Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 2: In the first court here and in nearly a year,
Speaker 2: a lawyer for Donald Trump clashed with the judge in
Speaker 2: the federal election interference prosecution of the former president. Prosecutors
Speaker 2: and defense lawyers are bitterly at odds over the next
Speaker 2: steps in the case. After the Supreme Court narrowed the
Speaker 2: scope of the prosecution by ruling that former presidents are
Speaker 2: entitled to broad immunity from criminal charges. There were several
Speaker 2: tens exchanges between Judge Tanya Chuckkin and Trump lawyer John Lauro,
Speaker 2: particularly when he referenced the November election. We're talking about
Speaker 2: the presidency of the United States, Laura said. At one point,
Speaker 2: Chuckkins shot back, I'm not talking about the presidency of
Speaker 2: the United States. I'm talking about a fore count indictment.
Speaker 2: Joining me is Zoe Tillman, Bloomberg senior reporter who is
Speaker 2: at the hearing and is joining us from the courthouse. ZOEA.
Speaker 2: I understand it was pretty contentious between the judge and
Speaker 2: Trump's attorney.
Speaker 3: Yeah, that's right. You know, I think that the defense
Speaker 3: really wanted to come out swinging, saying that they think
Speaker 3: that the Special Council is rushing and trying to move
Speaker 3: things too fast and prejudice them by going first, essentially
Speaker 3: to try and make their case for why the indictment
Speaker 3: should move forward after the Supreme Court's immunity ruling, and
Speaker 3: the Judge repeatedly said, you know, I don't want to
Speaker 3: hear rhetoric. I want to hear legal arguments. It doesn't
Speaker 3: seem like there's rushing and you know, references to the election.
Speaker 3: The judge made clear that she was deeply uninterested considering
Speaker 3: the electoral calendar and deciding what to do next. So
Speaker 3: those are all tension points.
Speaker 2: Today, there was a dispute about which side will file
Speaker 2: briefs first. The Special Council wants to submit a brief
Speaker 2: first on why it's superseding indictment complies with the sup
Speaker 2: Frame Court's immunity decision, and it would include a lot
Speaker 2: of evidence like grand jury transcripts and FBI notes on
Speaker 2: witness interviews.
Speaker 3: They wanted to essentially lay out the facts and the
Speaker 3: evidence that they're going to present as part of this
Speaker 3: next stage of the case and then argue why those
Speaker 3: all survive the immunity decision. Either because they are not
Speaker 3: official acts by Trump as president, or even if they are,
Speaker 3: why they sort of overcome the presumption of immunity that
Speaker 3: the Supreme Court laid out for sort of non core
Speaker 3: official acts by a president. And so they argued that
Speaker 3: the most efficient way to do this, rather than wait
Speaker 3: for Trump to file emotion to dismiss the incitement, which
Speaker 3: would be the normal course of action, would be for
Speaker 3: them to preemptively sort of lay out their case, make
Speaker 3: the argument for why it is legally valid under the
Speaker 3: immunity framework, and then have Trump respond to that.
Speaker 2: So did the judge decide whether to proceed in that
Speaker 2: way with them filing the brief first.
Speaker 3: She did not. She said that she hoped to set
Speaker 3: a schedule later in the day or at least soon,
Speaker 3: And you know, agreed with Trump's lawyers that this would
Speaker 3: sort of be going out of order. That's the normal
Speaker 3: course of business, and the normal rules would call for
Speaker 3: the defense to go first and sort of raise the
Speaker 3: points they want to raise about what is sufficient in
Speaker 3: the new indictments. But as the judgment also noted, you know,
Speaker 3: just because normal course of action doesn't mean that they
Speaker 3: can't change up the order and the government argued that
Speaker 3: this would avoid multiple potential appeals by Trump's lawyers, versus
Speaker 3: putting everything sort of in one package and then whoever
Speaker 3: loses can take all of that up to the DC circuit.
Speaker 2: So it seemed as if the judge and the prosecution
Speaker 2: acknowledge that no matter what happened, there was going to
Speaker 2: be an appeal, and that the prosecution was just trying
Speaker 2: to keep it down to one appeal.
Speaker 3: That's right. Basically, Trump lawyers talked about wanting to handle
Speaker 3: this in a couple stages where they first want to
Speaker 3: argue that by keeping allegations about Donald Trump's efforts to
Speaker 3: pressure then Vice President Mike Pence in the indictment, that
Speaker 3: that conduct specifically is still official acts not entitled to immunity.
Speaker 3: And if that's the case, they argue, that means that
Speaker 3: this new grand jury that returned the superseding indictment was
Speaker 3: tainted and the entire indictment should be tossed up. And
Speaker 3: then if the judge disagrees and says that the Pence
Speaker 3: information can stay in, then they would go to a
Speaker 3: next round of briefing as to why other parts of
Speaker 3: the indictment bill fail. Out of the immunity test. But yees,
Speaker 3: I think everyone agreed that whatever happens, whatever jun Tutkin does,
Speaker 3: will be appealed, and she at one point even said
Speaker 3: that she thought it was a quote exercise in futility
Speaker 3: to try to set some kind of trial schedule because
Speaker 3: it just doesn't matter, and everything we put on hold
Speaker 3: again when it goes up to the circuit or the
Speaker 3: Supreme courtance.
Speaker 2: Trump's lawyers took the position that the whole case has
Speaker 2: to fall if Trump's interactions with Mike Pence are immune
Speaker 2: from prosecution, and did the judge disagree with the defense
Speaker 2: interpretation of the Supreme Court decision?
Speaker 3: Not in so many words, but she suggested that she
Speaker 3: didn't think that it was clear cut that that was
Speaker 3: definitely off limits and that it was official acts and
Speaker 3: immune from prosecution. I think a few times she indicated
Speaker 3: that what exactly the Supreme Court had to say about
Speaker 3: the indictment was not as sort of clear cut as
Speaker 3: Trump's lawyers suggested it was, and that it had to be,
Speaker 3: you know, a fact based determination as opposed to just
Speaker 3: a decision on the wall about whether that that part
Speaker 3: of the indictment is wholesale off limits to prosecutors or not.
Speaker 2: Anyone who read that decision knows it's not clear cut.
Speaker 2: There's not much that's clear cut in that decision. Now. Also,
Speaker 2: the Trump lawyers did not try before for this to
Speaker 2: make an argument that the Special Counsel's appointment is unconstitutional,
Speaker 2: but now they want to make that argument here they do.
Speaker 3: There was definitely some tense back and forth about that
Speaker 3: as well, you know, with the judge and the prosecutor
Speaker 3: from Jack's miss Office, Tom Wyndham, basically saying that they
Speaker 3: actually missed the deadline to raise that argument before the
Speaker 3: case was paused during the immunity fights. But regardless, you know,
Speaker 3: Judge Chuckkin is going to give them some time to
Speaker 3: raise that argument, but she already signaled that it's an
Speaker 3: uphill battle for them. They noted, you know, that Judge
Speaker 3: Eileen Cannon and Florida had just missed the other case
Speaker 3: that miss Office brought regarding Trump's handling class by documents
Speaker 3: on the appointment's clause issue, and that Justice Thomas, in
Speaker 3: a concurring opinion in the immunity case, had mentioned that
Speaker 3: issue as one of interests him at least. And Trump
Speaker 3: lawyer said, well, these two things you know, really make
Speaker 3: this an important issue for us to approach now. And
Speaker 3: Judge Chuckkins said, I don't know about that. She said
Speaker 3: that she thought Judge Cannon's opinion on this issue was
Speaker 3: not quote, particularly persuasive. So I think we got an
Speaker 3: indication that she's not inclined to join Judge Cannon and Florida.
Speaker 3: And there's also finding PC Circuit president on this issue.
Speaker 3: So regardless of what she thinks about Judge Cannon's opinion,
Speaker 3: her hands are tied here. But they'll be able to
Speaker 3: raise it, but you unlikely to succeed, at least not
Speaker 3: in the way that they did in Florida.
Speaker 2: Is there still an attempt to move the case forward
Speaker 2: quickly even though it's obvious that it can't be tried
Speaker 2: before the election. Or are the prosecutors sort of a
Speaker 2: little bit more laid back about it?
Speaker 3: You know, it's interesting when they put in writing what
Speaker 3: they wanted to do next ahead of this hearing, the
Speaker 3: government noticeably did not commit to a certain date when
Speaker 3: they wanted things to get started. They just said that
Speaker 3: we're prepared to move as quickly as the judge wants
Speaker 3: us to. In court today, Judge Chuckkins said, you got
Speaker 3: to give me more than that. You know, how quickly
Speaker 3: are you prepared to really move and they said three weeks,
Speaker 3: two to three weeks, probably three weeks, so you know,
Speaker 3: that's that is quite fast. And I think it's really
Speaker 3: now a question of is the judge inclined to go
Speaker 3: with that schedule and sort of move things forward and
Speaker 3: have you know, new pleadings and aspects of this fight
Speaker 3: play out publicly before the election, or is she inclined
Speaker 3: to go with the sort of slower pace post election
Speaker 3: schedule that Trump's lawyers have proposed.
Speaker 2: And at one point, did Trump's lawyer actually say that
Speaker 2: they didn't want sensitive information coming out before the election?
Speaker 3: You know what Trump lay, John Laurro said a few
Speaker 3: times because he referred to this quick, sensitive time, and
Speaker 3: he brought that up a few times, and the judge
Speaker 3: finally said, let's talk about what you're talking about here.
Speaker 3: You're talking about the election. She goes, you know, I
Speaker 3: understand that there's an election coming, but and this is
Speaker 3: the point that she's made before the election does not
Speaker 3: dictate my schedule. It's not relevant to the schedule that
Speaker 3: I'm setting here. And at one point she even said
Speaker 3: to trumpflar. She accused them of trying to drag this
Speaker 3: out to avoid influencing the election, and you know, their
Speaker 3: argument was that they didn't want the government to sort
Speaker 3: of go first, right, So the implication was that they
Speaker 3: were trying to delay this anything coming out that might
Speaker 3: be hurtful to Trump's campaign before the election. And John
Speaker 3: Laurier pushed back on that and said, no, no, that's
Speaker 3: not what we're trying to do here. We just think
Speaker 3: that the Supreme Court has required us to give these
Speaker 3: very weighty issues related to the presidency careful considerations. That
Speaker 3: it was clear, you know, she was trying to unwrap
Speaker 3: what she said was really the subtext of what they
Speaker 3: were saying. When Dunlaer kept talking about this being a
Speaker 3: sensitive time.
Speaker 2: No surprise that they're trying to delay the case, as
Speaker 2: they've delayed every case so far. Was there any talk
Speaker 2: of whold an evidentiary hearing? Perhaps before the election.
Speaker 3: There was, but it didn't sound like that something that
Speaker 3: would happen anytime here from lawyer John Morrow talked about
Speaker 3: at some point their clients should have the ability to
Speaker 3: question the Special Counsel's witnesses and test their evidence as
Speaker 3: this immunity fight plays out, but neither side was really
Speaker 3: pushing for that kind of airing of evidence or testimony
Speaker 3: in the near future.
Speaker 2: So what's the next thing that will happen.
Speaker 3: So what we're waiting for now is for the judge
Speaker 3: to enter a scheduling order and it will indicate sort
Speaker 3: of who wins and loses this round, at least when
Speaker 3: it comes to timing, and will see, you know, if
Speaker 3: she sets any deadlines before November fifth, that's really the
Speaker 3: most important operative date right now, and what order she
Speaker 3: puts things in, if she has breathed to do sort
Speaker 3: of all at once, or if she staggers them. But
Speaker 3: we're not really expecting any other surprises on just when
Speaker 3: those first deadlines are Judge Chuckkin.
Speaker 2: Judge Chuckkins seems like a no nonsense judge. Judge Chuckkins
Speaker 2: seems like a no nonsense judge.
Speaker 3: She does, and you know, I think as a reporter
Speaker 3: watching her, you could sense the frustration that she had
Speaker 3: with some of the ways that Trump's lawyers were framing
Speaker 3: their arguments. You At one point she told John Laura
Speaker 3: to sort of cool it with the rhetoric, and he
Speaker 3: pushed back and said this is not rhetoric. These are
Speaker 3: legal arguments.
Speaker 2: Thanks so much, Zoe for taking us inside the courtroom.
Speaker 2: That's Bloomberg Senior reporter Zoe Tillman coming up next on
Speaker 2: the Bloomberg Law Show. Another twist and turn in the
Speaker 2: odd non Sayyed case, the legal saga that gained national
Speaker 2: attention through the podcast serial. I'm June Grosso and you're
Speaker 2: listening to Bloomberg. Yet another twist and turn in the
Speaker 2: odd non Sayyed case, a llegal saga that gained national
Speaker 2: attention through the hit podcast serial. After more than two
Speaker 2: decades in prison, Sayed was freed in September of twenty
Speaker 2: twenty two when a Baltimore judge overturned his conviction for
Speaker 2: the murder of his ex girlfriend at the request of
Speaker 2: Baltimore prosecutors, who said they found flaws in the evidence
Speaker 2: used against him at trial. But now Siyed is once
Speaker 2: again facing prison. His conviction has been reinstated after the
Speaker 2: Maryland Supreme Court, in a four to three decision, ruled
Speaker 2: that the earlier proceedings had violated the rights of the
Speaker 2: victim's family because they weren't given enough notice of the
Speaker 2: time of the hearing. Joining me as trial attorney David
Speaker 2: Ring of Tailor and Ring in Los Angeles. If prosecutors
Speaker 2: decide that they've wrongfully convicted someone, shouldn't it be their
Speaker 2: decision to drop the charges? I mean, why should a
Speaker 2: court make that decision?
Speaker 1: The court has a say in that because the or
Speaker 1: it's the ultimate gatekeeper. You know, we have to have
Speaker 1: checks and balances. Look, most of the time, if the
Speaker 1: prosecution comes in and says, hey, you know, this guy's
Speaker 1: wrongfully convicted, the vast majority of the time, the court's
Speaker 1: going to agree with them and drop the charges. But
Speaker 1: this court still has to sign off on it. There
Speaker 1: still has to be some sort of hearing, and it's
Speaker 1: just a way to have checks and balances to make
Speaker 1: sure that everyone's playing fairly in the system.
Speaker 2: So in this case, the issue is that the victim's brother,
Speaker 2: who spoke at the hearing by video conference from his
Speaker 2: house in California, he argued that you should have gotten
Speaker 2: more notice of the proceeding. He was given notice on
Speaker 2: Friday about a Monday hearing.
Speaker 1: That was the issue. But here's the bigger picture on
Speaker 1: that issue. Because the way it's kind of framed sometimes
Speaker 1: in the media, it's like well, what's the big deal?
Speaker 1: He beared by zoom. But that hearing was a monumental hearing.
Speaker 1: That was a hearing where the prosecution basically came into
Speaker 1: court and said, hey, Court, we want to drop these charges,
Speaker 1: we want to have this conviction overturned. And what Maryland's
Speaker 1: highest court has said in respond to that was, if
Speaker 1: you're going to have a hearing like that, the victim
Speaker 1: or the victim's representative absolutely has a right not only
Speaker 1: to be there in person, but to be heard. And
Speaker 1: that's a big part of this ruling is that you know,
Speaker 1: the victim's brother, mister Lee, he was in California. He
Speaker 1: was given notice on a Friday to be there Monday.
Speaker 1: He had an attorney who was representing him. They said, hey,
Speaker 1: give us another week. We want to be there in
Speaker 1: person and we want to be heard. And they weren't
Speaker 1: given that opportunity. And the key to this decision is
Speaker 1: if he had been given time to come to Baltimore
Speaker 1: to appear in court with his lawyer, the lawyer has
Speaker 1: a right to argue in basically in the shoes of
Speaker 1: the victim and say why is this conviction being dropped?
Speaker 1: There's plenty of evidence here, this guy did it, there's
Speaker 1: no new evidence to drop it, and they basically have
Speaker 1: a right to challenge the prosecution's decision to drop the case.
Speaker 1: That's where this decision is so important.
Speaker 2: There's no set time for the notice to a victim
Speaker 2: in Maryland law. So how did the Maryland Supreme Court
Speaker 2: decide what notice is enough? And how did they.
Speaker 1: Come to that it's a reasonableness standard. And so basically,
Speaker 1: in a very close decision four to three, the Supreme
Speaker 1: Court said it's not reasonable to tell the victims representative
Speaker 1: on a Friday that you're having a hearing on a
Speaker 1: Monday and say, oh, gee, but you can appear by zoom.
Speaker 1: That's not reasonable. They have a right to be there
Speaker 1: in person. So what's reasonable? Okay, set it a week out,
Speaker 1: two weeks out, but setting it on the next business
Speaker 1: day unreasonable. It denied the victim's representative of his right
Speaker 1: to be in court and to be heard. That's the key.
Speaker 2: While the appeal was pending, and eight days before the deadline,
Speaker 2: the Baltimore States Attorney had dropped all charges against Sayed
Speaker 2: in the dessense, Justice Michelle Houghten argued the issue was
Speaker 2: moot because the underlying charges no longer exist. Quote, this
Speaker 2: case exists as a procedural zombie. It has been reanimated
Speaker 2: despite its expiration. The doctrine of mootoness was designed to
Speaker 2: prevent such judicial necromancy. Very good language.
Speaker 1: Then I totally disagree with her. I think in this
Speaker 1: day and age, the victim's rights are incredibly important, and
Speaker 1: too many times the victim or their family the rights
Speaker 1: get trampled in the criminal process and the prosecutor. Remember,
Speaker 1: the prosecutor represents the people. They don't necessarily represent the
Speaker 1: victim's family or the victim. They represent the people. And
Speaker 1: so I think what Maryland Supreme Court has said here is, hey,
Speaker 1: you know what, we're going to respect the victim's rights here.
Speaker 1: And this victim had its rights trampled upon by this prosecutor,
Speaker 1: who who quickly went in court had completely reversed course
Speaker 1: on how they felt about Saii's conviction and suddenly was
Speaker 1: willing to let this guy go free. And basically the
Speaker 1: Supreme Court of Maryland said, hey, you know what, that's
Speaker 1: not fair. This victim her representative has an absolute right
Speaker 1: to be there and to challenge that decision by the prosecutor. Look,
Speaker 1: I think if you want to kind of read between
Speaker 1: the lines here, you know, sometimes we have to read
Speaker 1: between the lines of how these decisions get played out
Speaker 1: in the highest course. I think that the Supreme Court
Speaker 1: is basically saying, we don't think Saia should be free.
Speaker 1: We think there should be a new trial. Why did
Speaker 1: the prosecution, you know, fight this for twenty years and
Speaker 1: then suddenly in twenty twenty two reverse course and say, yeah,
Speaker 1: you know what, he should be free. Why did that
Speaker 1: suddenly happen? I think they want to see a new trial.
Speaker 1: They don't want to see him go free.
Speaker 2: Well, the prosecution did a complete new investigation and new
Speaker 2: DNA has staying from the shoes of the victim, excluded
Speaker 2: Sayed as a suspect. The prosecution had new evidence, and
Speaker 2: you know, the rights of the victim are one thing,
Speaker 2: but you know that our justice system is far from
Speaker 2: perfect and there are a lot of wrongful convictions. So
Speaker 2: how do you weigh you know, the twists and turns
Speaker 2: in this case. It's been going on for twenty years,
Speaker 2: you know, the rights of the victim versus the rights
Speaker 2: of a defendant that the prosecution says now was wrongfully convicted.
Speaker 1: Well, so Here's here's where this dynamic kicks in is
Speaker 1: because again it's all about the opportunity to be heard
Speaker 1: and to have a fair playing field. And so when
Speaker 1: the prosecution came in in twenty twenty two and said, oh,
Speaker 1: we have new evidence which we think exonerates, said, well,
Speaker 1: they did that behind closed doors. They didn't do that
Speaker 1: in open court. You know it's come out what the
Speaker 1: evidence was. But I'll tell you, if you'd have fresh
Speaker 1: eyes on that so called new evidence, I'm not sure
Speaker 1: how new or exculpatory it really is. I mean, there's
Speaker 1: no DNA on her shoes. To me, that's like a
Speaker 1: so wet you know, she was strangled to death. Why
Speaker 1: would there be his DNA on her shoes? How does
Speaker 1: that exonerate him? I get it. There's two sides to
Speaker 1: this case. There are people who absolutely believe he got
Speaker 1: railroaded and didn't do it, and there's people who believe
Speaker 1: that he absolutely did it. And so the Supreme Court
Speaker 1: is saying, you know what, not so fast here, not
Speaker 1: so fast prosecution. There's got to be a hearing on this.
Speaker 1: We want to shine a spotlight on what your new
Speaker 1: evidence is and what your reasons are for suddenly reversing
Speaker 1: a conviction and letting a guy go free, and we're
Speaker 1: not going to let you do it behind closed doors.
Speaker 2: Now there's another twist in the case because the Baltimore
Speaker 2: State's Attorney, Marilyn Moseby, who had moved to throw out
Speaker 2: the conviction and drop the charges, she's no longer the
Speaker 2: Baltimore State Attorney. And now there's a new Baltimore's state attorney,
Speaker 2: and his office said it needed time to review the
Speaker 2: Supreme Courts lent the opinion, and to determine whether his
Speaker 2: office has a conflict of interest in the case. What
Speaker 2: kind of conflict of interest are they referring to.
Speaker 1: So you have a new prosecutor, Ivan Bates, And in
Speaker 1: his campaign to become the prosecutor, he seemed to be
Speaker 1: a proponent that the conviction should be dropped. And so look,
Speaker 1: he's in a political pickle right now because it's a
Speaker 1: tough decision. Do you drop this conviction for murder or
Speaker 1: do you go ahead and reverse course yet again and
Speaker 1: have a new trial. So he might take the easy
Speaker 1: way out. He might punt it to another independent agency
Speaker 1: and let them make the decision. You know, he may
Speaker 1: look back at it and say, hey, this is too
Speaker 1: much water under the bridge here for this Baltimore prosecution office,
Speaker 1: and we've lost credibility on this case. Let's let an independent,
Speaker 1: another state agency come in and make that decision for us.
Speaker 2: This case, as you know, has gotten so much attention
Speaker 2: because of the serial podcast, and there have been so
Speaker 2: many legal twists and turns in the case. And after
Speaker 2: his release there were crowds outside the courthouse and it
Speaker 2: was covered nationally. He's now out pending the determination here.
Speaker 2: I mean, what would it be like politically for a
Speaker 2: state's attorney to say, oh, we're going to refile charges
Speaker 2: and you have to go back to prison.
Speaker 1: They'd absolutely be an outpright And I don't think anyone's
Speaker 1: expecting that decision to be made for that exact reason,
Speaker 1: because that's a tough decision to say, you know what,
Speaker 1: we're gonna have another trial, We're going to go through
Speaker 1: this all over again, and that's going to be more
Speaker 1: years and more appeals and all that, and you know,
Speaker 1: we're going to take this guy who's now out there
Speaker 1: and free and we're going to put him back in prison.
Speaker 1: That's the toughest decision to make. And you're right, The
Speaker 1: easy decision is we're just going to let things stand
Speaker 1: where they are. We're gon we're gonna pursue this any further.
Speaker 1: It's been going on too long already. It's been going
Speaker 1: on for twenty five years. You know, he was convicted
Speaker 1: in the year two thousand. This case has been going
Speaker 1: on for a long time. But it's not over yet
Speaker 1: because we still have to have this new hearing. The
Speaker 1: Supreme Court said there's going to be another hearing on
Speaker 1: whether this conviction is going to be dropped. The victim's
Speaker 1: brother has a right to be heard at that hearing,
Speaker 1: and then there could be appeals that flow from that.
Speaker 1: This case is going to go on for a few
Speaker 1: more years.
Speaker 2: Although if the victim's family gets its chance to appear
Speaker 2: and the charges are dropped again, that should and the appeals,
Speaker 2: I mean, tell us what could happen at this hearing.
Speaker 1: Well, look, here's the possible outcomes of this next hearing. Right,
Speaker 1: So it's going to be a redo, and we don't
Speaker 1: know which way the prosecution is going to come in.
Speaker 1: But let's say the prosecution stays where they were in
Speaker 1: twenty twenty two and says, hey, we think the conviction
Speaker 1: should be overturned, right, and then the mister Lee, the
Speaker 1: brother gets to come in and argue that shouldn't be
Speaker 1: the case. But let's say the judge agrees with that,
Speaker 1: all right, that probably brings an end to the case.
Speaker 1: You know, the conviction's overturned, he's free. Finally it's over. However,
Speaker 1: you know, there's going to be a new judge on
Speaker 1: this hearing. It's not going to be the judge from
Speaker 1: twenty twenty two. There's new prosecutors on this case, not
Speaker 1: the same ones from twenty twenty two, and there's a
Speaker 1: decent chance that with the new players involved and a
Speaker 1: new judge, this judge could say, you know what, I'm
Speaker 1: not going to overturn the conviction. We're going to have
Speaker 1: a new trial, and we're going to go back to
Speaker 1: square one, back where we were in two thousand, and
Speaker 1: have a new trial on this whole thing. I agree,
Speaker 1: it's a remote possibility, but it's a possibility.
Speaker 2: And it's really hard to try a murder case twenty
Speaker 2: five years later, very.
Speaker 1: Very difficult, especially given such the high profile, incredibly high
Speaker 1: profile nature of this case and all the interviews and
Speaker 1: the podcasts and all of the statements made by some
Speaker 1: of the key witnesses over the years, and wildly inconsistent
Speaker 1: statements and less space at the forensic evidence twenty five
Speaker 1: years ago is far different than what it is today.
Speaker 1: DNA and cell phone towers and all that. It would
Speaker 1: make it really, really tough to retry this case twenty
Speaker 1: five years later, A.
Speaker 2: Long way to go before that decision is made. Thanks
Speaker 2: so much, David. That's David Ring of Tailor and Ring
Speaker 2: coming up next. Short Sellers are spooked by the Andrew
Speaker 2: Left indictment. I'm Juan Grosso and you're listening to Bloomberg.
Speaker 2: Short Sellers are beefing up disclaimers in their research reports
Speaker 2: in the clearest sign yet that the criminal charges against
Speaker 2: Andrew Left are reverberating throughout the industry. Short seller Andrew
Speaker 2: Left securities fraud trial has been scheduled to start on
Speaker 2: September thirtieth of twenty twenty five in federal court in
Speaker 2: Los Angeles. Prosecutors say Left exploited his ability to move
Speaker 2: stocks in almost two dozen companies. It's sort of a
Speaker 2: novel case, and Bloomberg legal reporter Eric Larson has looked
Speaker 2: into it. Were the criminal charges against Andrew Left sort
Speaker 2: of years in the making, you know, explain what happened there.
Speaker 4: So this investigation by the SEC and the DOJ had
Speaker 4: been going on for a few years. And Andrew Lasty's
Speaker 4: on a prominent short cellar. He's well known in the industry,
Speaker 4: and it was known that, you know, he was one
Speaker 4: of the people who was perhaps concerned. But the investigations
Speaker 4: sort of dragged on for a little while without anything happening,
Speaker 4: so I think some people thought it was over, and
Speaker 4: then you know, in July, out of nowhere came this
Speaker 4: SEC civil complaints and then a DOJ criminal charges for
Speaker 4: security spraud. So this was sort of the culmination of
Speaker 4: this investigation into the industry.
Speaker 2: So what exactly is he accused of doing.
Speaker 4: So it's a securities broad case and it's a little unusual.
Speaker 4: Someone called it a landmark case. And because it's alleging
Speaker 4: securities fraud without pointing to specific victims or anything like that.
Speaker 4: So the indictment accuses Andrew Left of misleading investors by
Speaker 4: issuing his research reports alleging, you know, that a company
Speaker 4: was overvalued by the market, in the hopes that his
Speaker 4: reports and his tweets about his reports and would have
Speaker 4: influence and would move the market just enough for him
Speaker 4: to make some trades, to close out his short positions
Speaker 4: or his long positions in some cases, and to make
Speaker 4: a quick profit. So the DJ alleges that he was
Speaker 4: misleading lying about his views on these companies in some
Speaker 4: cases by putting out target prices, saying that a company
Speaker 4: was trading for X but should be training at you
Speaker 4: know at why, and instead of holding on to his
Speaker 4: position to see if he was correct that the stock
Speaker 4: would fall that low, he would sell it, sometimes within
Speaker 4: hours or days or even minutes of putting out a
Speaker 4: negative report about the company, long before it reached that
Speaker 4: target price, for example. And so the DJ is saying
Speaker 4: that this was evidence of him trying to manipulate the
Speaker 4: market by misleading investors and trying to nudge stocks up
Speaker 4: or down in such a way that he could make
Speaker 4: a quick buck, making between sixteen and twenty million dollars
Speaker 4: in illicit profits over several years of doing this. So
Speaker 4: it's a very unusual case different they're not saying that
Speaker 4: specific investors and specific companies were defrauded of specific amounts
Speaker 4: of money. They're just saying that he manipulated the stocks
Speaker 4: in about fifteen companies, big companies like Tesla American Airlines, Twitter,
Speaker 4: Facebook back when they were known as the Twitter and
Speaker 4: Facebook by putting out negative reports and then making a
Speaker 4: quick profit when the.
Speaker 2: Stocks moved, and this industry general operates in gray areas.
Speaker 4: The way that short sellers I interviewed for the story
Speaker 4: described it is that they thought that there was a
Speaker 4: certain rule books that they were playing under that they
Speaker 4: understood that as long as they put out research reports
Speaker 4: with accurate information and it was clear that they stood
Speaker 4: the benefit from their own trading, that that was sufficient.
Speaker 4: So now I think there's this question about whether or
Speaker 4: not some activities in the short selling industry are okay,
Speaker 4: or whether or not other companies or researchers could be
Speaker 4: in the wrong. You know, a lot of it depends
Speaker 4: on how this case goes, if it goes to trial,
Speaker 4: what a cury decides. So the question that kind of
Speaker 4: boils down to, you know, today, can a short seller
Speaker 4: put out a report that is damning about a company
Speaker 4: in such a way that it nudges the stock down
Speaker 4: and specifically tries to make a profit by trading, you know,
Speaker 4: because short seller is the profit when a stock goes down.
Speaker 4: So if they put out a report that's negative of
Speaker 4: that a company, the stock goes down a bit and
Speaker 4: they trade they can make the money on that. So
Speaker 4: the case put out some clarity around that kind of behavior,
Speaker 4: and I should add that to Andrew left case. So
Speaker 4: it goes a bit further than just saying he did that.
Speaker 4: That invitment is filled with what the DLJA that describes
Speaker 4: with evidence of less specifically misleading the public about his
Speaker 4: trading intentions, So saying I'm going to hold this short
Speaker 4: on this company until it reaches zero, for example, but
Speaker 4: then not actually doing that, and also allegedly lying about
Speaker 4: his coordination with one or two hedge funds that he
Speaker 4: was allegedly secretly working with on the side to carry
Speaker 4: out additional trades on his behalf, coordinating those trades around
Speaker 4: his reports to again make some of this profits. So
Speaker 4: it's not just as straightforward as saying whether the type
Speaker 4: of trading is long or not. A lot of this
Speaker 4: conduct is more specific just to Andrew Left, But that
Speaker 4: doesn't mean that it isn't spooking the industry, and a
Speaker 4: lot of short sellers are concerned that the case could
Speaker 4: have a chilling effect on some of their profitable types
Speaker 4: of trades that they do.
Speaker 2: Eric, his lawyer, Left's lawyer said that his predictions about
Speaker 2: companies were accurate. Does the government disagree with that.
Speaker 4: There are a lot of cases where his predictions about
Speaker 4: companies were accurate, and the government doesn't really specifically allege otherwise.
Speaker 4: And that's another interesting angle to this case here. Obviously,
Speaker 4: the prosecutors are aware of it, and I believe that
Speaker 4: he broke the law anyway in his efforts to allegedly
Speaker 4: manipulate the markets and investors. And it seems that their
Speaker 4: reasoning is that even though he might have been correct
Speaker 4: that a company was heading down for various reasons, that
Speaker 4: his intentions, you know, with putting out his report was
Speaker 4: to try to somehow capture a profit by misleading people
Speaker 4: into helping him move the market down. So it is
Speaker 4: very complicated. I'm not going to pretend to totally understand
Speaker 4: it one hundreds, but it is going to be I
Speaker 4: think that a complicated casey if it goes to a jury,
Speaker 4: and a lot of the short sellers they talked to
Speaker 4: you made that exact point that you made. He was
Speaker 4: right a lot of the time, but you know, some
Speaker 4: of other short sellers prominent short sellers were critical of
Speaker 4: Andrew Left as well. So it's not like there's a
Speaker 4: uniform belief that this case was brought incorrectly. There are
Speaker 4: some short sellers who don't really engage in the type
Speaker 4: of trading that Andrew Left does who thinks that the
Speaker 4: case has some merit.
Speaker 2: Because I can see if the government would go after you,
Speaker 2: even if your predictions were correct. I could see why
Speaker 2: some short sellers would be spooked by this because where's.
Speaker 4: The line exactly? And I think that that's why we
Speaker 4: saw recently two research firms, Hindenberg Research, Carry's del Capital.
Speaker 4: They both recently put out reports, short reports about companies
Speaker 4: that help drive some stock down. As they do, that's
Speaker 4: the normal force of business. And they've always had, like
Speaker 4: all short sellers, including Andrew Left, they have detailed disclaimers,
Speaker 4: you know, telling the public, you know, their opinions, various
Speaker 4: legal assurances that they understand that they're not financial advisors
Speaker 4: for everyone and they could profit if the stock goes down,
Speaker 4: and that sort of thing. But these two outfits, Pinnenberg
Speaker 4: and Carry's Ville recently changed their disclaimers, and Carry's bill
Speaker 4: Capital in particular kind of four page disclaimer on the
Speaker 4: last report specifically ripped apart. This case against Andrew Left
Speaker 4: included a little bit of even like starcasm and humor
Speaker 4: and sort of picking at the allegations and saying, yes,
Speaker 4: let me just be very clear, we might make trade
Speaker 4: after we put out a report to make a profit,
Speaker 4: and you should just assume that's what we're going to do.
Speaker 4: So you can see that there's already been some impacts
Speaker 4: on the industry. But yeah, a lot of this, like
Speaker 4: I said, it's really just going to hinge on where
Speaker 4: this case goes. If the Justice Department has brought a
Speaker 4: good case here and is on point, or if they've
Speaker 4: sort of overstepped and didn't quite understand how the industry worked.
Speaker 4: As Andrew Left's lawyer and some other short sellers told me,
Speaker 4: that's their opinion that the DJ doesn't really understand how
Speaker 4: the industry works, and that's what's brought about this case.
Speaker 2: Well. Also, as you're right, one of less defenses are
Speaker 2: his own disclaimers that he posted. His lawyer said he
Speaker 2: posted a disclaimer that saying that no one should make
Speaker 2: assumptions about his trading. So I don't know that a
Speaker 2: disclaimer is going to do the trick.
Speaker 4: Yeah, I mean, that's clearly going to be a big
Speaker 4: part of the defense. But I think in probably a
Speaker 4: lot of cases, different types of cases, you know, disclaimers
Speaker 4: a different sorts come up as defenses, and it really
Speaker 4: is going to be up to the jury to decide
Speaker 4: whether or not everything is all fine and dandy because
Speaker 4: of that disclaimer. I think that's far from certain.
Speaker 2: And so what happens next in this case, I think.
Speaker 4: We can expect to see Andrew left the dismissal of
Speaker 4: the indictment at some point. No deadlines that I'm aware
Speaker 4: of said on that yet.
Speaker 2: And while I have you, you're always following the Trump cases.
Speaker 2: He tried once again to move the hush money case
Speaker 2: after the verdict and before the sentencing, he tried to
Speaker 2: move it to federal court. What was his reasoning.
Speaker 4: His reasoning was the July landmark US Supreme Court decision
Speaker 4: on presidential immunity finding that former presidents have some immunity
Speaker 4: from criminal charges for conduct related to their official duties
Speaker 4: in office. And that was a landmark decision finding that
Speaker 4: that type of immunity from criminal charges exist for the
Speaker 4: first time. So that of course came out after his
Speaker 4: conviction in the hush money case in May, so, Trump
Speaker 4: argued that the case should be removed to federal court
Speaker 4: because of the sort of federal questions raised around whether
Speaker 4: or not his trial was painted by evidence or testimony
Speaker 4: that wouldn't have been allowed under this new Supreme Court ruling.
Speaker 4: He argued that only a federal judge should decide this.
Speaker 4: Sister judge here in Manhattan rejected that and said that
Speaker 4: it was not in his jurisdiction to handle a New
Speaker 4: York state law case. Notwithstanding the argument that Trump made.
Speaker 4: It was actually trump second time to try to move
Speaker 4: the case to to federal court. You know, he tried
Speaker 4: that before the trial even happened, and that was shot down.
Speaker 4: He appealed that and sort of abandoned that appeal, so
Speaker 4: it never really went to an appeals court properly. But
Speaker 4: that was, of course before the immunity ruling. So he
Speaker 4: went back for a second bite at the apple. It
Speaker 4: didn't work out, and now he is appealing again.
Speaker 2: Explain one of the reasons why Trump wants to move
Speaker 2: this case to federal court.
Speaker 4: So, one potential benefit of moving this case to federal
Speaker 4: court would be that it could get to the Supreme
Speaker 4: Court faster. You could see him trying to overturn his
Speaker 4: guilty verdict and then if the judge denied that, you know,
Speaker 4: appealing to the Second Circuit and then onto the Supreme Court.
Speaker 4: In this sort of faster track route than you might imagine.
Speaker 4: It's had to work its way through the New York
Speaker 4: State Court his challenge to his verdict, which by the way,
Speaker 4: he's already appealed that verdict in state court. That's one benefit,
Speaker 4: and other is that it simply would delay his sentencing,
Speaker 4: which of course is set for September eighteenth. If this
Speaker 4: had been moved to federal court, that really would have
Speaker 4: been unlikely that that sentence thing would have been able
Speaker 4: to go forward. And of course the election is coming up.
Speaker 4: He has been fighting to avoid being sentenced before the
Speaker 4: voters go to the polls. He calls that election interference.
Speaker 2: Also, if it's a federal case and he wins the election,
Speaker 2: he can dismiss.
Speaker 4: It, right, he can ask the Justice Department to dismiss
Speaker 4: a case in federal court. You know, it's all very unprecedented.
Speaker 4: We did see this, however, happened, you might recall, and
Speaker 4: the civil defamation lawsuits filed by Ejene Carroll that was
Speaker 4: started in state court and he actually was able to
Speaker 4: move it as a result of the Westball Acts. Is
Speaker 4: something I know we talked about a lot back then,
Speaker 4: but the idea being that if has claimed it to
Speaker 4: be covered by that federal law had worked in federal court,
Speaker 4: he could have had the justice part and just missed
Speaker 4: the case that didn't end up happening, But that is
Speaker 4: another benefit to having it in fedal report.
Speaker 2: So many cases and so many motions. Thanks so much, Eric.
Speaker 2: That's Bloomberg Legal reporter Eric Larson, and that's it for
Speaker 2: this edition of the Bloomberg Law Podcast. Remember you can
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Speaker 2: dot com, slash podcast, slash Law. I'm June Grosso and
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