WEBVTT - Defense Says SBF Needs More Adderall to Testify 0:00:01.960 --> 0:00:05.200 Welcome to the Boomberg Law Show. I'm June Grosso. A 0:00:05.240 --> 0:00:09.200 third witness from his inner circle who flipped takes the 0:00:09.240 --> 0:00:13.400 stand against Sam Bankman Freed and his attorney's raised questions 0:00:13.720 --> 0:00:16.560 related to his taking the stand in his own defense. 0:00:17.320 --> 0:00:22.560 A top bankruptcy judge resigns amid ethics questions, and a 0:00:22.640 --> 0:00:27.280 black high school student in Texas sues after being suspended 0:00:27.480 --> 0:00:32.640 over his hairstyle. Prosecutors have built their criminal fraud case 0:00:32.680 --> 0:00:37.120 against Sam Bankman Freed by reaching cooperation deals with his 0:00:37.200 --> 0:00:40.519 inner circle, and the third member of that inner circle 0:00:40.640 --> 0:00:44.560 testified against him today in court. Nishad Singh told the 0:00:44.600 --> 0:00:48.280 Manhattan jury that he was in severe emotional distress in 0:00:48.320 --> 0:00:51.680 the days leading up to ftx's failure as he dealt 0:00:51.720 --> 0:00:56.840 with accusations from ftx's former chief regulatory officer and others 0:00:57.120 --> 0:00:59.720 that he was partly to blame for the company's demise. 0:01:00.360 --> 0:01:03.160 Sing claimed he had only learned about the massive eight 0:01:03.240 --> 0:01:06.160 billion dollar hole in the company's balance sheet and the 0:01:06.240 --> 0:01:10.759 misuse of FTX customer funds in September of twenty twenty two, 0:01:11.280 --> 0:01:15.000 about two months before the firm file for bankruptcy. Bankman 0:01:15.040 --> 0:01:18.360 Freed faces decades in prison on charges that he funneled 0:01:18.440 --> 0:01:23.280 FTX customer money into Alimeter Research and affiliated hedge fund 0:01:23.680 --> 0:01:28.440 for risky trades, political donations, and expensive property before both 0:01:28.480 --> 0:01:32.280 companies collapsed into bankruptcy last year. Joining me is Bloomberg 0:01:32.360 --> 0:01:36.119 legal reporter Bob van Voris, who's covering the trial. Okay, 0:01:36.200 --> 0:01:38.080 so tell us about him. Who is he? H? 0:01:38.160 --> 0:01:42.039 Nashat saying is the former director of engineering at FTX. 0:01:42.520 --> 0:01:46.880 He's somebody who was a close friend of SBF's younger 0:01:46.880 --> 0:01:50.880 brother Gabriel and worked initially for Elmet Research and then 0:01:50.920 --> 0:01:54.120 came over to FTX. Obviously he was a tech person, 0:01:54.760 --> 0:01:59.320 and he was somebody who admitted to crimes for conspiring 0:01:59.400 --> 0:02:04.280 with Ellison, Garry Wang and Sam Bankman Freed into frauding 0:02:04.320 --> 0:02:06.320 investors and customers. 0:02:06.680 --> 0:02:09.959 What was the most important part of his testimony. 0:02:09.480 --> 0:02:12.079 Well, certainly the most dramatic part was at the end 0:02:12.120 --> 0:02:15.240 when he was talking about the slide of FTX and 0:02:15.280 --> 0:02:18.600 Alameda into bankruptcy and everything was blown up, and there 0:02:18.600 --> 0:02:22.760 were all kinds of crazy accusations. He testified, and at 0:02:22.760 --> 0:02:25.800 the end he said the accusation that he was getting 0:02:26.080 --> 0:02:29.520 for helping to blow up the firm had him suicidal 0:02:29.680 --> 0:02:32.240 in the final days in the early part of November 0:02:32.280 --> 0:02:35.520 twenty two. He claims he only knew about the fraud 0:02:35.760 --> 0:02:40.120 beginning around September of twenty two, and that he wanted 0:02:40.200 --> 0:02:43.640 Sambakmin Freed to step up and take responsibility for all 0:02:43.680 --> 0:02:43.840 of this. 0:02:44.840 --> 0:02:47.280 What did he admit to that he had done was 0:02:47.320 --> 0:02:50.519 he part of the redesign of the computer code. 0:02:50.440 --> 0:02:53.200 Was a part of basically designing a lot of the 0:02:53.240 --> 0:02:58.120 code that allowed Sambankman Freed to allegedly shift money from 0:02:58.360 --> 0:03:01.919 Alameda Research over to f PX and to steal the money. 0:03:02.040 --> 0:03:05.000 But as I say, he didn't understand that there was 0:03:05.639 --> 0:03:10.480 a multi billion dollar hole in FTX customer accounts until 0:03:10.520 --> 0:03:14.519 September twenty two. According to his testimony, he admitted also 0:03:15.200 --> 0:03:18.920 being used as a straw donor for lots of political donations. 0:03:18.960 --> 0:03:22.880 He told jurors about how he was given blank checks 0:03:22.919 --> 0:03:26.560 to sign and that those would go to Gabriel Bankman Freed, 0:03:26.840 --> 0:03:29.919 who was the head of a pack that Sam Bankman 0:03:29.960 --> 0:03:34.480 Free donated to. The money would go to various Democratic candidates. 0:03:34.520 --> 0:03:37.920 And that's saying it acted basically as a donor to 0:03:38.080 --> 0:03:40.640 lots of center left causes. That he really for the 0:03:40.720 --> 0:03:42.000 most part, had no idea. 0:03:42.280 --> 0:03:44.840 Let me understand this did. He claim that he didn't 0:03:44.880 --> 0:03:46.760 know that anything was wrong until the end. 0:03:47.240 --> 0:03:50.400 He claimed he didn't know about the big hole in 0:03:50.440 --> 0:03:54.080 the FTX customer account until the end. Until you know 0:03:54.160 --> 0:03:57.880 the massive fraud. There were certainly crimes that he admits 0:03:57.960 --> 0:04:00.800 being a part of before then, but that he didn't 0:04:00.800 --> 0:04:05.080 know about the big hole in the FTX account until September. 0:04:05.360 --> 0:04:09.280 He felt embarrassed and ashamed at the investment FTX made 0:04:09.320 --> 0:04:12.920 in a firm K five that had ties to many celebrities. 0:04:13.040 --> 0:04:15.280 Say he was embarrassed and ashamed about the rest of his. 0:04:15.280 --> 0:04:18.800 Actions, certainly at the end. He described a lot of 0:04:18.800 --> 0:04:21.160 the things that were going on it's dishonest, and that 0:04:21.240 --> 0:04:25.520 he tried to sidestep some of them, not to be 0:04:25.600 --> 0:04:30.320 involved in some of the decisions. He considered quitting many times, 0:04:30.640 --> 0:04:34.120 he said, but didn't want to be responsible for helping 0:04:34.200 --> 0:04:37.920 to hasten the final blow up of the firm. He 0:04:37.960 --> 0:04:42.400 wanted to stay, he said, and hopefully figure out a solution. 0:04:42.839 --> 0:04:45.400 As that became more and more remote, he became just 0:04:45.440 --> 0:04:46.440 more and more despondent. 0:04:46.760 --> 0:04:50.680 I understand that Judge Kaplan was pretty active, asking him 0:04:50.760 --> 0:04:56.200 questions about things like venture investing, blockchain, algorithmic failure. 0:04:56.640 --> 0:05:00.120 Well, same spoke very precisely, but often in a very 0:05:00.360 --> 0:05:03.560 technical manner and used a lot of terms that the 0:05:03.680 --> 0:05:05.800 judge I think was afraid we're going to go over 0:05:05.920 --> 0:05:10.599 Dror's head. Prosecutor Nicholas Ruse here really wasn't, you know, 0:05:10.720 --> 0:05:13.920 setting it up in a way that you know, some 0:05:14.000 --> 0:05:17.560 of these things were explainable. Judge Kaplan, Lewis Kaplan was, 0:05:17.680 --> 0:05:20.120 before he was appointed the bench, was a litigator for 0:05:20.440 --> 0:05:23.080 many years, so he kind of knows how Jerry's work 0:05:23.200 --> 0:05:26.000 and I think sense that some of these terms were 0:05:26.000 --> 0:05:28.839 going over their heads, and so he was jumping in 0:05:28.960 --> 0:05:32.960 quite a bit to ask questions of saying directly and 0:05:33.080 --> 0:05:35.240 just ask him to explain, you know, what he was 0:05:35.240 --> 0:05:35.799 talking about. 0:05:35.920 --> 0:05:39.440 Did they come across as believable contrite? 0:05:40.640 --> 0:05:43.920 I think certainly he came across as both. And I 0:05:44.080 --> 0:05:47.679 think you know, he kind of is in a similar 0:05:47.720 --> 0:05:51.040 sense to Caroline Ellison and Gary Wang, the other two 0:05:51.400 --> 0:05:56.760 people who were senior executives and pleaded guilty and have 0:05:56.839 --> 0:06:00.240 cooperated with the government. These are very brilliant young people 0:06:00.279 --> 0:06:03.960 who are very good at expressing themselves. They were pretty 0:06:03.960 --> 0:06:07.440 good on the stand, and certainly Ellison and Wang were 0:06:07.480 --> 0:06:10.479 able to get through cross examination without too many dents. 0:06:10.480 --> 0:06:14.440 We'll see how Sing does tomorrow, but these are kind 0:06:14.480 --> 0:06:17.039 of the big three witnesses against the guy, and the 0:06:17.080 --> 0:06:19.200 defense is certainly going to look to score some points. 0:06:19.880 --> 0:06:23.080 Sam begman Fried's lawyers have brought up the possibility of 0:06:23.360 --> 0:06:26.080 him testifying in his own defense. 0:06:26.480 --> 0:06:29.120 Well, they discussed it in the letter last night. Sam 0:06:29.160 --> 0:06:32.200 Begminfried has been having a problem all along that they've 0:06:32.240 --> 0:06:35.640 been raising with a judge about getting his adderall prescription. 0:06:35.880 --> 0:06:40.240 He gets the prescription for depression and for ADHD. His 0:06:40.360 --> 0:06:43.400 lawyers claim that he's not able to concentrate and to 0:06:43.480 --> 0:06:46.800 focus to the extent that he needs to, and that 0:06:47.000 --> 0:06:49.040 if he's not able to sort of work this out, 0:06:49.360 --> 0:06:51.880 that it's going to be a problem with him being 0:06:51.920 --> 0:06:55.480 able to meaningfully participate in his defense. And of course, 0:06:55.560 --> 0:06:57.520 you know that's what he needs to do to have 0:06:57.560 --> 0:07:00.800 a fair trial. So this is some serious that they're raising. 0:07:00.960 --> 0:07:03.360 In a letter late last night to the judge, they 0:07:03.440 --> 0:07:05.240 raised this and they said, you know that this is 0:07:05.279 --> 0:07:09.080 a critical time because we're deciding whether or not Bekmin 0:07:09.120 --> 0:07:11.160 Freed is going to get on the stand and testify 0:07:11.160 --> 0:07:11.920 in his own defense. 0:07:12.080 --> 0:07:15.720 I know they brought this up before, and it's surprising 0:07:15.760 --> 0:07:18.640 to me that if someone's on medication, you know, they 0:07:18.680 --> 0:07:21.640 can't get the medication that they're on because they're in 0:07:21.680 --> 0:07:24.880 prison during their trial. It seems sort of ridiculous. 0:07:25.120 --> 0:07:27.960 It certainly does. And the judge said, well, look, I'm 0:07:28.000 --> 0:07:31.320 not a doctor. I can't prescribe him medication, and that 0:07:31.360 --> 0:07:34.240 he only has limited control over the Bureau of Prison, 0:07:34.360 --> 0:07:37.800 whose doctors are the ones who make decisions. For Bekman 0:07:37.880 --> 0:07:40.640 freed while he's confined at the MDC in Brooklyn, the 0:07:40.680 --> 0:07:44.880 federal lock up in Brooklyn, as people probably know, Kaplan 0:07:44.960 --> 0:07:48.320 ordered them locked up in August after he violated the 0:07:48.400 --> 0:07:51.720 terms of his bail at the time. So this has 0:07:51.720 --> 0:07:54.960 been a problem that just keeps popping up, including well 0:07:54.960 --> 0:07:55.640 into the trial. 0:07:55.920 --> 0:08:00.360 I understand that during cross examination of Ellison, the defense 0:08:00.440 --> 0:08:03.080 wasn't able to ask a lot of questions because, you know, 0:08:03.160 --> 0:08:06.400 there were objections that were almost always sustained as to form, 0:08:06.440 --> 0:08:08.840 et cetera, et cetera. Did you see that too. 0:08:09.360 --> 0:08:12.560 There were definitely a lot of objections that were sustained, 0:08:12.600 --> 0:08:16.120 and the judge had put a number of issues, you know, 0:08:16.200 --> 0:08:19.320 out of reach for the defense, including things like whether 0:08:19.480 --> 0:08:22.440 he was acting on the advice of lawyers. You know, 0:08:22.480 --> 0:08:25.440 anytime the defense tried to get near any of these issues, 0:08:25.720 --> 0:08:28.600 there would be an objection. Often there'd be discussion of 0:08:28.760 --> 0:08:30.760 at the bench. Lawyers tell me, this is the kind 0:08:30.800 --> 0:08:33.640 of thing that really just screws up your rhythm, you know, 0:08:33.679 --> 0:08:37.000 when you're trying to get into a groove and cross examination. 0:08:37.559 --> 0:08:41.600 And I know that pre trial Caplan made several important 0:08:41.720 --> 0:08:45.199 rulings that were detrimental to bankman freed. 0:08:46.000 --> 0:08:47.680 You know, if he's convicted, we're going to see this 0:08:47.720 --> 0:08:50.360 on appeal. Judge Kaplan is definitely a judge who wants 0:08:50.360 --> 0:08:53.440 to move things along. He also, you know, can be 0:08:53.480 --> 0:08:57.319 a little cranky with trial counsel if they're not behaving 0:08:57.320 --> 0:08:58.280 in the way he wants them to. 0:08:58.679 --> 0:09:01.920 Seeing testified that he was a millionaire during his time 0:09:01.960 --> 0:09:04.120 at Alameda, Is he still a millionaire? 0:09:04.640 --> 0:09:07.000 Most of this money just slipped through, you know, just 0:09:07.080 --> 0:09:10.400 vanished into thin air. There's not much left for these people. 0:09:10.400 --> 0:09:13.439 They certainly sing is no longer a billionaire. 0:09:13.240 --> 0:09:15.839 So how much is left In the prosecution's case. 0:09:16.280 --> 0:09:18.600 The government is saying that they're going to basically wrap 0:09:18.720 --> 0:09:21.400 up their case. Oh really by the end of the week, 0:09:21.440 --> 0:09:23.520 with maybe a couple of people who have travel issues 0:09:23.559 --> 0:09:25.240 that they're going to have to put over till next week. 0:09:25.280 --> 0:09:28.040 So you know, this is going to move pretty fast 0:09:28.280 --> 0:09:28.800 for the end. 0:09:29.120 --> 0:09:31.800 So then we'll soon know if bankmin Freed is actually 0:09:31.800 --> 0:09:34.200 going to take the stand. And we'll check back with 0:09:34.240 --> 0:09:38.080 you tomorrow, Bob to see how the cross examination of 0:09:38.160 --> 0:09:41.920 sing when. Thanks so much. That's Bloomberg Legal reporter Bob 0:09:42.040 --> 0:09:46.559 van voris coming up next. A top bankruptcy judge resigns 0:09:47.040 --> 0:09:52.720 amid ethics charges. President Joe Biden has confirmed thirty six 0:09:52.880 --> 0:09:56.000 judges to the federal appellate courts and one hundred and 0:09:56.000 --> 0:09:59.320 eight judges to the district courts. But you can expect 0:09:59.320 --> 0:10:03.080 to slow down in the confirmation process in twenty twenty four, 0:10:03.240 --> 0:10:07.640 a presidential year, and there's also the prospect of Democrats 0:10:07.720 --> 0:10:11.800 losing the Senate. Joining me is judiciary expert Carl Tobias, 0:10:11.960 --> 0:10:15.720 a professor at the University of Richmond Law School. Start 0:10:15.760 --> 0:10:18.600 with the Biden numbers. How are his numbers at this 0:10:18.720 --> 0:10:21.520 point compared to other presidents. 0:10:21.920 --> 0:10:25.720 Well, I think they're still pretty solid compared to many 0:10:25.880 --> 0:10:30.520 other presidents, especially recent ones. I think he doesn't have 0:10:30.679 --> 0:10:34.640 quite as many confirmations as Trump did at this point 0:10:34.679 --> 0:10:39.400 in his presidency, but he's not very far behind, and 0:10:39.760 --> 0:10:42.520 there are a number of nominees on the floor who 0:10:42.559 --> 0:10:47.960 could be confirmed before Thanksgiving, for example, and so I 0:10:48.000 --> 0:10:51.200 think he may well catch Trump by the end of 0:10:51.240 --> 0:10:55.479 the year. Though there need to be more nominees forthcoming 0:10:55.480 --> 0:10:56.280 from the White House. 0:10:56.520 --> 0:10:58.400 So is that what's holding it up? The White House 0:10:58.520 --> 0:11:01.199 is not nominated them fast enough. 0:11:01.880 --> 0:11:06.559 Well, it could nominate them faster. Chair Durbin of the 0:11:06.640 --> 0:11:11.320 Judiciary Committee promised to hold hearings every two weeks that 0:11:11.520 --> 0:11:16.280 the Senate was in session, but that hasn't happened every 0:11:16.559 --> 0:11:21.120 two weeks this year, and so that's unfortunate, and I 0:11:21.160 --> 0:11:25.000 think that could be remedied. But there are problems because 0:11:25.160 --> 0:11:28.760 a number of the present vacancies are in states with 0:11:28.800 --> 0:11:33.360 one or two Republican senators, and especially in the district 0:11:33.360 --> 0:11:36.880 courts where most of the vacancies are, they have the 0:11:36.960 --> 0:11:44.560 blueslip privilege and they can reject White House nominees, and 0:11:44.640 --> 0:11:49.200 so that's a more difficult vacancy to fill. Where you 0:11:49.320 --> 0:11:52.600 have one or two home state senators who are GOP 0:11:52.760 --> 0:11:56.400 members and perhaps unwilling to work with the White House, 0:11:56.600 --> 0:12:00.640 though a number have been, for example in Indiana and 0:12:00.720 --> 0:12:01.840 in other states. 0:12:02.679 --> 0:12:05.720 I mean, once twenty twenty four arrives, it's going to 0:12:05.760 --> 0:12:08.640 be slowed down, right, the process. 0:12:08.280 --> 0:12:12.400 To some extent, Yes, because of a presidential election year, 0:12:13.080 --> 0:12:18.200 and both parties believe that their nominees will win, and 0:12:18.280 --> 0:12:21.640 so they don't want to confirm. Well, at least the 0:12:21.640 --> 0:12:26.440 Republicans won't want to confirm any more Biden nominees than 0:12:26.520 --> 0:12:30.000 they have to. But I think that Democrats are committed 0:12:30.520 --> 0:12:37.200 to confirming as many as possible and will schedule as 0:12:37.240 --> 0:12:40.839 many hearings and committee votes and floor votes as they can, 0:12:41.480 --> 0:12:44.960 even in a lame duck session, as Trump did in 0:12:45.040 --> 0:12:48.760 twenty twenty where he confirmed thirteen district and one circuit 0:12:48.800 --> 0:12:52.480 judge after the election. And so I think that's what 0:12:52.520 --> 0:12:54.640 you're likely to see. So it may not slow down 0:12:54.760 --> 0:12:57.800 that much, but there'll be times, you know, for example 0:12:57.800 --> 0:13:02.240 August recess and then campaigning in the fall, where it'll 0:13:02.280 --> 0:13:05.120 be difficult for the Senate to be in session. 0:13:05.360 --> 0:13:09.200 Let's turn out to some judges who are making news 0:13:09.280 --> 0:13:11.240 or in trouble, whichever way you want to look at it. 0:13:11.400 --> 0:13:14.640 So we talked about Judge Pauline Newman, who was the 0:13:14.800 --> 0:13:20.040 oldest judge in the country and she was suspended from 0:13:20.120 --> 0:13:23.040 new assignments for one year or until she complies with 0:13:23.200 --> 0:13:26.240 orders to submit to medical testing. She was doing an 0:13:26.240 --> 0:13:29.480 interview and she said, I have an open invitation from 0:13:29.520 --> 0:13:32.480 one circuitcause she didn't say which circuit or when that 0:13:32.559 --> 0:13:36.600 invitation came, to preside over a patent trial at the 0:13:36.679 --> 0:13:41.200 district court level. Since she suspended from new assignments on 0:13:41.240 --> 0:13:44.440 the federal circuit, is she allowed to just hear a 0:13:44.520 --> 0:13:46.240 case at the district court level. 0:13:46.480 --> 0:13:48.880 I don't know the precise answer to that. My guess 0:13:48.960 --> 0:13:55.320 is she probably can't. And often judges do entertain those 0:13:55.440 --> 0:13:58.839 kinds of invitations when they have them. Circuit judges may 0:13:58.880 --> 0:14:01.720 do that occasionally have a better sense of what the 0:14:01.760 --> 0:14:05.280 cases look like at the district level if they're competent 0:14:05.320 --> 0:14:08.080 to try them, and she certainly has the expertise in 0:14:08.120 --> 0:14:11.000 the patent area. I don't know that she's tried a 0:14:11.040 --> 0:14:14.000 lot of cases at the trial court level, probably not 0:14:14.120 --> 0:14:18.600 very many, but often you see that happening with appellet judges, 0:14:19.200 --> 0:14:22.960 so we'll see. I don't know maybe it's Delaware, which 0:14:22.960 --> 0:14:24.080 has a lot of patent cases. 0:14:24.160 --> 0:14:26.560 Yeah. No, I was just wondering because she was suspended 0:14:26.880 --> 0:14:29.920 at the Federal Circuit, and does that mean she's suspended 0:14:29.960 --> 0:14:32.600 everywhere because she's a federal Circuit judge. 0:14:33.400 --> 0:14:36.400 I don't know the answer to that, Okay. I think 0:14:36.440 --> 0:14:39.800 that probably she could sit in some other court, but 0:14:40.000 --> 0:14:41.560 not in the federal Circuit. 0:14:41.920 --> 0:14:45.240 Moving on to Texas, one of the nation's top bankruptcy 0:14:45.320 --> 0:14:48.920 judges who's at the center of an ethics storm, said 0:14:49.040 --> 0:14:53.080 yesterday he's resigning after the Fifth Circuit issued a formal 0:14:53.360 --> 0:14:57.320 misconduct complaint against him. David Jones was the chief bankruptcy 0:14:57.400 --> 0:15:00.400 judge for the Southern District of Texas, and he's come 0:15:00.480 --> 0:15:04.160 under fire for failing to disclose that his living girlfriend 0:15:04.680 --> 0:15:08.200 was a bankruptcy attorney at a prominent Texas law firm 0:15:08.600 --> 0:15:12.800 with business before his court. What ethics rules are involved here? 0:15:13.920 --> 0:15:18.240 I think the Ethics Code twenty eight USC. Four fifty 0:15:18.280 --> 0:15:23.040 five is clear as to that kind of situation. If 0:15:23.080 --> 0:15:29.520 you have a conflict in terms of financial benefit that 0:15:29.600 --> 0:15:33.160 may flow when a judge is ruling, then the judge 0:15:33.200 --> 0:15:37.000 is supposed to recuse in that case. And this sounds 0:15:37.160 --> 0:15:40.680 like that because at least the media reports are saying 0:15:41.440 --> 0:15:46.080 that he decided cases where the person with whom he 0:15:46.280 --> 0:15:49.480 shared a home was involved or her firm was involved, 0:15:50.040 --> 0:15:53.920 and probably he should have accused then and has chosen 0:15:53.960 --> 0:15:56.960 to resign, which is probably the best thing that could 0:15:57.000 --> 0:15:57.880 happen right now. 0:15:58.200 --> 0:16:01.040 Yeah, he had previously defended his conduct to the Wall 0:16:01.040 --> 0:16:04.800 Street Journal by arguing that he and the attorney were 0:16:04.840 --> 0:16:08.200 not married, he had no economic interest from her cases, 0:16:08.800 --> 0:16:11.400 and he said he would only have to accuse himself 0:16:11.440 --> 0:16:15.200 if they had been married and had communal property and 0:16:15.240 --> 0:16:17.760 she never personally appeared in his courtroom. Isn't there the 0:16:18.360 --> 0:16:22.080 appearance of impropriety? Or are the strict rules on this 0:16:22.520 --> 0:16:24.960 on having a relationship with an attorney? 0:16:25.440 --> 0:16:28.960 No, I think you're correct. I mean basically that four 0:16:29.040 --> 0:16:33.000 fifty five talks about the appearance of a conflict, and 0:16:33.040 --> 0:16:37.960 that's enough, And there seems to be enough of a 0:16:38.040 --> 0:16:43.280 financial interest there in her former firm when she was 0:16:43.600 --> 0:16:48.040 responsible for some cases that it would look like the 0:16:48.080 --> 0:16:52.800 appearance of a conflict, and so probably should have recused 0:16:52.880 --> 0:16:54.800 himself in any of those cases. 0:16:55.320 --> 0:16:59.960 And this judge has issued rulings in multi billion dollar reorganizations, 0:17:00.880 --> 0:17:04.040 and some legal experts say that both he and his 0:17:04.320 --> 0:17:09.520 girlfriend face the possibility of disbarment and criminal charges. So 0:17:09.600 --> 0:17:12.040 we'll see whether the resignation is the end of this 0:17:12.600 --> 0:17:15.359 or if there's more to come. Thanks so much, Carl. 0:17:15.640 --> 0:17:19.240 That's Professor Carl Tobias of the University of Richmond Law School. 0:17:19.560 --> 0:17:23.520 Coming up next. A black high school student in Texas 0:17:23.560 --> 0:17:27.840 sues after being suspended over his hairstyle. I'm June Grasso, 0:17:27.880 --> 0:17:30.919 and you're listening to Bloomberg. After serving more than a 0:17:30.960 --> 0:17:34.879 month of in school suspension over his hairstyle, a black 0:17:34.920 --> 0:17:37.919 student in Texas was told he'll be removed from his 0:17:38.000 --> 0:17:42.440 high school and sent to a disciplinary alternative education program. 0:17:42.960 --> 0:17:46.080 Eighteen year old Darryl george, a junior at Barber's Hill 0:17:46.160 --> 0:17:50.720 High School, has been suspended since August thirty first. Last month, 0:17:50.760 --> 0:17:54.200 his family filed a formal complaint with the Texas Education 0:17:54.359 --> 0:17:58.000 Agency and a federal civil rights lawsuit against the state's 0:17:58.160 --> 0:18:02.000 governor and attorney General, alleging they fail to enforce a 0:18:02.040 --> 0:18:06.560 new law outlying discrimination based on hair styles. The family 0:18:06.600 --> 0:18:12.040 alleges Georgea's suspension and subsequent discipline violate the state's Crown Act. 0:18:12.359 --> 0:18:15.360 Joining me is Melanie Jordan, a labor and employment attorney 0:18:15.359 --> 0:18:18.600 at Dorsey and Whitney. So, first of all, tell us 0:18:18.720 --> 0:18:21.919 about the Crown Act that was signed into law in 0:18:21.960 --> 0:18:22.800 Texas in May. 0:18:23.680 --> 0:18:26.440 That's right. So the Crown Act actually sits an acronym 0:18:26.960 --> 0:18:30.040 and it means creating a respectful and open world for 0:18:30.160 --> 0:18:33.920 natural hair. Now, this law prohibits discrimination based on race 0:18:33.960 --> 0:18:38.359 based hair styles such as twist, lacks, braves, et cetera. 0:18:39.000 --> 0:18:42.399 And so what the Crown Act does is extends statutory 0:18:42.440 --> 0:18:46.240 protection to hair texture and protective styles. And it does 0:18:46.280 --> 0:18:49.119 so in the workplace and in public schools. 0:18:49.280 --> 0:18:51.399 How many states have this law. 0:18:51.480 --> 0:18:54.040 So the Crown Act is currently law in more than 0:18:54.119 --> 0:18:58.359 forty localities cities like New Orleans, and in twenty four states, 0:18:58.400 --> 0:19:02.880 which includes Texas. Texas. Actually this law went into effect 0:19:03.160 --> 0:19:06.480 in September. September. First, you know the Crown Act. It's 0:19:06.560 --> 0:19:09.760 the brainchild of a coalition led by Dove, you know, 0:19:09.800 --> 0:19:14.359 the maker of soap shampoos. Dove partnered with several organizations 0:19:14.359 --> 0:19:17.480 such as Western Center on Law and Poverty in the 0:19:17.560 --> 0:19:21.320 National Urban League. And what this coalition did was they 0:19:21.440 --> 0:19:25.720 undertook a study and they only corroborated what's been experienced 0:19:25.760 --> 0:19:30.280 by generations of black and brown people, and especially black women, 0:19:30.320 --> 0:19:33.520 and that is that a fairly large percentage, over twenty 0:19:33.560 --> 0:19:36.120 percent of Black women aged twenty five to thirty four 0:19:36.119 --> 0:19:38.440 were sent home from work because of their hair. And 0:19:38.680 --> 0:19:40.440 I would even go as far as to say that, 0:19:40.720 --> 0:19:44.000 you know, as every black woman in the workplace knows, 0:19:44.359 --> 0:19:46.840 this is impactful because it's something that we've dealt with 0:19:47.080 --> 0:19:49.879 for honestly our whole entire life. 0:19:50.160 --> 0:19:53.919 Has there been a lot of litigation around the Crown 0:19:53.960 --> 0:19:56.159 Act in different states or localities. 0:19:56.440 --> 0:19:58.680 You know, a lot of these laws are new, right, 0:19:58.680 --> 0:20:02.119 they're passing on on a monthly basis, and so the 0:20:02.160 --> 0:20:04.760 first one in California that was passed in twenty nineteen, 0:20:04.800 --> 0:20:07.399 and we saw some litigation arising from that. There was 0:20:07.440 --> 0:20:09.679 a case that I think the first one in California 0:20:09.720 --> 0:20:12.280 was in twenty twenty one, as it relates to an 0:20:12.320 --> 0:20:15.800 out of state's job applicant who is intending to move 0:20:15.840 --> 0:20:18.720 to California and take a job, but he was informed, 0:20:18.720 --> 0:20:21.920 you know, allegedly that he needed to cut his hair. Right. 0:20:22.240 --> 0:20:25.120 And so as these laws take shape and they're being 0:20:25.119 --> 0:20:27.680 an act, it will see some litigation coming from them. 0:20:28.160 --> 0:20:30.560 So tell us what happened to this Texas high school 0:20:30.640 --> 0:20:33.960 student Darryl George in Barber's. 0:20:33.560 --> 0:20:37.080 Hill Independent School District or ISIC. We have a student, 0:20:37.240 --> 0:20:39.800 Darryl George. Darryl George, I think he was seventeen and 0:20:39.840 --> 0:20:43.120 now he's eighteen. He attends their high school and he 0:20:43.200 --> 0:20:46.600 wears his hair in locks. I know some people call 0:20:46.640 --> 0:20:49.800 it dreadlocks, but that's actually become more of a pejeorative term. 0:20:49.920 --> 0:20:54.640 So he wears his hair and twisted locks, and he 0:20:54.680 --> 0:20:58.240 typically ties it back with a headband and twisted away 0:20:58.280 --> 0:21:00.680 from his face in order to comply with barbars Hill's 0:21:00.720 --> 0:21:04.600 dress and group policy. Now, this policy only applies to 0:21:04.720 --> 0:21:08.640 male students, and it mandates that male students cannot wear 0:21:08.720 --> 0:21:11.920 their hair at any time below their eyebrows, or below 0:21:11.960 --> 0:21:15.000 their earlobes, or below the top of their T shirt 0:21:15.040 --> 0:21:18.119 collared or it has to be gathered or worn up 0:21:18.160 --> 0:21:21.439 in a style so that it stays above the eyebrows, 0:21:21.480 --> 0:21:24.280 the T shirt collar, or the ear lobes. And so 0:21:24.560 --> 0:21:28.560 obviously when you're wearing locks, they're growing and growing long, 0:21:28.920 --> 0:21:33.399 which is usually the intention. And so Darryl was wearing 0:21:33.440 --> 0:21:37.119 his hair or his locks and they became long. So 0:21:37.280 --> 0:21:41.240 he was suspended not once, but twice just this school 0:21:41.320 --> 0:21:43.919 year alone. He was suspended in August for wearing the 0:21:43.920 --> 0:21:46.720 twisted locks. Then when he returned to school, he was 0:21:46.720 --> 0:21:51.480 suspended immediately again September eighteenth, and now as recently as 0:21:51.480 --> 0:21:55.480 October twelfth, the school placed him in a disciplinary alternative 0:21:55.560 --> 0:21:58.600 education program and he's apparently going to be in this 0:21:58.640 --> 0:22:02.399 program through at least the end of November. And so 0:22:02.480 --> 0:22:07.280 the school district, they're contending that these disciplinary actions are 0:22:07.800 --> 0:22:14.920 fine essentially, and they argue that Darryl has violated many 0:22:15.040 --> 0:22:17.760 campus and classroom rules. For example, they alleged that he's 0:22:17.800 --> 0:22:22.600 disrupted the iss classroom in school suspension classroom. They contend 0:22:22.640 --> 0:22:25.560 that he's failed to comply with directives from their staff. 0:22:25.640 --> 0:22:29.240 He's been tardy, and he's violated the dress and ruling policy. 0:22:30.240 --> 0:22:34.639 And so now we're faced with the situation where the 0:22:34.640 --> 0:22:39.000 school district is administering the same hair and ruling policy 0:22:40.240 --> 0:22:43.720 against the same hairstyle for an issue that they faced, 0:22:43.880 --> 0:22:46.280 I guess just three years ago at this point, with 0:22:46.400 --> 0:22:49.680 other black students wearing dreadlocks as well or locks as well. 0:22:50.600 --> 0:22:53.120 And I believe in twenty twenty, a federal judge rule 0:22:53.280 --> 0:22:57.920 that the district's hair policy was discriminatory as far as 0:22:57.960 --> 0:23:03.360 the school's rules, does George's hair comply with those rules, 0:23:03.920 --> 0:23:05.680 you know above the collar, et cetera. 0:23:06.400 --> 0:23:10.320 So, no, his hair is quite long, and he wears 0:23:10.359 --> 0:23:14.560 it tied back, but his hair does extend past, of 0:23:14.640 --> 0:23:17.639 course his t shirt collars. He has very long dread locks, 0:23:18.080 --> 0:23:21.080 and his family contends that this is an expression of 0:23:21.080 --> 0:23:24.640 his culture, of his racial heritage. Many of the male 0:23:24.720 --> 0:23:27.600 family members also have worn their hair in locks, and 0:23:27.640 --> 0:23:32.879 so the family now has recently brought a lawsuit contending 0:23:33.040 --> 0:23:36.920 that this hair and growing policy is violated not only 0:23:36.960 --> 0:23:40.960 the Crown Act, but the plessora of other state and federal. 0:23:40.720 --> 0:23:41.360 Laws as well. 0:23:42.119 --> 0:23:44.520