 Speaker 2: Well, I think one of the problems with this tape 275 00:16:53,280 --> 00:16:55,480 Speaker 2: is that it does pain Michael Cohen in a rather 276 00:16:55,600 --> 00:16:59,920 Speaker 2: unslattering light. It shows that he is taping former President Trump, 277 00:17:00,080 --> 00:17:03,840 Speaker 2: his own client, without former President Trump's knowledge. Who knows 278 00:17:03,880 --> 00:17:06,800 Speaker 2: how many other clients he may have tape. And it 279 00:17:06,880 --> 00:17:09,399 Speaker 2: says something about Michael Cohen and about the way he 280 00:17:09,480 --> 00:17:12,600 Speaker 2: does business that he's taping his clients in September of 281 00:17:12,600 --> 00:17:15,320 Speaker 2: twenty sixteen. And what ends up happening here is we 282 00:17:15,440 --> 00:17:19,679 Speaker 2: have a tape that does help prosecures by hearing former 283 00:17:19,720 --> 00:17:23,560 Speaker 2: President Trump's voice talking about the hush money payments, talking 284 00:17:23,600 --> 00:17:26,600 Speaker 2: about his knowledge about those payments leading up to the election. 285 00:17:27,119 --> 00:17:29,960 Speaker 2: But the tape is not perfect because it doesn't. 286 00:17:29,640 --> 00:17:30,679 Speaker 5: Go into other areas. 287 00:17:30,720 --> 00:17:33,720 Speaker 2: And whenever you have a tape, there's always some comments 288 00:17:33,720 --> 00:17:36,240 Speaker 2: that are made that are helpful, and the defense will 289 00:17:36,240 --> 00:17:39,200 Speaker 2: always point to other comments that were not made during 290 00:17:39,240 --> 00:17:42,000 Speaker 2: the tape to suggest that because they weren't made on 291 00:17:42,040 --> 00:17:43,640 Speaker 2: the tape, then they don't exist. 292 00:17:43,920 --> 00:17:47,240 Speaker 1: Let's talk about the strategy of the defense, I mean 293 00:17:47,320 --> 00:17:51,080 Speaker 1: so far during the prosecution's case, so they're basically attacking 294 00:17:51,119 --> 00:17:54,200 Speaker 1: the credibility of most of the witnesses, but they're also 295 00:17:54,359 --> 00:17:58,399 Speaker 1: trying to put a spotlight on the actions Michael Cohen 296 00:17:58,440 --> 00:17:59,920 Speaker 1: took in these schemes. 297 00:18:00,480 --> 00:18:03,480 Speaker 2: The defense lawyer did a pretty good job of showing 298 00:18:03,520 --> 00:18:07,520 Speaker 2: that the lawyer who represented Stormy Daniels in connections with 299 00:18:07,640 --> 00:18:10,679 Speaker 2: the payment went right up to the line of extortion 300 00:18:11,040 --> 00:18:13,760 Speaker 2: by demanding a payment in order not to go public 301 00:18:13,960 --> 00:18:16,520 Speaker 2: with the statement of this alleged affair. And he beat 302 00:18:16,600 --> 00:18:19,160 Speaker 2: up that lawyer pretty well to show him at least 303 00:18:19,200 --> 00:18:22,919 Speaker 2: that someone who was skating on the edge of the 304 00:18:23,040 --> 00:18:25,560 Speaker 2: law when it came to extortion, he didn't suggest he 305 00:18:25,640 --> 00:18:28,960 Speaker 2: broke the law. But he certainly tried his best to 306 00:18:29,000 --> 00:18:32,800 Speaker 2: paint him in an unflattering light. But really the target 307 00:18:32,920 --> 00:18:35,359 Speaker 2: for the defense is always going to be Michael Cohne. 308 00:18:35,359 --> 00:18:37,760 Speaker 2: Michael Cohne is at the heart of this case. They 309 00:18:37,800 --> 00:18:40,480 Speaker 2: are going to suggest that Michael Cohne was the architect 310 00:18:40,960 --> 00:18:44,440 Speaker 2: of this payment scheme, and most critically, they are going 311 00:18:44,480 --> 00:18:46,960 Speaker 2: to suggest that it was Michael Cohne and not former 312 00:18:47,000 --> 00:18:51,639 Speaker 2: President Trump who designed the payoff scheme and designed the 313 00:18:51,720 --> 00:18:54,639 Speaker 2: cover up because remember, this case is not about the 314 00:18:54,720 --> 00:18:58,360 Speaker 2: hush money payment that was essentially conceded at the opening 315 00:18:58,400 --> 00:19:02,080 Speaker 2: statement by the Trump defense. It's all about how those 316 00:19:02,119 --> 00:19:05,600 Speaker 2: payments were allegedly covered up as a business expense. That's 317 00:19:05,640 --> 00:19:08,440 Speaker 2: what's made this case of crime, and the defense strategy 318 00:19:08,520 --> 00:19:11,520 Speaker 2: is going to say that that was all schemed up 319 00:19:11,720 --> 00:19:14,720 Speaker 2: by Michael Cohne without the involvement or the knowledge of 320 00:19:14,760 --> 00:19:16,200 Speaker 2: former President Trump at the time. 321 00:19:16,920 --> 00:19:20,800 Speaker 1: And now we have the big Friday witness. Prosecutors love 322 00:19:20,880 --> 00:19:24,080 Speaker 1: to put on witnesses on Friday afternoon that they think 323 00:19:24,119 --> 00:19:29,600 Speaker 1: are going to be very strong because it supposedly stays 324 00:19:29,640 --> 00:19:32,640 Speaker 1: with the jurors all weekend. Do you buy that theory 325 00:19:32,760 --> 00:19:35,080 Speaker 1: or did you fall into it? When you were a prosecutor. 326 00:19:35,560 --> 00:19:37,640 Speaker 2: Well, I think at the end of the day, prosecutors 327 00:19:37,920 --> 00:19:41,080 Speaker 2: have to present their witnesses in an orderly way, so 328 00:19:41,200 --> 00:19:45,120 Speaker 2: you can't really rejigger the testimony of witnesses. It has 329 00:19:45,160 --> 00:19:48,080 Speaker 2: to be logical, it has to flow. There's a certain 330 00:19:48,080 --> 00:19:51,600 Speaker 2: strategy into how you build your case. But as a 331 00:19:51,640 --> 00:19:54,600 Speaker 2: former prosecutor, I can tell you there's nothing wrong with 332 00:19:54,720 --> 00:19:58,440 Speaker 2: having a very strong witness the day on Friday. 333 00:19:59,200 --> 00:20:02,640 Speaker 1: Hope seems to be a lot different from the other 334 00:20:02,720 --> 00:20:06,760 Speaker 1: main prosecution witnesses we've heard from so far, because she 335 00:20:06,840 --> 00:20:11,639 Speaker 1: doesn't have the credibility or morality, shall we say, problems 336 00:20:11,800 --> 00:20:15,280 Speaker 1: of witnesses like the former publisher of the National Inquirer 337 00:20:15,760 --> 00:20:18,200 Speaker 1: or the lawyer who broker these hush money deals. 338 00:20:18,640 --> 00:20:20,960 Speaker 2: Yeah, Hope Hicks does not have a lot of baggage 339 00:20:21,080 --> 00:20:23,600 Speaker 2: at all. She is not a leg to being involved 340 00:20:23,640 --> 00:20:26,840 Speaker 2: in this payoff scheme. She wasn't working for the National 341 00:20:26,880 --> 00:20:31,199 Speaker 2: Inquirer on these tax and kill questionable practices of varying 342 00:20:31,280 --> 00:20:34,720 Speaker 2: stories for money. All of that is rather unseemly, and 343 00:20:34,760 --> 00:20:38,160 Speaker 2: all of those witnesses are open to cross examination based 344 00:20:38,240 --> 00:20:41,639 Speaker 2: upon only their credibility, but even the morality of what 345 00:20:41,680 --> 00:20:44,320 Speaker 2: they were doing. The defense lawyers made a point of 346 00:20:44,359 --> 00:20:47,480 Speaker 2: attacking them, and so she will be a strong witness 347 00:20:47,600 --> 00:20:51,159 Speaker 2: for the prosecution, but she doesn't have as much information 348 00:20:51,400 --> 00:20:52,639 Speaker 2: at the heart of the case as some of the 349 00:20:52,680 --> 00:20:53,600 Speaker 2: other witnesses are. 350 00:20:53,920 --> 00:20:56,840 Speaker 1: And with hicks testimony, the focus of the trial seemed 351 00:20:56,880 --> 00:21:00,639 Speaker 1: to be moving from the tabloid world to the world 352 00:21:00,640 --> 00:21:02,200 Speaker 1: of the campaign in White House. 353 00:21:03,040 --> 00:21:06,639 Speaker 2: What she adds to the prosecution's argument is to show 354 00:21:06,680 --> 00:21:10,639 Speaker 2: the campaign's sensitivity to these issues in light of a 355 00:21:10,680 --> 00:21:15,359 Speaker 2: Hollywood access tape, and how critical the campaign viewed the 356 00:21:15,400 --> 00:21:19,040 Speaker 2: public perception of Donald Trump, who was then a candidate 357 00:21:19,080 --> 00:21:22,240 Speaker 2: for president, and doing their best to try to tamp 358 00:21:22,320 --> 00:21:25,439 Speaker 2: down some of these salacious stories that were beginning to 359 00:21:25,480 --> 00:21:28,959 Speaker 2: percolate in the press. So it shows from the prosecution 360 00:21:29,119 --> 00:21:32,880 Speaker 2: standpoint how critical it was for Michael Cohen to try 361 00:21:32,880 --> 00:21:35,320 Speaker 2: to bury this story. That's what prosecutors are going to 362 00:21:35,320 --> 00:21:38,359 Speaker 2: try to argue based upon the testimony of Hope, Hicks and. 363 00:21:38,240 --> 00:21:43,639 Speaker 1: Bob The defense is refusing to stipulate to just about 364 00:21:43,760 --> 00:21:48,920 Speaker 1: every piece of evidence that the prosecution wants to introduce. So, 365 00:21:49,040 --> 00:21:52,520 Speaker 1: for example, one day we heard from the archivist at 366 00:21:52,880 --> 00:21:56,399 Speaker 1: c SPAN, so tapes could be introduced. I mean, it 367 00:21:56,480 --> 00:21:58,720 Speaker 1: slows down the trial, But how much does it really 368 00:21:58,800 --> 00:22:01,560 Speaker 1: get the defense in in the end that little slow 369 00:22:01,640 --> 00:22:05,320 Speaker 1: down or annoyance for the prosecution. I guess well. 370 00:22:05,320 --> 00:22:09,920 Speaker 2: Often the defense will stipulate to these non controversial, essentially 371 00:22:10,640 --> 00:22:14,440 Speaker 2: ministerial testimony in order to get certain documents entered into 372 00:22:14,520 --> 00:22:15,680 Speaker 2: evidence at a trial. 373 00:22:15,960 --> 00:22:16,440 Speaker 5: But what the. 374 00:22:16,400 --> 00:22:20,240 Speaker 2: Defense seems to be doing here is not agreeing to 375 00:22:20,440 --> 00:22:25,160 Speaker 2: any of these stipulated situations in order to slow down 376 00:22:25,240 --> 00:22:27,879 Speaker 2: the prosecution, to try to throw them off their game 377 00:22:28,160 --> 00:22:30,919 Speaker 2: and to break up the narrative. Now, it really is 378 00:22:31,280 --> 00:22:33,800 Speaker 2: a strategy that's being used here. They have every right 379 00:22:33,880 --> 00:22:37,200 Speaker 2: to do that. The defense is not required to stipulate 380 00:22:37,440 --> 00:22:40,600 Speaker 2: to any of these documents, witnesses, And what they're doing 381 00:22:40,640 --> 00:22:44,640 Speaker 2: here is slowing the case down, throwing the prosecutors off 382 00:22:44,680 --> 00:22:47,160 Speaker 2: their timing, or at least they're trying to. And they're 383 00:22:47,200 --> 00:22:50,119 Speaker 2: trying to slow this case down to break up the 384 00:22:50,160 --> 00:22:53,399 Speaker 2: prosecution's case so they can't really build up momentum and 385 00:22:53,560 --> 00:22:57,560 Speaker 2: tell a streamline narrative, which is what prosecutors are trying 386 00:22:57,560 --> 00:22:58,400 Speaker 2: to accomplish here. 387 00:22:58,920 --> 00:23:01,760 Speaker 1: There's been a lot of report about Trump sitting with 388 00:23:01,800 --> 00:23:05,080 Speaker 1: his eyes closed during the trial and on truth Social 389 00:23:05,160 --> 00:23:08,960 Speaker 1: he said that he's not sleeping. I simply close my 390 00:23:09,080 --> 00:23:14,040 Speaker 1: beautiful blue eyes sometimes listen intently and take it all in. 391 00:23:14,440 --> 00:23:15,640 Speaker 1: How might the jury see that. 392 00:23:15,920 --> 00:23:17,840 Speaker 2: Well, it's really hard to say what's in the mind 393 00:23:17,880 --> 00:23:20,280 Speaker 2: of jurors, but you can be certain that they are 394 00:23:20,520 --> 00:23:23,200 Speaker 2: looking at the defendant, as they do in any criminal trial, 395 00:23:23,240 --> 00:23:26,760 Speaker 2: that they're looking at the reactions to all this testimonies. 396 00:23:26,880 --> 00:23:30,200 Speaker 2: And generally, if you're a defense lawyer, you want your 397 00:23:30,440 --> 00:23:33,400 Speaker 2: client to not react to the testimony, to sit there 398 00:23:33,520 --> 00:23:36,560 Speaker 2: essentially stoneface. So it could be that the advice that 399 00:23:36,640 --> 00:23:39,120 Speaker 2: the defenselaers are giving former President trumpet is to act 400 00:23:39,160 --> 00:23:41,760 Speaker 2: as if none of this testimony really means anything. 401 00:23:42,160 --> 00:23:46,400 Speaker 1: Now about the gag order, this week, Judge Murshawn found 402 00:23:46,600 --> 00:23:49,760 Speaker 1: Trump in contempt of court for violating the gag order 403 00:23:49,800 --> 00:23:53,359 Speaker 1: on nine occasions and find him nine thousand dollars. He 404 00:23:53,440 --> 00:23:58,000 Speaker 1: also had a hearing on three additional alleged violations by Trump. 405 00:23:58,400 --> 00:24:02,200 Speaker 1: These monetary finds are pocket change to Trump. What can 406 00:24:02,200 --> 00:24:02,880 Speaker 1: the judge do? 407 00:24:03,600 --> 00:24:06,879 Speaker 2: Ultimately, the gag order is a problem for the judge 408 00:24:07,119 --> 00:24:11,119 Speaker 2: because prosecutors are repeatedly bringing up evidence to former President 409 00:24:11,160 --> 00:24:14,960 Speaker 2: Trump violating the gag order. Talking about witnesses. The other day, 410 00:24:15,200 --> 00:24:17,800 Speaker 2: he made the statement that the court was not permitting 411 00:24:17,880 --> 00:24:20,240 Speaker 2: him to testify in his own defense, so the judge 412 00:24:20,280 --> 00:24:22,520 Speaker 2: had to correct. That's been made clear that he has 413 00:24:22,520 --> 00:24:25,240 Speaker 2: a constitutional right to testify in his own defense, but 414 00:24:25,359 --> 00:24:27,720 Speaker 2: nothing is preventing him from doing that. But at the 415 00:24:27,760 --> 00:24:30,800 Speaker 2: end of the day, here the judge confine him and 416 00:24:30,920 --> 00:24:33,400 Speaker 2: does have the right, as he would with any other defendant, 417 00:24:33,600 --> 00:24:36,520 Speaker 2: to hold former President Trump in contempt and put him 418 00:24:36,560 --> 00:24:38,560 Speaker 2: in jail. But that's not something that we're going to 419 00:24:38,560 --> 00:24:40,879 Speaker 2: see happened in this case. He's not going to do that. 420 00:24:41,160 --> 00:24:43,400 Speaker 2: So all he can really do is continue to admonish 421 00:24:43,400 --> 00:24:46,359 Speaker 2: for our President Trump, to talk to defense lawyers to 422 00:24:46,400 --> 00:24:48,440 Speaker 2: try to get their fine in line, and at the 423 00:24:48,560 --> 00:24:51,400 Speaker 2: end of the day, continue to stack up fine if 424 00:24:51,440 --> 00:24:53,080 Speaker 2: the violations continue to occur. 425 00:24:53,640 --> 00:24:57,520 Speaker 1: Thanks Bob. That's Robert mant of maccarter and English coming up. 426 00:24:57,840 --> 00:25:01,080 Speaker 1: The richest person to do time in fact prison. I'm 427 00:25:01,160 --> 00:25:05,880 Speaker 1: June Grosso and you're listening to Bloomberg. Last November, Attorney 428 00:25:05,920 --> 00:25:09,640 Speaker 1: General Merrick Garland announced the guilty please of Crypto Giant 429 00:25:09,680 --> 00:25:14,040 Speaker 1: Finance and its chief executive Shangpen Jao for failures that 430 00:25:14,119 --> 00:25:17,800 Speaker 1: allowed cyber criminals and terrorist groups to freely trade on 431 00:25:17,880 --> 00:25:24,440 Speaker 1: the world's largest cryptocurrency exchange. Finance prioritized its profits over 432 00:25:24,600 --> 00:25:28,040 Speaker 1: the safety of the American people. The saga ended this 433 00:25:28,160 --> 00:25:31,040 Speaker 1: week when a judge sentenced the forty seven year old 434 00:25:31,080 --> 00:25:33,639 Speaker 1: to four months in prison. It's the first time a 435 00:25:33,760 --> 00:25:36,840 Speaker 1: CEO has ever gone to prison for a Bank Secrecy 436 00:25:36,880 --> 00:25:40,720 Speaker 1: Act violation, although the Justice Department had wanted a sentence 437 00:25:40,800 --> 00:25:43,680 Speaker 1: of three years to make an example out of Jao 438 00:25:43,880 --> 00:25:48,160 Speaker 1: to an industry rebounding from a slew of high profile scandals. 439 00:25:48,720 --> 00:25:52,120 Speaker 1: You remember Sam bankman Fried joining me is Bloomberg Legal 440 00:25:52,119 --> 00:25:55,480 Speaker 1: reporter Ava Benny Morrison, who was in the Seattle courtroom 441 00:25:55,480 --> 00:25:58,199 Speaker 1: for the sentencing, take us inside the courtroom. 442 00:25:58,240 --> 00:26:02,159 Speaker 4: Eva sure Jow, who's better known as cz planned up 443 00:26:02,160 --> 00:26:04,840 Speaker 4: to the Federal courthouse in Seattle. He had about half 444 00:26:04,840 --> 00:26:08,080 Speaker 4: a dozen lawyers with him. He didn't say much throughout 445 00:26:08,320 --> 00:26:11,119 Speaker 4: the proceeding other than getting up to give a statement 446 00:26:11,160 --> 00:26:13,919 Speaker 4: to the judge where he talked about how remorseful he was, 447 00:26:14,040 --> 00:26:16,160 Speaker 4: how he had made a mistake, but he took full 448 00:26:16,200 --> 00:26:19,480 Speaker 4: responsibility and that's why he had traveled from his home 449 00:26:19,840 --> 00:26:22,480 Speaker 4: in the UAE to America at the end of last 450 00:26:22,560 --> 00:26:25,400 Speaker 4: year to face the prosecution. While he was sitting at 451 00:26:25,400 --> 00:26:28,080 Speaker 4: the table, he was very still. He's sitting up straight, 452 00:26:28,160 --> 00:26:31,560 Speaker 4: He's staring at the judge. Seemed to be absorbing everything 453 00:26:31,600 --> 00:26:34,840 Speaker 4: that the judge and the prosecutors were saying. CZ's mother 454 00:26:35,200 --> 00:26:38,600 Speaker 4: and his sister, Jessica were both seated in the front row, 455 00:26:38,720 --> 00:26:41,360 Speaker 4: and there were a few other friends and supporters from 456 00:26:41,359 --> 00:26:43,639 Speaker 4: the crypto industry that were in the courthouse as well. 457 00:26:43,840 --> 00:26:46,879 Speaker 1: There was a plea deal here, but prosecutors were asking 458 00:26:46,960 --> 00:26:50,720 Speaker 1: for twice the sentencing guidelines. What was their reasoning? 459 00:26:51,080 --> 00:26:53,960 Speaker 4: Federal prosecutors were trying to make an example out of Cz. 460 00:26:54,520 --> 00:26:57,800 Speaker 4: He was the CEO of the world's biggest crypto company, 461 00:26:57,840 --> 00:27:01,000 Speaker 4: they argued, and he committed these as part of a 462 00:27:01,080 --> 00:27:03,879 Speaker 4: plan to violate US laws that would allow him to 463 00:27:03,880 --> 00:27:08,000 Speaker 4: make more money, allow big traders to continue using Binance 464 00:27:08,119 --> 00:27:11,200 Speaker 4: even though it didn't have an adequate anti money laundry progress. 465 00:27:11,320 --> 00:27:14,679 Speaker 4: So they were arguing for thirty six months in prison 466 00:27:14,720 --> 00:27:17,159 Speaker 4: for Cz to really send a message notly to the 467 00:27:17,160 --> 00:27:20,720 Speaker 4: crypto industry, but to corporate leaders far and wide that 468 00:27:20,800 --> 00:27:23,120 Speaker 4: this sort of behavior would not be tolerated and would 469 00:27:23,160 --> 00:27:23,720 Speaker 4: be punished. 470 00:27:24,000 --> 00:27:28,080 Speaker 1: As you mentioned, the defense was asking for leniency and probation. 471 00:27:28,240 --> 00:27:29,240 Speaker 1: What was their argument. 472 00:27:29,560 --> 00:27:32,879 Speaker 4: The defense was pleading with the judge to spare cz 473 00:27:33,040 --> 00:27:36,879 Speaker 4: from prison. They pointed to the fact that he voluntarily 474 00:27:36,960 --> 00:27:39,679 Speaker 4: came back to America to face these charges at the 475 00:27:39,720 --> 00:27:42,800 Speaker 4: end of last year. They said that he had cooperated 476 00:27:42,920 --> 00:27:45,959 Speaker 4: extensively with the government in this investigation and that he 477 00:27:46,000 --> 00:27:49,400 Speaker 4: directed Binance to cooperate with the DOJ as well. They 478 00:27:49,440 --> 00:27:54,119 Speaker 4: pointed out that Finance had settled several investigations with knowing 479 00:27:54,160 --> 00:27:58,480 Speaker 4: the DOJ, but the CFTC the Treasury Department, which resulted 480 00:27:58,600 --> 00:28:01,840 Speaker 4: in the company paying four point three billion dollars worth 481 00:28:01,840 --> 00:28:04,440 Speaker 4: of fines. I think the biggest sticking point in the 482 00:28:04,560 --> 00:28:08,560 Speaker 4: arguments was over whether a prison sentence was warranted for 483 00:28:08,640 --> 00:28:11,920 Speaker 4: this type of offense. Cz was essentially charged with violating 484 00:28:11,960 --> 00:28:14,600 Speaker 4: the Bank Secrecy Act, which sounds pretty minor on the 485 00:28:14,600 --> 00:28:19,400 Speaker 4: face of it, but attached to that crime were arguably 486 00:28:19,520 --> 00:28:23,720 Speaker 4: pretty serious circumstances. Because he didn't have an adequate AML 487 00:28:23,840 --> 00:28:28,160 Speaker 4: program at Finance, terrorist organizations like al Qaeda and Hamas 488 00:28:28,160 --> 00:28:31,119 Speaker 4: were able to trade on the platform, and US customers 489 00:28:31,160 --> 00:28:34,960 Speaker 4: were trading with customers in sanctioned countries like Ara. So 490 00:28:35,119 --> 00:28:37,240 Speaker 4: the defense was really trying to narrow in on the 491 00:28:37,280 --> 00:28:40,480 Speaker 4: fact that this was just a banking violation, for the 492 00:28:40,520 --> 00:28:44,000 Speaker 4: prosecution was urging the judge to look at those serious 493 00:28:44,040 --> 00:28:45,000 Speaker 4: circumstances that. 494 00:28:44,960 --> 00:28:45,680 Speaker 5: Were attached to it. 495 00:28:46,040 --> 00:28:50,520 Speaker 1: Did the prosecution prove in any way that CZ knew 496 00:28:50,560 --> 00:28:52,680 Speaker 1: about what was happening on the platform. 497 00:28:53,280 --> 00:28:57,520 Speaker 4: No, the prosecution didn't say that cind personally knew that 498 00:28:57,920 --> 00:29:02,080 Speaker 4: there were the proceeds of crime moving across finance, and 499 00:29:02,160 --> 00:29:05,720 Speaker 4: the defense really highlighted that as well, saying, look, there 500 00:29:05,760 --> 00:29:08,440 Speaker 4: is no evidence here that cz personally, as the SEEO 501 00:29:08,480 --> 00:29:12,600 Speaker 4: of the company knew that illicit funds were moving across finance, 502 00:29:12,720 --> 00:29:14,719 Speaker 4: and so that needed to be taken into account. 503 00:29:15,080 --> 00:29:18,200 Speaker 1: How long did his statement to the judge last and 504 00:29:18,560 --> 00:29:20,000 Speaker 1: what part of it stood out to you. 505 00:29:20,560 --> 00:29:23,479 Speaker 4: CZ's statement to the judge only lasted a few minutes. 506 00:29:23,800 --> 00:29:26,680 Speaker 4: He started by saying that he was remorseful and he 507 00:29:26,800 --> 00:29:29,800 Speaker 4: was sorry and he had made mistakes. He spoke about 508 00:29:29,800 --> 00:29:32,200 Speaker 4: how difficult it was for him to step down as 509 00:29:32,400 --> 00:29:35,520 Speaker 4: CEO of Finance, a company that he founded in China 510 00:29:35,680 --> 00:29:39,160 Speaker 4: several years ago. He spoke about how he struggled to 511 00:29:39,200 --> 00:29:41,960 Speaker 4: accept that that was essentially the only course of action here. 512 00:29:42,200 --> 00:29:44,560 Speaker 4: But he spoke about how he still wants to make 513 00:29:44,600 --> 00:29:47,000 Speaker 4: a difference in the world, and he's really focused on 514 00:29:47,320 --> 00:29:50,000 Speaker 4: philanthropy now that he's not leading finance. 515 00:29:50,560 --> 00:29:52,920 Speaker 1: And what was the judge's reasoning for handing down the 516 00:29:52,960 --> 00:29:54,160 Speaker 1: four months sentence. 517 00:29:54,720 --> 00:29:59,960 Speaker 4: The judge agreed with the defense that the prosecutions suggested 518 00:30:00,040 --> 00:30:02,600 Speaker 4: and that Cz should be sentenced to thirty six months 519 00:30:02,600 --> 00:30:05,920 Speaker 4: in prison was far too high. He said that he 520 00:30:06,080 --> 00:30:08,920 Speaker 4: had taken a lot of time to reap through more 521 00:30:08,960 --> 00:30:11,880 Speaker 4: than one hundred and sixty letters admitted from CZ's friends 522 00:30:11,920 --> 00:30:15,720 Speaker 4: and family and co workers that painted this man in 523 00:30:15,760 --> 00:30:19,000 Speaker 4: a very favorable light, describing him as a family man, 524 00:30:19,200 --> 00:30:22,760 Speaker 4: a humble person, and just a hard working entrepreneur. He 525 00:30:22,880 --> 00:30:26,040 Speaker 4: said that yes, while this is a Bank Secrecy Act 526 00:30:26,120 --> 00:30:30,600 Speaker 4: violation and other cases involving that charge had resulted in probation, 527 00:30:30,920 --> 00:30:33,880 Speaker 4: there were some egregious factors here, like the fact that 528 00:30:34,120 --> 00:30:38,560 Speaker 4: Hamas and cyber criminals and dark web transactions were able 529 00:30:38,560 --> 00:30:40,400 Speaker 4: to take place on the platform. 530 00:30:39,920 --> 00:30:40,440 Speaker 5: Because of it. 531 00:30:40,880 --> 00:30:43,840 Speaker 4: I think he just couldn't get past the Hamas al 532 00:30:43,880 --> 00:30:47,400 Speaker 4: Kader dark web element of this. I will say that 533 00:30:47,600 --> 00:30:51,120 Speaker 4: it's unusual for BSA cases to result in prison time, 534 00:30:51,560 --> 00:30:54,960 Speaker 4: so the judge was really sort of putting his neck 535 00:30:55,000 --> 00:30:58,640 Speaker 4: out here by handing down a sentence that did involve 536 00:30:58,680 --> 00:31:01,320 Speaker 4: prison time. It'll be interesting thing to see if this 537 00:31:01,480 --> 00:31:06,240 Speaker 4: sets a precedent for other BSA cases in white collar 538 00:31:06,280 --> 00:31:07,600 Speaker 4: prosecutions in the future. 539 00:31:07,960 --> 00:31:10,840 Speaker 1: What always seems striking to me about this case is 540 00:31:10,880 --> 00:31:14,480 Speaker 1: that the UAE has no extradition treaty with the US, 541 00:31:14,680 --> 00:31:18,040 Speaker 1: yet he flew here and turned himself in and then 542 00:31:18,280 --> 00:31:23,040 Speaker 1: prosecutors stopped him from returning home pending sentence. And as 543 00:31:23,080 --> 00:31:27,479 Speaker 1: for a sentencing of twice the guidelines, that scenario is 544 00:31:27,520 --> 00:31:30,840 Speaker 1: not going to encourage others to turn themselves in. 545 00:31:31,160 --> 00:31:34,240 Speaker 4: Yes, the defense actually did make a point out of that, 546 00:31:34,440 --> 00:31:37,280 Speaker 4: saying cz has done all the right things here. He's 547 00:31:37,320 --> 00:31:41,480 Speaker 4: come back from Dubai, turned himself in, pleaded guilty to 548 00:31:41,560 --> 00:31:45,120 Speaker 4: the charge, agreed to pay personally a fifty million dollar 549 00:31:45,200 --> 00:31:48,120 Speaker 4: fine to the government. He has ticked all the boxes. 550 00:31:48,360 --> 00:31:51,760 Speaker 4: But the fact that the prosecution was then arguing for 551 00:31:52,120 --> 00:31:55,240 Speaker 4: a prison sentence that was well above the federal sentencing 552 00:31:55,280 --> 00:31:59,240 Speaker 4: guidelines might actually deter people from doing that in the future. 553 00:31:59,360 --> 00:32:02,040 Speaker 4: And from the side to travel from a non extradition 554 00:32:02,160 --> 00:32:04,440 Speaker 4: country to the US to face the charges. 555 00:32:05,280 --> 00:32:08,240 Speaker 1: What happens now, Do I understand that he's not eligible 556 00:32:08,520 --> 00:32:11,560 Speaker 1: to go to a minimum security prison? 557 00:32:12,320 --> 00:32:15,400 Speaker 4: Yes, CZ, because he's not a US citizen, is then 558 00:32:15,680 --> 00:32:19,640 Speaker 4: eligible for a minimum security prison, and that's usually where 559 00:32:19,720 --> 00:32:23,040 Speaker 4: white collar defendants end up. So he has made a 560 00:32:23,080 --> 00:32:26,480 Speaker 4: request for the judge to be designated to a facility 561 00:32:26,520 --> 00:32:30,120 Speaker 4: called FDC C tach here in Seattle. We don't know 562 00:32:30,160 --> 00:32:33,000 Speaker 4: when he needs start that prison sentence that dates still 563 00:32:33,400 --> 00:32:36,080 Speaker 4: to be decided, and but his lawyer did say that 564 00:32:36,320 --> 00:32:38,200 Speaker 4: he's eager to just get it over and done with 565 00:32:38,360 --> 00:32:41,040 Speaker 4: and finally be able to return to Dubai to reunite 566 00:32:41,040 --> 00:32:41,720 Speaker 4: with his family. 567 00:32:42,040 --> 00:32:45,440 Speaker 1: This is the second high profile sentencing in the crypto 568 00:32:46,200 --> 00:32:50,440 Speaker 1: industry recently. Was Sam Magman Freed mentioned at all? 569 00:32:50,640 --> 00:32:53,520 Speaker 4: Sam Magman Freed did get a mention. Actually, when the 570 00:32:53,560 --> 00:32:57,480 Speaker 4: prosecutor was referring to the arguments that CZ's lawyers had 571 00:32:57,840 --> 00:33:01,200 Speaker 4: submitted to the court, he said, look, we're not alleging 572 00:33:01,320 --> 00:33:04,200 Speaker 4: that case is a Sambang mcfred. We're not saying that 573 00:33:04,240 --> 00:33:06,200 Speaker 4: he's a monster, and we're not trying to kill the 574 00:33:06,200 --> 00:33:09,160 Speaker 4: crypto industry. That we are saying that this is a 575 00:33:09,200 --> 00:33:12,680 Speaker 4: serious crime because he didn't have an AMO program and 576 00:33:12,720 --> 00:33:15,400 Speaker 4: that allowed some of the ilicid actives and terrorists to 577 00:33:15,440 --> 00:33:16,520 Speaker 4: gain access to buy it. 578 00:33:17,120 --> 00:33:21,680 Speaker 1: Thanks Seva, that's Bloomberg Leigal reporter Ava Benny Morrison. Joo's 579 00:33:21,680 --> 00:33:25,280 Speaker 1: wealth has ballooned to more than thirty eight billion dollars, 580 00:33:25,320 --> 00:33:28,719 Speaker 1: giving him the dubious distinction of being the richest person 581 00:33:29,040 --> 00:33:32,560 Speaker 1: ever to do time in a federal prison. Let's turn 582 00:33:32,600 --> 00:33:36,000 Speaker 1: out to another billionaire in the legal news, Elon Musk 583 00:33:36,040 --> 00:33:38,320 Speaker 1: has been trying to get rid of his Twitter sitter 584 00:33:38,440 --> 00:33:41,360 Speaker 1: for years, even though he agreed to have a lawyer 585 00:33:41,440 --> 00:33:44,520 Speaker 1: pre approve his tesla posts as part of a settlement 586 00:33:44,560 --> 00:33:48,920 Speaker 1: with the SEC in twenty eighteen, although it's unclear exactly 587 00:33:49,040 --> 00:33:52,600 Speaker 1: who's watching over his tweets and how much watching they're 588 00:33:52,720 --> 00:33:56,360 Speaker 1: actually doing. In an interview with sixty Minutes at the time, 589 00:33:56,840 --> 00:34:00,640 Speaker 1: Musk didn't seem too concerned about getting that soon provision. 590 00:34:01,200 --> 00:34:04,840 Speaker 3: The only tweets that would have to be say, reviewed, 591 00:34:05,000 --> 00:34:10,120 Speaker 3: would be if a tweet had a probability of causing 592 00:34:10,200 --> 00:34:11,920 Speaker 3: im movement in the stock and that's it. 593 00:34:12,200 --> 00:34:13,919 Speaker 2: Yeah, I mean, otherwise, it's hello. 594 00:34:14,000 --> 00:34:16,360 Speaker 3: First Amendment like premium speech is fundamental. 595 00:34:17,280 --> 00:34:21,560 Speaker 1: Freedom of speech is a fundamental constitutional right. But that 596 00:34:21,760 --> 00:34:24,840 Speaker 1: argument didn't convince the lower courts to throw out his 597 00:34:24,960 --> 00:34:29,040 Speaker 1: Twitter sitter agreement, and this week the Supreme Court refused 598 00:34:29,040 --> 00:34:32,640 Speaker 1: to hear Musk's appeal without comment. Joining me is business 599 00:34:32,680 --> 00:34:37,240 Speaker 1: law professor Eric Talley of Columbia Law School. Elon Musk 600 00:34:37,280 --> 00:34:41,160 Speaker 1: has battled the sec over his social media posts since 601 00:34:41,200 --> 00:34:45,840 Speaker 1: he tweeted in August twenty eighteen he had funding secured 602 00:34:45,960 --> 00:34:47,280 Speaker 1: to take Tesla private. 603 00:34:47,760 --> 00:34:51,280 Speaker 5: Well, this was yet another example of mister Musk's pensiant 604 00:34:51,400 --> 00:34:54,480 Speaker 5: for firing things up onto Twitter or acts, you know, 605 00:34:54,640 --> 00:34:56,360 Speaker 5: sort of at the spur of the moment. Back in 606 00:34:56,360 --> 00:35:02,160 Speaker 5: twenty eighteen, mister Musk dropped a tweet basically said funding 607 00:35:02,280 --> 00:35:06,200 Speaker 5: secured for you know, buying out Twitter at four hundred 608 00:35:06,200 --> 00:35:08,640 Speaker 5: and twenty dollars share and you know that number of 609 00:35:08,640 --> 00:35:11,799 Speaker 5: the four to twenty name is a very popular one 610 00:35:11,840 --> 00:35:12,520 Speaker 5: for mister Musk. 611 00:35:12,560 --> 00:35:12,759 Speaker 1: Case. 612 00:35:12,880 --> 00:35:16,280 Speaker 5: Well, people took seriously this idea that funding was secured, 613 00:35:16,320 --> 00:35:18,960 Speaker 5: and if you looked into the backstory, the funding sources 614 00:35:19,000 --> 00:35:21,839 Speaker 5: were not nearly as secure as he signaled that they 615 00:35:21,880 --> 00:35:25,719 Speaker 5: were at the time. So that ended up eliciting two 616 00:35:25,760 --> 00:35:28,359 Speaker 5: different legal actions won by the SEC, and then there 617 00:35:28,360 --> 00:35:31,280 Speaker 5: was also a class action lawsuit. He won the class 618 00:35:31,280 --> 00:35:34,160 Speaker 5: action lawsuit, but the SEC moved first and said that 619 00:35:34,239 --> 00:35:37,239 Speaker 5: was misleading. You didn't have the funding secured. We are 620 00:35:37,360 --> 00:35:41,239 Speaker 5: going to push our own regulatory action against you. And 621 00:35:41,280 --> 00:35:44,560 Speaker 5: the matter quickly settled, and it probably settled in part 622 00:35:44,560 --> 00:35:47,120 Speaker 5: because the SEC has a lot of heft when it 623 00:35:47,160 --> 00:35:49,799 Speaker 5: comes to sanctioned They can basically force someone not to 624 00:35:49,800 --> 00:35:52,160 Speaker 5: be an officer and director of a company for many, 625 00:35:52,239 --> 00:35:54,840 Speaker 5: many years if they chose to do so. So, the 626 00:35:55,040 --> 00:35:58,040 Speaker 5: terms of the settlement that mister Musk reached with the 627 00:35:58,080 --> 00:36:02,520 Speaker 5: SEC included monetary fines that he had to pay, which was, 628 00:36:02,600 --> 00:36:04,560 Speaker 5: you know, tens of millions of dollars but kind of 629 00:36:04,600 --> 00:36:06,880 Speaker 5: pocket change for him. And in addition, he had to 630 00:36:06,880 --> 00:36:09,080 Speaker 5: step down as chairman of the board to keep his 631 00:36:09,200 --> 00:36:12,799 Speaker 5: board position and CEO position. But then the final thing 632 00:36:12,840 --> 00:36:15,640 Speaker 5: is that he needed a Twitter babysitter. He needed to 633 00:36:15,760 --> 00:36:19,760 Speaker 5: consult with a lawyer before he put things up on Twitter, 634 00:36:20,000 --> 00:36:22,640 Speaker 5: so the lawyer could sort of sound the alarm bells 635 00:36:22,680 --> 00:36:25,280 Speaker 5: if what he was about to do had a bearing 636 00:36:25,360 --> 00:36:28,080 Speaker 5: on things like, oh, I don't know securities for us, 637 00:36:28,120 --> 00:36:31,640 Speaker 5: and so that's effectively what he had agreed to do 638 00:36:31,760 --> 00:36:35,200 Speaker 5: in this settlement. And you know, he is a guy 639 00:36:35,239 --> 00:36:39,360 Speaker 5: that tends not to like being, you know, overseen by 640 00:36:39,800 --> 00:36:42,560 Speaker 5: lawyers or anyone else. And within a couple of years 641 00:36:42,600 --> 00:36:44,640 Speaker 5: grew quite tired of the fact that he couldn't just 642 00:36:44,680 --> 00:36:48,920 Speaker 5: post whenever he wanted, and at some point decided he 643 00:36:49,000 --> 00:36:51,920 Speaker 5: was going to try to get out of the settlement. 644 00:36:52,000 --> 00:36:55,840 Speaker 5: So he had petitioned lower courts to let him out 645 00:36:55,960 --> 00:36:59,480 Speaker 5: of this, you know, Twitter babysitter settlement provision, saying that 646 00:36:59,560 --> 00:37:02,000 Speaker 5: it by related his First Amendment rights, there was a 647 00:37:02,040 --> 00:37:04,880 Speaker 5: prior restraint on what he was allowed to stay in 648 00:37:04,920 --> 00:37:07,839 Speaker 5: the public forum. The courts that heard it below they 649 00:37:07,840 --> 00:37:09,480 Speaker 5: were having nothing to do with it. They said, look, 650 00:37:09,520 --> 00:37:12,160 Speaker 5: this is a settlement that you entered into. This is 651 00:37:12,200 --> 00:37:15,960 Speaker 5: in fact a restriction that every other executive at TESLA has. 652 00:37:15,960 --> 00:37:18,040 Speaker 5: They can't post anything they want. They have to have 653 00:37:18,080 --> 00:37:20,479 Speaker 5: it cleared with in house counsel. And that's the same 654 00:37:20,520 --> 00:37:22,680 Speaker 5: thing with you right now. So no, you made your 655 00:37:22,719 --> 00:37:25,200 Speaker 5: bed and you're going to sleep it. And he tried 656 00:37:25,200 --> 00:37:27,719 Speaker 5: to take it to the Supreme Court and it was 657 00:37:27,840 --> 00:37:30,480 Speaker 5: rejected by the Supreme Court. You know it clearly did 658 00:37:30,520 --> 00:37:33,759 Speaker 5: not command enough attention of fitting justice for them to 659 00:37:33,840 --> 00:37:35,799 Speaker 5: want to get involved in this determination. 660 00:37:36,080 --> 00:37:38,759 Speaker 1: He can't win all his legal fights. Thanks so much, Eric. 661 00:37:38,960 --> 00:37:42,399 Speaker 1: That's Professor Eric Tally of Columbia Law School, and that's 662 00:37:42,440 --> 00:37:45,400 Speaker 1: it for this edition of the Bloomberg Law Podcast. Remember 663 00:37:45,440 --> 00:37:48,120 Speaker 1: you've can always get the latest legal news by subscribing 664 00:37:48,200 --> 00:37:51,640 Speaker 1: and listening to the show on Apple Podcasts, Spotify, and 665 00:37:51,719 --> 00:37:55,760 Speaker 1: at Bloomberg dot com, slash podcast, slash Law. I'm June 666 00:37:55,760 --> 00:37:57,880 Speaker 1: Grosso and this is Bloomberg