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Speaker 1: I've been talking to Michael Weinstein of Cole's Shots about

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Speaker 1: the trial of former Goldman banker Roger Ng and the

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Speaker 1: testimony of the star witness in the case, his former boss,

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Speaker 1: Tim Leisner. So, Michael, we were talking about the fact

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Speaker 1: that so far the prosecution has introduced a lot of

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Speaker 1: testimony about wild spending spree, but not by Roger Ng,

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Speaker 1: and whether that makes a difference. What's your opinion about

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Speaker 1: the Sullivan standard? Is it too broad? Well? Sullivan in

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Speaker 1: my realm amongst those of us Luke Keathon right about

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Speaker 1: the First Amendment and media law. It is our round

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Speaker 1: versus Board of Education, our Barbary versus Madison. They foundational

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Speaker 1: watershed case that is central to the link between First

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Speaker 1: Amendment protections and the operation of our democracy, the way

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Speaker 1: that we keep a check on those who are in power,

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Speaker 1: and the way that we make sure that defamation law

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Speaker 1: can't be wielded and weaponized to silence critics. And so

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Speaker 1: I think it's it's critically important as a foundation to

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Speaker 1: our democracy. There are a lot of really thoughtful and

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Speaker 1: I think important critiques of the way that the Sullivan

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Speaker 1: doctrine has expanded and grown and morphed over the years,

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Speaker 1: and particularly the ways that the definition of who qualifies

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Speaker 1: as a public figure has become confused and complicated in

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Speaker 1: our social media landscape. But I have really serious concerns

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Speaker 1: about the dialogue moving to a place in which the

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Speaker 1: Sullivan standard itself is potentially on the chopping block. I

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Speaker 1: think it's a it's a critically important protection that helps

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Speaker 1: preserve robust dialogue on really important matters of public concern.

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Speaker 1: Do you attribute this to President Trump's attacks on the media.

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Speaker 1: A number of us have written about the impact that

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Speaker 1: the Trump presidency quite clearly had on the tone of

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Speaker 1: dialogue about the press. It was really the first time

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Speaker 1: in modern history where we had president characterizing the press

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Speaker 1: and vilifying the press in such strong terms and referring

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Speaker 1: to them as the enemy of the people, and undercutting

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Speaker 1: the press function in such significant ways. And you know,

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Speaker 1: as as early as then, Candidate Trump was saying things

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Speaker 1: like he hoped that we could his language was open

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Speaker 1: up libel law, that he thought it was really important

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Speaker 1: to undercut the constitutional standards that we had in this

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Speaker 1: space to make it easier for people like him to

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Speaker 1: sue the press for defamation and to prevail. That's Ronal

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Speaker 1: Anderson Jones of the University of Utah Law School. Remember

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Speaker 1: when game stops spiked more than one thousand percent in

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Speaker 1: less than a week and triggered giant losses at some

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Speaker 1: hedge funds. Might it actually have been a case of

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Speaker 1: traders banding together to take down hedge funds? After all?

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Speaker 1: Joining me as Joshua Mets, a professor at Columbia Law School,

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Speaker 1: start by telling us about the SEC's view of that

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Speaker 1: game stop spike in January. So in October of last year,

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Speaker 1: the SEC at least a staff report which concluded that

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Speaker 1: some of the popular narratives which were out in the

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Speaker 1: press concerning the events of January were misguide were incorrect. Specifically,

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Speaker 1: they focused on two narratives. One was called a short squeeze,

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Speaker 1: the idea being that the price of game stop went

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Speaker 1: up because short sellers were forced to close their positions,

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Speaker 1: and they said, there wasn't a short squeeze here. And

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Speaker 1: the second conclusion they made is that there wasn't what's

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Speaker 1: called a gamma squeeze, which occurs when option dealers have

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Speaker 1: to buy lots of stock to cover their losses. So

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Speaker 1: they made these two conclusions which ended up serving as

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Speaker 1: a basis for their policy initiative in this area. So

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Speaker 1: these conclusions were really quite critical because they ended up

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Speaker 1: shaping the SEC's rulemaking effort, which is beginning actually now.

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Speaker 1: They just released the rule last week, the first of

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Speaker 1: several based on the conclusions in this report. So you

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Speaker 1: and a group of academics have studied this, and you

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Speaker 1: are the lead author of the study. Tell us about

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Speaker 1: your findings. So we went back to the data, you know,

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Speaker 1: in light of what we had anecdotally read about the

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Speaker 1: way in which short sellers were affected and many of

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Speaker 1: whom were quite devastated financially as a result of what

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Speaker 1: occurred with Game Stop. So we went back to the

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Speaker 1: report and we looked at the data that the SEC used,

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Speaker 1: and we saw a number of points in their report

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Speaker 1: which we're concerning to us. For example, they stated that

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Speaker 1: they cut off their sample on the se which basically

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Speaker 1: meant that they were not able to capture any of

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Speaker 1: the short selling activity that had occurred prior to the

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Speaker 1: end of December. But anecdotal media reports where that some

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Speaker 1: of the largest short sellers and game stuff stock had

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Speaker 1: built up large positions before December twenty four, So it

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Speaker 1: seemed to us just on a space that the report

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Speaker 1: was using a data set that was problematic. It was

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Speaker 1: too short, it was cut. They had made all sorts

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Speaker 1: of adjustments and modifications, saying we're only going to look,

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Speaker 1: for example, at short sellers with extremely large positions. When

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Speaker 1: we said, you know what, let's go back to the data,

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Speaker 1: let's see what we can put together, and let's see

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Speaker 1: if we come to the same conclusions. And we did that,

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Speaker 1: and we ended up coming to a very different set

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Speaker 1: of conclusion. We found that when one looks back and

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Speaker 1: includes all the data, when you don't make these kinds

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Speaker 1: of cuts and filters and modifications that the SEC was doing,

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Speaker 1: you actually get a picture much closer to what had

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Speaker 1: been originally reported anecdotally, namely that short sellers were forced

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Speaker 1: to cover their positions. In fact, in a compositional sense,

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Speaker 1: the majority of the purchase activity was, it seems short

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Speaker 1: sellers covering and closing their positions. So we found an

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Speaker 1: effect that the SEC just made some bad decisions with

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Speaker 1: the data that they were using, and we wanted to

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Speaker 1: show the Commission what could be done in the sorts

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Speaker 1: of conclusions that might be accessible if one makes better

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Speaker 1: decisions with the available data if one looks more broadly

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Speaker 1: at the sample, and so we thought that would be

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Speaker 1: a helpful contribution to the public policy debate, especially because

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Speaker 1: this report was so critical in shaping the SEC's response.

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Speaker 1: Does your report mean that it was, in fact, you know,

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Speaker 1: David versus Goliath, where David's were joining together on mass

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Speaker 1: to stick it to Wall Street goliaths. That's certainly a

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Speaker 1: conclusion one could draw. We don't think our report necessarily

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Speaker 1: goes so far as to pin down who the David's

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Speaker 1: and who the goliaths might be. One of the points

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Speaker 1: we say in our introduction is that we do not

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Speaker 1: have the anonymous data. So we're not able to say

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Speaker 1: who was trading. Because we're not entirely sure who was trading,

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Speaker 1: We can't answer that question with certainty. But what we

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Speaker 1: can say is that it seems that lots of short

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Speaker 1: sellers were forced to cover their positions, were forced to

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Speaker 1: close the position. We can say that it seems that

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Speaker 1: options dealers were forced to hedge by buying lots and

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Speaker 1: lots of shares. So the basic narrative that ordinary investors

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Speaker 1: retail investors came together and ended up purchasing and in

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Speaker 1: expressing their views, their anti short seller views through buying

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Speaker 1: shares and buying options and other forms of trading. That

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Speaker 1: that basic narrative seems consistent with our findings. And I

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Speaker 1: think our point is not that we've proven the narrative

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Speaker 1: is right, but that the SEC may have been too

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Speaker 1: quick to reject that narrative. And so that's why it's

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Speaker 1: essential to go back to the drawing board, to take

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Speaker 1: a look again at the data and to ask what

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Speaker 1: the right regulatory response should be. So, what are some

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Speaker 1: of the possible regulatory solutions you think could work. Sure,

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Speaker 1: so we think there's a starting point the SEC needs

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Speaker 1: to focus on the role of social media and trading.

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Speaker 1: I and a group of other about a dozen law

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Speaker 1: professors file the rulemaking petition two years ago in which

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Speaker 1: we asked the SEC to lay down the rules of

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Speaker 1: the road for posting on social media and trading. At

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Speaker 1: the same time, we asked the Commission to clarify, for example,

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Speaker 1: that if you say that you have a position in

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Speaker 1: a stock and then immediately change that position, that you

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Speaker 1: have to update the market and keep the market informed

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Speaker 1: as to the truth of what you said originally. So

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Speaker 1: if you say you're short and your longest stock and

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Speaker 1: that's not the case. You shouldn't leave that inform aations

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Speaker 1: out there for investors to rely on. You should be

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Speaker 1: transparent if you've voluntarily spoken to keep the market informed

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Speaker 1: when what you said is no longer true. We think

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Speaker 1: basic rules of honesty and transparency like these would go

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Speaker 1: a long way towards making the markets fairer and more

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Speaker 1: of a place that ordinary investors can invest their capital in,

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Speaker 1: rather than be subject to potentially fraudulent on manipulative trading

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Speaker 1: schemes through social media. Do you think that it would

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Speaker 1: be difficult for the SEC to start policing social media? Well,

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Speaker 1: we think what's critical is to lay down clear rules

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Speaker 1: of the road, but don't restrict what people can say

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Speaker 1: about companies because that's a basic matter of freedom and speech.

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Speaker 1: But rather say, when you voluntarily choose to jet information

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Speaker 1: into the market, when you tell people that you're short

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Speaker 1: or long a stock, you have to be transparent and forthcoming.

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Speaker 1: That has to be true. If it's not true, then

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Speaker 1: you're missing leading the market. So the goal is not

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Speaker 1: tell people what they can believe or how they can invest.

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Speaker 1: The goal is to simply say that we want investors

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Speaker 1: to invest with confidence knowing that when representations are made

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Speaker 1: about trading positions and about what companies are worth, that

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Speaker 1: those aren't in fact fraudulent schemes we disguised. This is

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Speaker 1: not a controversial point. The SEC has said this in general,

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Speaker 1: but they haven't come forward yet and put forward clear

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Speaker 1: rooms of the road for social media. We also think

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Speaker 1: that the role of short selling is incredibly important, and

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Speaker 1: it's essential to uphold and protect the integrity of the

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Speaker 1: market so that shortsellers can perform the important function that

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Speaker 1: they do in our markets. Where else did the SEC

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Speaker 1: fault are here? Well? I think what this episode shows

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Speaker 1: is the need for a rigorous approach to data analysis.

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Speaker 1: And I think what surprised so many market participants, not

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Speaker 1: only our committee but also observers, is just how quickly

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Speaker 1: the agency dismissed two fundamental explanations for what happened in

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Speaker 1: January short squeeze and Agama squeeze. We weren't the ones

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Speaker 1: who brought this to the the market's attention. People were

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Speaker 1: saying this even before January. Market participants were telegraphing. We're

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Speaker 1: saying that they were going to be engaging in a

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Speaker 1: short squeeze in Agama squeeze and so to reject this

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Speaker 1: out hand on the basis of partial data. What I

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Speaker 1: think it shows is that the SEC needs to fundamentally

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Speaker 1: engage as an organization and culturally with the role of

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Speaker 1: data in driving policymaking. And this is we think, you know,

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Speaker 1: something that starts with organizational culture. It starts with a commitment,

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Speaker 1: and it starts with engagement. And that's why what we've

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Speaker 1: done is we've made ourselves available to the Commission into

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Speaker 1: staff to help them in that effort. We don't just

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Speaker 1: want to be critical, we want to be constructive. And

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Speaker 1: we've said to the extent that we that we can

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Speaker 1: help in this process, that we can help you work

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Speaker 1: through this complex mountain of information. Let us come alongside,

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Speaker 1: and we think that could be a model for partnership

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Speaker 1: which could really lead to better policy in the end.

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Speaker 1: Since it seems that the meme stock frenzy is over,

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Speaker 1: do you think the SEC is less likely to spend

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Speaker 1: time on this. Well. While it's true that what happened

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Speaker 1: in early has largely petered out, the fact that is

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Speaker 1: that financial technology is continuing to evolve. The syntech sector.

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Speaker 1: Apps like robin Hood there maybe in their first generation

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Speaker 1: or second generation right now, but we're continuing to see

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Speaker 1: more and more innovation in this space. So I think

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Speaker 1: the future is greater and greater engagement individual market participants. UH. Today,

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Speaker 1: people just don't want to leave their money in for

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Speaker 1: a one K index fund and come back in thirty years.

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Speaker 1: They want to be engaged, they want to be participants

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Speaker 1: in the markets. So I think actually what we're saying

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Speaker 1: is an evolution, which makes this rulemaking even more urgent

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Speaker 1: because the next crisis is just around the corner. And

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Speaker 1: one of the challenges we've seen for regulators it's too

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Speaker 1: much of a backward focus. So the goal is not

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Speaker 1: to fix what happened in The goal is to understand

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Speaker 1: what happens in one so that we can be ready

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Speaker 1: for the next technological innovation. And the starting point for

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Speaker 1: that is good data in a rigorous engagement so that

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Speaker 1: we can put forward the best policy that protect investors.

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Speaker 1: I want to switch for a moment to the class

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Speaker 1: action lawsuit against robin Hood. It was filed by customers

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Speaker 1: who claim that robin Hood didn't properly disclose how it

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Speaker 1: sacrificed execution quality in favor of the highest payments from

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Speaker 1: market makers, Robin Hood is making a motion to dismiss

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Speaker 1: the lawsuit. Do you have a take on how strong

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Speaker 1: the case is for dismissal? Well, I think you know

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Speaker 1: it's it's always hard to apply in on on a

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Speaker 1: case um in a situation where you know you're reading

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Speaker 1: what's in a complaint, and judges are often in the

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Speaker 1: difficult position of having to decide whether they really want

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Speaker 1: to allow a case to go forward. At the motion stage,

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Speaker 1: the court isn't deciding whether a party is guilty or not,

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Speaker 1: are liable or not. Rather, the court has to decide

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Speaker 1: is there enough here? So I think if we take

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Speaker 1: a step back and ask fundamentally, what is the quality

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Speaker 1: of these disclosures, Well, you know, there's a real challenge

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Speaker 1: that fintech firms space around offering their products in a

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Speaker 1: way that attracts customers while at the same time being

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Speaker 1: transparent about who's paying ultimately for the service. And I

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Speaker 1: think that there are in fact profound questions to whether

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Speaker 1: Robin's disclosures were adequate, but ultimately as to whether those

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Speaker 1: questions rise to the level of a cognizable legal claim,

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Speaker 1: I think it's a question that a judge is going

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Speaker 1: to have to answer I and I think any other

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Speaker 1: legal expert would not rush to judgment, in part because

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Speaker 1: questions of disclosure can often be very very close. But

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Speaker 1: I think ultimately that what the court is going to

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Speaker 1: have to look at is what would a reasonable customer

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Speaker 1: have thought if you're being told, on the one hand

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Speaker 1: that you're able to trade for free. How much information

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Speaker 1: were you being given about execution quality? And was that

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Speaker 1: information material to the customer's decision to use the product.

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Speaker 1: These are challenging questions, and I don't envy the court.

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Speaker 1: I think that sometimes, you know, judges have to make

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Speaker 1: very close calls. This strikes me as a case where

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Speaker 1: it's not apparent at first glance which way the court

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Speaker 1: is going to go, but it's going to ultimately turn

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Speaker 1: on what message was sent to customers of the product

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Speaker 1: and did they understand ultimately how they, in effect we're

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Speaker 1: paying for something that was marketed to demus free. Thanks

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Speaker 1: for being on the show. That's Professor Joshua Mits of

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Speaker 1: Columbia Law School. It centers on former President Donald Trump's

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Speaker 1: infamous phone call to find eleven thousand seven votes for

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Speaker 1: him in Georgia. Fulton County District Attorney Fannie Willis has

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Speaker 1: been investigating whether Trump's unsuccessful call to up the state

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Speaker 1: in presidential election was criminal, and she's been investigating that

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Speaker 1: for more than a year and won't convene a special

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Speaker 1: grand jury until May. Bloomberg Legal reporter Greg Farrell talked

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Speaker 1: to Georgia's top election official, Secretary of State, Brad Ravensburger

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Speaker 1: about the investigation. So what does Ravensburger think about the

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Speaker 1: pace of the Fulton County Day's investigation. I think Ravensburger,

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Speaker 1: from our interview just sounded a little exasperated as to

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Speaker 1: why this is taking so long. And one of the

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Speaker 1: reasons we did the stories that I've heard that from

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Speaker 1: a number of lawyers who have been following this. The issue,

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Speaker 1: which is, you know, Trump's phone call to Ravensburger and

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Speaker 1: on January two last year, the infamous phone call asking

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Speaker 1: him to find eleven thousand, seven eight votes, is at

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Speaker 1: the crux of it. And I've been following the Manhattan

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Speaker 1: District Attorney, you know, investigation of the Trump and the

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Speaker 1: Trump organization, which involves eight years of tax returns, which

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Speaker 1: you know, included a battle that went all the way

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Speaker 1: to the Supreme court twice, includes like millions of business

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Speaker 1: documents going back two decades, so there's a huge volume

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Speaker 1: of material the Manhattan District Attorney's office has to sift

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Speaker 1: through as it, you know, tries to decide whether or

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Speaker 1: not charges against Trump himself are justified. In contrast, this

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Speaker 1: Georgia case, like the amount of evidence first of all,

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Speaker 1: but it's a window of time and involves only like

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Speaker 1: two months from mid November to mid January. It's it's

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Speaker 1: a very small amount of paper or document evidence, not

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Speaker 1: millions and millions of documents, but not enough that you

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Speaker 1: could fit into a small filing box and put in

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Speaker 1: the backseat of your car. So it's not as though

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Speaker 1: she has to boil the ocean the district sarn in

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Speaker 1: Fulton County to get to where she wants to go.

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Speaker 1: But it's clear that she wants to build a wide

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Speaker 1: ranging conspiracy case, almost like a Rico case, conspiracy to

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Speaker 1: overturn the results of the election in Georgia. So that's

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Speaker 1: in contrast to like just basically bringing a charge against

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Speaker 1: Trump for you know, what could be painted by a

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Speaker 1: prosecutor as a telling a state official to do something

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Speaker 1: fraudulent in order to benefit him the president and presidential candidate.

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Speaker 1: Does Ravensburger think that she should just go small, just

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Speaker 1: get it over with. He doesn't have an opinion on

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Speaker 1: whether or not it's criminal. It's more that, you know,

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Speaker 1: this is an issue he's he's he himself as a politician.

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Speaker 1: He's running. You know, he ran for Offerson, became Secretary

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Speaker 1: State of Georgia. Then he became you know, internationally famous

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Speaker 1: last year and wrote a book about his experience, and

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Speaker 1: now he's running for re election. And he's running in May.

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Speaker 1: There's a primary against a Trump backed uh, someone who

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Speaker 1: wants to take him out on the Republican side. So

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Speaker 1: he's got a battle for his life in Georgia, you know,

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Speaker 1: based on his willingness to basically follow the letter of

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Speaker 1: the law last year. So I think it's sort of

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Speaker 1: been this whole thing has been. He's not a hero

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Speaker 1: and the Republican Party. It's not as though he's a

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Speaker 1: widely lauded guy for what he did. He is in

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Speaker 1: many circles for standing up for the rule of law

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Speaker 1: and the integrity of the Georgia election. But you know,

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Speaker 1: he's reviled in Trump Land, and that includes a big

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Speaker 1: piece of Georgia. So he's in a he's in a

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Speaker 1: tricky position. You know, he's not like friendly with the

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Speaker 1: Fulton County d A. It's not like he's trying to

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Speaker 1: get Trump to be found guilty. He I think he

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Speaker 1: just wants this thing to be over. On top of that,

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Speaker 1: In a letter that the Fulton County District Attorney wrote

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Speaker 1: last month to Superior Court for permission to get to

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Speaker 1: convene a panel a special grand jury the d A,

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Speaker 1: Fannie Willis wrote that, you know she needs a special

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Speaker 1: grand jury with subpoena power because some witnesses have been

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Speaker 1: reluctant or have been hesitant or refused to cooperate until

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Speaker 1: being forced to. And then as an example, she cited

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Speaker 1: Rappensburg Is quotes in an NBC interview what he's promoting

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Speaker 1: his book, And in that interview, Ravensburg was asked, are

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Speaker 1: you cooperating with the Fulton County d A investigation? And

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Speaker 1: he said, yeah, our offices, we've turned over lots of documents,

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Speaker 1: are people have been made available to her, and if

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Speaker 1: she wants to speak to me, all she has to

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Speaker 1: do is get a subpoena, and you know, I'll comply

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Speaker 1: with it followed the Constitution. So he was portrayed in

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Speaker 1: her letter to the court as uh, one of these

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Speaker 1: characters who's like refusing to cooperate, when in fact he's

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Speaker 1: been cooperative. So I think there's a little bit of

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Speaker 1: just exhaustion and a little bit of frustration that he's

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Speaker 1: now being painted as a guy who's not even cooperating

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Speaker 1: with the investigation. So there's probably an element of that.

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Speaker 1: I don't know that, but he's kind of like a

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Speaker 1: man without a country. He is a Republican, but he's,

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Speaker 1: you know, not a Trump Republican. He's fighting for his

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Speaker 1: political life in May. So I think he just liked

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Speaker 1: this whole thing to be over so we can move on.

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Speaker 1: You can subpoena a witness for a regular grand jury,

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Speaker 1: can't you. Why does she need a special grand jury

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Speaker 1: to subpoena witness? Right, That's a good question, And that's

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Speaker 1: another reason I wanted to do the story is that

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Speaker 1: she first of all, wrote this letter in January, late

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Speaker 1: January to get a convenia special grand jury. The thing

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Speaker 1: she cited was a statement made by Ravensburg last October.

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Speaker 1: So logically last October when rap Sburger said that she

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Speaker 1: could have a week later gone to the full county

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Speaker 1: superior Courts that I need a special grand jury. Why

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Speaker 1: it took two months to get there is another reason

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Speaker 1: I wrote the story. It's this thing does seem to

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Speaker 1: be taking much longer than it should. And Ravensburger said

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Speaker 1: he thought that she was making a political thing out

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Speaker 1: of this, and some extent that could be the case,

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Speaker 1: because you know, even if she wants to build a

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Speaker 1: complex Rico case, now we're into a second year and

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Speaker 1: the special grand jury is not going to start until May.

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Speaker 1: She could have had the special grand jury convene like

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Speaker 1: now or I guess two there are two months terms

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Speaker 1: March April, but has put it off to May, so

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Speaker 1: then you know, that's gonna be two months of you know,

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Speaker 1: and then maybe extended. You know. She says she's going

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Speaker 1: to make a decision on charges by sometime this year,

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Speaker 1: So basically two full years from January last year, of

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Speaker 1: February last year, well into the second half of this

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Speaker 1: year are going to be consumed by like this is

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Speaker 1: not the most complex, this is not Special Counsel Robert

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Speaker 1: Muller trying to get to the bottom of Russian interference

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Speaker 1: in the sixteen election. This is a phone call and

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Speaker 1: a few other phone calls between officials between the White

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Speaker 1: House and Georgia State officials and Rudi Giuliani somewhere on

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Speaker 1: the periphery. It's just not that much evidence there. So um,

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Speaker 1: even if she does want to go in a big

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Speaker 1: way on this case, to a lot of outsiders that

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Speaker 1: I spoke to who do not want to be quoted,

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Speaker 1: it just seems like it's taking like a long time. Well,

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Speaker 1: I've been asking the question why is it taking so

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Speaker 1: long for months now, because of all the investigations, it

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Speaker 1: seemed like this one was the most compact and doable.

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Speaker 1: Do you think she has trepidation about indicting a former president? No,

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Speaker 1: I don't think that. I do think and we address

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Speaker 1: this in the article, there is a you can just

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Speaker 1: do it, as a former U. S attorney in Atlanta

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Speaker 1: told us, Michael Moore said, he viewed this as, you know,

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Speaker 1: do it fast, just to use a regular grand jury,

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Speaker 1: get an indictment based on the phone call. And uh.

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Speaker 1: He referred to it as a rifle shot case. You

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Speaker 1: just goin, present the evidence, treat the former president as

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Speaker 1: you would like, like, pass him through the case. Through

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Speaker 1: the grand jury like a shoplifter or McCart thief. And

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Speaker 1: by the way, we have a former president United States

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Speaker 1: who made this phone call. Uh, we have enough evidence,

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Speaker 1: can you give us an indictment and the grand jury

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Speaker 1: will and then go there. But so that's that would

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Speaker 1: have been one way to do it, he said way back,

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Speaker 1: just to sort of you know, get on this. Um,

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Speaker 1: I think I believe and and there's some real legitimacy

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Speaker 1: to this. I think Fonnie Willis's goal is to build

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Speaker 1: up enough evidence that there were so many phone calls,

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Speaker 1: because Trump in the phone call can say he actually

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Speaker 1: believed there was fraud. Therefore, that's why he wanted Brad

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Speaker 1: Ravensburger to find eleven thousand and seven votes. But if

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Speaker 1: she's able to, you know, bring together enough evidence by

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Speaker 1: enough officials in the White House like Mark Meadows, by

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Speaker 1: someone like Ruduc Cilianni, that there was a concerted effort

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Speaker 1: to deceive and you know, cajole and pressure Georgia state

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Speaker 1: officials like the governor Brian Kemp to participate in an

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Speaker 1: effort to overturn the validated electoral results. Then when the

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Speaker 1: phone call gets presented as d key piece of Evan

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Speaker 1: the smoking gun. It will be far more convincing than

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Speaker 1: if you just go to a jury with this phone

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Speaker 1: call and say what do you think, because a jury

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Speaker 1: of twelve, one or two people might think, hey, you know,

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Speaker 1: maybe he did believe there was fraud. But if you

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Speaker 1: can lay out, you know, a granular, detailed, exhaustive case

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Speaker 1: about all these different people associated with the president doing

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Speaker 1: the president's bidding, trying to overturn the result in Georgia,

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Speaker 1: and then finally this phone call, then I think she

434
00:24:40,119 --> 00:24:43,600
Speaker 1: has a point here. Um, it's it's far more convincing

435
00:24:43,600 --> 00:24:45,200
Speaker 1: to a jury. You could get some fence it or

436
00:24:45,280 --> 00:24:47,480
Speaker 1: someone who might have doubts about just the one phone

437
00:24:47,480 --> 00:24:51,240
Speaker 1: call say oh yeah, this was definitely you know, the

438
00:24:51,240 --> 00:24:53,359
Speaker 1: the ice on the cake or you know, part of

439
00:24:53,440 --> 00:24:57,480
Speaker 1: and the most serious over attempt action that was taken

440
00:24:57,520 --> 00:25:01,199
Speaker 1: to try to subvert the election was Elton, Georgia. And

441
00:25:01,240 --> 00:25:04,640
Speaker 1: then in the meantime, Trump has called her a radical,

442
00:25:04,840 --> 00:25:09,919
Speaker 1: vicious racist prosecutor. Is she getting protection? What's how has

443
00:25:10,000 --> 00:25:13,639
Speaker 1: that changed things at all? Well, she asked for extra

444
00:25:13,680 --> 00:25:16,440
Speaker 1: protection for you know, the courthouse where the grand jury

445
00:25:16,480 --> 00:25:18,680
Speaker 1: is going to meet starting in May. So she's issued

446
00:25:18,680 --> 00:25:22,639
Speaker 1: a statement. Letitia James has also issued a statement. I actually,

447
00:25:22,680 --> 00:25:25,520
Speaker 1: I think that's that's one reason, you know, because this

448
00:25:25,600 --> 00:25:28,080
Speaker 1: has taken so long now, you know, Trump could go

449
00:25:28,119 --> 00:25:30,520
Speaker 1: off like that a few weeks ago. If this case

450
00:25:30,560 --> 00:25:33,360
Speaker 1: had been charged last year, this would no longer be MEO.

451
00:25:33,440 --> 00:25:36,600
Speaker 1: He'd probably still be railing at her. But you know,

452
00:25:36,840 --> 00:25:39,439
Speaker 1: it wouldn't be this group of three prosecutors who were

453
00:25:39,480 --> 00:25:41,520
Speaker 1: all focused on Trump these days too, in New York

454
00:25:41,520 --> 00:25:45,080
Speaker 1: and one in Georgia. So that would be Willis, the

455
00:25:45,119 --> 00:25:49,560
Speaker 1: New York Attorney General, Letitia James, and the Manhattan District

456
00:25:49,560 --> 00:25:56,040
Speaker 1: Attorney Alvin Bragg, who took over when Sivance retired. Let's

457
00:25:56,080 --> 00:25:59,080
Speaker 1: turn to Trump's accountants for a moment, because they said

458
00:25:59,119 --> 00:26:02,880
Speaker 1: a decade of financial statements can't be relied on to

459
00:26:02,920 --> 00:26:07,520
Speaker 1: tell us what Masers has said their letter, which was

460
00:26:07,560 --> 00:26:11,600
Speaker 1: sent to the Trump organization last week and filed in court.

461
00:26:12,200 --> 00:26:16,760
Speaker 1: The letter is kind of squishy. It doesn't say last

462
00:26:16,800 --> 00:26:19,240
Speaker 1: ten years of statements on the financial condition of the

463
00:26:19,240 --> 00:26:22,439
Speaker 1: Trump organization, doesn't say that the information is false, but

464
00:26:22,760 --> 00:26:26,240
Speaker 1: it does say that basically, we believe that the people

465
00:26:26,280 --> 00:26:29,000
Speaker 1: you send it to, for example of banks, insurance companies

466
00:26:29,119 --> 00:26:32,640
Speaker 1: or you know, government overseers. These should not be relied upon.

467
00:26:33,160 --> 00:26:36,639
Speaker 1: So this, I think is a direct result of the

468
00:26:37,359 --> 00:26:41,240
Speaker 1: massive filing that the New York Attorney General basically submitted

469
00:26:41,280 --> 00:26:43,919
Speaker 1: to court a month ago as part of our ongoing

470
00:26:43,920 --> 00:26:46,639
Speaker 1: battle to get you know, the Trump family to actually

471
00:26:47,080 --> 00:26:50,440
Speaker 1: cooperate a little more, provide more documents, and to basically

472
00:26:50,480 --> 00:26:53,639
Speaker 1: sit for interviews. And Trump and several of his children

473
00:26:53,760 --> 00:26:57,640
Speaker 1: refused to do that so far. And her argument Letitia

474
00:26:57,760 --> 00:27:01,800
Speaker 1: James's argument last month, you know, a hundred thirteen page filing.

475
00:27:02,280 --> 00:27:04,960
Speaker 1: She laid out she used examples of like seven or

476
00:27:05,040 --> 00:27:09,280
Speaker 1: more different assets property assets of the Trump organization, and

477
00:27:09,359 --> 00:27:13,359
Speaker 1: to varying degrees, pointed out the you know, like the

478
00:27:13,359 --> 00:27:16,200
Speaker 1: the huge, you know, the inflated asset values that the

479
00:27:16,240 --> 00:27:19,520
Speaker 1: Trump wart organization had assigned. And in some of the cases,

480
00:27:20,160 --> 00:27:22,720
Speaker 1: let's say, you know, a piece of property north of

481
00:27:22,720 --> 00:27:26,439
Speaker 1: New York City, Um was valued at I don't have

482
00:27:26,480 --> 00:27:27,560
Speaker 1: in front of me, so I'll just say it was

483
00:27:27,600 --> 00:27:32,440
Speaker 1: valued at five million, because um, they're planning to carve

484
00:27:32,480 --> 00:27:35,080
Speaker 1: it up and build you know a bunch of mansions,

485
00:27:35,359 --> 00:27:38,480
Speaker 1: which each of which could be sold for fifty million dollars.

486
00:27:38,520 --> 00:27:43,280
Speaker 1: So a very aggressive, like top of the market valuation

487
00:27:43,280 --> 00:27:45,560
Speaker 1: of the property based on what could happen to this

488
00:27:45,720 --> 00:27:48,679
Speaker 1: land when they plan to build all these mansions and

489
00:27:48,680 --> 00:27:51,680
Speaker 1: sell them at top dollar. But there's there's all sorts

490
00:27:51,680 --> 00:27:54,840
Speaker 1: of assumptions, including that the town will cooperate, they've got

491
00:27:54,840 --> 00:27:58,639
Speaker 1: the permits um to build all these mansions and seldom

492
00:27:58,680 --> 00:28:01,399
Speaker 1: takes years to do something you can say today and

493
00:28:01,400 --> 00:28:05,120
Speaker 1: then sell tomorrow. Um, they're bringing all that value forward

494
00:28:05,400 --> 00:28:07,360
Speaker 1: to an assumption of like right now, yeah, it's worth

495
00:28:07,400 --> 00:28:10,080
Speaker 1: a five millions, say, because that's what they can do.

496
00:28:10,160 --> 00:28:12,840
Speaker 1: But it's all hypothetical. It's all based on the most

497
00:28:12,920 --> 00:28:16,960
Speaker 1: positive you know, maybe even more than positive, but like uh,

498
00:28:17,080 --> 00:28:22,439
Speaker 1: impossibly optimistic assumptions at every angle to assume like the

499
00:28:22,480 --> 00:28:26,160
Speaker 1: best possible outcome. Uh for like a string of five

500
00:28:26,200 --> 00:28:28,920
Speaker 1: to ten assumptions that all come out completely the way

501
00:28:28,960 --> 00:28:32,000
Speaker 1: Trump envisions them. Then and only then can you value

502
00:28:32,119 --> 00:28:35,720
Speaker 1: five million. But million will be there and for ten

503
00:28:35,800 --> 00:28:38,160
Speaker 1: or fifteen or twenty years. But it's bringing it all

504
00:28:38,200 --> 00:28:40,800
Speaker 1: forward to now. So there was there's a series of

505
00:28:41,400 --> 00:28:44,560
Speaker 1: valuations like that that Letitia James highlighted. So I think

506
00:28:44,800 --> 00:28:48,160
Speaker 1: the Miszaar's people in the letter it seems like, you know,

507
00:28:48,280 --> 00:28:51,040
Speaker 1: they probably realized this is not a good look. That

508
00:28:51,080 --> 00:28:56,200
Speaker 1: they've signed off on these hyperbolic assumptions of property values

509
00:28:56,560 --> 00:28:59,760
Speaker 1: based on computations that were given to them by the

510
00:28:59,760 --> 00:29:02,440
Speaker 1: Trump Organization, and they didn't question them. So I think

511
00:29:02,600 --> 00:29:05,160
Speaker 1: it's not so much that it's false, because yeah, if

512
00:29:05,200 --> 00:29:09,000
Speaker 1: if everything goes fantastically well in every possible way for

513
00:29:09,040 --> 00:29:12,320
Speaker 1: every property, you know, going forward, then yeah, it's like

514
00:29:12,400 --> 00:29:16,800
Speaker 1: it's it's it's possible that this five million valuation or

515
00:29:16,800 --> 00:29:20,000
Speaker 1: one billion, whatever the valuation is, will be true. But

516
00:29:20,080 --> 00:29:23,560
Speaker 1: that's only the most hopeful five percent chance or less

517
00:29:23,600 --> 00:29:25,920
Speaker 1: of that actually happening. So I think they were stuck

518
00:29:25,960 --> 00:29:29,360
Speaker 1: in this place that they realized, you know, especially now

519
00:29:29,400 --> 00:29:32,280
Speaker 1: that charges have been filed against the Trump Organization and

520
00:29:32,320 --> 00:29:35,840
Speaker 1: more charges civil charges are being considered by the New

521
00:29:35,920 --> 00:29:37,880
Speaker 1: York Attorney General. It's like they don't want to be

522
00:29:37,920 --> 00:29:41,240
Speaker 1: there anymore. So I think they probably basically formed the

523
00:29:41,240 --> 00:29:44,360
Speaker 1: Trump Organization last year. They want out, and now this

524
00:29:44,600 --> 00:29:46,960
Speaker 1: is finally just burbling out, you know, surfacing in the

525
00:29:46,960 --> 00:29:50,680
Speaker 1: public domain now despite all the squishiness, and you know,

526
00:29:50,840 --> 00:29:55,680
Speaker 1: this depends on that if they prepared them and those

527
00:29:55,680 --> 00:29:58,440
Speaker 1: statements can't be relied on. It's hard to escape the

528
00:29:58,480 --> 00:30:04,160
Speaker 1: conclusion that they did something wrong somewhere right, and and

529
00:30:04,200 --> 00:30:05,920
Speaker 1: I think miss ours is concerned that they will be

530
00:30:05,960 --> 00:30:09,000
Speaker 1: held viable if there's any sort of regulatory action or

531
00:30:09,120 --> 00:30:14,960
Speaker 1: litigation against the Trump organization for basically misrepresenting its financial

532
00:30:14,960 --> 00:30:17,800
Speaker 1: position to banks and insurance companies. I think MASSARS is

533
00:30:17,840 --> 00:30:20,160
Speaker 1: trying to take a step to like not be on

534
00:30:20,160 --> 00:30:21,840
Speaker 1: the hook or as much on the hook as they

535
00:30:21,880 --> 00:30:25,120
Speaker 1: could otherwise be. This is bad for Trump because you know,

536
00:30:25,200 --> 00:30:27,080
Speaker 1: he's fond of saying, why the best lawyers, I have

537
00:30:27,120 --> 00:30:28,959
Speaker 1: the best accounts, I have the best you know whatever,

538
00:30:29,040 --> 00:30:30,959
Speaker 1: until they turn on him. Michael Cohen used to be

539
00:30:31,080 --> 00:30:33,760
Speaker 1: like the best until Michael Cohen decided to cooperate with

540
00:30:33,800 --> 00:30:37,680
Speaker 1: the government. Then Cohen became a very different character. And

541
00:30:37,840 --> 00:30:40,720
Speaker 1: you know, but he has said in the past, Trump

542
00:30:40,760 --> 00:30:43,360
Speaker 1: has that he has the best account and so he's

543
00:30:43,360 --> 00:30:46,960
Speaker 1: not gonna be saying that anymore. Can Letitia James use

544
00:30:47,080 --> 00:30:51,200
Speaker 1: that in her investigation or in her case? I think

545
00:30:51,240 --> 00:30:54,120
Speaker 1: it could be used as supporting evidence, right, It's not

546
00:30:54,200 --> 00:30:57,280
Speaker 1: It's not like a witness for the defense. Something becomes

547
00:30:57,280 --> 00:31:00,040
Speaker 1: a witness for the prosecution as much as a witness

548
00:31:00,040 --> 00:31:02,840
Speaker 1: with the defense basically starts easing away from it. It's like,

549
00:31:02,920 --> 00:31:05,880
Speaker 1: we're not comfortable anymore. If this were a publicly traded company,

550
00:31:05,920 --> 00:31:09,440
Speaker 1: that would be like shareholder lawsuits and the Stark price

551
00:31:09,560 --> 00:31:12,120
Speaker 1: dive at that sort of thing. Thanks for being on

552
00:31:12,200 --> 00:31:16,239
Speaker 1: the show, Greg. That's Bloomberg Legal reporter Greg Farrell, and

553
00:31:16,280 --> 00:31:18,440
Speaker 1: that's it for this edition of the Bloomberg Law Show.

554
00:31:18,920 --> 00:31:21,040
Speaker 1: Remember you can always get the latest legal news on

555
00:31:21,120 --> 00:31:25,200
Speaker 1: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

556
00:31:25,760 --> 00:31:30,440
Speaker 1: and at www dot Bloomberg dot com, slash podcast slash Law.

557
00:31:30,960 --> 00:31:33,600
Speaker 1: I'm joom Lasso, and you're listening to Bloomberg