WEBVTT - Brett Kavanaugh Is the Most Hated Justice 0:00:03.160 --> 0:00:07.960 This is Bloombird Law with June Brusso from Bloomberg Radio. 0:00:09.200 --> 0:00:13.400 Justice Brett Kavanaugh is the Supreme Court's lightning rod, despite 0:00:13.440 --> 0:00:15.480 the fact that he's at the center of the court 0:00:15.720 --> 0:00:19.840 in the majority more than any other Justice. Protesters demonstrate 0:00:19.880 --> 0:00:24.639 at his home regularly and recently converged outside of Washington restaurant, 0:00:24.720 --> 0:00:27.240 forcing him to leave by the back door, and of 0:00:27.280 --> 0:00:30.600 course he's mocked by late night comedians who won't get 0:00:30.640 --> 0:00:32.800 over that rant on his love of beer at his 0:00:32.920 --> 0:00:37.360 confirmation hearings. Stephen Colbert seems to make the most of it. Yes, 0:00:37.440 --> 0:00:41.920 we drank beer. I liked beer. Still like beer. We 0:00:42.040 --> 0:00:47.080 drank beer. Do you drink beer? Like beer? Still like beer? 0:00:47.640 --> 0:00:52.559 Drank beer? Then reach for a cold bottle of Kavanaugh Cava. 0:00:53.200 --> 0:00:56.680 Kavanaugh Beer is full body for great drink ability and 0:00:56.760 --> 0:01:01.360 Supreme Judge ability, and a recent more Kent University Law 0:01:01.360 --> 0:01:05.200 School poll seems to confirm the obvious. Kavanaugh had by 0:01:05.200 --> 0:01:09.160 far the Court's worst net favorability rating of negative eleven 0:01:09.160 --> 0:01:12.919 percentage points. The only other Johnstice with a negative rating 0:01:13.040 --> 0:01:16.600 was Amy Coney Barrett at negative two. My guest is 0:01:16.640 --> 0:01:19.920 Barbara Perry, a presidential and Supreme Court scholar at the 0:01:20.040 --> 0:01:24.120 University of Virginia's Miller Center, Barbara From all the protests 0:01:24.200 --> 0:01:27.360 against Kavanaugh, you'd never know that he was at the 0:01:27.400 --> 0:01:30.119 center of the court. Well, I suppose we should begin 0:01:30.200 --> 0:01:34.119 by saying that the center has shifted so that even 0:01:34.480 --> 0:01:38.400 Chief Justice Roberts now seems much more moderate and much 0:01:38.440 --> 0:01:43.960 more centrist relatively speaking, than those like Alito and the 0:01:44.040 --> 0:01:47.600 three Trump nominees on the far far right. But it 0:01:47.720 --> 0:01:50.840 is the case, by whatever measure we're now using, even 0:01:50.840 --> 0:01:54.240 if the center has shifted, at least Brett Kavanaugh is 0:01:54.320 --> 0:01:56.640 closer to that than he is to the far right. 0:01:57.080 --> 0:02:01.520 He's also less confrontational during oral arguments than some of 0:02:01.520 --> 0:02:05.800 the other justices like Samuel Alito. Sometimes you think from 0:02:05.840 --> 0:02:08.800 what he says, he's going to vote with the liberals. 0:02:09.160 --> 0:02:12.880 Do you think it's deliberate? I think that is probably 0:02:13.040 --> 0:02:18.160 his personality, and that the aberration was his anger at 0:02:18.240 --> 0:02:21.840 his own confirmation hearings four years ago. And we have 0:02:21.960 --> 0:02:27.119 information that Trump talked to him and said go low 0:02:27.160 --> 0:02:30.720 and go angry, and so that that's probably not his 0:02:30.880 --> 0:02:36.120 normal approach to his public life, and that he did 0:02:36.200 --> 0:02:39.320 that in order to get through and to please Donald 0:02:39.320 --> 0:02:42.000 Trump and to please the Trump is in the Senate 0:02:42.000 --> 0:02:45.480 and on the Judiciary Committee. So I suspect that while 0:02:45.520 --> 0:02:49.160 he's very, very conservative, it certainly has a conservative background. 0:02:49.560 --> 0:02:52.959 I suspect that his personality is much more moderate than 0:02:53.040 --> 0:02:56.400 he displayed in public in his confirmation hearing, so that 0:02:56.520 --> 0:03:00.960 the true personality in persona Brett Kavanaugh is probably what 0:03:01.040 --> 0:03:03.880 you see in oral arguments and to some extent in 0:03:03.960 --> 0:03:06.840 his opinion. I mean, he's mocked more than the other 0:03:06.960 --> 0:03:10.400 justices who are far more conservative than he is. How 0:03:10.480 --> 0:03:13.760 much of that is duty think to his confirmation hearings, 0:03:13.840 --> 0:03:17.480 As you said, he was angry, he was confrontational, and 0:03:17.560 --> 0:03:20.600 he had some of those frat boy comments. Yes, he 0:03:20.639 --> 0:03:23.920 had not only the unfortunate descriptions of his friend, but 0:03:24.000 --> 0:03:28.040 their unfortunate nicknames. And then what will carry him to 0:03:28.280 --> 0:03:32.040 his grave probably is I like beer all said not 0:03:32.160 --> 0:03:36.120 only with anger, because Claire's Thomas was angry because of 0:03:36.160 --> 0:03:39.640 the Anita Hill accusations at his nomination hearing, but in 0:03:39.760 --> 0:03:43.480 terms of his facial expressions, he had a rather poker 0:03:43.640 --> 0:03:47.960 face but angry voice, whereas Brett Kavanaugh had not only 0:03:48.000 --> 0:03:51.040 anger in his voice, but his scrunched up face, and 0:03:51.080 --> 0:03:54.760 then even when he has his resting, alcoholic, resting, moderate face, 0:03:55.360 --> 0:03:58.520 it is an easily caricatured face. So some people just 0:03:58.560 --> 0:04:01.760 have facial characteristic and it's Richard Nixon and his beady 0:04:01.880 --> 0:04:04.400 dark eyes and his d nose and his dark eyebrows. 0:04:04.520 --> 0:04:09.360 Wreck Havanag just has a face that's easily caricatured by cartoonists, 0:04:09.360 --> 0:04:13.320 but also easily portrayed in a Stephen Colbert monologue or 0:04:13.360 --> 0:04:17.080 a Stephen Colbert cold opening cartoons. In a few cases, 0:04:17.440 --> 0:04:20.880 for example, in the jobs case the abortion case, his 0:04:20.920 --> 0:04:24.680 opinion included a section that said you could limit the 0:04:24.720 --> 0:04:28.080 sweep of the abortion decision and that you won't have 0:04:28.440 --> 0:04:31.920 states going after women who go to other states for abortion. 0:04:32.160 --> 0:04:34.560 So what's his point Is his point, as it was 0:04:34.600 --> 0:04:37.039 in the gun case, to sort of say, Hey, what 0:04:37.040 --> 0:04:39.760 we're doing is not that bad. You don't really have 0:04:39.880 --> 0:04:44.440 to worry about this. I think that he probably believes that, 0:04:45.040 --> 0:04:48.279 and he also may have more moderate clerks around him. So, 0:04:48.360 --> 0:04:51.880 for example, I think the language that Thomas had in 0:04:52.040 --> 0:04:56.520 his concurrence in Dabbs about going back to reconsider gay 0:04:56.560 --> 0:05:01.000 marriage and sexual privacy and contraception, I hear the voice 0:05:01.160 --> 0:05:05.720 of fairly extreme law clerks that Clarence Thomas typically hires. 0:05:06.120 --> 0:05:09.159 And for Brett Kavanaugh, if indeed he is a slightly 0:05:09.200 --> 0:05:13.240 more moderate conservative, he may well have slightly more moderately 0:05:13.440 --> 0:05:17.320 conservative clerks. And let's face it, they do right typically 0:05:17.480 --> 0:05:21.240 the first draft of the Justice's opinions. So here, I 0:05:21.279 --> 0:05:25.200 think Kavanaugh's agreement with the team and his chambers, but 0:05:25.320 --> 0:05:27.919 also it does in his mind, I'm sure, helped to 0:05:28.040 --> 0:05:31.560 separate him from what he must see as the extremism 0:05:31.640 --> 0:05:35.920 from his colleagues from the Trump era and Alito and Thomas. 0:05:35.920 --> 0:05:38.520 But still, I mean, even though he says that, and 0:05:38.560 --> 0:05:41.960 he writes that, he still goes along with the majority 0:05:42.000 --> 0:05:44.279 and gives them the fifth vote that they need or 0:05:44.320 --> 0:05:46.960 the sixth vote that they want. Well, yes, and so 0:05:47.120 --> 0:05:50.080 did the Chief Justice, because I think they all wanted 0:05:50.120 --> 0:05:52.760 to end Row. And then you also get to the 0:05:52.839 --> 0:05:55.160 issue of you know, fool me once, shame on you. 0:05:55.200 --> 0:05:57.360 Whatever it was it for George W. Bush had in 0:05:57.400 --> 0:06:00.080 trouble saying, but you know, if I'm fooled by I 0:06:00.080 --> 0:06:02.640 think it was Susan Collins said, oh, well, but Kevin 0:06:02.720 --> 0:06:05.880 all lied to me about upholding Row. Well, if you 0:06:06.000 --> 0:06:09.080 go back and listen to what those Conservatives were saying 0:06:09.120 --> 0:06:12.240 about Row. They were founding, first of all, the party 0:06:12.320 --> 0:06:15.200 line to get them confirmed, because they all said the 0:06:15.200 --> 0:06:17.359 same thing, and they had all been coached to say that, 0:06:17.800 --> 0:06:21.400 which was yes, it's precedent. Well, that's a truism. Row 0:06:21.600 --> 0:06:24.840 was precedent. Should they pay attention to precedent? Yes, that's 0:06:24.880 --> 0:06:27.679 one of the maxims of self restraint of the court. 0:06:27.960 --> 0:06:31.000 But they didn't just come straight out and say, I 0:06:31.040 --> 0:06:36.240 would never, under any circumstances overturn Row. So nevertheless, they 0:06:36.560 --> 0:06:40.200 led some people to believe, including Susan Collins, that they 0:06:40.240 --> 0:06:43.799 wouldn't vote to overturn Row. So if you believe that, 0:06:43.920 --> 0:06:46.880 then are you going to believe what the Chief Justice 0:06:47.040 --> 0:06:49.760 was saying in the oral arguments, which sounded like he 0:06:49.839 --> 0:06:53.159 wanted to uphold the Mississippi Statute on the fifteen week 0:06:53.240 --> 0:06:58.200 limitations on abortions and yet voted to overturn Row in effect. 0:06:58.360 --> 0:07:00.760 And are you going to believe kavin Off that he 0:07:00.800 --> 0:07:04.080 won't go back with the rest of the Conservatives and 0:07:04.160 --> 0:07:08.839 look at and overturned the sexual privacy cases, the contraceptive cases, 0:07:08.880 --> 0:07:11.680 and the marriage equality cases. I don't think for a 0:07:11.800 --> 0:07:15.240 moment that those are safe with these five men and 0:07:15.400 --> 0:07:18.080 one woman on the bench on the right. As you mentioned, 0:07:18.280 --> 0:07:22.200 Clarence Thomas seems to still be holding a grudge for 0:07:22.280 --> 0:07:25.960 his confirmation thirty years ago. He told his law clerks 0:07:26.040 --> 0:07:29.840 two years after his confirmation, according to a article from 0:07:29.840 --> 0:07:32.080 The New York Times, that he intended to serve on 0:07:32.120 --> 0:07:34.400 the highest court of the land to make the lives 0:07:34.440 --> 0:07:39.120 of liberals miserable. So yes, but it seems like Kavanaugh 0:07:39.560 --> 0:07:44.480 is not taking that tact. He's not, and good for him, 0:07:44.520 --> 0:07:48.120 because I would have argued, as someone who has followed 0:07:48.120 --> 0:07:50.360 the court and studied the court for four decades now 0:07:50.400 --> 0:07:53.360 and served as a judicial fellow there in the midnight nineties, 0:07:53.400 --> 0:07:57.360 and as someone who appreciates what it takes to be 0:07:57.720 --> 0:08:00.320 a federal judge, and especially on the highest court in 0:08:00.360 --> 0:08:03.520 the land, I believe in something that's called judicial temperament. 0:08:03.800 --> 0:08:06.440 That is that a justice not only should be as 0:08:06.520 --> 0:08:08.800 neutral as he or she can be, but they should 0:08:08.800 --> 0:08:13.600 just have the personality and persona of someone with maturity 0:08:13.680 --> 0:08:17.000 and judicial temperament. And I would have made the argument 0:08:17.200 --> 0:08:21.520 that Brett Kevanaugh did not display proper judicial temperament while 0:08:21.560 --> 0:08:24.280 he was at that time a federal judge before the 0:08:24.320 --> 0:08:27.520 Senate Judiciary Commode. So my view is that he, at 0:08:27.600 --> 0:08:31.080 least now after getting on the court, is trying to 0:08:31.160 --> 0:08:33.840 hold to judicial temperament, and as we said, that might 0:08:33.920 --> 0:08:37.080 be his normal persona. Anyway, maybe that's not so hard 0:08:37.120 --> 0:08:39.880 for him and so good for him that he's taking 0:08:39.920 --> 0:08:42.880 a different approach from the I will be angry till 0:08:42.960 --> 0:08:46.719 I die Clarence Thomas vision. And by the way, he 0:08:46.840 --> 0:08:50.920 was also an angry young man, and understandably so. He 0:08:51.000 --> 0:08:54.760 came from the Deep South where he was discriminated against. 0:08:54.840 --> 0:08:57.760 He studied for the priesthood. At one time he was 0:08:57.800 --> 0:09:00.960 in the Catholic seminary, and when he heard people saying 0:09:01.040 --> 0:09:05.559 nasty things about Martin Luther King upon King's assassination, he 0:09:05.600 --> 0:09:07.800 gave up and he left. He left the church at 0:09:07.800 --> 0:09:10.000 that point. He's now come back to the Catholic Church, 0:09:10.040 --> 0:09:13.520 but he's had a lot of anger in his life, 0:09:13.760 --> 0:09:16.800 and it all came tumbling out again because of the 0:09:16.840 --> 0:09:20.120 Anita Hill accusations. Whether they were true or not, it 0:09:20.280 --> 0:09:23.480 certainly riled him up, and he is riled to this day. 0:09:23.720 --> 0:09:27.640 And now being able to have his conservative positions become 0:09:27.679 --> 0:09:30.200 the law of the land he's also must be doing 0:09:30.240 --> 0:09:33.400 a happy dance. So Kavanaugh was a clerk of Justice 0:09:33.440 --> 0:09:36.560 Anthony Kennedy and took his place on the court. Do 0:09:36.600 --> 0:09:40.040 you think that over time Kavanaugh will move closer to 0:09:40.120 --> 0:09:43.600 where Justice Kennedy was or is he just too conservative? 0:09:43.840 --> 0:09:48.800 There's always hope, yes, and particularly since Kavanaugh has messaged 0:09:48.880 --> 0:09:52.000 through his opinions and through his demeanor on the bench, 0:09:52.080 --> 0:09:55.200 and he's not going out and being angry in public 0:09:55.440 --> 0:09:58.000 as Clarence Thomas has been, So I think there is 0:09:58.040 --> 0:10:00.160 hope there. And the other thing I would say as 0:10:00.160 --> 0:10:04.319 a political scientist is that political scientists, scholars who studied 0:10:04.320 --> 0:10:09.040 the court have found that across his history, of justices 0:10:09.480 --> 0:10:13.560 tend to depart from the ideology their appointing president hope 0:10:13.600 --> 0:10:16.280 they would represent on the court. And it typically those 0:10:16.360 --> 0:10:20.040 twenty centers go from being conservatives to liberals, or at 0:10:20.080 --> 0:10:23.040 least to maybe being a swing vote. So Justice Kennedy 0:10:23.200 --> 0:10:27.120 was an example of that. Justice O'Connor. Justice Blackman, interestingly enough, 0:10:27.160 --> 0:10:29.880 who wrote the majority in Rosy Wade, was put on 0:10:29.920 --> 0:10:33.360 the court as a conservative by Richard Nixon, but he 0:10:33.520 --> 0:10:37.080 became a liberal vote, a reliable liberal vote. So yes, 0:10:37.160 --> 0:10:40.680 there's always hope. But nevertheless, even if the three liberals 0:10:40.720 --> 0:10:43.800 got kavanag there's still only at four. And one of 0:10:43.800 --> 0:10:46.760 my favorite elements of being a judicial fellow is meeting 0:10:46.760 --> 0:10:49.480 with the then retired Justice Brennan, a leader of the 0:10:49.760 --> 0:10:53.120 Warrant Court in its liberal revolutions. But he would bring 0:10:53.160 --> 0:10:55.760 in his new clerks every year about this time, and 0:10:56.160 --> 0:10:58.240 he would say, what's the most important word at the court. 0:10:58.280 --> 0:11:01.840 And they were all super bright, and they say justice, liberty, freedom, 0:11:01.920 --> 0:11:04.160 and he'd say no, no, and they'd stop answering. He'd say, 0:11:04.200 --> 0:11:06.480 are you finished? They say yes. He'd hold up one 0:11:06.559 --> 0:11:09.120 hand with all five fingers that lay and he'd say five, 0:11:09.520 --> 0:11:12.040 that's the most important word here at the court. So 0:11:12.120 --> 0:11:15.240 he was a pragmatist. And right now, even if the 0:11:15.320 --> 0:11:18.960 Liberals got Brett Cavanaugh, they'd only or vote. What they 0:11:19.000 --> 0:11:21.880 have to hope is that on some of these instances, 0:11:21.920 --> 0:11:24.760 for example, when Chief does this Roberts voted twice to 0:11:24.960 --> 0:11:29.240 uphold the A c A UH so called Obamacare, maybe 0:11:29.280 --> 0:11:32.959 they could win him over for these cases that are 0:11:33.040 --> 0:11:36.680 hot button social issues that everybody cares about. We'll see 0:11:36.679 --> 0:11:40.520 what happens next term. Thanks so much, Barbara. That's Barbara Perry, 0:11:40.600 --> 0:11:43.679 a presidential and Supreme Court scholar at the University of 0:11:43.760 --> 0:11:49.880 Virginia's Miller Center. When the Manhattan US Attorney Damien Williams 0:11:49.960 --> 0:11:54.719 announced new insider trading charges against a former US Congressman, 0:11:55.000 --> 0:11:59.359 a former Goldman Sachs banker, and a one time FBI trainee, 0:11:59.720 --> 0:12:03.840 he issued a warning. When insider trading occurs, investors who 0:12:03.920 --> 0:12:06.800 played by the rules are left to conclude that the 0:12:06.840 --> 0:12:10.440 deck is stacked against them. The cases that we unsealed 0:12:10.520 --> 0:12:14.199 today demonstrate our commitment to fighting that perception, and it 0:12:14.240 --> 0:12:17.679 should send a strong message to anyone who was even 0:12:17.720 --> 0:12:23.160 thinking about committing insider trading. Cut it out because we're watching, 0:12:24.160 --> 0:12:27.599 and perhaps cut it out because many of these insider 0:12:27.679 --> 0:12:32.760 trading cases show that sometimes crime doesn't really pay. Joining 0:12:32.760 --> 0:12:36.280 me is Bloomberg Legal reporter Bob van Voris. Bob tell 0:12:36.360 --> 0:12:40.079 us about Briget Goyle, who was one of the people indicted. 0:12:40.880 --> 0:12:46.160 Brigett Coyle was an investment banker at Goldman Sachs and 0:12:46.200 --> 0:12:50.359 then moved to Apollo Global, where he was a principal. 0:12:50.880 --> 0:12:56.120 He was charged recently with insider trading. It's alleged that 0:12:56.320 --> 0:13:00.640 he uh and a friend made two thoul and dollars 0:13:00.880 --> 0:13:04.800 in a scheme where they traded on insider information about 0:13:05.040 --> 0:13:07.880 deals that Goal picked up while he was working in 0:13:07.960 --> 0:13:14.160 Coldman Sachs. He was only recently charged with this. His friend, 0:13:14.280 --> 0:13:18.520 a guy named x Shane ran John, former Barclay's trader, 0:13:19.000 --> 0:13:23.600 was sued by the SEC. Goyle please not guilty and 0:13:23.679 --> 0:13:26.960 Naran John is not charged criminally, but he is sued 0:13:27.000 --> 0:13:29.760 by the SEC. One of the interesting things about this 0:13:29.840 --> 0:13:33.360 case is, at least at this point, prosecutors have only 0:13:33.400 --> 0:13:39.000 alleged that Goyle made thousand dollars from the split of 0:13:39.040 --> 0:13:43.080 the money here, which is dwarfed by the amount that 0:13:43.280 --> 0:13:46.319 obviously that he stands to gain as a principal at 0:13:46.320 --> 0:13:49.440 Apollo and as a thirty seven year old in the 0:13:49.440 --> 0:13:53.320 middle of a very promising career. Otherwise, what kind of 0:13:53.320 --> 0:13:56.560 money are we talking about as a principal at Apollo. Well, 0:13:56.600 --> 0:14:00.800 he was looking at probably a million plus a year 0:14:01.240 --> 0:14:04.520 going forward. This was an estimate from a recruiter that 0:14:04.600 --> 0:14:08.200 I talked to over the years. Obviously, this is going 0:14:08.320 --> 0:14:11.280 to grow. His value is going to you know, if 0:14:11.320 --> 0:14:14.080 his career continues to be successful, He's going to make 0:14:14.120 --> 0:14:16.040 a lot of money. He's going to have a very 0:14:16.120 --> 0:14:20.240 high status. He is on leave from Apollo now. As 0:14:20.280 --> 0:14:23.760 I say, he's pleaded not guilty. He hasn't been convicted 0:14:23.760 --> 0:14:27.720 of anything at this point. But this is obviously, at 0:14:27.720 --> 0:14:29.920 the very best, a huge speed pump in his career. 0:14:29.920 --> 0:14:33.400 And if he's convicted, he faces the possibility of prison, 0:14:33.560 --> 0:14:36.600 the loss of his career, and you know all the 0:14:36.680 --> 0:14:41.360 things that go with that. His squash buddy's facing charges 0:14:41.400 --> 0:14:46.479 by the SEC, but wasn't charged criminally taped a conversation 0:14:46.600 --> 0:14:51.080 with him. So the supposition is that he is cooperating 0:14:51.080 --> 0:14:54.520 with prosecutors. That's right. As I say, there's no criminal 0:14:54.560 --> 0:14:57.680 charges against him at the moment, and he has been 0:14:57.720 --> 0:15:03.280 identified as somebody who is coopera rating with the investigators. 0:15:03.760 --> 0:15:07.960 He made as you said, he made a consensual recording 0:15:08.240 --> 0:15:14.720 for investigators with Goel according to prosecutors, in which Coil 0:15:14.960 --> 0:15:19.800 incriminated himself in the scheme. This often happens. We often 0:15:19.840 --> 0:15:24.960 see this in insider trading cases. According to the SEC, 0:15:25.600 --> 0:15:29.720 Coil and Duran John were friends going back all the 0:15:29.720 --> 0:15:32.760 way to grad school, were very close, lived in the 0:15:32.840 --> 0:15:36.680 same apartment building at one point. But then you find 0:15:37.160 --> 0:15:41.560 often when somebody gets jammed up with the possibility of 0:15:41.600 --> 0:15:45.320 criminal charges in prison, they'll flip on, you know, people 0:15:45.360 --> 0:15:48.200 that they were very close to to save themselves, and 0:15:48.840 --> 0:15:50.960 it may be that that's what's going on in this case. 0:15:51.720 --> 0:15:55.680 So the question is, these people are making huge salaries. 0:15:55.680 --> 0:15:58.640 For the most part, directors and investment banks can make 0:15:59.040 --> 0:16:01.600 more than a million dollars a year. They all seem 0:16:01.640 --> 0:16:04.000 to be making a lot of money, So why do 0:16:04.080 --> 0:16:07.000 they do this? Absolutely, and you look at a lot 0:16:07.000 --> 0:16:09.080 of these cases. There are more of these where you 0:16:09.120 --> 0:16:13.520 see people with just so much at risk, with great careers, 0:16:13.560 --> 0:16:16.640 making a lot of money, putting them at risk for 0:16:17.080 --> 0:16:21.000 kind of you know, low level kind of insider trading, 0:16:21.520 --> 0:16:23.640 and you have to ask yourself, you know, what are 0:16:23.680 --> 0:16:27.800 they thinking? And from talking to people, it seems the 0:16:27.840 --> 0:16:30.520 thing that they're thinking the most is I'm not going 0:16:30.560 --> 0:16:33.440 to get caught. This is free money. And that's basically. 0:16:33.720 --> 0:16:37.960 These are risk takers, uh. In their jobs, They're used 0:16:38.000 --> 0:16:40.760 to taking risk with a lot of money, and so 0:16:41.640 --> 0:16:44.200 they are potentially more comfortable with this kind of risk 0:16:44.280 --> 0:16:48.160 than the normal person might be. They're also confident that 0:16:48.240 --> 0:16:51.320 they can sort of manage that risk by you know, 0:16:51.480 --> 0:16:56.200 sort of taking steps to keep uh, the information and 0:16:56.440 --> 0:16:58.880 you know what they're up to, keeping that secret, keeping 0:16:58.920 --> 0:17:02.640 that outside of a view of their employers and potential 0:17:02.680 --> 0:17:06.639 regulators and prosecutors. The problem with that is these are 0:17:06.680 --> 0:17:10.320 not people who are career criminals, right, So obviously you know, 0:17:10.720 --> 0:17:12.919 this is maybe the first time out for a lot 0:17:12.960 --> 0:17:15.320 of these guys, and they screw up. There's also a 0:17:15.400 --> 0:17:17.959 lot of factors that they can't control, right. They passed 0:17:18.480 --> 0:17:21.359 tips to people who maybe then pass them on to 0:17:21.680 --> 0:17:24.879 third parties who are indiscreet, or who passed them on, 0:17:25.000 --> 0:17:26.720 or who makes the kind of trades that are gonna 0:17:26.880 --> 0:17:29.439 draw attention at scrutiny. So there are a lot of 0:17:29.440 --> 0:17:33.600 different ways that these things unraveled. Sometimes, disappointed spouts, you know, 0:17:33.680 --> 0:17:37.520 an angry ax will turn somebody in. Sometimes a person 0:17:37.560 --> 0:17:40.560 will get charged with a tax thing and they'll want 0:17:40.640 --> 0:17:43.000 to get out from under that, and they'll inform on 0:17:43.080 --> 0:17:45.359 somebody that they had done an insider trade with. So 0:17:45.400 --> 0:17:47.280 there are a lot of ways that these things can 0:17:47.320 --> 0:17:49.520 go wrong, and I think a lot of the time 0:17:49.600 --> 0:17:52.879 people aren't thinking that through. And do we know how 0:17:53.000 --> 0:17:57.000 Goile got caught. It appears that it was based on 0:17:57.359 --> 0:18:01.720 the information that was pro bided by his friend and 0:18:01.840 --> 0:18:07.680 by market surveillance, which the SEC and FINRA are doing 0:18:07.760 --> 0:18:11.360 much more of. They've developed market surveillance tools that kind 0:18:11.359 --> 0:18:17.080 of flag potentially problematic trade following a big transaction in 0:18:17.080 --> 0:18:20.679 the market, and they're identifying people that are sort of 0:18:20.800 --> 0:18:23.160 under you know, what used to be the level where 0:18:23.160 --> 0:18:25.520 they would be able to get caught. You don't have 0:18:25.600 --> 0:18:28.160 to make a huge trade, you don't have to necessarily 0:18:28.200 --> 0:18:32.120 be trading, you know, making really flashy options trades anymore. 0:18:32.640 --> 0:18:35.359 They are getting flagged at a much lower level, and 0:18:35.520 --> 0:18:37.439 maybe that they don't think that their trading is at 0:18:37.480 --> 0:18:39.560 a high enough level to be caught. Is there any 0:18:39.560 --> 0:18:42.960 indication that there's a lot more inside trading going on 0:18:43.080 --> 0:18:47.200 than is being caught and prosecuted. It's really hard to tell. 0:18:47.280 --> 0:18:50.399 We know certainly that there are trades out there that 0:18:50.440 --> 0:18:53.720 there's insider trading going on that doesn't get caught. If 0:18:53.720 --> 0:18:56.439 you're just sharing a tip at the golf course or 0:18:56.920 --> 0:18:59.320 at the club, and the person trades on it and 0:18:59.440 --> 0:19:02.280 doesn't make it hunt of money and doesn't tell anybody, 0:19:02.640 --> 0:19:04.960 it's going to be really hard for authorities to get 0:19:05.000 --> 0:19:07.679 at that. So there's certainly trading that goes on. How 0:19:07.760 --> 0:19:10.239 much there is It's hard to tell, right because the 0:19:10.280 --> 0:19:12.920 ones that we know about are the ones where people 0:19:12.960 --> 0:19:16.160 get caught and people get identified and sued or they 0:19:16.200 --> 0:19:20.959 get prosecuted, so notionally, just talking to people, there is 0:19:21.119 --> 0:19:23.520 an idea that there are trades like that out there, 0:19:23.600 --> 0:19:25.800 but it's really hard to quantify. The one thing that's 0:19:25.880 --> 0:19:29.520 kind of interesting about that is that this is not 0:19:29.720 --> 0:19:33.320 too long after pre Berrara, the former U S attorney 0:19:33.440 --> 0:19:37.400 in Manhattan, had a very big crackdown on insider training 0:19:37.560 --> 0:19:40.320 at hedge funds that involved people like rod Rod Rotten 0:19:40.920 --> 0:19:43.679 s a c capital that was very much in the news, 0:19:43.760 --> 0:19:46.199 and you would think that people would be dissuaded, but 0:19:46.440 --> 0:19:49.040 still we continue to see insider training. The new U 0:19:49.160 --> 0:19:53.359 S attorney for Manhattan is he trying to crack down 0:19:53.400 --> 0:19:56.280 on insider trading. It's not clear yet whether he is 0:19:56.320 --> 0:19:59.600 going to be bringing the same number of cases or 0:19:59.640 --> 0:20:04.199 whether the same investigatory resources have been put into this. 0:20:04.560 --> 0:20:07.600 Damien Williams is the new U S attorney in Manhattan, 0:20:07.720 --> 0:20:11.439 and most of these cases will have been initiated before 0:20:11.520 --> 0:20:14.120 he came on the job, So we'll see going forward 0:20:14.200 --> 0:20:16.960 if insider trading is a big priority for Williams or 0:20:17.000 --> 0:20:19.560 if he's just going to be charging the cases as 0:20:19.600 --> 0:20:21.080 they come up. I just want to go to a 0:20:21.119 --> 0:20:24.640 few older cases of people who have been prosecuted, and 0:20:24.720 --> 0:20:27.159 you know one that sticks out to me is Shaun 0:20:27.280 --> 0:20:30.640 Stewart because he tipped off his father and he ended 0:20:30.720 --> 0:20:33.119 up going to prison for it. That's right. That was 0:20:33.280 --> 0:20:37.120 a case in which Sean Stewart, uh he's the former 0:20:37.520 --> 0:20:41.520 Carella Weinberg Partners banker, and he was convicted of sharing 0:20:41.520 --> 0:20:44.240 a number of tips about healthcare mergers with his father. 0:20:44.480 --> 0:20:47.840 The father then apparently passed them along to a friend 0:20:47.880 --> 0:20:50.760 of his who traded I think upwards of a million 0:20:50.760 --> 0:20:54.720 dollars in the tips and ended up getting caught and 0:20:54.960 --> 0:20:59.080 flipping on both Sean Stewart and his father. Sean Stewart 0:20:59.119 --> 0:21:02.840 went to trial, was convicted, and was sentenced to two 0:21:02.920 --> 0:21:07.159 years in prison. The only profit that the government was 0:21:07.200 --> 0:21:10.439 able to say that he made from this from tipping 0:21:10.480 --> 0:21:14.119 off his father was that when Sean got married, the 0:21:14.240 --> 0:21:18.240 father used ten thousand dollars the money that he got 0:21:18.240 --> 0:21:21.200 in his trades to pay for the photographer at the wedding. 0:21:21.359 --> 0:21:25.560 So you know, obviously the risk benefit there is just 0:21:25.680 --> 0:21:28.600 way out of line and Stewart's career is over. He 0:21:29.400 --> 0:21:31.760 is not making the money that he once made and 0:21:31.960 --> 0:21:35.280 is barred from the industry. Dollars a lot for a 0:21:35.320 --> 0:21:39.520 wedding photographer, I think absolutely so these are like small 0:21:39.560 --> 0:21:43.440 time gains made. But there are some people who make 0:21:43.680 --> 0:21:48.240 huge money on insider trading. Yeah, absolutely, um. There are 0:21:48.320 --> 0:21:53.080 examples of very, very big insider trading cases. The biggest 0:21:53.280 --> 0:21:56.240 individual case that anybody is aware of is a guy 0:21:56.280 --> 0:22:01.320 named Matthew Martoma, former s a C Capital Advisor portfolio manager. 0:22:01.520 --> 0:22:04.880 He was convicted of making two d and seventy six 0:22:04.960 --> 0:22:09.560 million dollars for the firm for SAC Capital trading on 0:22:10.080 --> 0:22:14.679 information about the development of an alzheimer drug. Rod Roger 0:22:14.760 --> 0:22:17.560 Rottenham of Galleon Group, in a very famous case, was 0:22:17.600 --> 0:22:22.000 convicted of a scheme that prosecutors said netted his hedge 0:22:22.000 --> 0:22:25.960 fund seventy two million dollars. And in a somewhat lesser 0:22:25.960 --> 0:22:29.159 known case, a Swiss trader named Mark domain to Be 0:22:29.720 --> 0:22:33.560 admitted that he made at least seventy million dollars from 0:22:33.560 --> 0:22:38.040 an international insider trading rank that traded on information stolen 0:22:38.080 --> 0:22:41.879 by bankers. And this was a multi continent insider trading 0:22:41.960 --> 0:22:46.720 rank and domain to be was able to cooperate and 0:22:47.160 --> 0:22:49.840 avoid the prison sentence. He spent some time in jail 0:22:49.840 --> 0:22:52.640 before his trial, but he's free now. Did you recently 0:22:52.680 --> 0:22:55.400 speak to RAJ rog Rottenham after his he came out 0:22:55.400 --> 0:22:59.040 of prison. I did. I went to Roger. Roger Rottenham 0:22:59.119 --> 0:23:03.320 is running a family office. He is not able to 0:23:03.359 --> 0:23:07.560 invest money for clients as a result of his felony 0:23:07.640 --> 0:23:10.639 convictions and his seven years in prison, but he's now 0:23:10.720 --> 0:23:14.160 investing his own money and he's got a small staff 0:23:14.320 --> 0:23:18.600 of people who are working with him. He's investing in healthcare, 0:23:18.920 --> 0:23:24.040 clean energy, and some other things, real estate investments, and 0:23:24.200 --> 0:23:26.399 you know, this is kind of his second act. But 0:23:26.480 --> 0:23:29.639 he is still trading and he's looking for, you know, 0:23:29.760 --> 0:23:31.720 a way to sort of get back in the in 0:23:31.760 --> 0:23:34.600 the game. He's also he's written a book in which 0:23:34.680 --> 0:23:41.800 he is very critical of pre Berarra and the surprise, surprise, surprise, 0:23:41.880 --> 0:23:44.760 the charges that were made against him. Of course, Roger 0:23:44.840 --> 0:23:48.640 rotten was convicted at trial. His conviction and sentence were 0:23:48.720 --> 0:23:52.320 upheld repeatedly by judges. So he did his time. Does 0:23:52.359 --> 0:23:55.760 he still claim that he's not guilty. Absolutely, He claims 0:23:55.800 --> 0:23:58.879 that it was a result of over zealous prosecution, that 0:23:59.000 --> 0:24:01.879 pressure was put the people who testified against him, and 0:24:01.960 --> 0:24:04.359