1 00:00:03,160 --> 00:00:07,960 Speaker 1: This is Bloombird Law with June Brusso from Bloomberg Radio. 2 00:00:09,240 --> 00:00:14,280 Speaker 1: I stock today, HI had twins. I went to the 3 00:00:14,360 --> 00:00:19,400 Speaker 1: poor farm. I'm a millionaires. That's life. Game of Life, 4 00:00:21,200 --> 00:00:28,680 Speaker 1: Life Life when you play. The Game of Life came 5 00:00:28,680 --> 00:00:32,360 Speaker 1: out in nineteen sixty and became a classic. It's now 6 00:00:32,440 --> 00:00:36,080 Speaker 1: part of the permanent collection at the Smithsonian. So why now, 7 00:00:36,360 --> 00:00:39,559 Speaker 1: after more than sixty years, are the heirs of the 8 00:00:39,600 --> 00:00:43,240 Speaker 1: game's designer trying to reclaim the copyright to the game 9 00:00:43,280 --> 00:00:47,320 Speaker 1: from Hasbro? And will they succeed? The answers to those 10 00:00:47,440 --> 00:00:52,159 Speaker 1: questions could have massive repercussions, even affecting characters in the 11 00:00:52,240 --> 00:00:56,360 Speaker 1: far away Marvel universe like Iron Man, Spider Man, and 12 00:00:56,520 --> 00:01:00,240 Speaker 1: Doctor Strange. Here to help us sort through this really 13 00:01:00,280 --> 00:01:04,880 Speaker 1: complex case is intellectual property litigator Terence Frost, a partner 14 00:01:05,000 --> 00:01:08,679 Speaker 1: Captain Uten Rosenman. So Terry tell us about the story 15 00:01:08,880 --> 00:01:13,160 Speaker 1: behind the Game of Life. So June in ninety nine, 16 00:01:13,440 --> 00:01:17,360 Speaker 1: a toy designer by the name of Reuben claimer I 17 00:01:17,520 --> 00:01:19,679 Speaker 1: was trying to pitch a new toy to the Milton 18 00:01:19,720 --> 00:01:23,440 Speaker 1: Bradley Company in Massachusetts. Milton Bradley took a pass on 19 00:01:23,480 --> 00:01:25,959 Speaker 1: the toy, but told them they were interested in coming 20 00:01:26,040 --> 00:01:29,880 Speaker 1: up with something to commemorate the hundredth anniversary of the company, 21 00:01:30,080 --> 00:01:33,240 Speaker 1: so Mr Claimer asked permission to look through their archives 22 00:01:33,400 --> 00:01:37,000 Speaker 1: and he found in the archives of the Milton Bradley 23 00:01:37,000 --> 00:01:41,559 Speaker 1: Company the original very first game invented by Mr Milton 24 00:01:41,600 --> 00:01:45,520 Speaker 1: Bradley in eighteen sixty and it was called the checkerboard 25 00:01:45,640 --> 00:01:49,360 Speaker 1: Game of Life. And Claimer decided to do a modern 26 00:01:49,480 --> 00:01:53,600 Speaker 1: version of that game which would celebrate the hundredth anniversary 27 00:01:53,640 --> 00:01:56,840 Speaker 1: of the founding of Milton Bradley, and Milton Bradley just 28 00:01:56,920 --> 00:01:59,840 Speaker 1: loved the idea, and so Mr Claimer went back to 29 00:02:00,160 --> 00:02:02,440 Speaker 1: Andrews where he was based, and being more of an 30 00:02:02,440 --> 00:02:04,760 Speaker 1: ideals guy, he had to come up with somebody who 31 00:02:04,760 --> 00:02:08,320 Speaker 1: could actually develop the prototype, and he talked to a 32 00:02:08,360 --> 00:02:10,960 Speaker 1: guy he knew by the name of Bill Markham, who 33 00:02:10,960 --> 00:02:14,200 Speaker 1: had a small company designing toys and games, and he 34 00:02:14,320 --> 00:02:17,120 Speaker 1: managed to develop a prototype of the Game of Life 35 00:02:17,200 --> 00:02:20,960 Speaker 1: modern version in only six weeks. Claimer took it pitched 36 00:02:20,960 --> 00:02:23,960 Speaker 1: it to Milton Bradley again. They loved it as produced, 37 00:02:23,960 --> 00:02:25,760 Speaker 1: They made some tweaks to it and it was out 38 00:02:25,800 --> 00:02:29,760 Speaker 1: on the store shelves by March of nineteen sixty anniversary 39 00:02:29,840 --> 00:02:33,239 Speaker 1: Milton Bradley. Milton Bradley goes on to make a lot 40 00:02:33,240 --> 00:02:36,240 Speaker 1: of money off of this game and ultimately is bought 41 00:02:36,280 --> 00:02:39,920 Speaker 1: by the Hasbroke Company. So that's the background to the 42 00:02:39,960 --> 00:02:42,200 Speaker 1: Game of Life, which is the creative work at the 43 00:02:42,240 --> 00:02:44,799 Speaker 1: centerpiece of this lawsuit. So this game has been out 44 00:02:44,840 --> 00:02:49,160 Speaker 1: for some sixty years. Why a lawsuit at this point, Well, 45 00:02:49,480 --> 00:02:53,400 Speaker 1: this lawsuit arises out of a change that Congress made 46 00:02:53,919 --> 00:02:57,120 Speaker 1: to the copyright laws back when it revised them in 47 00:02:57,240 --> 00:03:01,200 Speaker 1: nine And up to that time, copyright in the United 48 00:03:01,200 --> 00:03:03,320 Speaker 1: States was governed by what was referred to as the 49 00:03:03,440 --> 00:03:05,720 Speaker 1: nineteen o nine Act, which is one of the reasons 50 00:03:05,760 --> 00:03:08,359 Speaker 1: that the Congress felt they needed to revise it, and 51 00:03:08,440 --> 00:03:10,760 Speaker 1: so the new law became the nineteen seventy six Act. 52 00:03:11,080 --> 00:03:15,080 Speaker 1: In this nineteen seventy six Act, Congress put in a 53 00:03:15,120 --> 00:03:19,760 Speaker 1: provision that had not previously ever existed. And what that provision, 54 00:03:19,840 --> 00:03:22,119 Speaker 1: Section three or four of the nineteen seventy six Acts 55 00:03:22,160 --> 00:03:26,799 Speaker 1: said was that a creator that had assigned away their 56 00:03:26,960 --> 00:03:31,880 Speaker 1: copyright in a creative work would have a right to 57 00:03:32,240 --> 00:03:36,520 Speaker 1: terminate that assignment for a brief period time fifty six 58 00:03:36,600 --> 00:03:40,400 Speaker 1: years after the copyright had originally been a paid and 59 00:03:40,720 --> 00:03:44,600 Speaker 1: this was in response to numerous stories during hearings in 60 00:03:44,680 --> 00:03:48,440 Speaker 1: Congress from inventors who didn't know what their rights were 61 00:03:48,560 --> 00:03:51,240 Speaker 1: at the time they signed away, copyrights weren't yet popular, 62 00:03:51,720 --> 00:03:57,040 Speaker 1: didn't understand their bargaining power. Flora of stories from creators 63 00:03:57,080 --> 00:04:01,040 Speaker 1: about the problem with the copyright assignments led Congress to 64 00:04:01,120 --> 00:04:03,920 Speaker 1: create this sort of option whereby they could get their 65 00:04:03,960 --> 00:04:07,080 Speaker 1: copyrights back after a certain period of time. And that 66 00:04:07,200 --> 00:04:10,200 Speaker 1: was a right that did not exist under the nine Act. 67 00:04:10,520 --> 00:04:13,560 Speaker 1: And that is the source of the problem here, because 68 00:04:13,640 --> 00:04:17,039 Speaker 1: the copyright in the Game of Life is under the 69 00:04:17,160 --> 00:04:21,320 Speaker 1: nineteen o nine Act, not the NYT. Adding to the 70 00:04:21,360 --> 00:04:26,720 Speaker 1: complexity here is the rule called the instance and expense rule. 71 00:04:27,560 --> 00:04:32,880 Speaker 1: So the nineteen o nine Copyright Act did not contain 72 00:04:33,480 --> 00:04:40,520 Speaker 1: any references whatsoever to how an independent contractor commissioned to 73 00:04:40,720 --> 00:04:42,880 Speaker 1: create a work and this should be treated for copyright 74 00:04:42,920 --> 00:04:48,360 Speaker 1: law purposes. The courts developed their own rules for addressing 75 00:04:48,400 --> 00:04:52,840 Speaker 1: the problem of independent contractors commissioned to create a creative work, 76 00:04:53,200 --> 00:04:56,080 Speaker 1: and the rule they developed came to be known as 77 00:04:56,160 --> 00:04:59,760 Speaker 1: the Instances and Expense Rule, made a certain amount of 78 00:04:59,760 --> 00:05:02,720 Speaker 1: sem for the period time in which it was developed. 79 00:05:03,160 --> 00:05:07,640 Speaker 1: It essentially said that if the idea for creative work 80 00:05:07,880 --> 00:05:12,000 Speaker 1: is developed by an employer and they ask a non 81 00:05:12,080 --> 00:05:15,760 Speaker 1: employee of which an independent contractor, to develop that idea 82 00:05:15,880 --> 00:05:19,440 Speaker 1: into the actual work, and they pay for those development costs, 83 00:05:19,560 --> 00:05:23,520 Speaker 1: then they have the copyright in the ultimate work that 84 00:05:23,720 --> 00:05:28,600 Speaker 1: is created, not the independent contractor. And so that became 85 00:05:29,040 --> 00:05:33,479 Speaker 1: the rule throughout the United States for any copyright that 86 00:05:33,880 --> 00:05:37,640 Speaker 1: was the result of work by an independent contractor and 87 00:05:37,839 --> 00:05:40,240 Speaker 1: resulted in a copyright under the nineteen o nine Act. 88 00:05:40,680 --> 00:05:45,039 Speaker 1: Is that why Markham lost his case at the district 89 00:05:45,120 --> 00:05:48,360 Speaker 1: court and appeals court level. So keep in mind that 90 00:05:48,600 --> 00:05:50,960 Speaker 1: there was no righting of the nineteen o nine Act 91 00:05:51,000 --> 00:05:53,960 Speaker 1: to terminate an assignment of your copyright that comes in 92 00:05:54,120 --> 00:05:59,120 Speaker 1: nineteen seventy ninety six Act. What the ninety Acts said, 93 00:05:59,160 --> 00:06:03,640 Speaker 1: curiously is we are going to extend, expressly extend this 94 00:06:03,760 --> 00:06:08,000 Speaker 1: right to terminate copyright assignments backwards in time to copyrights 95 00:06:08,040 --> 00:06:10,720 Speaker 1: issues under the nineteen o nine Act. A very curious 96 00:06:10,800 --> 00:06:15,000 Speaker 1: choice because obviously, when people were negotiating that assignment under 97 00:06:15,040 --> 00:06:17,760 Speaker 1: the nineteen o nine Act, they were unaware that there 98 00:06:17,839 --> 00:06:20,560 Speaker 1: might be a right determination in the future and could 99 00:06:20,600 --> 00:06:23,520 Speaker 1: not deal with it now. The Congress did create an 100 00:06:23,560 --> 00:06:27,440 Speaker 1: exception in the nineteen Copyright Act for this section three 101 00:06:27,520 --> 00:06:30,640 Speaker 1: or four right of termination. The exception was that the 102 00:06:30,800 --> 00:06:34,880 Speaker 1: right would not convey backwards in time to a work 103 00:06:35,240 --> 00:06:38,119 Speaker 1: made for higher under the nineteen o nine Act. Now, 104 00:06:38,160 --> 00:06:40,400 Speaker 1: the problem with the way they drafted it was the 105 00:06:40,480 --> 00:06:43,320 Speaker 1: nineteen o nine Act does not contain the words work 106 00:06:43,440 --> 00:06:46,680 Speaker 1: made for higher And so the courts now have been 107 00:06:46,800 --> 00:06:51,360 Speaker 1: left to interpret how do we deal with an independent 108 00:06:51,400 --> 00:06:55,160 Speaker 1: contractor who developed a copyright work under the nineteen o 109 00:06:55,279 --> 00:06:59,400 Speaker 1: nine Act and is now seeking to terminate the assignment 110 00:06:59,440 --> 00:07:02,080 Speaker 1: of that be right to the third party. Do we 111 00:07:02,200 --> 00:07:06,400 Speaker 1: apply current law as it's understood now, or do we 112 00:07:06,600 --> 00:07:11,000 Speaker 1: apply this instances an expense to test which was the 113 00:07:11,080 --> 00:07:14,040 Speaker 1: law under the nineteen o nine Act. And that's the 114 00:07:14,040 --> 00:07:18,720 Speaker 1: conundrum that the lower courts are facing here. And Mr 115 00:07:18,880 --> 00:07:23,080 Speaker 1: Markham and the heirs to his estate lost in the 116 00:07:23,120 --> 00:07:28,640 Speaker 1: lower courts because they believed that the law developed under 117 00:07:28,680 --> 00:07:30,960 Speaker 1: the nineteen o nine Copyright Act. In other words, the 118 00:07:31,000 --> 00:07:35,040 Speaker 1: instance is an expense rule should apply to explain what 119 00:07:35,160 --> 00:07:38,320 Speaker 1: a work made for higher is under the nine Act. 120 00:07:38,600 --> 00:07:41,880 Speaker 1: And they found in the particular instance of this lawsuit 121 00:07:42,200 --> 00:07:45,600 Speaker 1: that what Mr Markham had done with respect to the 122 00:07:45,600 --> 00:07:48,560 Speaker 1: Game of Life was a work made for higher because 123 00:07:48,600 --> 00:07:52,000 Speaker 1: it had been commissioned at the instance of Milton Bradley, 124 00:07:52,040 --> 00:07:54,520 Speaker 1: and they had paid for the development expenses. Therefore it 125 00:07:54,520 --> 00:07:57,120 Speaker 1: was work made for higher and there was no right determination. 126 00:07:57,400 --> 00:07:59,760 Speaker 1: So he lost in the District Court of Rhode Island 127 00:08:00,160 --> 00:08:04,240 Speaker 1: and again in the First Circuit on appeal, and now 128 00:08:04,400 --> 00:08:07,120 Speaker 1: he's going to the Supreme Court saying all those lower 129 00:08:07,160 --> 00:08:11,280 Speaker 1: courts got it wrong. And there's a split in the circuits. 130 00:08:11,320 --> 00:08:15,880 Speaker 1: Although the courts that are most involved in copyright, the 131 00:08:15,920 --> 00:08:19,360 Speaker 1: Second and the Ninth Circuits, have said the rule still 132 00:08:19,440 --> 00:08:23,720 Speaker 1: stands for old works. That's correct. So the state applied 133 00:08:23,800 --> 00:08:27,480 Speaker 1: now is that the Second Circuit, the Ninth Circuit, which 134 00:08:27,520 --> 00:08:30,680 Speaker 1: you correctly identified as the most important courts of appeal 135 00:08:30,680 --> 00:08:32,760 Speaker 1: at the federal level for copy r law, and the 136 00:08:32,800 --> 00:08:36,839 Speaker 1: First Circuit, which covers New England, they have all said 137 00:08:36,920 --> 00:08:41,240 Speaker 1: that we apply this instance and expense rule from the 138 00:08:41,320 --> 00:08:44,320 Speaker 1: nineteen o nine Act to determine what a work made 139 00:08:44,400 --> 00:08:48,360 Speaker 1: for higher is under Section three or four of However, 140 00:08:48,600 --> 00:08:52,199 Speaker 1: the Eleventh Circuit, down in Florida, Georgia's southeastern part of 141 00:08:52,200 --> 00:08:54,559 Speaker 1: the United States, has said none of that can't be right. 142 00:08:55,040 --> 00:08:57,600 Speaker 1: The right to terminate Section three or four is in 143 00:08:57,600 --> 00:09:00,960 Speaker 1: the x Act, and therefore we have to use the 144 00:09:01,080 --> 00:09:05,120 Speaker 1: law of the to determine that right now, June. As 145 00:09:05,160 --> 00:09:07,720 Speaker 1: you know, the Spring Court is not required in the 146 00:09:07,720 --> 00:09:10,240 Speaker 1: Constitution to take every single appeal that goes to It 147 00:09:10,520 --> 00:09:15,200 Speaker 1: has discretionary powers in most cases except four cases between 148 00:09:15,200 --> 00:09:18,280 Speaker 1: two sovereign states Georgia and North Carolina suit each other, 149 00:09:18,320 --> 00:09:20,199 Speaker 1: they have to take that. But all the rest of 150 00:09:20,200 --> 00:09:23,520 Speaker 1: the cases, it's a discretionary jurisdiction. And so you file 151 00:09:23,600 --> 00:09:26,679 Speaker 1: a petition for certain c r which is what the 152 00:09:26,840 --> 00:09:30,240 Speaker 1: Markham State has done here asking the Court to review 153 00:09:30,280 --> 00:09:33,400 Speaker 1: this case because it's important and one of the things 154 00:09:33,600 --> 00:09:35,920 Speaker 1: that the Spring Court looks at to determine whether the 155 00:09:36,400 --> 00:09:39,840 Speaker 1: cases we're taking on appeal is is there a split 156 00:09:39,960 --> 00:09:42,400 Speaker 1: in the circuit courts, Because the Spreme Court is of 157 00:09:42,440 --> 00:09:45,000 Speaker 1: the view that if there's a split in the circuit courts, 158 00:09:45,080 --> 00:09:49,000 Speaker 1: um different law is being applied based on the portion 159 00:09:49,040 --> 00:09:50,760 Speaker 1: of the country that you're in, and we have to 160 00:09:50,800 --> 00:09:53,960 Speaker 1: fix that. There has to be a uniform law across 161 00:09:54,080 --> 00:09:56,760 Speaker 1: the United States, so it doesn't matter which circuit you're it. 162 00:09:56,960 --> 00:10:00,600 Speaker 1: And therefore there's very strong reason here because of that 163 00:10:00,800 --> 00:10:04,480 Speaker 1: circuit split to believe the Supreme Court scoring accept this case, 164 00:10:05,080 --> 00:10:08,080 Speaker 1: and that has been confirmed recently by the fact that 165 00:10:08,120 --> 00:10:12,080 Speaker 1: the Supreme Court asked, in a very unusual manner for 166 00:10:12,200 --> 00:10:16,200 Speaker 1: the Hasbroke Company, which acquired all the rights and interests 167 00:10:16,240 --> 00:10:21,000 Speaker 1: of Milton Bradley, asked Hasbroke Company, who won below. They 168 00:10:21,040 --> 00:10:24,400 Speaker 1: asked them to respond to this petition for certain cry, 169 00:10:24,840 --> 00:10:27,800 Speaker 1: which is usually a signal that the Supreme Court is 170 00:10:27,840 --> 00:10:32,480 Speaker 1: inclined to accept the case. And so my betting is 171 00:10:32,840 --> 00:10:35,199 Speaker 1: that they're going to take this case. And here it's 172 00:10:35,240 --> 00:10:40,400 Speaker 1: sometime next fall. Explain the significance of this case. It's 173 00:10:40,440 --> 00:10:43,640 Speaker 1: not about just the Game of Life has such wide 174 00:10:44,000 --> 00:10:49,520 Speaker 1: repercussions if the rules changed. Oh, this case has millions, 175 00:10:49,520 --> 00:10:53,040 Speaker 1: if not billions of dollars at stake over and beyond 176 00:10:53,480 --> 00:10:55,480 Speaker 1: the Game of Life. There's a lot of money at 177 00:10:55,480 --> 00:10:57,800 Speaker 1: stake ins because Game of Life is the second most 178 00:10:57,840 --> 00:11:01,440 Speaker 1: popular board game of all time, selling something like thirty 179 00:11:01,480 --> 00:11:03,880 Speaker 1: million copies worldwide. So there's a lot of money at 180 00:11:03,920 --> 00:11:06,760 Speaker 1: stake in this case. But the real money at stake 181 00:11:07,120 --> 00:11:10,720 Speaker 1: has to do with all the copyrights from the fifties 182 00:11:10,720 --> 00:11:14,000 Speaker 1: and sixties that are still valid. They were procured and 183 00:11:14,040 --> 00:11:16,400 Speaker 1: issued under the nineteen o nine Act, and so we 184 00:11:16,480 --> 00:11:22,000 Speaker 1: have copyrights for the entire Marvel Comic book universe. All 185 00:11:22,200 --> 00:11:26,800 Speaker 1: those character rights could be terminated by the creators if 186 00:11:26,840 --> 00:11:30,559 Speaker 1: the Supreme Court rules in favor of the market state 187 00:11:30,640 --> 00:11:33,520 Speaker 1: here and says that there is a right to terminate. 188 00:11:33,800 --> 00:11:37,000 Speaker 1: Keep in mind that copyrights issued in the nineteen o 189 00:11:37,120 --> 00:11:41,920 Speaker 1: nine Act exists for years, and so any copyright issued 190 00:11:41,960 --> 00:11:46,760 Speaker 1: between the years nineteen seven nineteen seventy seven are still 191 00:11:46,800 --> 00:11:49,440 Speaker 1: in effect. And we're issued in the nineteen o nine Act, 192 00:11:49,640 --> 00:11:53,960 Speaker 1: and therefore, potentially, now out of the blue, the creators, 193 00:11:54,200 --> 00:11:57,120 Speaker 1: to the extent that they've assigned away their copyright, will 194 00:11:57,160 --> 00:12:01,360 Speaker 1: have a right to terminate. And that's a very big 195 00:12:01,400 --> 00:12:04,800 Speaker 1: deal given the number, the large number of copyrights issued 196 00:12:04,880 --> 00:12:09,720 Speaker 1: during that fifty year period. I find the ability to 197 00:12:09,800 --> 00:12:13,520 Speaker 1: recapture the copyright a little bit troubling because so much 198 00:12:13,679 --> 00:12:17,960 Speaker 1: goes into the success of a board game, let's say, 199 00:12:18,000 --> 00:12:22,600 Speaker 1: beyond just its creation. There's the marketing, there's the promotion, 200 00:12:22,960 --> 00:12:27,320 Speaker 1: the packaging, the production, the distribution, a host of things. 201 00:12:27,800 --> 00:12:30,880 Speaker 1: And for someone to be able to come back after 202 00:12:30,920 --> 00:12:34,679 Speaker 1: all that's been done and recapture the copyright because I 203 00:12:34,720 --> 00:12:37,080 Speaker 1: didn't know about the success of the products, so they 204 00:12:37,120 --> 00:12:41,800 Speaker 1: didn't know about their bargaining position. It seems unfair, and Junior, 205 00:12:41,800 --> 00:12:44,480 Speaker 1: you're exactly right, and it extends beyond just the game 206 00:12:44,480 --> 00:12:47,720 Speaker 1: of life and what's gone into making it so popular. 207 00:12:48,120 --> 00:12:50,640 Speaker 1: I mean, think about your typical movie. Yes, you have 208 00:12:50,679 --> 00:12:53,920 Speaker 1: to acquire the character, right, but somebody still has to 209 00:12:54,040 --> 00:12:56,080 Speaker 1: write the story. The actors have to perform at the 210 00:12:56,080 --> 00:12:58,760 Speaker 1: director has to direct it, the editor has to edit it, 211 00:12:58,800 --> 00:13:01,040 Speaker 1: the found editor has to bring in the sounds. The 212 00:13:01,120 --> 00:13:03,640 Speaker 1: distribution company has to get out there marketing and get 213 00:13:03,679 --> 00:13:06,560 Speaker 1: into theaters make it popular. All those things are things 214 00:13:06,600 --> 00:13:09,080 Speaker 1: that the owner of the copyright and the character did 215 00:13:09,080 --> 00:13:12,320 Speaker 1: not do to make a fame. And that owner of 216 00:13:12,360 --> 00:13:15,400 Speaker 1: that character copy right now will have an opportunity to 217 00:13:16,000 --> 00:13:19,280 Speaker 1: terminate their assignment, which will stop any future movies being made, 218 00:13:19,520 --> 00:13:23,200 Speaker 1: and to renegotiate the right. And I don't think Congress 219 00:13:23,360 --> 00:13:26,320 Speaker 1: fully thought through what they were doing here when they 220 00:13:26,360 --> 00:13:30,400 Speaker 1: put section three or four in the They clearly bought 221 00:13:30,440 --> 00:13:33,520 Speaker 1: hook line and sinker all these tales of low from 222 00:13:33,720 --> 00:13:36,480 Speaker 1: artists and writers that they were being taken advantage of. 223 00:13:36,880 --> 00:13:39,760 Speaker 1: And there is some of that that went on but 224 00:13:40,440 --> 00:13:44,080 Speaker 1: there was also a lot of just good old honest 225 00:13:44,400 --> 00:13:48,800 Speaker 1: bargaining that went on. And if the purchasers of those 226 00:13:48,840 --> 00:13:52,640 Speaker 1: assigned copyrights had known that there was this right to 227 00:13:52,760 --> 00:13:55,720 Speaker 1: terminate in the future, they would have factored that into 228 00:13:55,720 --> 00:13:58,880 Speaker 1: their economic analysis and not paid as much in the 229 00:13:58,920 --> 00:14:02,040 Speaker 1: first place. Are they would have bargained in the first 230 00:14:02,080 --> 00:14:05,640 Speaker 1: place for the right to give up that termination in 231 00:14:05,679 --> 00:14:09,040 Speaker 1: the future. And because they didn't know that this termination 232 00:14:09,160 --> 00:14:12,840 Speaker 1: right existed in nineteen sixty, for example, when the copyright 233 00:14:12,920 --> 00:14:15,120 Speaker 1: Game of Life was a sign, they could not possibly 234 00:14:15,200 --> 00:14:18,640 Speaker 1: negotiate that way. And so it is in some respects 235 00:14:18,760 --> 00:14:22,720 Speaker 1: very unfair to the owners of these copyright assignments to 236 00:14:22,840 --> 00:14:26,640 Speaker 1: now go back in time and force a renegotiation. I mean, 237 00:14:26,720 --> 00:14:31,560 Speaker 1: with this conservative court disturbed the Marvel universe in this way. 238 00:14:32,240 --> 00:14:36,080 Speaker 1: It's a great question, June, because we are at a 239 00:14:36,280 --> 00:14:41,080 Speaker 1: nodal point in Supreme Court jurisprudence with respect the copyright law. 240 00:14:41,720 --> 00:14:46,560 Speaker 1: The two great champions of copyright law at different ends 241 00:14:46,560 --> 00:14:51,480 Speaker 1: of the spectrum, for Justice Ginsburg and Justice Bryer. Justice 242 00:14:51,520 --> 00:14:56,280 Speaker 1: Ginsburg passed away she believed in a very strong protection 243 00:14:56,360 --> 00:14:59,200 Speaker 1: for copyright. We can see how her voice was missed 244 00:14:59,200 --> 00:15:02,480 Speaker 1: on the Court during the Oracle case, which was decided 245 00:15:02,920 --> 00:15:06,840 Speaker 1: the last term, in which the side that believed in 246 00:15:06,880 --> 00:15:10,760 Speaker 1: a weak copyright prevailed. Because she was not there to 247 00:15:11,040 --> 00:15:14,200 Speaker 1: articulate the need for a strong copyright system. Justice Bryer, 248 00:15:14,240 --> 00:15:17,200 Speaker 1: on the other hand, has always been her antagonist with 249 00:15:17,240 --> 00:15:19,960 Speaker 1: respect the copyright laws. He has always argued in favor 250 00:15:19,960 --> 00:15:23,000 Speaker 1: of a weaker copyright protection system. We saw him prevail 251 00:15:23,120 --> 00:15:26,960 Speaker 1: in the Oracle case last term. If this case involving 252 00:15:27,400 --> 00:15:29,920 Speaker 1: the Game of Life would come up while he was 253 00:15:29,960 --> 00:15:32,920 Speaker 1: still on the court, I would say that there's a 254 00:15:33,040 --> 00:15:37,000 Speaker 1: very significant risk that he would overturn or certainly try 255 00:15:37,080 --> 00:15:39,280 Speaker 1: to overturn and get the votes in the court the 256 00:15:39,360 --> 00:15:42,080 Speaker 1: lower court decision and say that there was a termination 257 00:15:42,200 --> 00:15:45,680 Speaker 1: right in the copy right. It is likely that this 258 00:15:45,720 --> 00:15:48,760 Speaker 1: case will not come before the Spring Court until next 259 00:15:48,760 --> 00:15:53,160 Speaker 1: October at the earliest, and my understanding is that just 260 00:15:53,320 --> 00:15:55,320 Speaker 1: as Brides likely to be off the court at that point, 261 00:15:55,560 --> 00:15:58,360 Speaker 1: in which case we will have a Supreme Court that 262 00:15:58,560 --> 00:16:03,040 Speaker 1: is truly bereft of any deep knowledge or experience with 263 00:16:03,280 --> 00:16:06,640 Speaker 1: the copyright laws to the United States, and we will 264 00:16:06,680 --> 00:16:10,240 Speaker 1: have to see who steps up to fill the spots 265 00:16:10,640 --> 00:16:14,200 Speaker 1: less vacant by Justice Ginsburg, Justice Brier in the copyright 266 00:16:14,200 --> 00:16:16,760 Speaker 1: field of the Supreme Court, and it's anybody's guests how 267 00:16:16,800 --> 00:16:19,720 Speaker 1: this court might rule on this case. I will tell 268 00:16:19,760 --> 00:16:23,840 Speaker 1: you this, If the Supreme Court agrees to take this case, um, 269 00:16:23,920 --> 00:16:28,160 Speaker 1: we are going to see a flood of amacus briefs 270 00:16:28,240 --> 00:16:32,600 Speaker 1: taking one side or the other. Certainly, the owners of 271 00:16:33,200 --> 00:16:37,400 Speaker 1: assignments of nineteen o nine Act copyrights will be arguing 272 00:16:37,440 --> 00:16:44,040 Speaker 1: to affirm the decision below, and the assignees of nineteen 273 00:16:44,040 --> 00:16:46,920 Speaker 1: o nine Act copyrights are going to be flooding the 274 00:16:46,920 --> 00:16:51,160 Speaker 1: courts with a meekus briefs arguing that there should be 275 00:16:51,200 --> 00:16:55,040 Speaker 1: a right of termination. It will arguably be one of 276 00:16:55,240 --> 00:17:00,960 Speaker 1: the busiest dockets that the Supreme Court has seen years 277 00:17:01,000 --> 00:17:04,480 Speaker 1: because of the vested interests and the sheer amount of 278 00:17:04,520 --> 00:17:08,160 Speaker 1: money at stake. It will be fascinating to see what happens. Terry, 279 00:17:08,240 --> 00:17:12,679 Speaker 1: thanks so much. That's intellectual property litigator Terence Ross of Katon. 280 00:17:12,920 --> 00:17:19,160 Speaker 1: I'm June Gross. When you're listening to Bloomberg. After years 281 00:17:19,200 --> 00:17:23,439 Speaker 1: of public humiliation over sexual abuse allegations that rocked the 282 00:17:23,480 --> 00:17:28,280 Speaker 1: British royal family, Prince Andrew is sparing himself a courtroom 283 00:17:28,359 --> 00:17:33,680 Speaker 1: showdown by settling with his accuser. Andrew has consistently denied 284 00:17:33,760 --> 00:17:36,560 Speaker 1: Virginia Drew Freese claim that he was one of several 285 00:17:36,560 --> 00:17:40,480 Speaker 1: men to whom Jeffrey Epstein lent her for sexual abuse 286 00:17:40,520 --> 00:17:43,040 Speaker 1: when she was a teenager. His failure to get the 287 00:17:43,080 --> 00:17:47,480 Speaker 1: lawsuit dismissed last month set off a cascade of repercussions, 288 00:17:47,840 --> 00:17:51,399 Speaker 1: leading to Buckingham Palace stripping him of honorific titles and 289 00:17:51,480 --> 00:17:55,040 Speaker 1: royal patronage. Is Andrew has agreed to settle the case 290 00:17:55,080 --> 00:17:58,040 Speaker 1: for an undisclosed sum. Here to tell us more is 291 00:17:58,080 --> 00:18:02,960 Speaker 1: Bloomberg Legal editor Anthony Lynn. Did this settlement come as 292 00:18:02,960 --> 00:18:06,960 Speaker 1: a surprise to people who are watching the case? I think, 293 00:18:07,440 --> 00:18:10,800 Speaker 1: ultimately not. I do think it was a surprise how 294 00:18:10,840 --> 00:18:13,000 Speaker 1: early it came. I think a lot of people thought 295 00:18:13,000 --> 00:18:14,960 Speaker 1: maybe this would get a little closer, a little further. 296 00:18:15,200 --> 00:18:18,040 Speaker 1: But a lot of people who have been following, you know, 297 00:18:18,080 --> 00:18:22,240 Speaker 1: litigation relating to Jeffrey Epstein did not expect this ultimately 298 00:18:22,240 --> 00:18:24,080 Speaker 1: go to trial. So ultimately the fact that it was 299 00:18:24,119 --> 00:18:27,440 Speaker 1: settled wasn't that surprising. But he'd been taking a sort 300 00:18:27,440 --> 00:18:32,879 Speaker 1: of scorched earth approach to her claims, indicating he wanted 301 00:18:32,920 --> 00:18:37,120 Speaker 1: to vindicate his name at trial. Yeah, I think certainly 302 00:18:37,119 --> 00:18:41,800 Speaker 1: the litigation strategy right up until the settlement was pretty 303 00:18:41,840 --> 00:18:46,000 Speaker 1: aggressive in terms of saying she consented to some aspects 304 00:18:46,080 --> 00:18:48,639 Speaker 1: of this, you know that she was out for money. 305 00:18:48,680 --> 00:18:50,800 Speaker 1: But clearly there was a turning point in the sense 306 00:18:50,840 --> 00:18:54,640 Speaker 1: of when the judge basically denied his motion dismissed the case. 307 00:18:55,000 --> 00:18:58,200 Speaker 1: So he was facing a number of issues. For instance, 308 00:18:58,200 --> 00:19:00,440 Speaker 1: he would have had to sit for a deposition soon. 309 00:19:01,080 --> 00:19:03,800 Speaker 1: You know, they were getting this evidence from, for instances, 310 00:19:03,920 --> 00:19:07,840 Speaker 1: his former personal assistant. So there were these sort of immediate, 311 00:19:07,960 --> 00:19:09,879 Speaker 1: you know, obstacles in his path that I guess he 312 00:19:09,920 --> 00:19:13,919 Speaker 1: wanted to avoid. Did the judge ever rule on his 313 00:19:14,760 --> 00:19:19,880 Speaker 1: argument that this litigation was covered by a release that 314 00:19:20,040 --> 00:19:24,159 Speaker 1: Dreffrey signed as part of a settlement with Epstein, No, 315 00:19:24,320 --> 00:19:27,119 Speaker 1: the judge never explicitly ruled on that. So that was 316 00:19:27,160 --> 00:19:29,960 Speaker 1: the core argument that he put forth in his motion 317 00:19:30,000 --> 00:19:32,760 Speaker 1: to dismissed that this two thousand and nine settlement between 318 00:19:32,800 --> 00:19:37,960 Speaker 1: two for and Epstein Um included him, and Duffer's lawyers 319 00:19:38,440 --> 00:19:41,199 Speaker 1: said that there was there was no possible way that 320 00:19:41,240 --> 00:19:43,960 Speaker 1: he could have been included in that as a potential defendant. 321 00:19:43,960 --> 00:19:49,320 Speaker 1: The agreement said all potential defendants. UM, and the judge 322 00:19:49,359 --> 00:19:52,120 Speaker 1: basically said it was it was too early to rule 323 00:19:52,200 --> 00:19:55,720 Speaker 1: on that because there was a there was more evidence 324 00:19:55,800 --> 00:19:59,760 Speaker 1: to be discovered on that basically, and so that that 325 00:20:00,280 --> 00:20:03,800 Speaker 1: he basically reserved judgment on that. It seemed as if 326 00:20:03,920 --> 00:20:05,840 Speaker 1: this was going to be and he said, she said, 327 00:20:06,880 --> 00:20:10,800 Speaker 1: I mean, essentially, I think it's it's um, there's no UM, 328 00:20:10,840 --> 00:20:14,320 Speaker 1: there's no dispute that he was friendly with Epstein and 329 00:20:14,359 --> 00:20:19,560 Speaker 1: that he was apparently very close friends with Glenn Maxwell, 330 00:20:19,640 --> 00:20:23,399 Speaker 1: who was you know, Epstein's former girlfriend who was just 331 00:20:23,520 --> 00:20:29,359 Speaker 1: convicted in Manhattan of sex trafficking. So UM, you know, 332 00:20:29,400 --> 00:20:32,560 Speaker 1: there there is a lot of you know, he can't 333 00:20:32,560 --> 00:20:35,600 Speaker 1: deny that he knew them and that you know, and 334 00:20:35,640 --> 00:20:38,959 Speaker 1: that they were involved in this, uh, in this scheme. 335 00:20:39,359 --> 00:20:45,440 Speaker 1: But um, but whether he actually abused Virginia Duffrey. I mean, 336 00:20:45,720 --> 00:20:47,840 Speaker 1: they are the only two people I think who could 337 00:20:47,880 --> 00:20:50,720 Speaker 1: say one we or the other. And why wasn't this 338 00:20:51,320 --> 00:20:56,040 Speaker 1: claim barred by the statute of limitations. Well, there is 339 00:20:56,119 --> 00:21:01,080 Speaker 1: a law that was passed in New York at UM 340 00:21:01,119 --> 00:21:04,800 Speaker 1: that extended the time for people who were um sort 341 00:21:04,800 --> 00:21:09,720 Speaker 1: of childhood victims of sexual abuse to bring claims and 342 00:21:09,800 --> 00:21:13,520 Speaker 1: that's actually why Duffrey, I think sued when she did 343 00:21:13,760 --> 00:21:18,720 Speaker 1: UM these claims that she's she's made them publicly before. UM. 344 00:21:18,760 --> 00:21:23,080 Speaker 1: But but yes, she specifically references the fact that New 345 00:21:23,119 --> 00:21:25,879 Speaker 1: York passed this law. I think in the wake of UH, 346 00:21:26,040 --> 00:21:28,720 Speaker 1: you know, I think, like Harvey Weinstein and some of 347 00:21:28,760 --> 00:21:31,600 Speaker 1: the other me two cases, do you know why she 348 00:21:31,760 --> 00:21:35,959 Speaker 1: wasn't called to testify against Maxwell? Well, I don't know 349 00:21:36,040 --> 00:21:41,800 Speaker 1: why specifically. UM. I think there are potentially you could 350 00:21:41,800 --> 00:21:43,919 Speaker 1: you could see that there might have been issues with 351 00:21:45,400 --> 00:21:48,640 Speaker 1: some of the testimony that other witnesses had brought up. 352 00:21:49,080 --> 00:21:53,040 Speaker 1: There was one witness who mentioned that Gruffrey was the 353 00:21:53,080 --> 00:21:57,440 Speaker 1: one who brought her into Maxwell and Epstein's world for instance. 354 00:21:57,720 --> 00:22:01,880 Speaker 1: UM so and and this is something that Andrew has 355 00:22:01,920 --> 00:22:04,960 Speaker 1: alluded to and even more publicly. I guess Alan Dershwitz, 356 00:22:05,000 --> 00:22:08,280 Speaker 1: who Virginia drew for his o sol suing and accusing 357 00:22:08,400 --> 00:22:13,120 Speaker 1: of similar conduct, though he has denied it, UM has 358 00:22:13,119 --> 00:22:17,840 Speaker 1: aggressively raised that fact in his defense, saying that that 359 00:22:18,160 --> 00:22:21,280 Speaker 1: this shows that she's culpable in her own way. In 360 00:22:21,280 --> 00:22:25,840 Speaker 1: the settlement, he admitted to no wrongdoing, but his tone 361 00:22:26,040 --> 00:22:30,080 Speaker 1: was quite different from what we've heard from him before 362 00:22:30,680 --> 00:22:35,119 Speaker 1: describe a tone that was conciliatory, I I thought, in 363 00:22:35,200 --> 00:22:39,159 Speaker 1: the sense of um, you know, compared especially to the 364 00:22:39,240 --> 00:22:42,919 Speaker 1: language in his motion dismissed last October and in the 365 00:22:42,960 --> 00:22:47,720 Speaker 1: more recent UM answer formal answer to the to the complaint, 366 00:22:47,760 --> 00:22:50,879 Speaker 1: which he only had to file after losing on the 367 00:22:50,880 --> 00:22:54,560 Speaker 1: motion to dismiss, where he specifically said he was going 368 00:22:54,600 --> 00:22:59,320 Speaker 1: to raise these defenses like consent. Uh. He specifically raised 369 00:22:59,640 --> 00:23:04,679 Speaker 1: legal tense of unclean hands, um, you know, basically suggesting 370 00:23:04,960 --> 00:23:08,600 Speaker 1: she she was as fault in this as well. She's 371 00:23:08,640 --> 00:23:13,080 Speaker 1: not you know, a blameless person in in in in 372 00:23:13,160 --> 00:23:16,359 Speaker 1: her own sexual abuse, which um, you know, it's pretty 373 00:23:16,359 --> 00:23:20,800 Speaker 1: harsh defense to bring up and and um. In this 374 00:23:20,800 --> 00:23:24,840 Speaker 1: this latest statement, he is commending her for her bravery 375 00:23:24,880 --> 00:23:27,040 Speaker 1: and you know, and and saying, you know how much 376 00:23:27,080 --> 00:23:29,639 Speaker 1: sympathy has for for all the victims, and you know, 377 00:23:29,720 --> 00:23:31,959 Speaker 1: part of the agreement is that he's going to make 378 00:23:32,000 --> 00:23:37,159 Speaker 1: a substantial donation to her charity, which is UH is 379 00:23:37,440 --> 00:23:41,960 Speaker 1: supposed to support victims rights. The Telegraph in the UK 380 00:23:42,200 --> 00:23:45,000 Speaker 1: is reporting that the sum will be more than twelve 381 00:23:45,040 --> 00:23:50,320 Speaker 1: billion British pounds, which is more than he supposedly has. 382 00:23:51,280 --> 00:23:54,000 Speaker 1: I mean, we've certainly reported that his his net worth, 383 00:23:54,040 --> 00:23:56,119 Speaker 1: at least I believe it was some years ago, was 384 00:23:56,280 --> 00:24:01,280 Speaker 1: estimated at five or six million pounds um. You know, 385 00:24:01,320 --> 00:24:04,160 Speaker 1: I certainly seen the British papers have suggested that Buckingham 386 00:24:04,200 --> 00:24:07,800 Speaker 1: Palaces is paying for this. So I don't know where 387 00:24:07,800 --> 00:24:10,960 Speaker 1: that money is coming from um or in fact, whether 388 00:24:11,040 --> 00:24:14,879 Speaker 1: that's that amount is accurate. Okay, thanks Tony. That's Bloomberg 389 00:24:14,920 --> 00:24:20,680 Speaker 1: Legal editor Anthony Lynn counterfeits Gerald's former global co head 390 00:24:20,720 --> 00:24:25,760 Speaker 1: of equities helped violate SEC rules on recording commissions on trades. 391 00:24:26,359 --> 00:24:29,359 Speaker 1: That was a jury's verdict after a week long trial 392 00:24:29,760 --> 00:24:32,399 Speaker 1: at which Adam Matta Such and other traders trying to 393 00:24:32,480 --> 00:24:36,000 Speaker 1: cast blame on a permissive culture at the firm. Joining 394 00:24:36,000 --> 00:24:39,560 Speaker 1: me is Bloomberg Legal reporter Crystal Mesh. What was he 395 00:24:39,640 --> 00:24:42,719 Speaker 1: on trial for? So he was on trial for, It's 396 00:24:42,800 --> 00:24:45,239 Speaker 1: kind of interesting. He was not. He's not accused of 397 00:24:45,320 --> 00:24:49,720 Speaker 1: violating rules himself. He's accused of helping the firm avoid 398 00:24:49,880 --> 00:24:53,520 Speaker 1: SEC rules that you know require broker dealers to provide 399 00:24:53,720 --> 00:24:58,440 Speaker 1: detailed compensation information so that you know, customers and regulators 400 00:24:58,480 --> 00:25:02,960 Speaker 1: whoever can identify who's bociated with what trades. So was 401 00:25:03,040 --> 00:25:07,719 Speaker 1: the culture of Cantor on trial as well, not really. 402 00:25:08,280 --> 00:25:10,560 Speaker 1: There have been a lot of you know, UM stories 403 00:25:10,600 --> 00:25:13,359 Speaker 1: about Cantor over the years and its culture UM, so 404 00:25:13,440 --> 00:25:15,040 Speaker 1: that kind of loomed over it a little bit. But 405 00:25:15,080 --> 00:25:17,320 Speaker 1: this was more of a This is more of a 406 00:25:17,359 --> 00:25:20,159 Speaker 1: case about um, you know, compensation, and it's it's a 407 00:25:20,240 --> 00:25:23,560 Speaker 1: rare look into you know, how you know, Wall Street 408 00:25:23,600 --> 00:25:27,199 Speaker 1: firms are compensated and how compensation works, and it's just 409 00:25:27,280 --> 00:25:29,240 Speaker 1: something you don't see a lot of the SEC cases. 410 00:25:30,200 --> 00:25:33,560 Speaker 1: If they bring criminal charges along with them, they go 411 00:25:33,640 --> 00:25:36,399 Speaker 1: to trial, but rarely do we get SEC cases that 412 00:25:36,440 --> 00:25:38,480 Speaker 1: go all the way to trial like this. So it 413 00:25:38,600 --> 00:25:42,200 Speaker 1: was very revealing about how they pay people and what 414 00:25:42,240 --> 00:25:45,119 Speaker 1: they how they distribute commissions and things like that. Because 415 00:25:45,280 --> 00:25:47,719 Speaker 1: so that was probably the most impressing part about it 416 00:25:48,160 --> 00:25:52,160 Speaker 1: tell us about who the SEC sued initially. So they 417 00:25:52,160 --> 00:25:56,040 Speaker 1: initially sued Mattasich and another trader, Joseph Ludovico, who was 418 00:25:56,080 --> 00:25:58,520 Speaker 1: one of the sales traders who split commissions with him. 419 00:25:58,640 --> 00:26:02,160 Speaker 1: Ludovico UM had paid Manasuch at least fifty eight thousand 420 00:26:02,200 --> 00:26:04,480 Speaker 1: dollars in one year, so he was one of the 421 00:26:04,600 --> 00:26:06,840 Speaker 1: leading people that split these commissions with it, and it 422 00:26:06,880 --> 00:26:10,840 Speaker 1: was actually his testimony to Finra that tipped everybody off 423 00:26:10,840 --> 00:26:13,800 Speaker 1: to this commission splitting scheme that they were doing. He 424 00:26:13,920 --> 00:26:16,080 Speaker 1: testified at the trial and he kind of backed up 425 00:26:16,119 --> 00:26:18,679 Speaker 1: what Manisi should argued is that this was kind of 426 00:26:18,840 --> 00:26:22,679 Speaker 1: an open secret that everyone exchanged personal checks on the 427 00:26:22,720 --> 00:26:26,520 Speaker 1: desk open. It was not anything that was hidden. Ludovico 428 00:26:26,720 --> 00:26:30,680 Speaker 1: settled with the SEC. Why didn't settle, Well, that's a 429 00:26:30,800 --> 00:26:32,560 Speaker 1: very good question. Um, you know, that would be one 430 00:26:32,560 --> 00:26:35,080 Speaker 1: of the first questions I would ask him. Um. You know, 431 00:26:35,160 --> 00:26:37,399 Speaker 1: his lawyers decline to comment after the case other than 432 00:26:37,440 --> 00:26:40,400 Speaker 1: to say, you know that they're considering there their next options, 433 00:26:40,480 --> 00:26:43,960 Speaker 1: which you know could indicate an appeal, um. But it's 434 00:26:43,960 --> 00:26:47,800 Speaker 1: almost a reputational thing. They weren't really um seeking any 435 00:26:47,960 --> 00:26:50,840 Speaker 1: anything other than a monetary fine and you know, an 436 00:26:50,840 --> 00:26:53,640 Speaker 1: injunction blocking him from violating this rule again. But he's 437 00:26:53,640 --> 00:26:56,679 Speaker 1: not at the firm anymore. So that's kind of I 438 00:26:56,720 --> 00:26:59,520 Speaker 1: think this was just more him trying to maintain its 439 00:26:59,560 --> 00:27:03,800 Speaker 1: reputation and fight the SEC. His lawyers argued that, you know, 440 00:27:03,840 --> 00:27:05,679 Speaker 1: he was a scapegoat, that he was thrown under the 441 00:27:05,680 --> 00:27:09,160 Speaker 1: bus for something that was done regularly. Um. By other 442 00:27:09,160 --> 00:27:13,200 Speaker 1: traders and other employees at Cantor. What's wrong with this? Well, 443 00:27:13,280 --> 00:27:15,719 Speaker 1: the problem is is that this has been going on 444 00:27:16,040 --> 00:27:19,000 Speaker 1: since the sect rule of the issue was dated back 445 00:27:19,000 --> 00:27:22,120 Speaker 1: to two thousand one. UM. But Cancer traders never really 446 00:27:22,160 --> 00:27:24,680 Speaker 1: got any guidance on this and it wasn't really necessarily 447 00:27:24,720 --> 00:27:27,760 Speaker 1: known as you know, the years went by and you know, 448 00:27:28,000 --> 00:27:31,199 Speaker 1: firms were required to track things more closely, you know, 449 00:27:31,720 --> 00:27:35,520 Speaker 1: reveal more of their communications, you know, as electronics communication 450 00:27:35,600 --> 00:27:37,680 Speaker 1: kind of makes its way in the wall street, which 451 00:27:37,720 --> 00:27:40,439 Speaker 1: has done over the past twenty years, which these allegations 452 00:27:40,480 --> 00:27:43,240 Speaker 1: date back to. You know, the more and more they 453 00:27:43,240 --> 00:27:45,040 Speaker 1: have to comply with these rules, the more and more 454 00:27:45,040 --> 00:27:47,440 Speaker 1: they start to push out people who are allegedly didn't 455 00:27:47,480 --> 00:27:52,280 Speaker 1: comply with them. So he had other traders testified that 456 00:27:53,080 --> 00:27:57,359 Speaker 1: this was done routinely at Cantor. Yes, they all said 457 00:27:57,359 --> 00:28:00,639 Speaker 1: that they So nobody really said anything to the people 458 00:28:00,640 --> 00:28:03,240 Speaker 1: about this rule until two thousand four teen when the 459 00:28:03,320 --> 00:28:07,160 Speaker 1: chief compliance officer, who also testified it at the trial, UM, 460 00:28:07,200 --> 00:28:10,879 Speaker 1: you know, issued a memo saying you can't share um split, 461 00:28:11,040 --> 00:28:14,080 Speaker 1: you know, any kind of pay with any other employees 462 00:28:14,119 --> 00:28:17,359 Speaker 1: that Cancer in connection with official business. So you know, 463 00:28:17,480 --> 00:28:20,000 Speaker 1: after that they got it just kind of stopped. But 464 00:28:20,160 --> 00:28:22,080 Speaker 1: the traders who got up all said that they thought 465 00:28:22,119 --> 00:28:24,520 Speaker 1: that that was a new policy. They had not aware 466 00:28:24,560 --> 00:28:26,639 Speaker 1: that they could not do this before. But there was 467 00:28:26,680 --> 00:28:29,840 Speaker 1: also some testimony that some of these other arrangements where 468 00:28:29,880 --> 00:28:33,080 Speaker 1: you know, commissions were split or something like that, UM 469 00:28:33,080 --> 00:28:36,120 Speaker 1: either went through some sort of approval channels UM or 470 00:28:36,160 --> 00:28:40,160 Speaker 1: you know, we're unofficially condoned by the firm. So what 471 00:28:40,240 --> 00:28:43,600 Speaker 1: was that issue at trial was something that happened before. 472 00:28:44,640 --> 00:28:47,520 Speaker 1: In other words, this wasn't ongoing. No, it stopped in 473 00:28:47,520 --> 00:28:50,240 Speaker 1: two thousand fourteen, but they didn't pick up their probe 474 00:28:50,240 --> 00:28:53,240 Speaker 1: in two thousand eighteen, and that's when it appears that 475 00:28:53,280 --> 00:28:56,240 Speaker 1: they allowed him to resign. It seems a little odd 476 00:28:56,280 --> 00:28:59,520 Speaker 1: to bring this to trial. I mean the SEC, like 477 00:28:59,520 --> 00:29:02,480 Speaker 1: I said, all the SEC cases get settled, so and 478 00:29:02,680 --> 00:29:04,840 Speaker 1: you know they don't the government doesn't tend to give 479 00:29:04,920 --> 00:29:08,160 Speaker 1: up a lot of time UM, and especially the SEC 480 00:29:08,320 --> 00:29:10,360 Speaker 1: doesn't get a lot of these cases. Look if these cases, 481 00:29:10,760 --> 00:29:15,000 Speaker 1: if an SEC case is a fairly um substantial case, 482 00:29:15,160 --> 00:29:17,560 Speaker 1: it's probably going to result in criminal charges. We saw 483 00:29:17,600 --> 00:29:19,760 Speaker 1: that today with another case. So you know, when the 484 00:29:19,880 --> 00:29:24,200 Speaker 1: SEC has its own case they fight and um, Mattafitch 485 00:29:24,280 --> 00:29:26,600 Speaker 1: did not give up. He fought the whole way through. 486 00:29:27,040 --> 00:29:28,800 Speaker 1: This is just civils. Do we know how much he's 487 00:29:28,800 --> 00:29:31,080 Speaker 1: facing and fines We don't. That still has to be 488 00:29:31,120 --> 00:29:34,560 Speaker 1: determined by the judge. And what did Cantor pay and fines? 489 00:29:35,120 --> 00:29:38,160 Speaker 1: Canner paid um one point to five million to resolve 490 00:29:38,200 --> 00:29:41,080 Speaker 1: the claims without admitting or denying wrongdoing. Thanks for being 491 00:29:41,080 --> 00:29:44,560 Speaker 1: on the show, Chris. That's Chris Dalmash, Bloomberg Legal Reporter. 492 00:29:45,280 --> 00:29:47,560 Speaker 1: And that's it for this edition of The Bloomberg Law Show. 493 00:29:47,920 --> 00:29:50,200 Speaker 1: Remember you can always get the latest legal news on 494 00:29:50,280 --> 00:29:54,560 Speaker 1: our Bloomberg Law podcast. You can find them on Apple Podcasts, Spotify, 495 00:29:54,760 --> 00:29:59,800 Speaker 1: and at www dot Bloomberg dot com, slash podcast Slash Law, 496 00:30:00,200 --> 00:30:02,840 Speaker 1: and remember to tune to The Bloomberg Laws Show every 497 00:30:02,840 --> 00:30:05,960 Speaker 1: week night at ten p m. Wall Street Time. I'm 498 00:30:06,040 --> 00:30:08,520 Speaker 1: June Grossow, and you're listening to Bloomberg