WEBVTT - Weekend Law: Campus Protests, Trump Trial & Richest Prisoner

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<v Speaker 1>Welcome to the Bloomberg Law Show. I'm June Grosso. Ahead

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<v Speaker 1>in this hour, When do campus protesters lose First Amendment protections?

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<v Speaker 1>Audio tapes and testimony from a former White House aid

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<v Speaker 1>In the second week of Trump's hush money trial, Elon

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<v Speaker 1>Musk's Twitter sitter case turned down by the Supreme Court,

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<v Speaker 1>and billionaire Binance founder Shang Panjao will be the richest

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<v Speaker 1>person ever to do time in a federal prison. Demonstrations

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<v Speaker 1>against the Israel Hamas war have wreaked havoc on college

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<v Speaker 1>campuses across the country, escalating in recent weeks as pro

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<v Speaker 1>Palestinian demonstrators refuse to remove encampments and administrators turned to

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<v Speaker 1>police to clear them by force, often resulting in violent clashes.

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<v Speaker 2>I kinda Gail Gibson, the police captain for the University

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<v Speaker 2>of Cowboy of other at.

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<v Speaker 3>And your right player has to be at my momost

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<v Speaker 3>break ups, and you do not do so, you may

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<v Speaker 3>be arrested or subject to other prospections.

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<v Speaker 1>At UCLA's campus in Los Angeles on Thursday, police warned

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<v Speaker 1>protesters for hours over loud speakers that there would be

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<v Speaker 1>arrests if they didn't disperse, and in the pre dawn hours,

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<v Speaker 1>police in riot gear confronted demonstrators in helmets and gas

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<v Speaker 1>masks and arrested two hundred protesters. Similar chaotic scenes are

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<v Speaker 1>playing out at colleges nationwide. From the White House, President

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<v Speaker 1>Joe Biden warned against violence and said the protests put

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<v Speaker 1>to the test two fundamental American principles. The first is

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<v Speaker 1>the right to free speech and for people to peacefully

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<v Speaker 1>assemble and make their voices heard. The second is the

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<v Speaker 1>rule of law.

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<v Speaker 2>Both must be upheld.

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<v Speaker 1>The charge situation sp like the difficulty of balancing the

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<v Speaker 1>right to free speech with the need to provide a

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<v Speaker 1>space where students feel safe joining me is constitutional law

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<v Speaker 1>scholar Michael Dorf, a professor at Cornell Law School, explain

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<v Speaker 1>what the First Amendment protects in the context of these demonstrations.

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<v Speaker 3>The First Amendment protects speech and other expressive activity, primarily

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<v Speaker 3>against government interference or where it's voluntarily undertaken, private university

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<v Speaker 3>interference that is based on the content of the speech. Right.

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<v Speaker 3>So the critical distinction is between what are sometimes called time,

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<v Speaker 3>place and manner restrictions. Right, you can have your rally

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<v Speaker 3>in this place, but not that place, at this time,

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<v Speaker 3>but not that time without amplification, except under certain circumstances.

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<v Speaker 3>Those are about how you are making your point, and

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<v Speaker 3>generally the government has considerable leeway to restrict that so

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<v Speaker 3>long as it does so reasonably. Orsu content based restrictions.

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<v Speaker 3>You can't have a rally for this side, but you

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<v Speaker 3>can have it for the other side, right, And so

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<v Speaker 3>that's the sort of basic principle that's operating here. The

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<v Speaker 3>government can restrict speech, but not based on its content,

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<v Speaker 3>and when it does so, it has to do so reasonably,

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<v Speaker 3>meaning leave open adequate alternative channels of communication and so forth.

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<v Speaker 1>Let me give you an example. An anti semitic chant.

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<v Speaker 1>Would that be protected under the First Amendment?

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<v Speaker 3>Strange as it may sound, the answer to that question

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<v Speaker 3>is yes. In most constitutional democracies the answer would be no.

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<v Speaker 3>But in the United States, what is sometimes called hate

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<v Speaker 3>speech is not unprotected in virtue of the fact that

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<v Speaker 3>it is hate speech. The leading case is a case

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<v Speaker 3>from the US Supreme Court in nineteen ninety two called

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<v Speaker 3>rav against City of Saint Paul, which said that the

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<v Speaker 3>First Amendment does not include an exception for hate speech. Now,

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<v Speaker 3>I should qualify that by saying that an anti Semitic

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<v Speaker 3>chant under certain circumstances, could be proscribable harassment. So if

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<v Speaker 3>you think about racial or sexual harassment at the workplace,

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<v Speaker 3>which is forbidden by Title seven of the nineteen sixty

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<v Speaker 3>four Civil Rights Act, or at a federally funded college

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<v Speaker 3>or university, which means just about every college and university

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<v Speaker 3>in the country, racial harassment is prescribed if a college

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<v Speaker 3>university takes federal funds. It's just what all of them do.

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<v Speaker 3>They're not permitted to tolerate racial harassment. And Department of

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<v Speaker 3>Education guidelines define anti semitism, Islamophobia, and various other forms

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<v Speaker 3>of hatred that you might think correlate with religion but

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<v Speaker 3>have some sort of ethnic and therefore racial component. It

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<v Speaker 3>defines those as covered by Title six. So if the

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<v Speaker 3>chant rises to the level of harassment, then it is

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<v Speaker 3>forbidden by Title six. In the universe, city is not

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<v Speaker 3>only permitted, but obligated to stop it. And now the

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<v Speaker 3>question that naturally raises is does the First Amendment contain

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<v Speaker 3>an exception for harassment? The Supreme Court has never decided

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<v Speaker 3>that question. Lower courts have assumed that the answer to

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<v Speaker 3>that is yes, and I think that is the correct answer.

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<v Speaker 3>That is to say that what is defined as harassment,

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<v Speaker 3>which is sort of creating a hostile environment based on

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<v Speaker 3>race or sex and so forth, is proscribable. That is

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<v Speaker 3>to say, the First Moment doesn't protect that, And you

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<v Speaker 3>have to ask, well, what's the reason for that. Why

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<v Speaker 3>is it that if there is no exception to the

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<v Speaker 3>First Moment for hate speech, why is it that the

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<v Speaker 3>government can forbid harassment that takes the form of hate speech.

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<v Speaker 3>The answer to that, I think is that the government

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<v Speaker 3>can't forbid harassment generally where harassment consists simply of saying

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<v Speaker 3>offensive things, but it can do so when it's targeted

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<v Speaker 3>in circumstances where someone can't just sort of look the

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<v Speaker 3>other way. So if a neo Nazi group or white

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<v Speaker 3>supremacists want to have a march through Charlottesville, for example,

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<v Speaker 3>they're protected by the First Amendment in doing so. But

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<v Speaker 3>if they want to do that at the workplace of

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<v Speaker 3>particular individuals, then those people are a kind of captive

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<v Speaker 3>audience at work. And the crucial question, then, I think,

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<v Speaker 3>for current purposes, is to what extent is a college

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<v Speaker 3>or university campus more like a workplace where there's a

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<v Speaker 3>kind of captive audience rationale for restricting what would otherwise

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<v Speaker 3>be offensive. But first protected speech versus more like just

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<v Speaker 3>the public streets and public parks and so forth. I

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<v Speaker 3>think that's a question to which we don't have an answer,

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<v Speaker 3>but it's sort of at the heart of the clash

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<v Speaker 3>between the First Amendment and crimination principles.

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<v Speaker 1>More than twenty three hundred demonstrators have been arrested across

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<v Speaker 1>the country so far. Let's use Colombia as an example.

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<v Speaker 1>And let's say that these protesters are charged. Do they

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<v Speaker 1>have any defense based on the First Amendment?

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<v Speaker 3>Say so, that's a complicated question because their right to

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<v Speaker 3>free speech as against Columbia is of course contractual right

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<v Speaker 3>because Columbia adopt free speech principles voluntarily. It's not imposed

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<v Speaker 3>by the First Amendment. There is a New York state

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<v Speaker 3>law that governs discipline for various reasons, but it doesn't

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<v Speaker 3>really create a free speech right if they are prosecuted.

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<v Speaker 3>And my understanding is a lot of people are being released,

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<v Speaker 3>although I don't know what's happening with the latest rounds

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<v Speaker 3>of arrests, I know that was true of the earlier round.

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<v Speaker 3>But if they are prosecuted, in order to have a

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<v Speaker 3>successful First Amendment defense, they would need to show that

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<v Speaker 3>they were being selectively prosecuted by New York State or

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<v Speaker 3>New York City because of their message, as opposed to

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<v Speaker 3>because they were engaged in criminal trespass and we're told

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<v Speaker 3>to leave and give an opportunity to leave. And it's

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<v Speaker 3>notoriously difficult to make out a successful case of selective prosecution.

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<v Speaker 3>And so I think the answer is very likely no,

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<v Speaker 3>especially because my understanding is the New York City Police

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<v Speaker 3>only moved in at Columbia's invitation. So even if we

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<v Speaker 3>think Columbia is acting because they don't like the message,

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<v Speaker 3>which I don't think it's established. But even if we

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<v Speaker 3>thought that, that doesn't mean that New York City is

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<v Speaker 3>proceeding because they don't like the message. As I said,

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<v Speaker 3>the MIPD only goes in once they're invited. You can

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<v Speaker 3>think of it in the following way, right, that is,

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<v Speaker 3>there is a law against criminal trespass. If somebody comes

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<v Speaker 3>into your apartment when you're not there, and then you

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<v Speaker 3>ask them to leave, and they refuse to leave, and

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<v Speaker 3>you call the comp the police come and they remove them,

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<v Speaker 3>doesn't matter what your reason was for calling the cups.

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<v Speaker 3>Maybe you didn't like that they were there. Because they

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<v Speaker 3>were saying things that you found offensive that wouldn't convert

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<v Speaker 3>the police action in removing that person into a violation

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<v Speaker 3>of the First Amendment.

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<v Speaker 1>What's the hardest part of this analysis of what the

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<v Speaker 1>First Amendment protects and what it doesn't.

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<v Speaker 3>I mean, I think the place at which you draw

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<v Speaker 3>the line between permissible free speech and prescribable harassment. It's

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<v Speaker 3>complicated by the fact that there are you know, many

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<v Speaker 3>participants in these encampments, and so you know, in New York,

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<v Speaker 3>you know, you saw Mayor Adams complaining yesterday about outside

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<v Speaker 3>agitators sort of infiltrating the Columbia takeover of Hamilton Hall

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<v Speaker 3>and the protests generally. And you know, that's an old problem,

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<v Speaker 3>especially on a political left, that you have movements that

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<v Speaker 3>attract people who have views that are sort of within

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<v Speaker 3>a range of sort of within a standard deviation or

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<v Speaker 3>two of the center of public opinion. And then you

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<v Speaker 3>have people who are truly radical, and not just radical

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<v Speaker 3>in their substance views, but in the means that they

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<v Speaker 3>want to use, who then attach themselves to these movements,

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<v Speaker 3>and that can then undercut the other folks. And so,

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<v Speaker 3>you know, in addition to the question of how do

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<v Speaker 3>you protect students who feel, in some cases justifiably threatened

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<v Speaker 3>by the protests without you know, shutting down people's right

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<v Speaker 3>to express themselves. There's also the question of how do

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<v Speaker 3>you separate out the people who are really engaged in

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<v Speaker 3>harassment or threats what have you, from people who are

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<v Speaker 3>just there legitimately to protest. And I think that's a

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<v Speaker 3>very very hard question.

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<v Speaker 1>There's so much that goes into this analysis, and the

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<v Speaker 1>Supreme Court has never drawn a line between the two.

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<v Speaker 3>No. I mean, so the subcuit has never faced a

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<v Speaker 3>case in which the issue was somebody is being charged

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<v Speaker 3>with the racial or sexual harassment, whether it's an employer

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<v Speaker 3>for failing to shut it down, whatever, and there's a

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<v Speaker 3>claim of free speech. On the other side, there are

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<v Speaker 3>lower court cases that in Supreme Ware cases that seem

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<v Speaker 3>to just accept that it's permissible for the government to

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<v Speaker 3>require private employers, private universities, et cetera, to restrict harassment,

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<v Speaker 3>or even public universities to restrict harassment and harassment includes

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<v Speaker 3>creating a hostile environment. But they don't directly address the

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<v Speaker 3>question of, you know, well, what if the basis for

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<v Speaker 3>finding that it's a hostile environment is that people are

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<v Speaker 3>engaged in protests that express a viewpoint but also hit

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<v Speaker 3>home with other people in the community. That is unexplored territory.

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<v Speaker 3>There's academic writing on it, but again no definitive Supreme Court.

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<v Speaker 1>We'll have to see how the courts handle these cases.

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<v Speaker 1>Thanks so much, Mike. That's Professor Michael Dorf of Cornell

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<v Speaker 1>Law School coming up. How's the prosecution doing in the

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<v Speaker 1>second week of Trump's hush money trial. I'm June Grosso

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<v Speaker 1>and you're listening to Bloomberg. We are appointing this till

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<v Speaker 1>we had a fair trial.

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<v Speaker 4>If we had a fair judge, I don't think it

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<v Speaker 4>would to be allowed.

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<v Speaker 2>This trial to take place.

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<v Speaker 1>Trying to make it a salacious He's allowing things in

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<v Speaker 1>that have nothing to do with this case.

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<v Speaker 4>Nothing to do with it.

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<v Speaker 1>Donald Trump once again complaining about the hush money trial

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<v Speaker 1>on Friday, after a week in which jurors heard first

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<v Speaker 1>hand accounts of the negotiations to pay off two women

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<v Speaker 1>to prevent damaging stories about the former president's alleged extramarital

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<v Speaker 1>affairs from becoming public as part of a scheme to

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<v Speaker 1>illegally influence the twenty sixteen presidential election, and one of

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<v Speaker 1>the pivotal pieces of evidence was a recording of a

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<v Speaker 1>meeting between Trump and Michael Cohen, his former lawyer and fixer,

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<v Speaker 1>shortly before the election, in which they in which they

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<v Speaker 1>discussed a plan to pay off an ex playboy model

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<v Speaker 1>who claimed to have had an affair with Trump, and

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<v Speaker 1>I spoke to.

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<v Speaker 3>Allan about it.

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<v Speaker 5>When it comes time to the financing, which will be.

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<v Speaker 3>We'll have to pay you, so'll no no no, I got.

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<v Speaker 1>And the last witness this week was Trump's former top aide,

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<v Speaker 1>Hope Hicks, who gave dramatic testimony about the campaign's panic

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<v Speaker 1>when explosive stories about Trump's alleged affairs leaked to the public.

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<v Speaker 1>Joining me for a look at the week is former

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<v Speaker 1>federal prosecutor Robert Mintz, a partner maccarter in English, Bob

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<v Speaker 1>tell us about the prosecution's strategy here, particularly in the

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<v Speaker 1>presentation of the witnesses.

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<v Speaker 2>The key witness in this case is certainly going to

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<v Speaker 2>be Michael Cohene, former President Trump's lawyer and fixer, who

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<v Speaker 2>was at the very heart of this case. What prosecutors

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<v Speaker 2>have done is to try to say at the stage

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<v Speaker 2>building up to the testimony of mister Cohen, which will

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<v Speaker 2>be the climactic moment of this trial without any question,

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<v Speaker 2>And they're trying to introduce to jurors the concept of

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<v Speaker 2>mister Cohen, the role that he played relative to this case,

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<v Speaker 2>and his relationship with former President Trump. And they're doing

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<v Speaker 2>that first through the remarks of people who knew him.

0:14:22.120 --> 0:14:24.640
<v Speaker 2>Now they have done it more recently by playing a

0:14:24.760 --> 0:14:27.800
<v Speaker 2>tape where they can hear mister Cohne's voice along with

0:14:27.840 --> 0:14:30.960
<v Speaker 2>former President Trump, and eventually they will hear from mister

0:14:31.040 --> 0:14:34.080
<v Speaker 2>Cohen himself. But by the time that mister Cohn takes

0:14:34.120 --> 0:14:37.640
<v Speaker 2>the stand, jurors will already be very familiar with who

0:14:37.680 --> 0:14:40.360
<v Speaker 2>he is and what his role in this case is.

0:14:40.400 --> 0:14:42.000
<v Speaker 2>From the standpoint of the prosecution.

0:14:42.560 --> 0:14:47.400
<v Speaker 1>Prosecutors love tapes, and they played a recording that Cohen

0:14:47.520 --> 0:14:52.400
<v Speaker 1>secretly made in which he's discussing with Trump financing one

0:14:52.480 --> 0:14:56.400
<v Speaker 1>hundred and fifty thousand dollars payment a few months before

0:14:56.440 --> 0:14:59.960
<v Speaker 1>the twenty sixteen election. But the tape seems to cut

0:15:00.160 --> 0:15:03.920
<v Speaker 1>both ways because he's talking about the financing and how

0:15:03.920 --> 0:15:07.440
<v Speaker 1>he's got it all under control, like he's in charge,

0:15:07.840 --> 0:15:10.800
<v Speaker 1>and that sort of squares with Trump's defense that this

0:15:10.920 --> 0:15:12.200
<v Speaker 1>was all, Michael Cohen.

0:15:12.560 --> 0:15:14.840
<v Speaker 2>Well, when we talk about the tape that was introduced

0:15:14.880 --> 0:15:17.120
<v Speaker 2>during this trial, we need to make something very clear

0:15:17.200 --> 0:15:20.480
<v Speaker 2>because it's critical to how this tape came into being

0:15:20.760 --> 0:15:24.280
<v Speaker 2>and how we'll be viewed by jurors. When prosecutors make tapes,

0:15:24.320 --> 0:15:28.560
<v Speaker 2>and you're absolutely right, prosecutors love tapes because it's a

0:15:28.600 --> 0:15:32.280
<v Speaker 2>way for them to hear from the defendants themselves. Defendants

0:15:32.320 --> 0:15:34.640
<v Speaker 2>have a Fifth Amendment right not to take the stand

0:15:34.680 --> 0:15:37.880
<v Speaker 2>in the criminal case. In most criminal cases, defendants do

0:15:38.000 --> 0:15:41.360
<v Speaker 2>not testify on their own behalf because that generally does

0:15:41.360 --> 0:15:44.760
<v Speaker 2>not end well for them. So the only way that

0:15:44.920 --> 0:15:48.080
<v Speaker 2>jurors will often hear from a defendant is by hearing

0:15:48.120 --> 0:15:51.800
<v Speaker 2>a tape in which they hear the defendant. According to prosecutors,

0:15:51.880 --> 0:15:55.160
<v Speaker 2>talking about the criminal activity. It's a way for jurors

0:15:55.240 --> 0:15:59.080
<v Speaker 2>here the voices of the co conspirators in real time

0:15:59.520 --> 0:16:03.240
<v Speaker 2>carrying out the alleged criminal scheme. So tapes are a

0:16:03.360 --> 0:16:07.240
<v Speaker 2>favorite tool of prosecutors, but typically the tape is done

0:16:07.400 --> 0:16:10.520
<v Speaker 2>under the supervision and at the direction of the FBI

0:16:10.640 --> 0:16:13.920
<v Speaker 2>or the DEA or whatever federal agency is running the case.

0:16:14.360 --> 0:16:18.440
<v Speaker 2>They get the witnesses prepared, They basically give an outline

0:16:18.680 --> 0:16:23.040
<v Speaker 2>to the witnesses about the conversation. It might be a wiretap.

0:16:23.120 --> 0:16:25.360
<v Speaker 2>That's another way the tapes are created. But here we

0:16:25.400 --> 0:16:29.560
<v Speaker 2>had an usual circumstance where Michael Cone made this tape himself.

0:16:29.800 --> 0:16:32.040
<v Speaker 2>This was years before any of this started. It was

0:16:32.080 --> 0:16:35.960
<v Speaker 2>in twenty sixteen, two months before the presidential election, and

0:16:36.040 --> 0:16:39.160
<v Speaker 2>so Cone made this tape himself. And as a result,

0:16:39.240 --> 0:16:42.240
<v Speaker 2>it's not a dream tape for prosecutors, but it does

0:16:42.280 --> 0:16:44.600
<v Speaker 2>help them in some ways and it hurts them in others.

0:16:45.480 --> 0:16:48.520
<v Speaker 1>What about the fact that Michael Cohen, a lawyer, is

0:16:48.640 --> 0:16:50.320
<v Speaker 1>taping his own client.

0:16:50.840 --> 0:16:53.040
<v Speaker 2>Well, I think one of the problems with this tape

0:16:53.280 --> 0:16:55.480
<v Speaker 2>is that it does pain Michael Cohen in a rather

0:16:55.600 --> 0:16:59.920
<v Speaker 2>unslattering light. It shows that he is taping former President Trump,

0:17:00.080 --> 0:17:03.840
<v Speaker 2>his own client, without former President Trump's knowledge. Who knows

0:17:03.880 --> 0:17:06.800
<v Speaker 2>how many other clients he may have tape. And it

0:17:06.880 --> 0:17:09.399
<v Speaker 2>says something about Michael Cohen and about the way he

0:17:09.480 --> 0:17:12.600
<v Speaker 2>does business that he's taping his clients in September of

0:17:12.600 --> 0:17:15.320
<v Speaker 2>twenty sixteen. And what ends up happening here is we

0:17:15.440 --> 0:17:19.679
<v Speaker 2>have a tape that does help prosecures by hearing former

0:17:19.720 --> 0:17:23.560
<v Speaker 2>President Trump's voice talking about the hush money payments, talking

0:17:23.600 --> 0:17:26.600
<v Speaker 2>about his knowledge about those payments leading up to the election.

0:17:27.119 --> 0:17:29.960
<v Speaker 2>But the tape is not perfect because it doesn't.

0:17:29.640 --> 0:17:30.679
<v Speaker 5>Go into other areas.

0:17:30.720 --> 0:17:33.720
<v Speaker 2>And whenever you have a tape, there's always some comments

0:17:33.720 --> 0:17:36.240
<v Speaker 2>that are made that are helpful, and the defense will

0:17:36.240 --> 0:17:39.200
<v Speaker 2>always point to other comments that were not made during

0:17:39.240 --> 0:17:42.000
<v Speaker 2>the tape to suggest that because they weren't made on

0:17:42.040 --> 0:17:43.640
<v Speaker 2>the tape, then they don't exist.

0:17:43.920 --> 0:17:47.240
<v Speaker 1>Let's talk about the strategy of the defense, I mean

0:17:47.320 --> 0:17:51.080
<v Speaker 1>so far during the prosecution's case, so they're basically attacking

0:17:51.119 --> 0:17:54.200
<v Speaker 1>the credibility of most of the witnesses, but they're also

0:17:54.359 --> 0:17:58.399
<v Speaker 1>trying to put a spotlight on the actions Michael Cohen

0:17:58.440 --> 0:17:59.920
<v Speaker 1>took in these schemes.

0:18:00.480 --> 0:18:03.480
<v Speaker 2>The defense lawyer did a pretty good job of showing

0:18:03.520 --> 0:18:07.520
<v Speaker 2>that the lawyer who represented Stormy Daniels in connections with

0:18:07.640 --> 0:18:10.679
<v Speaker 2>the payment went right up to the line of extortion

0:18:11.040 --> 0:18:13.760
<v Speaker 2>by demanding a payment in order not to go public

0:18:13.960 --> 0:18:16.520
<v Speaker 2>with the statement of this alleged affair. And he beat

0:18:16.600 --> 0:18:19.160
<v Speaker 2>up that lawyer pretty well to show him at least

0:18:19.200 --> 0:18:22.919
<v Speaker 2>that someone who was skating on the edge of the

0:18:23.040 --> 0:18:25.560
<v Speaker 2>law when it came to extortion, he didn't suggest he

0:18:25.640 --> 0:18:28.960
<v Speaker 2>broke the law. But he certainly tried his best to

0:18:29.000 --> 0:18:32.800
<v Speaker 2>paint him in an unflattering light. But really the target

0:18:32.920 --> 0:18:35.359
<v Speaker 2>for the defense is always going to be Michael Cohne.

0:18:35.359 --> 0:18:37.760
<v Speaker 2>Michael Cohne is at the heart of this case. They

0:18:37.800 --> 0:18:40.480
<v Speaker 2>are going to suggest that Michael Cohne was the architect

0:18:40.960 --> 0:18:44.440
<v Speaker 2>of this payment scheme, and most critically, they are going

0:18:44.480 --> 0:18:46.960
<v Speaker 2>to suggest that it was Michael Cohne and not former

0:18:47.000 --> 0:18:51.639
<v Speaker 2>President Trump who designed the payoff scheme and designed the

0:18:51.720 --> 0:18:54.639
<v Speaker 2>cover up because remember, this case is not about the

0:18:54.720 --> 0:18:58.360
<v Speaker 2>hush money payment that was essentially conceded at the opening

0:18:58.400 --> 0:19:02.080
<v Speaker 2>statement by the Trump defense. It's all about how those

0:19:02.119 --> 0:19:05.600
<v Speaker 2>payments were allegedly covered up as a business expense. That's

0:19:05.640 --> 0:19:08.440
<v Speaker 2>what's made this case of crime, and the defense strategy

0:19:08.520 --> 0:19:11.520
<v Speaker 2>is going to say that that was all schemed up

0:19:11.720 --> 0:19:14.720
<v Speaker 2>by Michael Cohne without the involvement or the knowledge of

0:19:14.760 --> 0:19:16.200
<v Speaker 2>former President Trump at the time.

0:19:16.920 --> 0:19:20.800
<v Speaker 1>And now we have the big Friday witness. Prosecutors love

0:19:20.880 --> 0:19:24.080
<v Speaker 1>to put on witnesses on Friday afternoon that they think

0:19:24.119 --> 0:19:29.600
<v Speaker 1>are going to be very strong because it supposedly stays

0:19:29.640 --> 0:19:32.640
<v Speaker 1>with the jurors all weekend. Do you buy that theory

0:19:32.760 --> 0:19:35.080
<v Speaker 1>or did you fall into it? When you were a prosecutor.

0:19:35.560 --> 0:19:37.640
<v Speaker 2>Well, I think at the end of the day, prosecutors

0:19:37.920 --> 0:19:41.080
<v Speaker 2>have to present their witnesses in an orderly way, so

0:19:41.200 --> 0:19:45.120
<v Speaker 2>you can't really rejigger the testimony of witnesses. It has

0:19:45.160 --> 0:19:48.080
<v Speaker 2>to be logical, it has to flow. There's a certain

0:19:48.080 --> 0:19:51.600
<v Speaker 2>strategy into how you build your case. But as a

0:19:51.640 --> 0:19:54.600
<v Speaker 2>former prosecutor, I can tell you there's nothing wrong with

0:19:54.720 --> 0:19:58.440
<v Speaker 2>having a very strong witness the day on Friday.

0:19:59.200 --> 0:20:02.640
<v Speaker 1>Hope seems to be a lot different from the other

0:20:02.720 --> 0:20:06.760
<v Speaker 1>main prosecution witnesses we've heard from so far, because she

0:20:06.840 --> 0:20:11.639
<v Speaker 1>doesn't have the credibility or morality, shall we say, problems

0:20:11.800 --> 0:20:15.280
<v Speaker 1>of witnesses like the former publisher of the National Inquirer

0:20:15.760 --> 0:20:18.200
<v Speaker 1>or the lawyer who broker these hush money deals.

0:20:18.640 --> 0:20:20.960
<v Speaker 2>Yeah, Hope Hicks does not have a lot of baggage

0:20:21.080 --> 0:20:23.600
<v Speaker 2>at all. She is not a leg to being involved

0:20:23.640 --> 0:20:26.840
<v Speaker 2>in this payoff scheme. She wasn't working for the National

0:20:26.880 --> 0:20:31.199
<v Speaker 2>Inquirer on these tax and kill questionable practices of varying

0:20:31.280 --> 0:20:34.720
<v Speaker 2>stories for money. All of that is rather unseemly, and

0:20:34.760 --> 0:20:38.160
<v Speaker 2>all of those witnesses are open to cross examination based

0:20:38.240 --> 0:20:41.639
<v Speaker 2>upon only their credibility, but even the morality of what

0:20:41.680 --> 0:20:44.320
<v Speaker 2>they were doing. The defense lawyers made a point of

0:20:44.359 --> 0:20:47.480
<v Speaker 2>attacking them, and so she will be a strong witness

0:20:47.600 --> 0:20:51.159
<v Speaker 2>for the prosecution, but she doesn't have as much information

0:20:51.400 --> 0:20:52.639
<v Speaker 2>at the heart of the case as some of the

0:20:52.680 --> 0:20:53.600
<v Speaker 2>other witnesses are.

0:20:53.920 --> 0:20:56.840
<v Speaker 1>And with hicks testimony, the focus of the trial seemed

0:20:56.880 --> 0:21:00.639
<v Speaker 1>to be moving from the tabloid world to the world

0:21:00.640 --> 0:21:02.200
<v Speaker 1>of the campaign in White House.

0:21:03.040 --> 0:21:06.639
<v Speaker 2>What she adds to the prosecution's argument is to show

0:21:06.680 --> 0:21:10.639
<v Speaker 2>the campaign's sensitivity to these issues in light of a

0:21:10.680 --> 0:21:15.359
<v Speaker 2>Hollywood access tape, and how critical the campaign viewed the

0:21:15.400 --> 0:21:19.040
<v Speaker 2>public perception of Donald Trump, who was then a candidate

0:21:19.080 --> 0:21:22.240
<v Speaker 2>for president, and doing their best to try to tamp

0:21:22.320 --> 0:21:25.439
<v Speaker 2>down some of these salacious stories that were beginning to

0:21:25.480 --> 0:21:28.959
<v Speaker 2>percolate in the press. So it shows from the prosecution

0:21:29.119 --> 0:21:32.880
<v Speaker 2>standpoint how critical it was for Michael Cohen to try

0:21:32.880 --> 0:21:35.320
<v Speaker 2>to bury this story. That's what prosecutors are going to

0:21:35.320 --> 0:21:38.359
<v Speaker 2>try to argue based upon the testimony of Hope, Hicks and.

0:21:38.240 --> 0:21:43.639
<v Speaker 1>Bob The defense is refusing to stipulate to just about

0:21:43.760 --> 0:21:48.920
<v Speaker 1>every piece of evidence that the prosecution wants to introduce. So,

0:21:49.040 --> 0:21:52.520
<v Speaker 1>for example, one day we heard from the archivist at

0:21:52.880 --> 0:21:56.399
<v Speaker 1>c SPAN, so tapes could be introduced. I mean, it

0:21:56.480 --> 0:21:58.720
<v Speaker 1>slows down the trial, But how much does it really

0:21:58.800 --> 0:22:01.560
<v Speaker 1>get the defense in in the end that little slow

0:22:01.640 --> 0:22:05.320
<v Speaker 1>down or annoyance for the prosecution. I guess well.

0:22:05.320 --> 0:22:09.920
<v Speaker 2>Often the defense will stipulate to these non controversial, essentially

0:22:10.640 --> 0:22:14.440
<v Speaker 2>ministerial testimony in order to get certain documents entered into

0:22:14.520 --> 0:22:15.680
<v Speaker 2>evidence at a trial.

0:22:15.960 --> 0:22:16.440
<v Speaker 5>But what the.

0:22:16.400 --> 0:22:20.240
<v Speaker 2>Defense seems to be doing here is not agreeing to

0:22:20.440 --> 0:22:25.160
<v Speaker 2>any of these stipulated situations in order to slow down

0:22:25.240 --> 0:22:27.879
<v Speaker 2>the prosecution, to try to throw them off their game

0:22:28.160 --> 0:22:30.919
<v Speaker 2>and to break up the narrative. Now, it really is

0:22:31.280 --> 0:22:33.800
<v Speaker 2>a strategy that's being used here. They have every right

0:22:33.880 --> 0:22:37.200
<v Speaker 2>to do that. The defense is not required to stipulate

0:22:37.440 --> 0:22:40.600
<v Speaker 2>to any of these documents, witnesses, And what they're doing

0:22:40.640 --> 0:22:44.640
<v Speaker 2>here is slowing the case down, throwing the prosecutors off

0:22:44.680 --> 0:22:47.160
<v Speaker 2>their timing, or at least they're trying to. And they're

0:22:47.200 --> 0:22:50.119
<v Speaker 2>trying to slow this case down to break up the

0:22:50.160 --> 0:22:53.399
<v Speaker 2>prosecution's case so they can't really build up momentum and

0:22:53.560 --> 0:22:57.560
<v Speaker 2>tell a streamline narrative, which is what prosecutors are trying

0:22:57.560 --> 0:22:58.400
<v Speaker 2>to accomplish here.

0:22:58.920 --> 0:23:01.760
<v Speaker 1>There's been a lot of report about Trump sitting with

0:23:01.800 --> 0:23:05.080
<v Speaker 1>his eyes closed during the trial and on truth Social

0:23:05.160 --> 0:23:08.960
<v Speaker 1>he said that he's not sleeping. I simply close my

0:23:09.080 --> 0:23:14.040
<v Speaker 1>beautiful blue eyes sometimes listen intently and take it all in.

0:23:14.440 --> 0:23:15.640
<v Speaker 1>How might the jury see that.

0:23:15.920 --> 0:23:17.840
<v Speaker 2>Well, it's really hard to say what's in the mind

0:23:17.880 --> 0:23:20.280
<v Speaker 2>of jurors, but you can be certain that they are

0:23:20.520 --> 0:23:23.200
<v Speaker 2>looking at the defendant, as they do in any criminal trial,

0:23:23.240 --> 0:23:26.760
<v Speaker 2>that they're looking at the reactions to all this testimonies.

0:23:26.880 --> 0:23:30.200
<v Speaker 2>And generally, if you're a defense lawyer, you want your

0:23:30.440 --> 0:23:33.400
<v Speaker 2>client to not react to the testimony, to sit there

0:23:33.520 --> 0:23:36.560
<v Speaker 2>essentially stoneface. So it could be that the advice that

0:23:36.640 --> 0:23:39.120
<v Speaker 2>the defenselaers are giving former President trumpet is to act

0:23:39.160 --> 0:23:41.760
<v Speaker 2>as if none of this testimony really means anything.

0:23:42.160 --> 0:23:46.400
<v Speaker 1>Now about the gag order, this week, Judge Murshawn found

0:23:46.600 --> 0:23:49.760
<v Speaker 1>Trump in contempt of court for violating the gag order

0:23:49.800 --> 0:23:53.359
<v Speaker 1>on nine occasions and find him nine thousand dollars. He

0:23:53.440 --> 0:23:58.000
<v Speaker 1>also had a hearing on three additional alleged violations by Trump.

0:23:58.400 --> 0:24:02.200
<v Speaker 1>These monetary finds are pocket change to Trump. What can

0:24:02.200 --> 0:24:02.880
<v Speaker 1>the judge do?

0:24:03.600 --> 0:24:06.879
<v Speaker 2>Ultimately, the gag order is a problem for the judge

0:24:07.119 --> 0:24:11.119
<v Speaker 2>because prosecutors are repeatedly bringing up evidence to former President

0:24:11.160 --> 0:24:14.960
<v Speaker 2>Trump violating the gag order. Talking about witnesses. The other day,

0:24:15.200 --> 0:24:17.800
<v Speaker 2>he made the statement that the court was not permitting

0:24:17.880 --> 0:24:20.240
<v Speaker 2>him to testify in his own defense, so the judge

0:24:20.280 --> 0:24:22.520
<v Speaker 2>had to correct. That's been made clear that he has

0:24:22.520 --> 0:24:25.240
<v Speaker 2>a constitutional right to testify in his own defense, but

0:24:25.359 --> 0:24:27.720
<v Speaker 2>nothing is preventing him from doing that. But at the

0:24:27.760 --> 0:24:30.800
<v Speaker 2>end of the day, here the judge confine him and

0:24:30.920 --> 0:24:33.400
<v Speaker 2>does have the right, as he would with any other defendant,

0:24:33.600 --> 0:24:36.520
<v Speaker 2>to hold former President Trump in contempt and put him

0:24:36.560 --> 0:24:38.560
<v Speaker 2>in jail. But that's not something that we're going to

0:24:38.560 --> 0:24:40.879
<v Speaker 2>see happened in this case. He's not going to do that.

0:24:41.160 --> 0:24:43.400
<v Speaker 2>So all he can really do is continue to admonish

0:24:43.400 --> 0:24:46.359
<v Speaker 2>for our President Trump, to talk to defense lawyers to

0:24:46.400 --> 0:24:48.440
<v Speaker 2>try to get their fine in line, and at the

0:24:48.560 --> 0:24:51.400
<v Speaker 2>end of the day, continue to stack up fine if

0:24:51.440 --> 0:24:53.080
<v Speaker 2>the violations continue to occur.

0:24:53.640 --> 0:24:57.520
<v Speaker 1>Thanks Bob. That's Robert mant of maccarter and English coming up.

0:24:57.840 --> 0:25:01.080
<v Speaker 1>The richest person to do time in fact prison. I'm

0:25:01.160 --> 0:25:05.880
<v Speaker 1>June Grosso and you're listening to Bloomberg. Last November, Attorney

0:25:05.920 --> 0:25:09.640
<v Speaker 1>General Merrick Garland announced the guilty please of Crypto Giant

0:25:09.680 --> 0:25:14.040
<v Speaker 1>Finance and its chief executive Shangpen Jao for failures that

0:25:14.119 --> 0:25:17.800
<v Speaker 1>allowed cyber criminals and terrorist groups to freely trade on

0:25:17.880 --> 0:25:24.440
<v Speaker 1>the world's largest cryptocurrency exchange. Finance prioritized its profits over

0:25:24.600 --> 0:25:28.040
<v Speaker 1>the safety of the American people. The saga ended this

0:25:28.160 --> 0:25:31.040
<v Speaker 1>week when a judge sentenced the forty seven year old

0:25:31.080 --> 0:25:33.639
<v Speaker 1>to four months in prison. It's the first time a

0:25:33.760 --> 0:25:36.840
<v Speaker 1>CEO has ever gone to prison for a Bank Secrecy

0:25:36.880 --> 0:25:40.720
<v Speaker 1>Act violation, although the Justice Department had wanted a sentence

0:25:40.800 --> 0:25:43.680
<v Speaker 1>of three years to make an example out of Jao

0:25:43.880 --> 0:25:48.160
<v Speaker 1>to an industry rebounding from a slew of high profile scandals.

0:25:48.720 --> 0:25:52.120
<v Speaker 1>You remember Sam bankman Fried joining me is Bloomberg Legal

0:25:52.119 --> 0:25:55.480
<v Speaker 1>reporter Ava Benny Morrison, who was in the Seattle courtroom

0:25:55.480 --> 0:25:58.199
<v Speaker 1>for the sentencing, take us inside the courtroom.

0:25:58.240 --> 0:26:02.159
<v Speaker 4>Eva sure Jow, who's better known as cz planned up

0:26:02.160 --> 0:26:04.840
<v Speaker 4>to the Federal courthouse in Seattle. He had about half

0:26:04.840 --> 0:26:08.080
<v Speaker 4>a dozen lawyers with him. He didn't say much throughout

0:26:08.320 --> 0:26:11.119
<v Speaker 4>the proceeding other than getting up to give a statement

0:26:11.160 --> 0:26:13.919
<v Speaker 4>to the judge where he talked about how remorseful he was,

0:26:14.040 --> 0:26:16.160
<v Speaker 4>how he had made a mistake, but he took full

0:26:16.200 --> 0:26:19.480
<v Speaker 4>responsibility and that's why he had traveled from his home

0:26:19.840 --> 0:26:22.480
<v Speaker 4>in the UAE to America at the end of last

0:26:22.560 --> 0:26:25.400
<v Speaker 4>year to face the prosecution. While he was sitting at

0:26:25.400 --> 0:26:28.080
<v Speaker 4>the table, he was very still. He's sitting up straight,

0:26:28.160 --> 0:26:31.560
<v Speaker 4>He's staring at the judge. Seemed to be absorbing everything

0:26:31.600 --> 0:26:34.840
<v Speaker 4>that the judge and the prosecutors were saying. CZ's mother

0:26:35.200 --> 0:26:38.600
<v Speaker 4>and his sister, Jessica were both seated in the front row,

0:26:38.720 --> 0:26:41.360
<v Speaker 4>and there were a few other friends and supporters from

0:26:41.359 --> 0:26:43.639
<v Speaker 4>the crypto industry that were in the courthouse as well.

0:26:43.840 --> 0:26:46.879
<v Speaker 1>There was a plea deal here, but prosecutors were asking

0:26:46.960 --> 0:26:50.720
<v Speaker 1>for twice the sentencing guidelines. What was their reasoning?

0:26:51.080 --> 0:26:53.960
<v Speaker 4>Federal prosecutors were trying to make an example out of Cz.

0:26:54.520 --> 0:26:57.800
<v Speaker 4>He was the CEO of the world's biggest crypto company,

0:26:57.840 --> 0:27:01.000
<v Speaker 4>they argued, and he committed these as part of a

0:27:01.080 --> 0:27:03.879
<v Speaker 4>plan to violate US laws that would allow him to

0:27:03.880 --> 0:27:08.000
<v Speaker 4>make more money, allow big traders to continue using Binance

0:27:08.119 --> 0:27:11.200
<v Speaker 4>even though it didn't have an adequate anti money laundry progress.

0:27:11.320 --> 0:27:14.679
<v Speaker 4>So they were arguing for thirty six months in prison

0:27:14.720 --> 0:27:17.159
<v Speaker 4>for Cz to really send a message notly to the

0:27:17.160 --> 0:27:20.720
<v Speaker 4>crypto industry, but to corporate leaders far and wide that

0:27:20.800 --> 0:27:23.120
<v Speaker 4>this sort of behavior would not be tolerated and would

0:27:23.160 --> 0:27:23.720
<v Speaker 4>be punished.

0:27:24.000 --> 0:27:28.080
<v Speaker 1>As you mentioned, the defense was asking for leniency and probation.

0:27:28.240 --> 0:27:29.240
<v Speaker 1>What was their argument.

0:27:29.560 --> 0:27:32.879
<v Speaker 4>The defense was pleading with the judge to spare cz

0:27:33.040 --> 0:27:36.879
<v Speaker 4>from prison. They pointed to the fact that he voluntarily

0:27:36.960 --> 0:27:39.679
<v Speaker 4>came back to America to face these charges at the

0:27:39.720 --> 0:27:42.800
<v Speaker 4>end of last year. They said that he had cooperated

0:27:42.920 --> 0:27:45.959
<v Speaker 4>extensively with the government in this investigation and that he

0:27:46.000 --> 0:27:49.400
<v Speaker 4>directed Binance to cooperate with the DOJ as well. They

0:27:49.440 --> 0:27:54.119
<v Speaker 4>pointed out that Finance had settled several investigations with knowing

0:27:54.160 --> 0:27:58.480
<v Speaker 4>the DOJ, but the CFTC the Treasury Department, which resulted

0:27:58.600 --> 0:28:01.840
<v Speaker 4>in the company paying four point three billion dollars worth

0:28:01.840 --> 0:28:04.440
<v Speaker 4>of fines. I think the biggest sticking point in the

0:28:04.560 --> 0:28:08.560
<v Speaker 4>arguments was over whether a prison sentence was warranted for

0:28:08.640 --> 0:28:11.920
<v Speaker 4>this type of offense. Cz was essentially charged with violating

0:28:11.960 --> 0:28:14.600
<v Speaker 4>the Bank Secrecy Act, which sounds pretty minor on the

0:28:14.600 --> 0:28:19.400
<v Speaker 4>face of it, but attached to that crime were arguably

0:28:19.520 --> 0:28:23.720
<v Speaker 4>pretty serious circumstances. Because he didn't have an adequate AML

0:28:23.840 --> 0:28:28.160
<v Speaker 4>program at Finance, terrorist organizations like al Qaeda and Hamas

0:28:28.160 --> 0:28:31.119
<v Speaker 4>were able to trade on the platform, and US customers

0:28:31.160 --> 0:28:34.960
<v Speaker 4>were trading with customers in sanctioned countries like Ara. So

0:28:35.119 --> 0:28:37.240
<v Speaker 4>the defense was really trying to narrow in on the

0:28:37.280 --> 0:28:40.480
<v Speaker 4>fact that this was just a banking violation, for the

0:28:40.520 --> 0:28:44.000
<v Speaker 4>prosecution was urging the judge to look at those serious

0:28:44.040 --> 0:28:45.000
<v Speaker 4>circumstances that.

0:28:44.960 --> 0:28:45.680
<v Speaker 5>Were attached to it.

0:28:46.040 --> 0:28:50.520
<v Speaker 1>Did the prosecution prove in any way that CZ knew

0:28:50.560 --> 0:28:52.680
<v Speaker 1>about what was happening on the platform.

0:28:53.280 --> 0:28:57.520
<v Speaker 4>No, the prosecution didn't say that cind personally knew that

0:28:57.920 --> 0:29:02.080
<v Speaker 4>there were the proceeds of crime moving across finance, and

0:29:02.160 --> 0:29:05.720
<v Speaker 4>the defense really highlighted that as well, saying, look, there

0:29:05.760 --> 0:29:08.440
<v Speaker 4>is no evidence here that cz personally, as the SEEO

0:29:08.480 --> 0:29:12.600
<v Speaker 4>of the company knew that illicit funds were moving across finance,

0:29:12.720 --> 0:29:14.719
<v Speaker 4>and so that needed to be taken into account.

0:29:15.080 --> 0:29:18.200
<v Speaker 1>How long did his statement to the judge last and

0:29:18.560 --> 0:29:20.000
<v Speaker 1>what part of it stood out to you.

0:29:20.560 --> 0:29:23.479
<v Speaker 4>CZ's statement to the judge only lasted a few minutes.

0:29:23.800 --> 0:29:26.680
<v Speaker 4>He started by saying that he was remorseful and he

0:29:26.800 --> 0:29:29.800
<v Speaker 4>was sorry and he had made mistakes. He spoke about

0:29:29.800 --> 0:29:32.200
<v Speaker 4>how difficult it was for him to step down as

0:29:32.400 --> 0:29:35.520
<v Speaker 4>CEO of Finance, a company that he founded in China

0:29:35.680 --> 0:29:39.160
<v Speaker 4>several years ago. He spoke about how he struggled to

0:29:39.200 --> 0:29:41.960
<v Speaker 4>accept that that was essentially the only course of action here.

0:29:42.200 --> 0:29:44.560
<v Speaker 4>But he spoke about how he still wants to make

0:29:44.600 --> 0:29:47.000
<v Speaker 4>a difference in the world, and he's really focused on

0:29:47.320 --> 0:29:50.000
<v Speaker 4>philanthropy now that he's not leading finance.

0:29:50.560 --> 0:29:52.920
<v Speaker 1>And what was the judge's reasoning for handing down the

0:29:52.960 --> 0:29:54.160
<v Speaker 1>four months sentence.

0:29:54.720 --> 0:29:59.960
<v Speaker 4>The judge agreed with the defense that the prosecutions suggested

0:30:00.040 --> 0:30:02.600
<v Speaker 4>and that Cz should be sentenced to thirty six months

0:30:02.600 --> 0:30:05.920
<v Speaker 4>in prison was far too high. He said that he

0:30:06.080 --> 0:30:08.920
<v Speaker 4>had taken a lot of time to reap through more

0:30:08.960 --> 0:30:11.880
<v Speaker 4>than one hundred and sixty letters admitted from CZ's friends

0:30:11.920 --> 0:30:15.720
<v Speaker 4>and family and co workers that painted this man in

0:30:15.760 --> 0:30:19.000
<v Speaker 4>a very favorable light, describing him as a family man,

0:30:19.200 --> 0:30:22.760
<v Speaker 4>a humble person, and just a hard working entrepreneur. He

0:30:22.880 --> 0:30:26.040
<v Speaker 4>said that yes, while this is a Bank Secrecy Act

0:30:26.120 --> 0:30:30.600
<v Speaker 4>violation and other cases involving that charge had resulted in probation,

0:30:30.920 --> 0:30:33.880
<v Speaker 4>there were some egregious factors here, like the fact that

0:30:34.120 --> 0:30:38.560
<v Speaker 4>Hamas and cyber criminals and dark web transactions were able

0:30:38.560 --> 0:30:40.400
<v Speaker 4>to take place on the platform.

0:30:39.920 --> 0:30:40.440
<v Speaker 5>Because of it.

0:30:40.880 --> 0:30:43.840
<v Speaker 4>I think he just couldn't get past the Hamas al

0:30:43.880 --> 0:30:47.400
<v Speaker 4>Kader dark web element of this. I will say that

0:30:47.600 --> 0:30:51.120
<v Speaker 4>it's unusual for BSA cases to result in prison time,

0:30:51.560 --> 0:30:54.960
<v Speaker 4>so the judge was really sort of putting his neck

0:30:55.000 --> 0:30:58.640
<v Speaker 4>out here by handing down a sentence that did involve

0:30:58.680 --> 0:31:01.320
<v Speaker 4>prison time. It'll be interesting thing to see if this

0:31:01.480 --> 0:31:06.240
<v Speaker 4>sets a precedent for other BSA cases in white collar

0:31:06.280 --> 0:31:07.600
<v Speaker 4>prosecutions in the future.

0:31:07.960 --> 0:31:10.840
<v Speaker 1>What always seems striking to me about this case is

0:31:10.880 --> 0:31:14.480
<v Speaker 1>that the UAE has no extradition treaty with the US,

0:31:14.680 --> 0:31:18.040
<v Speaker 1>yet he flew here and turned himself in and then

0:31:18.280 --> 0:31:23.040
<v Speaker 1>prosecutors stopped him from returning home pending sentence. And as

0:31:23.080 --> 0:31:27.479
<v Speaker 1>for a sentencing of twice the guidelines, that scenario is

0:31:27.520 --> 0:31:30.840
<v Speaker 1>not going to encourage others to turn themselves in.

0:31:31.160 --> 0:31:34.240
<v Speaker 4>Yes, the defense actually did make a point out of that,

0:31:34.440 --> 0:31:37.280
<v Speaker 4>saying cz has done all the right things here. He's

0:31:37.320 --> 0:31:41.480
<v Speaker 4>come back from Dubai, turned himself in, pleaded guilty to

0:31:41.560 --> 0:31:45.120
<v Speaker 4>the charge, agreed to pay personally a fifty million dollar

0:31:45.200 --> 0:31:48.120
<v Speaker 4>fine to the government. He has ticked all the boxes.

0:31:48.360 --> 0:31:51.760
<v Speaker 4>But the fact that the prosecution was then arguing for

0:31:52.120 --> 0:31:55.240
<v Speaker 4>a prison sentence that was well above the federal sentencing

0:31:55.280 --> 0:31:59.240
<v Speaker 4>guidelines might actually deter people from doing that in the future.

0:31:59.360 --> 0:32:02.040
<v Speaker 4>And from the side to travel from a non extradition

0:32:02.160 --> 0:32:04.440
<v Speaker 4>country to the US to face the charges.

0:32:05.280 --> 0:32:08.240
<v Speaker 1>What happens now, Do I understand that he's not eligible

0:32:08.520 --> 0:32:11.560
<v Speaker 1>to go to a minimum security prison?

0:32:12.320 --> 0:32:15.400
<v Speaker 4>Yes, CZ, because he's not a US citizen, is then

0:32:15.680 --> 0:32:19.640
<v Speaker 4>eligible for a minimum security prison, and that's usually where

0:32:19.720 --> 0:32:23.040
<v Speaker 4>white collar defendants end up. So he has made a

0:32:23.080 --> 0:32:26.480
<v Speaker 4>request for the judge to be designated to a facility

0:32:26.520 --> 0:32:30.120
<v Speaker 4>called FDC C tach here in Seattle. We don't know

0:32:30.160 --> 0:32:33.000
<v Speaker 4>when he needs start that prison sentence that dates still

0:32:33.400 --> 0:32:36.080
<v Speaker 4>to be decided, and but his lawyer did say that

0:32:36.320 --> 0:32:38.200
<v Speaker 4>he's eager to just get it over and done with

0:32:38.360 --> 0:32:41.040
<v Speaker 4>and finally be able to return to Dubai to reunite

0:32:41.040 --> 0:32:41.720
<v Speaker 4>with his family.

0:32:42.040 --> 0:32:45.440
<v Speaker 1>This is the second high profile sentencing in the crypto

0:32:46.200 --> 0:32:50.440
<v Speaker 1>industry recently. Was Sam Magman Freed mentioned at all?

0:32:50.640 --> 0:32:53.520
<v Speaker 4>Sam Magman Freed did get a mention. Actually, when the

0:32:53.560 --> 0:32:57.480
<v Speaker 4>prosecutor was referring to the arguments that CZ's lawyers had

0:32:57.840 --> 0:33:01.200
<v Speaker 4>submitted to the court, he said, look, we're not alleging

0:33:01.320 --> 0:33:04.200
<v Speaker 4>that case is a Sambang mcfred. We're not saying that

0:33:04.240 --> 0:33:06.200
<v Speaker 4>he's a monster, and we're not trying to kill the

0:33:06.200 --> 0:33:09.160
<v Speaker 4>crypto industry. That we are saying that this is a

0:33:09.200 --> 0:33:12.680
<v Speaker 4>serious crime because he didn't have an AMO program and

0:33:12.720 --> 0:33:15.400
<v Speaker 4>that allowed some of the ilicid actives and terrorists to

0:33:15.440 --> 0:33:16.520
<v Speaker 4>gain access to buy it.

0:33:17.120 --> 0:33:21.680
<v Speaker 1>Thanks Seva, that's Bloomberg Leigal reporter Ava Benny Morrison. Joo's

0:33:21.680 --> 0:33:25.280
<v Speaker 1>wealth has ballooned to more than thirty eight billion dollars,

0:33:25.320 --> 0:33:28.719
<v Speaker 1>giving him the dubious distinction of being the richest person

0:33:29.040 --> 0:33:32.560
<v Speaker 1>ever to do time in a federal prison. Let's turn

0:33:32.600 --> 0:33:36.000
<v Speaker 1>out to another billionaire in the legal news, Elon Musk

0:33:36.040 --> 0:33:38.320
<v Speaker 1>has been trying to get rid of his Twitter sitter

0:33:38.440 --> 0:33:41.360
<v Speaker 1>for years, even though he agreed to have a lawyer

0:33:41.440 --> 0:33:44.520
<v Speaker 1>pre approve his tesla posts as part of a settlement

0:33:44.560 --> 0:33:48.920
<v Speaker 1>with the SEC in twenty eighteen, although it's unclear exactly

0:33:49.040 --> 0:33:52.600
<v Speaker 1>who's watching over his tweets and how much watching they're

0:33:52.720 --> 0:33:56.360
<v Speaker 1>actually doing. In an interview with sixty Minutes at the time,

0:33:56.840 --> 0:34:00.640
<v Speaker 1>Musk didn't seem too concerned about getting that soon provision.

0:34:01.200 --> 0:34:04.840
<v Speaker 3>The only tweets that would have to be say, reviewed,

0:34:05.000 --> 0:34:10.120
<v Speaker 3>would be if a tweet had a probability of causing

0:34:10.200 --> 0:34:11.920
<v Speaker 3>im movement in the stock and that's it.

0:34:12.200 --> 0:34:13.919
<v Speaker 2>Yeah, I mean, otherwise, it's hello.

0:34:14.000 --> 0:34:16.360
<v Speaker 3>First Amendment like premium speech is fundamental.

0:34:17.280 --> 0:34:21.560
<v Speaker 1>Freedom of speech is a fundamental constitutional right. But that

0:34:21.760 --> 0:34:24.840
<v Speaker 1>argument didn't convince the lower courts to throw out his

0:34:24.960 --> 0:34:29.040
<v Speaker 1>Twitter sitter agreement, and this week the Supreme Court refused

0:34:29.040 --> 0:34:32.640
<v Speaker 1>to hear Musk's appeal without comment. Joining me is business

0:34:32.680 --> 0:34:37.240
<v Speaker 1>law professor Eric Talley of Columbia Law School. Elon Musk

0:34:37.280 --> 0:34:41.160
<v Speaker 1>has battled the sec over his social media posts since

0:34:41.200 --> 0:34:45.840
<v Speaker 1>he tweeted in August twenty eighteen he had funding secured

0:34:45.960 --> 0:34:47.280
<v Speaker 1>to take Tesla private.

0:34:47.760 --> 0:34:51.280
<v Speaker 5>Well, this was yet another example of mister Musk's pensiant

0:34:51.400 --> 0:34:54.480
<v Speaker 5>for firing things up onto Twitter or acts, you know,

0:34:54.640 --> 0:34:56.360
<v Speaker 5>sort of at the spur of the moment. Back in

0:34:56.360 --> 0:35:02.160
<v Speaker 5>twenty eighteen, mister Musk dropped a tweet basically said funding

0:35:02.280 --> 0:35:06.200
<v Speaker 5>secured for you know, buying out Twitter at four hundred

0:35:06.200 --> 0:35:08.640
<v Speaker 5>and twenty dollars share and you know that number of

0:35:08.640 --> 0:35:11.799
<v Speaker 5>the four to twenty name is a very popular one

0:35:11.840 --> 0:35:12.520
<v Speaker 5>for mister Musk.

0:35:12.560 --> 0:35:12.759
<v Speaker 1>Case.

0:35:12.880 --> 0:35:16.280
<v Speaker 5>Well, people took seriously this idea that funding was secured,

0:35:16.320 --> 0:35:18.960
<v Speaker 5>and if you looked into the backstory, the funding sources

0:35:19.000 --> 0:35:21.839
<v Speaker 5>were not nearly as secure as he signaled that they

0:35:21.880 --> 0:35:25.719
<v Speaker 5>were at the time. So that ended up eliciting two

0:35:25.760 --> 0:35:28.359
<v Speaker 5>different legal actions won by the SEC, and then there

0:35:28.360 --> 0:35:31.280
<v Speaker 5>was also a class action lawsuit. He won the class

0:35:31.280 --> 0:35:34.160
<v Speaker 5>action lawsuit, but the SEC moved first and said that

0:35:34.239 --> 0:35:37.239
<v Speaker 5>was misleading. You didn't have the funding secured. We are

0:35:37.360 --> 0:35:41.239
<v Speaker 5>going to push our own regulatory action against you. And

0:35:41.280 --> 0:35:44.560
<v Speaker 5>the matter quickly settled, and it probably settled in part

0:35:44.560 --> 0:35:47.120
<v Speaker 5>because the SEC has a lot of heft when it

0:35:47.160 --> 0:35:49.799
<v Speaker 5>comes to sanctioned They can basically force someone not to

0:35:49.800 --> 0:35:52.160
<v Speaker 5>be an officer and director of a company for many,

0:35:52.239 --> 0:35:54.840
<v Speaker 5>many years if they chose to do so. So, the

0:35:55.040 --> 0:35:58.040
<v Speaker 5>terms of the settlement that mister Musk reached with the

0:35:58.080 --> 0:36:02.520
<v Speaker 5>SEC included monetary fines that he had to pay, which was,

0:36:02.600 --> 0:36:04.560
<v Speaker 5>you know, tens of millions of dollars but kind of

0:36:04.600 --> 0:36:06.880
<v Speaker 5>pocket change for him. And in addition, he had to

0:36:06.880 --> 0:36:09.080
<v Speaker 5>step down as chairman of the board to keep his

0:36:09.200 --> 0:36:12.799
<v Speaker 5>board position and CEO position. But then the final thing

0:36:12.840 --> 0:36:15.640
<v Speaker 5>is that he needed a Twitter babysitter. He needed to

0:36:15.760 --> 0:36:19.760
<v Speaker 5>consult with a lawyer before he put things up on Twitter,

0:36:20.000 --> 0:36:22.640
<v Speaker 5>so the lawyer could sort of sound the alarm bells

0:36:22.680 --> 0:36:25.280
<v Speaker 5>if what he was about to do had a bearing

0:36:25.360 --> 0:36:28.080
<v Speaker 5>on things like, oh, I don't know securities for us,

0:36:28.120 --> 0:36:31.640
<v Speaker 5>and so that's effectively what he had agreed to do

0:36:31.760 --> 0:36:35.200
<v Speaker 5>in this settlement. And you know, he is a guy

0:36:35.239 --> 0:36:39.360
<v Speaker 5>that tends not to like being, you know, overseen by

0:36:39.800 --> 0:36:42.560
<v Speaker 5>lawyers or anyone else. And within a couple of years

0:36:42.600 --> 0:36:44.640
<v Speaker 5>grew quite tired of the fact that he couldn't just

0:36:44.680 --> 0:36:48.920
<v Speaker 5>post whenever he wanted, and at some point decided he

0:36:49.000 --> 0:36:51.920
<v Speaker 5>was going to try to get out of the settlement.

0:36:52.000 --> 0:36:55.840
<v Speaker 5>So he had petitioned lower courts to let him out

0:36:55.960 --> 0:36:59.480
<v Speaker 5>of this, you know, Twitter babysitter settlement provision, saying that

0:36:59.560 --> 0:37:02.000
<v Speaker 5>it by related his First Amendment rights, there was a

0:37:02.040 --> 0:37:04.880
<v Speaker 5>prior restraint on what he was allowed to stay in

0:37:04.920 --> 0:37:07.839
<v Speaker 5>the public forum. The courts that heard it below they

0:37:07.840 --> 0:37:09.480
<v Speaker 5>were having nothing to do with it. They said, look,

0:37:09.520 --> 0:37:12.160
<v Speaker 5>this is a settlement that you entered into. This is

0:37:12.200 --> 0:37:15.960
<v Speaker 5>in fact a restriction that every other executive at TESLA has.

0:37:15.960 --> 0:37:18.040
<v Speaker 5>They can't post anything they want. They have to have

0:37:18.080 --> 0:37:20.479
<v Speaker 5>it cleared with in house counsel. And that's the same

0:37:20.520 --> 0:37:22.680
<v Speaker 5>thing with you right now. So no, you made your

0:37:22.719 --> 0:37:25.200
<v Speaker 5>bed and you're going to sleep it. And he tried

0:37:25.200 --> 0:37:27.719
<v Speaker 5>to take it to the Supreme Court and it was

0:37:27.840 --> 0:37:30.480
<v Speaker 5>rejected by the Supreme Court. You know it clearly did

0:37:30.520 --> 0:37:33.759
<v Speaker 5>not command enough attention of fitting justice for them to

0:37:33.840 --> 0:37:35.799
<v Speaker 5>want to get involved in this determination.

0:37:36.080 --> 0:37:38.759
<v Speaker 1>He can't win all his legal fights. Thanks so much, Eric.

0:37:38.960 --> 0:37:42.399
<v Speaker 1>That's Professor Eric Tally of Columbia Law School, and that's

0:37:42.440 --> 0:37:45.400
<v Speaker 1>it for this edition of the Bloomberg Law Podcast. Remember

0:37:45.440 --> 0:37:48.120
<v Speaker 1>you've can always get the latest legal news by subscribing

0:37:48.200 --> 0:37:51.640
<v Speaker 1>and listening to the show on Apple Podcasts, Spotify, and

0:37:51.719 --> 0:37:55.760
<v Speaker 1>at Bloomberg dot com, slash podcast, slash Law. I'm June

0:37:55.760 --> 0:37:57.880
<v Speaker 1>Grosso and this is Bloomberg