WEBVTT - NFTs and Why They're So Hot 0:00:03.200 --> 0:00:07.960 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:09.000 --> 0:00:12.039 The frenzy over n f T s or non fungible 0:00:12.080 --> 0:00:14.600 tokens is a little hard to wrap your head around. 0:00:14.920 --> 0:00:19.320 From digital art to sports memorabilia to tweets, everyone seems 0:00:19.320 --> 0:00:21.920 to be getting into the craze, and the sales prices 0:00:21.960 --> 0:00:25.680 are staggering, from nearly six hundred thousand dollars for the 0:00:25.800 --> 0:00:28.440 n f T of Nion Cat, a cat with a 0:00:28.480 --> 0:00:31.920 pop tart body that leaves a trail of rainbows, to 0:00:32.000 --> 0:00:34.320 two point nine million dollars for an n f T 0:00:34.479 --> 0:00:38.320 of Twitter founder Jack Dorsey's first tweet, to a record 0:00:38.479 --> 0:00:41.080 sixty nine million dollars for the n f T of 0:00:41.120 --> 0:00:44.479 a digital art collage by the artist People sold at 0:00:44.520 --> 0:00:48.360 Christie's auction house in March. Even the artist, whose real 0:00:48.440 --> 0:00:52.240 name is Mike Winkleman, seemed overwhelmed by the final price 0:00:52.479 --> 0:00:54.720 as he and his family watched the auction from his 0:00:54.800 --> 0:00:58.200 living room. We're watching that closing of the auction, which 0:00:58.200 --> 0:01:01.440 closes in an hour and eight minutes. It's already at 0:01:01.480 --> 0:01:15.480 like an absolutely ridiculous amount to say congratulations, Yet I 0:01:15.520 --> 0:01:18.640 think it probably means digital art is here. To stay. 0:01:18.959 --> 0:01:23.000 I'm going to Disney World. So what is an n 0:01:23.040 --> 0:01:26.240 f T and why are they so hot? Joining me 0:01:26.319 --> 0:01:29.240 is Robert him a partner at Tartar, Crinsky and Drogan 0:01:29.480 --> 0:01:32.160 who recently wrote an article on n f T s 0:01:32.200 --> 0:01:36.280 and securities law and turned it into an n f T. So, 0:01:36.360 --> 0:01:38.720 Bob tell us what an n f T is. An 0:01:38.800 --> 0:01:41.920 n f T is a non fungible token, and it's 0:01:41.959 --> 0:01:44.920 a new development that's been occurring in the markets. And 0:01:45.360 --> 0:01:49.560 unlike say a cryptocurrency like bitcoin, which is fungible in 0:01:49.600 --> 0:01:52.520 the way dollar bills are in the sense that you 0:01:52.520 --> 0:01:55.160 don't care what sort of dollar bill you get. They're 0:01:55.160 --> 0:01:57.480 all pretty much the same and they do the same thing. 0:01:57.800 --> 0:02:00.680 And n f T is a unique token, so people 0:02:00.720 --> 0:02:03.800 do care about the specific token that they're getting because 0:02:03.840 --> 0:02:07.320 each one is on the blockchain and each one individually 0:02:07.520 --> 0:02:10.600 carries a certain amount of right with it, whether it's 0:02:10.600 --> 0:02:13.440 to digital art or to music or two other things. 0:02:13.480 --> 0:02:15.920 And it's really a way that's starting to revolutionize a 0:02:15.919 --> 0:02:18.880 lot of the creative industries. N f T seemed to 0:02:18.919 --> 0:02:23.480 be really popular for artistic endeavors. N f t s 0:02:23.480 --> 0:02:27.440 have been the most popular with respect to artistic endeavors. 0:02:27.560 --> 0:02:30.520 In March, there was an auction at Christie's where an 0:02:30.600 --> 0:02:34.000 artist named People had sold a digital art collection for 0:02:34.040 --> 0:02:37.440 sixty nine million dollars and that's really raised a lot 0:02:37.520 --> 0:02:40.240 of interest. And the n f T market for art 0:02:40.360 --> 0:02:43.919 had been growing before that, but with that blockbuster sale 0:02:43.960 --> 0:02:47.280 it really came into the mainstream. There's other companies, especially 0:02:47.320 --> 0:02:50.320 the NBA, they've been at the forefront in terms of 0:02:50.360 --> 0:02:54.120 creating n f T s for essentially collectibles and almost 0:02:54.240 --> 0:02:58.079 like the digital version of sports collectible cards. And as 0:02:58.080 --> 0:03:00.440 we look to the future, there's a lot of exciting 0:03:00.520 --> 0:03:03.640 possibilities in the in the physical world, like an ownership 0:03:03.639 --> 0:03:06.760 of real property that can be documented on the blockchain. 0:03:07.200 --> 0:03:09.119 There's a lot of new opportunities that are out there. 0:03:09.120 --> 0:03:11.920 But currently it seems like the creative industries are really 0:03:12.120 --> 0:03:14.720 um in the throws of the new n FT craze 0:03:14.720 --> 0:03:17.280 and benefiting a lot from it. So just to get 0:03:17.320 --> 0:03:20.600 really down to basics, if you buy an n f T, 0:03:21.200 --> 0:03:23.840 what do you get a digital file? Do you get 0:03:23.840 --> 0:03:25.919 a thumb drive? What do you get in your hand 0:03:26.040 --> 0:03:28.919 or on your computer? Well, that's a great question, June, 0:03:28.919 --> 0:03:32.120 because h n f T has its own set of 0:03:32.200 --> 0:03:34.680 rights with it, and really right now, it's a buyer 0:03:34.720 --> 0:03:37.640 beware market, so buyers really have to dig deep and 0:03:37.720 --> 0:03:40.320 understand what they're getting. But at the heart of it, 0:03:40.360 --> 0:03:43.640 a person gets essentially a piece of code, and they're 0:03:43.640 --> 0:03:46.640 mostly being done on the Ethereum blockchain, but there's some 0:03:46.680 --> 0:03:49.480 other blockchains that are doing it as well. But you 0:03:49.520 --> 0:03:52.880 don't get any sort of physical device like a USB drive. 0:03:53.080 --> 0:03:56.520 You have to have a digital wallet which accepts Ethereum 0:03:56.720 --> 0:04:00.520 or whatever cryptocurrency you you get, and it appears essentially 0:04:00.520 --> 0:04:02.760 in your wallet, on your browser, on your cell phone, 0:04:03.080 --> 0:04:05.480 and it's an n f T that's unique. It's on 0:04:05.520 --> 0:04:09.000 the blockchain, and it's a way of authenticating the person 0:04:09.200 --> 0:04:11.920 that purchase a n f T is really the true 0:04:11.920 --> 0:04:15.400 owner of that piece of digital artwork or work that 0:04:15.560 --> 0:04:19.240 was created. The n f T that was sold at 0:04:19.320 --> 0:04:23.039 Christie's for the digital art. So you own the n 0:04:23.080 --> 0:04:26.400 f T. Do you own the digital art? Can you 0:04:26.560 --> 0:04:30.320 say if someone tries to show that digital art on 0:04:30.360 --> 0:04:33.359 a computer somewhere, can you say that's mine? You can't 0:04:33.480 --> 0:04:36.159 use that. It really comes down to the rights that 0:04:36.240 --> 0:04:39.960 the creator the artist gives to the token purchaser um 0:04:40.040 --> 0:04:43.400 and and each token can carry different rights. Um, A 0:04:43.400 --> 0:04:45.919 lot of the digital art tokens that are being created 0:04:46.040 --> 0:04:49.000 come with licenses for the person to be able to 0:04:49.120 --> 0:04:52.560 essentially use it for personal use. Other n f t 0:04:52.760 --> 0:04:56.400 s come with rights to commercialize the digital artwork and 0:04:56.520 --> 0:04:59.560 to to generate royalties. And that's really one of the 0:04:59.640 --> 0:05:01.560 nice thing about n f f p s is that they 0:05:01.600 --> 0:05:05.119 really allow for a lot of customization. Uh, some artists 0:05:05.160 --> 0:05:09.000 are even including residual clauses in their tokens, so that 0:05:09.080 --> 0:05:12.359 if they sell the first one, say for a thousand dollars, 0:05:12.400 --> 0:05:15.599 and in that person resells it for ten thousand, the 0:05:15.720 --> 0:05:19.520 artists might get ten percent as a residual royalty from 0:05:19.520 --> 0:05:23.240 the subsequent sales of the token, and they the rights 0:05:23.360 --> 0:05:26.440 can really be tailored to however the artist wants to 0:05:26.480 --> 0:05:30.120 give to the to the purchaser. So is it governed 0:05:30.240 --> 0:05:34.159 by the securities laws? Whether the securities laws apply is 0:05:34.200 --> 0:05:37.720 going to be a developing question. I recently wrote an 0:05:37.800 --> 0:05:40.560 article that ties into whether n f t s are 0:05:40.680 --> 0:05:44.120 covered by securities laws, and I actually turned that article 0:05:44.160 --> 0:05:46.120 into an n f T and I sold it on 0:05:46.240 --> 0:05:49.840 a digital platform. So somebody out there purchased my n 0:05:49.920 --> 0:05:52.360 f T of the first legal articles as far as 0:05:52.400 --> 0:05:55.120 I know, but a lot of the securities law questions 0:05:55.120 --> 0:05:58.760 are going to be tied into how the token is marketed. 0:05:59.200 --> 0:06:02.200 If it's marketed it as an investment as a way 0:06:02.240 --> 0:06:05.320 for people to make money, as something where they're going 0:06:05.360 --> 0:06:07.800 to be relying on the efforts of other people in 0:06:07.920 --> 0:06:10.880 order to earn a profit, then it's very likely that 0:06:10.920 --> 0:06:14.360 an n f T could come under the regulations of securities. 0:06:14.400 --> 0:06:15.919 But if it's being marketed it is more of a 0:06:15.920 --> 0:06:19.520 digital collectible as a way to authenticate the ownership, as 0:06:19.520 --> 0:06:22.520 a way to authenticate that it's a legitimate, authorized piece 0:06:22.520 --> 0:06:25.120 of digital art, then in that situation, it's a lot 0:06:25.200 --> 0:06:27.960 less likely to become a security So it's really going 0:06:28.000 --> 0:06:31.320 to be a new developing areas we apply these principles 0:06:31.320 --> 0:06:33.200 that have been around for over a hundred years with 0:06:33.240 --> 0:06:36.880 the securities laws to these new emerging technologies in the 0:06:36.960 --> 0:06:42.160 digital space. So let's say that three people get together 0:06:42.560 --> 0:06:46.600 to create an n f T for profit based on art. 0:06:47.160 --> 0:06:49.760 Is that an investment contract that might be subject to 0:06:49.800 --> 0:06:53.200 securities laws? It certainly can be if the people create 0:06:53.240 --> 0:06:56.120 an n f T that's focused on digital art, But 0:06:56.240 --> 0:06:58.080 when they go out to sell that n f T 0:06:58.480 --> 0:07:00.520 and they promote it in such a way the person 0:07:00.720 --> 0:07:03.760 can get rich or they could make a significant profit 0:07:03.839 --> 0:07:06.320 by buying this n f T, And it's really a 0:07:06.400 --> 0:07:09.800 decision that's being driven by an investment desire and a 0:07:09.840 --> 0:07:13.760 profit making desire. Under an old Supreme Court test called 0:07:13.760 --> 0:07:16.800 the Howie test, that contract that n f T could 0:07:16.800 --> 0:07:20.800 be considered an investment contract and therefore security. These days, 0:07:20.840 --> 0:07:22.920 most people are trying to stay away from that. So 0:07:23.200 --> 0:07:25.680 we are seeing a lot of marketing being done by 0:07:25.840 --> 0:07:29.840 artists that are really emphasizing the art and the collectibility 0:07:29.840 --> 0:07:32.880 of the art and the significance of the art, versus 0:07:32.920 --> 0:07:37.040 a way of trying to entice people to invest based 0:07:37.120 --> 0:07:40.120 on a desire to turn a quick profit. Now a 0:07:40.160 --> 0:07:42.120 lot of people are purchasing these n f T s 0:07:42.160 --> 0:07:44.920 with the desire to perhaps make money, but that in 0:07:44.960 --> 0:07:47.240 it itself will not be enough to make it a security. 0:07:47.280 --> 0:07:49.600 It's really going to depend on the whole picture about 0:07:49.600 --> 0:07:53.040 how the tokens are being marketed to people. Do you 0:07:53.080 --> 0:07:54.880 know of any n f T s that have been 0:07:54.920 --> 0:07:58.160 registered as a security I'm not aware of any n 0:07:58.200 --> 0:08:00.040 f T s that have yet to be registered it 0:08:00.120 --> 0:08:02.960 as a security. UM I do know that recently there 0:08:03.040 --> 0:08:05.720 is an investment fund that is in the process of 0:08:05.760 --> 0:08:08.400 being started that it looks like it's going to be 0:08:08.480 --> 0:08:12.520 listed on the London UH Stock Exchange UM. So definitely 0:08:12.560 --> 0:08:15.720 there's some more established players that are coming into the 0:08:15.840 --> 0:08:18.440 n f T market to UM to invest in it, 0:08:18.840 --> 0:08:20.720 but as of yet, I don't believe in any n 0:08:20.760 --> 0:08:24.360 f t s have been registered as securities. And the 0:08:24.440 --> 0:08:26.720 nice thing about n f T s, as we kind 0:08:26.720 --> 0:08:29.840 of compare it to the boom and initial coin offerings 0:08:29.920 --> 0:08:33.840 UH several years ago, is that while initial coin offerings 0:08:33.880 --> 0:08:36.720 had a lot of the traditional indications that they would 0:08:36.720 --> 0:08:40.760 be securities. In other words, people were using UM initial 0:08:40.800 --> 0:08:43.960 coin offerings to raise money for new businesses and they 0:08:43.960 --> 0:08:47.040 were going to be deploying the capital to develop concept. 0:08:47.600 --> 0:08:51.200 Those things were almost, you know, very similar to typical 0:08:51.559 --> 0:08:54.599 startups issuing stock. Here with n f T s, I 0:08:54.679 --> 0:08:58.240 think there's much more of a real world application in 0:08:58.360 --> 0:09:01.800 terms of people UM, you know, purchasing these items, not 0:09:01.920 --> 0:09:05.600 so much to invest in the business because these these 0:09:05.640 --> 0:09:09.920 digital artworks are already created, So people aren't funding new ideas, 0:09:09.960 --> 0:09:14.000 they're they're purchasing digital art They're purchasing certificates of authenticity. 0:09:14.559 --> 0:09:17.080 So I think the whole impetus in a lot of 0:09:17.080 --> 0:09:18.920 ways for n f t s has a much more 0:09:19.400 --> 0:09:24.400 real world focus and much much not more natural affinity 0:09:24.480 --> 0:09:27.440 for collectibles and for art than they would for for 0:09:27.480 --> 0:09:31.960 securities laws and investment purposes. Let's say it was determined 0:09:32.000 --> 0:09:34.640 that one of these n f t s was an 0:09:34.640 --> 0:09:38.760 investment contract. What kinds of procedures do you have to 0:09:38.800 --> 0:09:42.079 go through if if it's considered a security. Well, if 0:09:42.080 --> 0:09:45.040 it's a security, there's a couple of problems that are 0:09:45.080 --> 0:09:47.400 going to come up. You know, one of the creator 0:09:47.440 --> 0:09:50.360 sells an n f T and it's subsequently determined to 0:09:50.400 --> 0:09:53.120 be a security, that person is going to be subject 0:09:53.160 --> 0:09:56.559 to sanctions in terms of having to potentially disgorge any 0:09:56.679 --> 0:09:59.800 money that they received, having to pay civil penalties to 0:09:59.840 --> 0:10:04.360 the sec having an injunction entered against the person um 0:10:04.440 --> 0:10:08.319 and that's going to be quite quite problematic. But if 0:10:08.320 --> 0:10:11.199 a person was to um create an n f T 0:10:11.440 --> 0:10:13.599 that that was designed to be a security and to 0:10:13.679 --> 0:10:17.120 come under the securities laws, then the traditional ways of 0:10:17.160 --> 0:10:20.400 marketing and security would come into effect. If the person 0:10:20.480 --> 0:10:22.560 wants to sell it to the general public, they'll have 0:10:22.600 --> 0:10:25.319 to register that n f T with the Securities and 0:10:25.400 --> 0:10:28.800 Exchange Commission on a registration statement with the perspectives that 0:10:29.360 --> 0:10:32.920 outlines the business purpose of the n FT outlines the 0:10:33.040 --> 0:10:35.800 risk factors. But probably if people are going to create 0:10:35.920 --> 0:10:38.360 n f t s that their first um their first 0:10:38.400 --> 0:10:41.440 approaches are more likely to be private placement, which are 0:10:41.440 --> 0:10:44.880 also regulated by the SEC under something called Regulation D. 0:10:45.520 --> 0:10:48.479 And these are investment opportunities that are open to accredited 0:10:48.520 --> 0:10:52.840 investors and they generally can't be marketed to the general 0:10:52.880 --> 0:10:56.240 public UM with certain exceptions. So it's a it's a 0:10:56.440 --> 0:10:59.240 it's a much more established market and in in a 0:10:59.280 --> 0:11:02.960 regulatory that people will become familiar with. So if you 0:11:03.120 --> 0:11:06.439 create an n f T and decide to sell it, 0:11:07.160 --> 0:11:10.280 what do you have to think about legally? Well, right 0:11:10.280 --> 0:11:12.560 now it's it's an open question. But if you're just 0:11:12.600 --> 0:11:17.720 a regular person that's participating in some of these online marketplaces, 0:11:17.760 --> 0:11:19.840 there's there's quite a few that have gotten to be 0:11:20.280 --> 0:11:25.000 very popular. There's different marketplaces called Mintable and Wearable and 0:11:25.120 --> 0:11:28.240 top Shop as the NBA shop. UM as a as 0:11:28.240 --> 0:11:30.319 a person just buying an n f T for their 0:11:30.360 --> 0:11:33.160 own use or maybe looking to resell it down the road. 0:11:33.600 --> 0:11:35.360 You really don't have much in the way to to 0:11:35.400 --> 0:11:39.240 worry about with regards to securities regulations. It really only 0:11:39.280 --> 0:11:43.280 becomes an issue if, um if you're go out and 0:11:43.280 --> 0:11:47.400 you're promoting it and you're issuing perhaps press releases or 0:11:47.800 --> 0:11:50.559 another area that's been a great concern to the SEC 0:11:50.679 --> 0:11:55.480 or social media influencers. There's been a number of celebrities 0:11:55.480 --> 0:11:58.720 that have been charged by the SEC for accepting undisclosed 0:11:58.760 --> 0:12:03.000 payments for cryptocur in seas and touting those cryptocurrencies on 0:12:03.040 --> 0:12:07.200 their social media accounts. Floyd Mayweather, the famous boxer, was 0:12:07.240 --> 0:12:09.760 one of the one of the people that settled with 0:12:09.800 --> 0:12:12.880 the SEC about that. Um. So, but as long as 0:12:12.880 --> 0:12:16.280 you're not accepting payments for that aren't being disclosed, and 0:12:16.400 --> 0:12:19.960 you're just kind of personally purchasing and selling n f 0:12:20.000 --> 0:12:22.040 T s, there's really not a lot of risk to 0:12:22.240 --> 0:12:25.839 that process. So, but can you walk us through how 0:12:25.840 --> 0:12:28.760 you made an n f T of your article? Yeah, 0:12:28.840 --> 0:12:30.720 what I did is I used one of the popular 0:12:30.760 --> 0:12:33.079 sites called Mintable, So I took the b d F 0:12:33.200 --> 0:12:35.560 of the article that I wrote, I used the Mintable 0:12:35.640 --> 0:12:38.120 site to create an n f T from it, and 0:12:38.160 --> 0:12:40.880 then I listed it for sale on the mintable site, 0:12:41.280 --> 0:12:44.200 and to my surprise, about five hours after I created it, 0:12:44.360 --> 0:12:47.360 there was a crypto investor an entrepreneur that had purchased 0:12:47.520 --> 0:12:49.720 the n f T. But it was really a pretty 0:12:49.760 --> 0:12:53.000 straightforward process. I had a basic understanding of ethereum and 0:12:53.120 --> 0:12:55.800 had a wallet already. Once you have the basic covered, 0:12:56.200 --> 0:12:58.960 it's not a very difficult process. And a lot of 0:12:58.960 --> 0:13:02.400 people that are every day artists that aren't necessarily tech 0:13:02.520 --> 0:13:05.360 people are finding it manageable to create their own n 0:13:05.440 --> 0:13:07.320 f t s. And so how much did you get? 0:13:07.720 --> 0:13:10.000 I did it more just as a learning experience, So 0:13:10.240 --> 0:13:13.040 I saw this for the grand price of five dollars um. 0:13:13.320 --> 0:13:16.080 But you know, in the future, as I think about it, 0:13:16.120 --> 0:13:18.480 maybe I'll create another n f T or something else 0:13:18.480 --> 0:13:20.400 in the legal space. But it was really a great 0:13:20.520 --> 0:13:23.760 learning experience and some a securities lawyer that's worked a 0:13:23.760 --> 0:13:25.839 lot in the crypto space. Part of the reason I 0:13:25.920 --> 0:13:28.480 did it was to better understand my clients who who 0:13:28.520 --> 0:13:30.840 are also starting to operate with n f t s 0:13:30.880 --> 0:13:34.400 and creating them. Thanks Bob, that's Robert him of tartar 0:13:34.480 --> 0:13:39.120 Kinsky and Drogan. The Netflix documentary series on the college 0:13:39.120 --> 0:13:44.079 admission scandal entitled Operation Varsity Blues the College Admission Scandal, 0:13:44.440 --> 0:13:48.280 became available for streaming on Mark seventeen. The movie, starring 0:13:48.320 --> 0:13:52.040 actor Matthew Modine as Rick Singer, the admitted mastermind of 0:13:52.040 --> 0:13:56.439 the college admission scheme, presents re enactments of conversations drawn 0:13:56.480 --> 0:13:59.880 from FBI tapes in addition to the usual interviews of 0:14:00.040 --> 0:14:05.080 documentary fair We helped the wealthiest families in the US 0:14:05.200 --> 0:14:08.040 get their kids into school. So I've done seven sixty 0:14:08.080 --> 0:14:11.320 one what I would call side doors. The front door 0:14:11.440 --> 0:14:16.000 means getting in on your own. So I've created this 0:14:16.080 --> 0:14:23.440 kind of side door. And because my families, I want 0:14:23.440 --> 0:14:27.560 to guarantee A private equity and real estate executive accused 0:14:27.560 --> 0:14:30.600 of paying bribes to get his children into Harvard, Stanford 0:14:30.600 --> 0:14:34.880 and USC as recruited athletes is suing Netflix for defamation. 0:14:35.280 --> 0:14:38.040 John B. Wilson has pleaded not guilty and is awaiting 0:14:38.080 --> 0:14:43.040 trial on charges including money laundering, conspiracy, federal programs, bribery, 0:14:43.040 --> 0:14:46.200 and filing a false tax return. Joining me is Bloomberg 0:14:46.240 --> 0:14:49.840 Legal reporter Patricia Hurtado tell us a little bit about 0:14:49.960 --> 0:14:55.160 the series and the complaint. Well, their Netflix did a 0:14:55.320 --> 0:14:59.920 series based on the investigation in the case called Operate 0:15:00.040 --> 0:15:04.240 and Varsity Blurs, and it's based on the events of 0:15:04.280 --> 0:15:08.440 the case and allegations including you know that Lori Laughlin 0:15:08.520 --> 0:15:13.600 and her husband Um allegations that they got their daughters 0:15:13.640 --> 0:15:16.480 to pose on a rowing machine and pretend that they 0:15:16.480 --> 0:15:21.600 were real athletes so they could get into like usd UM. 0:15:21.680 --> 0:15:27.120 This dad is a private equity UM executive and he 0:15:27.200 --> 0:15:31.000 lives in Lynnfield and he is finding the charges the 0:15:31.080 --> 0:15:33.680 next six series. It's a documentary that is a re 0:15:33.880 --> 0:15:36.680 enactment of the investigation. So what they've done is they've 0:15:36.760 --> 0:15:40.360 hired actors and actresses to read the transcripts of the 0:15:40.440 --> 0:15:43.320 wire taps and the conversations of the government quotes and 0:15:43.320 --> 0:15:47.280 the criminal complaints and indictments against the parents, and then 0:15:47.320 --> 0:15:51.920 they have actors and actresses re enact SBI agents listening 0:15:51.960 --> 0:15:55.640 to the call. So it's a documentary, but not in 0:15:55.680 --> 0:15:58.760 the typical ken Burns type of documentary that you're thinking 0:15:58.800 --> 0:16:02.680 of with real people. UM. This is of a recent 0:16:02.800 --> 0:16:06.560 case that's still pending. So there are at least a 0:16:06.920 --> 0:16:09.800 half dozen parents that are still fighting the charges of 0:16:09.840 --> 0:16:12.560 the more than thirty parents that were charged in the case. 0:16:13.360 --> 0:16:15.840 And so the parents that are still fighting. The charges 0:16:15.880 --> 0:16:20.520 include this dab John Wilson from Lynnfield, Massachusetts. He has 0:16:20.600 --> 0:16:24.360 three kids, and he was accused of conspiring to get 0:16:24.640 --> 0:16:27.560 with the with singer to pay bribes to get his 0:16:27.720 --> 0:16:33.360 children into USC, Stanford and Harvard. So Wilson says he's innocent, 0:16:33.640 --> 0:16:36.400 but the film groups him in with the parents who 0:16:36.400 --> 0:16:41.280 pleaded guilty, and he claims they contacted the producers before 0:16:41.280 --> 0:16:45.840 the series aired. What happened is, according to uh the 0:16:46.080 --> 0:16:50.440 lawyer for John Wilson, is that they met with the 0:16:50.480 --> 0:16:54.960 Netflix producers before the series was completed. The documentary was completed, 0:16:55.400 --> 0:17:00.040 and they lawyer gave them evidence. The producer's evidence of 0:17:00.200 --> 0:17:04.119 what he said is will clear him of wrongdoing, evidence 0:17:04.160 --> 0:17:08.560 of his actual innocence, including that the dad, John Wilson, 0:17:08.880 --> 0:17:13.760 took a a lie detector test and passed with flying colors, 0:17:13.800 --> 0:17:17.880 according to lawyer Howard Cooper. He also says that they 0:17:17.880 --> 0:17:20.119 have evidence of the kids F A T and a 0:17:20.240 --> 0:17:23.879 C T score test scores um the grade of the 0:17:24.400 --> 0:17:28.720 three kids that they narrited applying to these schools, and 0:17:28.880 --> 0:17:33.080 one of the key examples is that there is um 0:17:33.440 --> 0:17:36.080 the allegation that his son may have had this picture 0:17:36.240 --> 0:17:39.440 doctor to a fake athlete as a water polo athlete. 0:17:39.560 --> 0:17:44.000 When John Wilson's lawyer says, they actually have proof that 0:17:44.560 --> 0:17:49.240 his son, Johnny was a star high school water polo 0:17:49.359 --> 0:17:53.400 player who is now at USC on the USC water 0:17:53.440 --> 0:17:56.919 polo team and he's never been taken off so that 0:17:57.000 --> 0:18:00.280 he narrated it. There also is um. The father's says 0:18:00.320 --> 0:18:03.520 there's proof that all three of his kids tested in 0:18:03.560 --> 0:18:07.720 the ninetieth percentile as their college exams, including one daughter 0:18:07.800 --> 0:18:11.080 who got a perfect score on her a c T test. 0:18:11.840 --> 0:18:15.560 So they presented all this evidence to the Netflix producers, 0:18:15.600 --> 0:18:20.760 according to Howard Cooper, who's John Wilson's lawyer, and Netflix 0:18:20.800 --> 0:18:23.080 went ahead and put him in the same hopper with 0:18:23.160 --> 0:18:26.280 the parents who pled guilty, and they talked about doctored 0:18:26.320 --> 0:18:30.040 photos and photoshop pictures of kids that are fake athletes. 0:18:30.840 --> 0:18:35.639 So now John Wilson says he's technically gonna stand trial 0:18:35.800 --> 0:18:38.920 in September. You have all these people sitting at home 0:18:39.480 --> 0:18:42.919 watching Netflix because they're the global pandemic. They can't go 0:18:43.000 --> 0:18:46.200 to the movie, so they're live streaming their hearts out 0:18:46.240 --> 0:18:50.000 at home on their sofas. And John Wilson says, the 0:18:50.119 --> 0:18:53.159 whole potential jury pool who could hear his case in 0:18:53.200 --> 0:18:57.440 September has now been painted. That evidence sounds pretty strong. 0:18:57.680 --> 0:19:01.639 But before trial, they would have tried to approach the 0:19:01.920 --> 0:19:06.320 prosecution right and present that evidence. But the prosecution is 0:19:06.320 --> 0:19:10.040 still going forward. So what does that tell us? Well, 0:19:10.080 --> 0:19:12.120 it tells us I mean there is a fine line 0:19:12.160 --> 0:19:14.520 if you think about it. You know, everyone has presumed 0:19:14.560 --> 0:19:18.399 innocent until convicted, right until either plead you plead guilty 0:19:18.480 --> 0:19:23.840 or convicted a trial. So it sounds to me almost 0:19:23.920 --> 0:19:29.879 like the producers and Netflix didn't make that distinction in 0:19:29.920 --> 0:19:35.119 their depictions of the parents and um. John Wilson's lawyer 0:19:35.200 --> 0:19:38.800 told me that he the family friends of his client 0:19:38.880 --> 0:19:41.439 have called him up and said, hey, I didn't know 0:19:41.520 --> 0:19:43.600 you did this. I thought you did what you know 0:19:43.920 --> 0:19:48.080 x or y, and and it completely blurs the line 0:19:48.160 --> 0:19:51.560 between those who have admitted their guilt versus those who didn't. 0:19:52.200 --> 0:19:55.000 So I mean, technically, you know, we as we journalists, 0:19:55.000 --> 0:19:57.679 we would write and say the person has denied wrongdeering 0:19:57.720 --> 0:20:00.480 and it's fighting the charges, and here's what they're defense 0:20:00.560 --> 0:20:05.199 lawyers say. But that's kind of omitted from these re enactments, 0:20:05.400 --> 0:20:08.639 according to the lawyer complaining about the documentary. So they 0:20:09.040 --> 0:20:14.000 sued them for defamation, and the producers saying they're basically 0:20:14.040 --> 0:20:16.800 put in the same bucket with all the parents who 0:20:16.840 --> 0:20:19.560 pled guilty, you know, the likes of A. Lori Laughlin 0:20:19.720 --> 0:20:23.040 and her husband or in Felicity Huffman. They've admitted their guilt. 0:20:23.080 --> 0:20:26.679 They said they did these crimes. They plead guilty, and 0:20:27.119 --> 0:20:29.879 that's the truth as far as the courts are concerned. 0:20:30.080 --> 0:20:33.080 But somebody who has pled not guilty has a right 0:20:33.160 --> 0:20:35.640 to say, wait a minute. The court of public opinion 0:20:35.800 --> 0:20:39.800 may say something, but you know, technically you're fighting the charges, 0:20:40.240 --> 0:20:43.320 and if you want to be accurate, you know, you 0:20:43.440 --> 0:20:45.680 might need to remember that even in a in a 0:20:45.800 --> 0:20:50.280 documentary depiction. So Wilson says he's not guilty, but did 0:20:50.320 --> 0:20:54.399 he have any contact at all with Singer, who masterminded 0:20:54.440 --> 0:20:57.720 the admission scandal. He argues that he did have contact 0:20:57.800 --> 0:21:00.600 with Singer, but nothing was improper. He said he was 0:21:00.680 --> 0:21:04.840 introduced to Singer after a major financial advisory firm referred 0:21:04.920 --> 0:21:07.399 him to him, so that he was called a highly 0:21:07.440 --> 0:21:11.560 reputable college admissions counselor so, and that they were legitimate 0:21:11.600 --> 0:21:15.320 donations that were made, not bribes paid with the way 0:21:15.320 --> 0:21:20.320 the government argues this. Have the producers or Netflix responded 0:21:20.359 --> 0:21:23.439 to why they put Wilson in with the people who 0:21:23.520 --> 0:21:27.760 pleaded guilty. Uh, now, they would not give us any comments, 0:21:27.920 --> 0:21:30.760 so I guess we'll remain to see what their responses 0:21:30.840 --> 0:21:34.320 are in court. Um, they filed a lawsuit, and I 0:21:34.400 --> 0:21:39.080 understand from my colleague in Boston the lawyer for John Wilson, 0:21:39.560 --> 0:21:43.320 his name is Howard Cooper, and he's been successful as 0:21:43.440 --> 0:21:46.439 one of the top defamation lawyers in the Boston area. 0:21:46.960 --> 0:21:50.320 So this child will be pending in state court in Boston. 0:21:51.280 --> 0:21:53.240 You know, we've seen all the movie stars, the famous 0:21:53.280 --> 0:21:57.240 people going to prison, coming out of prison. It's surprising 0:21:57.280 --> 0:21:59.880 to me that the case is still going on. Oh, 0:22:00.240 --> 0:22:04.280 you know, with the government charged a whole slew of people. 0:22:04.359 --> 0:22:06.320 I mean, I think the universe of people. I think 0:22:06.320 --> 0:22:09.200 we're up into the fifties now. Um, many of them 0:22:09.200 --> 0:22:12.639 have pled guilty. And there's certainly, you know, a whole 0:22:12.720 --> 0:22:19.800 cast of characters and parents, coaches, school consultants, testing consultants 0:22:19.960 --> 0:22:23.600 as well as um, you know, the parents that have 0:22:23.720 --> 0:22:27.520 been implicated in this case, and many of them have 0:22:27.600 --> 0:22:30.159 pled guilty. I think the scorecard is I think we 0:22:30.200 --> 0:22:34.240 have over thirty parents that have pled guilty. Um, and 0:22:34.440 --> 0:22:38.960 certainly some coaches. There was a Stanford sailing coach, a 0:22:39.080 --> 0:22:42.919 Georgetown tennis coach. They all they played guilty. So the 0:22:43.000 --> 0:22:47.119 universe of people that the documentary filmmakers could have used, 0:22:47.240 --> 0:22:50.439 you know, there's plenty, it's plenty of material. I guess 0:22:50.440 --> 0:22:54.959 this dad is saying, I'm not in that universe of people, 0:22:55.200 --> 0:22:58.120 so you should have made more of a distinction. And 0:22:58.560 --> 0:23:01.720 you know, especially he's got a well known libel and 0:23:01.720 --> 0:23:06.600 defamation lawyer who's met in advance of the documentary being 0:23:06.840 --> 0:23:09.560 broadcast and completed, and he said that, you know, he 0:23:09.760 --> 0:23:14.120 put a dossier of information and they went ahead and 0:23:14.400 --> 0:23:17.800 he says, defamed him. And what about the parents who 0:23:17.840 --> 0:23:20.720