WEBVTT - Book Bans Are Surging 0:00:03.160 --> 0:00:11.120 This is Bloombird Law with June Brasso from Bloomberg Radio. Now, 0:00:11.160 --> 0:00:13.040 if any of you guys ever seen one of these 0:00:13.080 --> 0:00:18.599 bad things for real, We've burned almost every physical book 0:00:18.600 --> 0:00:22.440 in the country. It's about the time you guys grow up, 0:00:22.560 --> 0:00:27.560 there won't be one book left burning. The fireman used 0:00:27.600 --> 0:00:33.040 to put out fires. That's a classic lie. I want 0:00:33.040 --> 0:00:36.520 to know why we burn. We are not born equal. 0:00:37.240 --> 0:00:40.320 We must be made equal by the fire, and then 0:00:41.479 --> 0:00:47.360 we can be happy. Fahrenheit four for the temperature at 0:00:47.400 --> 0:00:51.080 which book paper catches fire and burns. The movie is 0:00:51.159 --> 0:00:54.960 based on the dystopian novel by Ray Bradberry, depicting a 0:00:55.080 --> 0:00:59.520 society where books are outlawed and fireman burn every book 0:00:59.560 --> 0:01:02.320 they find. Mind, it may not be as severe as burning, 0:01:02.360 --> 0:01:06.200 but there's been a dramatic escalation in the banning of books, 0:01:06.240 --> 0:01:10.120 and it seems to reflect culture war issues. Book challenges 0:01:10.200 --> 0:01:16.039 doubled from one According to the American Library Association, the 0:01:16.120 --> 0:01:21.120 majority of banned books focus on sexual orientation, gender identity, race, 0:01:21.240 --> 0:01:24.640 and racism. One Texas school district is getting ready for 0:01:24.680 --> 0:01:27.760 the start of school by removing forty one books from 0:01:27.760 --> 0:01:32.640 school library shelves, including gender queer by Maya Kobab, one 0:01:32.640 --> 0:01:35.920 of the most challenged books of last year. My guest 0:01:35.959 --> 0:01:40.280 is Deborah calwell Stone, director of the American Library Association's 0:01:40.360 --> 0:01:44.640 Office for Intellectual Freedom. Why do you think book bands 0:01:44.840 --> 0:01:48.440 are on the rise? I think because a number of 0:01:48.720 --> 0:01:53.960 events that have come together. One is the apparent success 0:01:54.040 --> 0:01:58.400 of Glenn young Can in his gubernatorial campaign, leveraging a 0:01:58.560 --> 0:02:03.520 parents complaint about a school book in Virginia to apparently 0:02:03.920 --> 0:02:07.240 draw voters and win that election. But I also think 0:02:07.480 --> 0:02:12.880 that there is an organized effort to attack education more broadly, 0:02:13.120 --> 0:02:16.800 and that books have become part of that campaign. We're 0:02:16.800 --> 0:02:21.200 seeing groups that call themselves parents rights groups, Moms for Liberty, 0:02:21.680 --> 0:02:26.560 No Left Turn and Education Parents Defending Education, activate local 0:02:27.120 --> 0:02:31.560 members local chapters to attend school board meetings, library board 0:02:31.560 --> 0:02:36.040 meetings and demand the removal of books and being very successful. 0:02:36.600 --> 0:02:41.040 The reasons for challenging books change over the years. Between 0:02:41.080 --> 0:02:44.520 two thousand and two thousand nine, the Harry Potter series 0:02:44.600 --> 0:02:50.200 was frequently challenged because of allegedly promoting witchcraft and wizardry. 0:02:50.440 --> 0:02:53.799 What do the challenges now mainly focus on. What we've 0:02:53.840 --> 0:02:58.560 observed since is the majority of books challenged in schools 0:02:58.560 --> 0:03:02.000 and libraries that when someone demands that they be removed 0:03:02.040 --> 0:03:05.480 from the library shelf are books centering the lives and 0:03:05.560 --> 0:03:10.120 experiences of lgbt q i A persons, And this includes 0:03:10.560 --> 0:03:14.239 things like picture books that simply depict a family headed 0:03:14.240 --> 0:03:17.959 by a same sex couple, ranging two young adult materials 0:03:18.000 --> 0:03:22.360 dealing with coming of age stories, romance, or nonfiction books 0:03:22.400 --> 0:03:26.480 dealing with sex education. The other trend that we're observing, 0:03:26.680 --> 0:03:31.079 and this is tied to the current campaign around critical 0:03:31.160 --> 0:03:34.280 race theory, or the claim that critical race theory is 0:03:34.320 --> 0:03:37.560 being taught in K through twelve schools, is a real 0:03:37.640 --> 0:03:41.760 effort to remove books reflecting the experience of African Americans. 0:03:41.840 --> 0:03:46.040 Are reflecting a perspective on history by African Americans who 0:03:46.160 --> 0:03:49.680 challenge some of the traditional narratives about racism and US 0:03:49.800 --> 0:03:53.960 history and their experience of slavery. And so what we're 0:03:53.960 --> 0:03:58.920 seeing is a focus on removing books that challenge the 0:03:58.960 --> 0:04:03.440 traditional narratives that elevates the lives and the voices of 0:04:03.600 --> 0:04:06.800 persons who have been traditionally excluded from society. But now 0:04:06.840 --> 0:04:09.880 I've found a voice. I think we've reached a kind 0:04:09.920 --> 0:04:13.200 of consensus here in the United States. Books written for 0:04:13.280 --> 0:04:18.120 adults and intended for adult audiences rarely see challenges. It 0:04:18.200 --> 0:04:21.400 never really becomes an issue. The real dispute is about 0:04:21.440 --> 0:04:24.960 books that are available to young people, and there has 0:04:25.040 --> 0:04:28.000 been a successful effort by a number of groups who 0:04:28.040 --> 0:04:32.240 style themselves parents rights groups to make this an issue 0:04:32.320 --> 0:04:36.440 about challenging their authority to raise their children, when in 0:04:36.560 --> 0:04:41.480 fact the end results has been to eliminate books that 0:04:41.520 --> 0:04:46.000 speak to the experiences of others in society who do 0:04:46.080 --> 0:04:50.440 not share their moral or political views. Looking at the states, 0:04:50.520 --> 0:04:55.159 Texas had the most bands, followed by Pennsylvania, Florida, and Oklahoma. 0:04:55.360 --> 0:04:58.360 Does book banning happen on both sides of the political 0:04:58.400 --> 0:05:02.400 spectrum because we mostly hear about it on what i'd 0:05:02.440 --> 0:05:07.440 call the conservative side. Certainly, book challenges do come from 0:05:07.880 --> 0:05:11.200 persons from all parts of the political spectrum, and we've 0:05:11.200 --> 0:05:16.479 seen challenges to books that use racial epithets from individuals 0:05:16.480 --> 0:05:19.240 and parents who believe that no young person should be 0:05:19.279 --> 0:05:22.479 exposed to things like the N word. And so I 0:05:22.560 --> 0:05:25.679 know that there's been a few school districts that have 0:05:26.000 --> 0:05:30.039 at least eliminated from the curriculum books like Cuckleberry Fin 0:05:30.200 --> 0:05:33.839 and even to Kill a Mockingbird, or they've moved those 0:05:33.880 --> 0:05:36.680 books up to the high school level, and they're teaching 0:05:36.680 --> 0:05:38.760 them at the high school level rather than the middle 0:05:38.800 --> 0:05:42.640 school levels. And there have been efforts to remove books 0:05:42.680 --> 0:05:46.240 that deal with gun violence. So you're absolutely correct that 0:05:46.640 --> 0:05:49.479 challenges can come from all parts of the political spectrum. 0:05:49.640 --> 0:05:53.160 But what we're seeing right now is really this coordinated 0:05:53.200 --> 0:05:57.719 efforts by a number of conservative advocacy organizations to target 0:05:58.080 --> 0:06:02.920 the kinds of narratives that challenge their authority that suggests 0:06:03.040 --> 0:06:07.560 that there's a place for individuals who are not like 0:06:07.720 --> 0:06:12.480 them in society, essentially silencing the voices of gay, queer, 0:06:12.560 --> 0:06:18.240 transgender people African Americans who offer more honest perspective on 0:06:18.560 --> 0:06:22.520 their experiences of racism here in American society. The only 0:06:22.560 --> 0:06:25.480 school library case to have been decided by the Supreme 0:06:25.520 --> 0:06:30.120 Court was forty years ago Island Tree School District. Fepiko 0:06:30.520 --> 0:06:33.640 tell us about that case. That was a plurality decision 0:06:34.080 --> 0:06:38.359 where it was determined that the first school board had 0:06:38.440 --> 0:06:41.640 to operate in a way that was consistent with the 0:06:41.640 --> 0:06:45.720 First Amendment and that indeed, students do have First Amendment 0:06:45.800 --> 0:06:49.279 rights to access books that are provided to them for 0:06:49.400 --> 0:06:52.520 voluntary reading in the school library, and that the school 0:06:52.520 --> 0:06:55.640 board could not remove books from the school library simply 0:06:55.680 --> 0:07:01.000 because they didn't like the ideas, opinions, viewpoint expressed in 0:07:01.040 --> 0:07:05.760 those books, And the result was guidance that said that, 0:07:05.960 --> 0:07:08.960 in fact, there is a First Amendment right to read 0:07:09.320 --> 0:07:12.520 and access ideas in a public library and a public 0:07:12.560 --> 0:07:16.880 school library, and that removing books because of their content 0:07:17.000 --> 0:07:20.480 or viewpoint could very well violate the First Amendment rights 0:07:20.520 --> 0:07:23.960 of the users who were supposed to be able to 0:07:23.960 --> 0:07:28.280 read them. And so we've seen a number of lower 0:07:28.320 --> 0:07:33.200 court decisions drawing on that authority that, for example, found 0:07:33.360 --> 0:07:37.280 that putting Harry Potter on a restricted shelf and requiring 0:07:37.360 --> 0:07:41.160 written parental permission to Accessory Potter in the school library 0:07:41.480 --> 0:07:44.720 did indeed violate the First Amendment rights the students who 0:07:44.760 --> 0:07:47.360 are entitled to use the books in that library and 0:07:47.400 --> 0:07:52.280 the public library. Realm District courts determined that when a 0:07:52.440 --> 0:07:56.920 city council authorized on ordinance that allowed any three hundred 0:07:57.000 --> 0:07:59.240 people to demand that a book be removed from the 0:07:59.320 --> 0:08:02.600 children's room to a restricted shelf in the adult area, 0:08:02.920 --> 0:08:06.360 and that was used to target two picture books dealing 0:08:06.560 --> 0:08:10.080 with families headed by same sex couples. Heather has two mommies, 0:08:10.160 --> 0:08:14.920 daddy's roommate um. They found that ordnance essentially violated the 0:08:15.200 --> 0:08:19.480 First Amendment rights both of the young people who were 0:08:19.840 --> 0:08:22.440 supposed to be able to browse and read those books, 0:08:22.440 --> 0:08:24.880 but also the parents who wanted their children to be 0:08:24.960 --> 0:08:28.040 able to find and read those books in the public library. 0:08:28.240 --> 0:08:30.920 So the court druck down the ordinance and ordered the 0:08:30.920 --> 0:08:35.240 books returned to the children's browsing collection. So there's been 0:08:35.320 --> 0:08:39.000 this defense of the ability of individuals to make their 0:08:39.000 --> 0:08:42.199 own choices about the reading and the ability of libraries 0:08:42.240 --> 0:08:46.080 to provide a variety of information needs across the range 0:08:46.240 --> 0:08:51.520 of beliefs and politics. On August fifth, a judge rejected 0:08:51.640 --> 0:08:54.959 Missouri students bid for a preliminary injunction and suit over 0:08:55.040 --> 0:08:59.760 school library book removals. His opinion question their reliance on 0:08:59.840 --> 0:09:03.800 the plurality opinion in the Island Trees case. Do you 0:09:03.840 --> 0:09:06.520 fear a time when Island Trees will no longer be 0:09:06.640 --> 0:09:10.400 controlling law because it was just a plurality opinion? Well, 0:09:10.760 --> 0:09:14.480 you know, I would argue that subsequent cases and other 0:09:14.760 --> 0:09:19.200 decisions drought the federal court system have upheld the idea 0:09:19.400 --> 0:09:22.760 that students don't shed the First Amendment right when they 0:09:22.920 --> 0:09:26.680 enter the schoolhouse gate, to quote another famous case, the 0:09:26.760 --> 0:09:32.040 Tinker decision. But also, ultimately, I would have faith that 0:09:32.360 --> 0:09:38.120 courts would recognize that broad censorship of ideas in public 0:09:38.160 --> 0:09:42.079 school systems that are supposed to be serving the entire community, 0:09:42.280 --> 0:09:47.720 based on particular parents or particular advocacy groups objection to 0:09:47.840 --> 0:09:51.600 those ideas is the kind of government censorship we don't 0:09:51.640 --> 0:09:55.000 want our schools engaging in. How would you describe the 0:09:55.040 --> 0:09:59.640 criteria for banning a book? Is it based mainly on obscenity. 0:10:00.040 --> 0:10:03.440 It's a framing that we're hearing from these advocacy groups 0:10:03.440 --> 0:10:07.800 that any book touching on topics dealing with gender identity, 0:10:08.000 --> 0:10:14.360 sexual orientation, that provide information about changing bodies, human reproduction, 0:10:14.960 --> 0:10:18.920 sexuality are inherently obscene for minors, which of course is 0:10:18.960 --> 0:10:23.160 an objection based on particular moral or religious beliefs, and 0:10:23.200 --> 0:10:26.240 that really should have no place in the decision making 0:10:26.280 --> 0:10:29.040 about what books are available to young people in schools. 0:10:29.240 --> 0:10:33.319 And certainly obscenity is the bottom line as far as 0:10:33.360 --> 0:10:37.280 determining what is not protected by the First Amendment in 0:10:37.400 --> 0:10:40.000 those terms, But the Court has made it very clear 0:10:40.120 --> 0:10:43.640 that that's a very narrow category of materials that has 0:10:43.640 --> 0:10:50.040 no serious value, no educational value. You know, when library professionals, 0:10:50.080 --> 0:10:53.800 for an educational professionals select books for school students, they're 0:10:53.840 --> 0:10:57.040 selecting them because they do have an educational value, and 0:10:57.160 --> 0:11:01.360 particularly for voluntary reading in the school library. These books 0:11:01.400 --> 0:11:04.439 may serve the needs of a particular subset of students 0:11:04.520 --> 0:11:08.839 and they're not required reading. So the streisand effect is 0:11:08.920 --> 0:11:12.600 something that does occur when a book is challenged or banned, 0:11:12.840 --> 0:11:16.280 but it doesn't happen to every book. And ultimately, we 0:11:16.360 --> 0:11:19.960 have to think about those students, those members of the 0:11:20.000 --> 0:11:23.920 community who don't have access to credits, who don't have 0:11:24.400 --> 0:11:29.840 regular access to the internet, who can't travel to alternative bookstores. 0:11:30.200 --> 0:11:34.400 Public libraries exist to serve those very people, and school 0:11:34.480 --> 0:11:38.280 libraries serve students who have no other information resources. So 0:11:38.360 --> 0:11:41.240 when we ban a book from a school library, when 0:11:41.280 --> 0:11:44.360 we ban a book from a public library, we're denying 0:11:44.640 --> 0:11:48.679 those who have less in society the ability to gain 0:11:48.720 --> 0:11:53.040 the same access to information and ideas that are enjoyed 0:11:53.120 --> 0:11:57.720 by those with better income. In Virginia, there's a case 0:11:57.760 --> 0:12:03.120 where a former state congressman is trying to use this 0:12:03.520 --> 0:12:08.360 o Virginia law to ban the sale of books to miners. 0:12:08.760 --> 0:12:12.880 Is this another step because they're attempting to tell places 0:12:12.920 --> 0:12:16.160 like Barnes and Nobles what they can or can't sell. 0:12:16.800 --> 0:12:21.960 That's the core here. Um. We have individuals trying to 0:12:21.960 --> 0:12:24.240 tell us what to think about, what to read about, 0:12:24.600 --> 0:12:28.839 to recruit elected officials and the governments in their campaign 0:12:28.960 --> 0:12:32.240 to limit what we can read, what we can think about, 0:12:32.600 --> 0:12:35.040 even how we can live our own lives, and the 0:12:35.120 --> 0:12:38.440 government should not be engaged in that. That's what the 0:12:38.440 --> 0:12:43.560 First Amendment is for, this effort to reframe the conversation 0:12:43.880 --> 0:12:48.600 around gender identity and sexual orientation to somehow define it 0:12:48.800 --> 0:12:52.360 as inappropriate for any minor even the oldest of miners 0:12:52.440 --> 0:12:55.880 to consider and think about, when in fact, we know 0:12:56.200 --> 0:13:01.080 that we have many young people um who are parts 0:13:01.120 --> 0:13:05.680 of families who have gay or transgender members, are who 0:13:05.679 --> 0:13:08.959 are grappling with these issues themselves, or have friends who 0:13:09.000 --> 0:13:12.280 are grappling with these issues themselves. Is something that the 0:13:12.320 --> 0:13:15.600 government simply should not be engaged in. The First Amendment 0:13:15.720 --> 0:13:18.600 has promised us the freedom to believe as we wish, 0:13:18.679 --> 0:13:21.280 to think what we wish to read, what we want 0:13:21.400 --> 0:13:24.720 to speak as we wish um, in full freedom of 0:13:24.760 --> 0:13:27.720 conscience and what we have here is a campaign to 0:13:27.880 --> 0:13:31.880 take those rights away, um, and particularly in regards to 0:13:32.000 --> 0:13:35.400 the concepts dealing, you know, with the lives and identities 0:13:35.600 --> 0:13:39.280 of those who have been traditionally marginalized in our society, 0:13:39.320 --> 0:13:43.439 to limit our consideration to something that was probably acceptable 0:13:43.480 --> 0:13:47.080 in nineteen fifty two but no longer reflects the reality 0:13:47.320 --> 0:13:50.080 of the society we live in or the people who 0:13:50.160 --> 0:13:54.319 live in it. It's the antithesis of democracy to tell 0:13:54.400 --> 0:13:57.839 us what to think and read about, and to argue 0:13:57.880 --> 0:14:00.880 that our public schools and that our public with libraries 0:14:01.080 --> 0:14:05.839 should only reflect the views of a vocal minority. Really, 0:14:06.200 --> 0:14:09.640 um got the very meaning of the First Amendment and 0:14:09.800 --> 0:14:13.520 its promise of our freedom to read and believe as 0:14:13.559 --> 0:14:18.360 we wish. I remember when Senator Ted Cruz read from 0:14:18.400 --> 0:14:23.600 a book asking now Justice Katangi Brown Jackson about racist babies. 0:14:23.640 --> 0:14:26.000 The sales of that book went up. Is that what 0:14:26.200 --> 0:14:30.120 usually happens when there are attempts to ban books. Yes, 0:14:30.200 --> 0:14:34.920 we do observe that frequently when a book is challenged 0:14:35.040 --> 0:14:39.560 or banned, there is increased curiosity. People want to find 0:14:39.560 --> 0:14:42.480 out what's so salacious, what's so wrong with the book, 0:14:42.800 --> 0:14:46.680 And so sales do go Up One author Andie Thomas, 0:14:46.680 --> 0:14:49.520 who wrote a book for young adults called They Hate 0:14:49.520 --> 0:14:53.560 You Give. She's actually stated on social media that she 0:14:53.920 --> 0:14:57.160 has come to appreciate book bands because it means but 0:14:57.320 --> 0:15:00.800 she sells more books. So the strikes and effect is 0:15:00.880 --> 0:15:04.560 something that does occur when a book is challenged or banned, 0:15:04.800 --> 0:15:08.240 but it doesn't happen to every book. And ultimately, we 0:15:08.320 --> 0:15:11.920 have to think about those students, those members of the 0:15:11.960 --> 0:15:15.880 community who don't have access to credits, who don't have 0:15:16.360 --> 0:15:21.760 regular access to the Internet, who can't travel to alternative bookstores. 0:15:22.160 --> 0:15:26.400 Public libraries exist to serve those very people, and school 0:15:26.480 --> 0:15:30.240 libraries serve students who have no other information resources. So 0:15:30.320 --> 0:15:33.200 when we ban a book from a school library, when 0:15:33.240 --> 0:15:36.320 we ban a book from a public library, we're denying 0:15:36.600 --> 0:15:40.640 those who have less in society the ability to gain 0:15:40.720 --> 0:15:45.000 the same access to information and ideas that are enjoyed 0:15:45.080 --> 0:15:49.880 by those with better income. Thanks Debora, that's Deborah calwell Stone, 0:15:49.960 --> 0:15:55.600 director of the American Library Association's Office for Intellectual Freedom, 0:15:55.640 --> 0:15:58.840 the former head of the JP Morgan Chase precious metals 0:15:58.880 --> 0:16:02.400 business and It's Up Gold Trader were convicted in Chicago 0:16:02.840 --> 0:16:07.080 on charges of fraud spoofing and market manipulation and face 0:16:07.240 --> 0:16:10.520 decades in prison. It's a victory for the government and 0:16:10.560 --> 0:16:14.040 its long crackdown on spoofing in the precious metals market, 0:16:14.360 --> 0:16:17.920 even though a third defendant, a salesman, was acquitted. Joining 0:16:17.920 --> 0:16:20.160 me is James Park, a professor at u c l 0:16:20.200 --> 0:16:24.640 A Law School. His latest book is called The Valuation Treadmill, 0:16:24.920 --> 0:16:29.680 How securities Fraud Threatens the integrity of public companies. Two 0:16:29.720 --> 0:16:32.760 of the defendants were convicted, including the man who was 0:16:32.800 --> 0:16:36.040 once the most powerful figure in the gold market, but 0:16:36.240 --> 0:16:40.520 one was acquitted. So is this a victory for federal 0:16:40.560 --> 0:16:44.400 prosecutors in their crackdown. It is a victory in in 0:16:44.480 --> 0:16:49.160 my view. The person who was acquitted was not directly 0:16:49.240 --> 0:16:52.920 involved in the trade, and so he was a salesperson, 0:16:53.440 --> 0:16:56.840 so he may have had a stronger defense. And so 0:16:56.880 --> 0:17:00.120 I think the two convictions, though, are very significant, and 0:17:00.440 --> 0:17:02.640 you know, they send a signal not just with respect 0:17:02.680 --> 0:17:07.320 to gold market, but also other markets. And it culminates 0:17:07.359 --> 0:17:10.880 an extensive effort to crack down on this sort of 0:17:11.240 --> 0:17:15.720 spoofing and manipulative market activity. And it also shows that 0:17:16.000 --> 0:17:19.719 prosecutors can bring these cases before a jury. They'll understand 0:17:19.760 --> 0:17:23.480 it and they're willing to convict. In some cases, the 0:17:23.560 --> 0:17:27.000 jury was out for eight hours. That seems like a 0:17:27.080 --> 0:17:29.280 lot for this kind of case, with the amount of 0:17:29.320 --> 0:17:33.439 evidence that the prosecution put in. It may be it 0:17:33.520 --> 0:17:38.840 really depends on the context. And you know, it is, 0:17:39.200 --> 0:17:42.919 you know, a case that involves a lot of different transactions, 0:17:42.960 --> 0:17:47.439 a lot of different different trading transactions, and you know, 0:17:47.520 --> 0:17:50.639 the jury may have been trying to make sure it 0:17:50.880 --> 0:17:56.000 understood the details of what was being alleged. They certainly 0:17:56.040 --> 0:18:01.200 were also pass with deciding the fate of three different individuals, 0:18:01.280 --> 0:18:05.359 and so I would guess that a significant portion of 0:18:05.440 --> 0:18:08.760 that time might have been spent on um the acquitted 0:18:08.800 --> 0:18:12.960 individuals case, trying to understand what his role was in 0:18:13.000 --> 0:18:19.560 the transactions and whether or not be potentially guilty. So 0:18:19.720 --> 0:18:23.840 the government tried racketeering charges here, which are normally used 0:18:23.840 --> 0:18:28.040 in mob cases or gang cases. Prosecutors alleged the precious 0:18:28.080 --> 0:18:32.240 metals business at JP Morgan was run as a criminal enterprise, 0:18:32.840 --> 0:18:35.680 but it didn't work. The jury didn't buy that. They 0:18:35.680 --> 0:18:40.800 acquitted all three on racketeering. It's interesting, you know, we 0:18:40.840 --> 0:18:45.040 think of rico and racketeering as being um the sort 0:18:45.040 --> 0:18:49.280 of charges you level against the mafia for very serious 0:18:49.400 --> 0:18:54.639 types of crimes. Having said that the statue does include fraud, 0:18:55.200 --> 0:18:59.840 and fraud can include spoofing and other manipulative activities. But 0:19:00.119 --> 0:19:02.439 I think what they were trying to say is that 0:19:02.480 --> 0:19:07.480 they believed that the evidence only supported that the spoof 0:19:07.520 --> 0:19:11.800 thing was really the responsibility of the individuals involved in 0:19:11.840 --> 0:19:14.800 those activities as as opposed to the desk as a whole. 0:19:15.480 --> 0:19:18.840 That you couldn't say that the desk was acting in 0:19:18.920 --> 0:19:24.919 a coordinated manner to engage in criminal activity, and that 0:19:25.080 --> 0:19:28.320 some of this activity may not have been completely obvious 0:19:28.359 --> 0:19:31.639 to everyone on the desk, that some members of the 0:19:31.760 --> 0:19:35.920 desk may not have understood that this was a systemic, 0:19:36.600 --> 0:19:40.159 repeated practice that was going on over many years. And 0:19:40.200 --> 0:19:44.040 if that's the case, then you can only really blame 0:19:44.160 --> 0:19:48.480 the individuals who executed the spoofing trades as opposed to 0:19:48.960 --> 0:19:52.440 the desk as an enterprise. So I think that's a 0:19:52.480 --> 0:19:56.640 reasonable conclusion. And at the same time, you can see 0:19:56.640 --> 0:20:00.040 why the government may have felt it was appropriate to 0:20:00.040 --> 0:20:03.040 advanced the theory like this. You know, you're going after 0:20:03.080 --> 0:20:05.920 the head of the death, not a low level employee, 0:20:05.920 --> 0:20:07.600 and so if you think that the head of the 0:20:07.640 --> 0:20:12.919 desk is involved in this activity, then surely you know 0:20:12.960 --> 0:20:15.880 there's an argument that the desk as a whole was involved, 0:20:15.920 --> 0:20:20.199 as the head of the death was basically engineering this scheme. 0:20:21.359 --> 0:20:25.320 The government's investigated this like a mob case. Once they 0:20:25.320 --> 0:20:27.959 got the data, they started to look for co operators 0:20:28.040 --> 0:20:31.560 on lower levels and flip them. They arrested one of 0:20:31.600 --> 0:20:34.960 the mid level traders at an airport in Fort Lauderdale 0:20:35.080 --> 0:20:37.560 returning from his honeymoon. Is that like a sort of 0:20:37.600 --> 0:20:42.040 a scare tactic. Definitely, And it's really extraordinary measures that 0:20:42.080 --> 0:20:45.240 they took in this signals how serious they are taking 0:20:45.280 --> 0:20:50.760 these manipulative activities. I think it also reflects the difficulty 0:20:50.840 --> 0:20:55.680 of establishing manipulation and spoofing. They can always argue that, 0:20:55.880 --> 0:20:59.200 you know, these are trades that were made for other reasons, 0:20:59.280 --> 0:21:02.359 They were not men to manipulate the marketplace. And the 0:21:02.440 --> 0:21:06.480 only way you can really establish manipulative intent is by 0:21:06.480 --> 0:21:11.240 getting testimony of other individuals who may know and have 0:21:11.359 --> 0:21:15.000 evidence about that intent. And so it was very important 0:21:15.040 --> 0:21:17.800 for the government to bring a criminal case that they 0:21:17.920 --> 0:21:20.760 have this sort of specific evidence, and the only way 0:21:20.800 --> 0:21:24.119 you can get that is by getting other employees to 0:21:24.520 --> 0:21:28.760 flip and to testify, and so they took very aggressive 0:21:28.960 --> 0:21:33.800 tactics in order to achieve that result. Racketeering charges are 0:21:33.880 --> 0:21:38.679 also part of the government's case against Bill Wang, whose 0:21:39.000 --> 0:21:43.720 Articos Capital management collapsed last year and cost banks billions 0:21:43.720 --> 0:21:48.960 of dollars? Is this case instructive for the government's case there? 0:21:49.560 --> 0:21:52.439 It certainly indicates that it may be difficult for the 0:21:52.480 --> 0:21:56.520 government to win racketeering charges. But every jury is different, 0:21:56.760 --> 0:22:01.239 and the fact that the government laws on racketeering in 0:22:01.280 --> 0:22:04.960 this case does not necessarily mean that they will lose 0:22:05.000 --> 0:22:08.040 in another case. And so you will have to look 0:22:08.080 --> 0:22:11.080 at each organization on its own facts and look at 0:22:11.080 --> 0:22:15.399 the very particular way the organization was run. You know, 0:22:15.720 --> 0:22:19.560 you could argue with sort of a family fund that 0:22:19.600 --> 0:22:24.600 maybe the structure of the organization was such so that 0:22:24.760 --> 0:22:27.440 you might think of it as more like a unified 0:22:27.600 --> 0:22:31.160 enterprise that a trading desk. Now, on the other hand, 0:22:31.200 --> 0:22:33.240 you could say, well, it's it's just the same people 0:22:33.280 --> 0:22:37.280 may have different levels of knowledge of what is potentially 0:22:37.320 --> 0:22:40.399 illegal activity. So it really is going to depend on 0:22:40.440 --> 0:22:43.880 the facts. No, Back and Smith will be sentenced next year. 0:22:44.320 --> 0:22:48.320 They each face decades in prison, though probably the sentence 0:22:48.320 --> 0:22:50.840 will be far less. I think it will be far 0:22:50.920 --> 0:22:54.240 less than decades. I think I've seen some other convictions 0:22:54.280 --> 0:22:58.720 of sentences of around a year um. I would suspect 0:22:58.760 --> 0:23:01.280 maybe it's a bit more in that, but it's hard 0:23:01.320 --> 0:23:03.280 to say how the judge is going to rule, and 0:23:03.359 --> 0:23:06.000 they're the judge is going to look at the severity 0:23:06.000 --> 0:23:10.640 of the conduct and all the circumstances in crafting a sentence, 0:23:11.080 --> 0:23:15.520 because in these white collar cases you have defendants who 0:23:15.920 --> 0:23:19.640 don't usually have you know, any records, any criminal records, 0:23:19.720 --> 0:23:23.320 so that's always one thing in their favor. That's absolutely right. 0:23:23.440 --> 0:23:26.119 They may not have criminal records. And you know, the 0:23:26.160 --> 0:23:29.080 other argument I would make if I was on the 0:23:29.119 --> 0:23:32.159 defensive side, is that, you know, you look, who are 0:23:32.200 --> 0:23:36.639 the victims of the spoofing? And you know, my understanding 0:23:36.720 --> 0:23:39.240 is that a lot of the investors who lost money 0:23:39.280 --> 0:23:43.240 on the other side of these trades were other sophisticated investors, 0:23:43.359 --> 0:23:48.440 high frequency trading funds, and so you might argue, well, 0:23:48.680 --> 0:23:53.840 there were losses, but these were losses that more um 0:23:53.960 --> 0:23:59.320 born by barely sophisticated wealthy parties, and so could that 0:23:59.520 --> 0:24:03.639 mitigate the argument for a strong sentence that could be 0:24:03.680 --> 0:24:06.960 an argument that the Defense Council will make, is there 0:24:07.040 --> 0:24:10.919 still spoofing in the markets? I would guess that there is, 0:24:11.160 --> 0:24:14.000 you know. One of the problems is defining spoofing can 0:24:14.040 --> 0:24:17.920 be difficult, and there's a lot of activity that may 0:24:18.080 --> 0:24:20.640 go up to the brink of spoofing but not actually 0:24:20.720 --> 0:24:24.560 be spoofing. It really requires placing orders in a market 0:24:24.600 --> 0:24:27.480 with the intent to cancel them, and you're only placing 0:24:27.480 --> 0:24:30.040 the order to manipulate the market price in your favor 0:24:30.080 --> 0:24:34.000 for other transaction, And so what exactly is your intent? 0:24:34.320 --> 0:24:38.080 I'm sure that there are other transactions that could potentially 0:24:38.080 --> 0:24:40.840 fit that definition, but may go right up to the edge, 0:24:40.880 --> 0:24:44.479 some may go over the edge. Uh, And so you know, 0:24:44.520 --> 0:24:47.000 with this conviction though, that's a strong signal that you 0:24:47.040 --> 0:24:50.120 should not engage in this activity. And I would imagine 0:24:50.119 --> 0:24:52.400 it's going to have a to turn effect and reduced 0:24:52.440 --> 0:24:56.159 spoofing in many different markets. Did electronic trading make it 0:24:56.240 --> 0:25:01.359 easier to spoof? The speed of the trans actions that 0:25:01.560 --> 0:25:06.760 is enabled by the electronic trading can make it easier 0:25:06.800 --> 0:25:11.440 to place and cancel orders more quickly. I think that certainly, 0:25:11.880 --> 0:25:14.440 you know, I think a factor in you know, and 0:25:14.560 --> 0:25:16.600 does make it easier I think to sort of put 0:25:16.640 --> 0:25:19.000 in a lot of orders and cancel them very quickly. 0:25:19.040 --> 0:25:22.480 If you are, you know, trying to phone in orders, 0:25:22.800 --> 0:25:25.080 it may be harder to you know, make a subsequent 0:25:25.119 --> 0:25:27.119 phone called the cancel in order, Whereas if you have 0:25:27.640 --> 0:25:29.919 just the ability to cancel it with a click of 0:25:29.920 --> 0:25:33.719 a mouse, then you know, I think that makes it 0:25:33.800 --> 0:25:36.119 easier for somebody to put in a lot of orders 0:25:36.160 --> 0:25:40.000 and then quickly cancel them right away. This is the 0:25:40.080 --> 0:25:45.400 highlight of the federal government's crackdown on spoofing in precious metals. 0:25:45.640 --> 0:25:48.080 How did they do all? In all? I think they 0:25:48.119 --> 0:25:53.680 did very well. They initially got settlement from JP Morgan 0:25:53.840 --> 0:25:58.399 the institution, and they have also gotten a number of convictions, 0:25:58.640 --> 0:26:01.760 both through pre bargaining and also through jury trials. I 0:26:01.800 --> 0:26:05.520 think they're around ten individuals who have pleaded guilty or 0:26:05.560 --> 0:26:08.520 been convicted. And you know, this is not just a 0:26:08.560 --> 0:26:12.320 case where they found the misconduct and they penalized JP 0:26:12.400 --> 0:26:16.840 Morgan the corporation. There are a lot of commentators scholars 0:26:16.880 --> 0:26:21.880 who have criticized federal prosecutors for not bringing the individual cases, 0:26:21.920 --> 0:26:26.199 not bringing cases against individuals for corporate wrongdoing, and this 0:26:26.240 --> 0:26:29.199 is a nice example where the government did bring cases 0:26:29.240 --> 0:26:32.359 against individuals and worked very hard to do so, and 0:26:32.760 --> 0:26:37.280