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Speaker 1: Now it's time for our daily Bloomberg Law Brief, exploring

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Speaker 1: legal issues in the news. The Bloomberg Law Brief brought

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Speaker 1: to you by American Arbitration Association. Business disputes are inevitable

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Speaker 1: resolved faster with the American Arbitration Association, the global leader

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Speaker 1: in alternative dispute resolution for over ninety years. More at

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Speaker 1: a d r dot org. Today, Bloomberg Law host June

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Speaker 1: Grasso and Michael Beast discussed the conviction of former Jeffreys

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Speaker 1: Bond trader Jesse Litvak, who was found guilty of just

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Speaker 1: one of ten counts of fraud. On Friday. They speak

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Speaker 1: with Robert Hackett, professor at Cornell University Law School. Bob,

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Speaker 1: is this a surprising verdict only one out of ten counts?

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Speaker 1: I think it's all that surprising. I think what would

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Speaker 1: have been truly surprising would have been if he had

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Speaker 1: been found guilty none of the counts. Um. I think

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Speaker 1: that the thought was probably along the lines that what

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Speaker 1: one conviction or one count is enough. The rest, in

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Speaker 1: theory could be considered guilding the lily. They all sort

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Speaker 1: of went to the same type of behavior, that is,

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Speaker 1: not telling the truth and being fraud on what the

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Speaker 1: price he paid for bonds was when he was selling

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Speaker 1: them to other people. So what distinction could the jury

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Speaker 1: have drawn here between the count that they convicted him

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Speaker 1: of and the nine counts that they acquitted him of.

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Speaker 1: It's not altogether clear, but my guess would be that

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Speaker 1: the jury was probably focusing, especially on the so called

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Speaker 1: materiality of the misrepresentations. UH and materiality is a somewhat

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Speaker 1: complex and sort of vaguely contoured concept that's used in

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Speaker 1: cases like this. It embraces, on the one hand, um,

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Speaker 1: the sort of rationality of a particular customers allowing the

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Speaker 1: information that he or she has given to influence his

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Speaker 1: or her decision. That's an important part of it. And

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Speaker 1: what that means in turn is that there's at least

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Speaker 1: some relevance played in cases like this in the form

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Speaker 1: of the degree of sophistication of the putative victims or

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Speaker 1: the plaintiffs. Right. So another way to put that a

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Speaker 1: little bit more concretely would be to say, if I

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Speaker 1: lied to, on the one hand, a very naive and

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Speaker 1: unsophisticated investor, and then lied, on the other hand to

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Speaker 1: a very sophisticated and highly skeptical investor. My lie to

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Speaker 1: the first investor would be likely to be found a

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Speaker 1: bit more material than with that to the second investor.

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Speaker 1: That's Robert Hockett, professor at Cornell University Law School, speaking

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Speaker 1: with Bloomberg Law host June Grasso and Michael Best. You

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Speaker 1: can listen to Bloomberg Law wheat days at one pm

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Speaker 1: Blow Street Time here on Bloomberg Radio as this morning's

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Speaker 1: Bloomberg Labrary. If you can find more illegal news at

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Speaker 1: Bloomberg Law dot com and Bloomberg BNA dot com. Attorneys

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Speaker 1: will find exceptional legal research and business development tools there

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Speaker 1: as well. Visit Bloomberg Law dot com and Bloomberg BNA

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Speaker 1: dot com for more information.