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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: On Tuesday, the Supreme Court justices took up the divisive

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Speaker 2: issue of abortion for the first time since overturning the

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Speaker 2: constitutional right to an abortion in twenty twenty two, but

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Speaker 2: even some of the conservative justices who voted to overturn

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Speaker 2: Roe v. Wade appeared wary of the legal attack on

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Speaker 2: mifa pristone, a drug now used in more than half

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Speaker 2: of the nation's abortions. Justices from across the ideological spectrum

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Speaker 2: expressed skepticism that the anti abortion doctors challenging the FDA's

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Speaker 2: loosening of regulations for mifa pristone have standing or the

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Speaker 2: type of direct harm that gives them legal grounds to

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Speaker 2: bring the suit. Here are Justices Katanji, Brown Jackson, and

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Speaker 2: Neil Gorsich.

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Speaker 3: I mean, it makes perfect sense for the individual doctors

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Speaker 3: to seek an exemption, but as I understand that they

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Speaker 3: already had that, and so what they're asking for here

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Speaker 3: is that in order to prevent them from possibly ever

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Speaker 3: having to do these kinds of procedures, everyone else should

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Speaker 3: be prevented from getting access to this medication.

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Speaker 2: So why isn't that plainly overbroad.

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Speaker 4: We've had. One might call it a rash of universal

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Speaker 4: injunctions or vacatures, and this case seems like a prime

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Speaker 4: example of turning what could be a small lawsuit into

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Speaker 4: a nationwide legislative assembly on an FDA rule or any

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Speaker 4: other federal government action.

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Speaker 2: Joining me is an expert in reproductive rights, Mary Ziegler,

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Speaker 2: a professor at UC Davis Law School. Mary, just about

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Speaker 2: everyone who listened to the oral arguments is of the

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Speaker 2: opinion that a majority of the justices will turn away

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Speaker 2: this challenge to mif A pristone. Is that your opinion

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Speaker 2: as well?

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Speaker 1: Yeah, it is. I think that it seemed that most

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Speaker 1: of the justices were convinced that the plaintiffs in the

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Speaker 1: case didn't outstanding.

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Speaker 2: So the main issue, I mean, the real issue before

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Speaker 2: we get to standing, was whether the FDA acted unlawfully

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Speaker 2: when it relaxed the rules and expanded access to MiFi

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Speaker 2: pristone back in twenty sixteen. Where did the justices stand

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Speaker 2: on that issue?

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Speaker 1: The argument, at least that the alliance for hippocratic medicine

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Speaker 1: the plaintiffs wanted to make was twofold right one, that

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Speaker 1: the FDA didn't have the authority either to approve mif

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Speaker 1: pristone back in two thousand, or to lift subsequent restrictions

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Speaker 1: on the drug in twenty sixteen or twenty twenty one,

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Speaker 1: the argument being that the FDA hadn't been careful enough

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Speaker 1: with the science to make all of those decisions, And

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Speaker 1: there was a related argument on the twenty twenty one changes,

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Speaker 1: which are what permitted abortion for reasons of telehealth. Their

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Speaker 1: activists argued that the federal Comstock Act, which is in

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Speaker 1: nineteenth century obscenity statute, prohibited the mailing of abortion related items,

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Speaker 1: So the FDA couldn't have had the authority to approve

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Speaker 1: telehealth because doing sowhat of violated federal law. So those

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Speaker 1: were a lot of the arguments that in herey the

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Speaker 1: court could consider. We don't imagine they'll be in a

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Speaker 1: majority opinion because we think the plaintiffs will likely be

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Speaker 1: held not to have standing, but some of those arguments

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Speaker 1: seem to capture the interests of some of the conservative

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Speaker 1: justices for down the road.

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Speaker 2: Abortion opponents have looked at the Comstocked Act as a

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Speaker 2: possible way to stop medication abortions. Do you think that

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Speaker 2: that is a fight that will happen down the road

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Speaker 2: in night.

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Speaker 1: I mean, so in this case, you know, if these

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Speaker 1: plaintiffs don't have standing, other plaintiffs could we know that,

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Speaker 1: at least on the Comstock Act front, that both Justices

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Speaker 1: Thomas and Alito signaled some interest in the idea that

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Speaker 1: the Comstock Act bans mailing abortion pills and maybe other

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Speaker 1: abortion related items as well. So I think, you know,

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Speaker 1: whatever comes out of this case may not be a

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Speaker 1: final resolution.

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Speaker 2: So, as you said, the justice is from across the

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Speaker 2: eyedelogical spectrum expressed doubt that the doctors and the organizations

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Speaker 2: had standing to try to overturn the FDA changes. What

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Speaker 2: do you think was the heart of that argument.

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Speaker 1: The plaintiff's argument essentially was a speculative argument, right, So

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Speaker 1: they said, there are complications that inevitably ensue when people

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Speaker 1: take mitha pristone, and some percentage of those people with

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Speaker 1: complications will end up in the emergency room. And then

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Speaker 1: they said, it's reasonable to assume that some of those

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Speaker 1: patients might end up in our emergency rooms and it

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Speaker 1: may be the case that we have to treat them,

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Speaker 1: and then that may cause us a conscience based injury.

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Speaker 1: The problem with that, according to many of the justices

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Speaker 1: was one, none of that may happen. This is all

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Speaker 1: just possibilities, and two that it seemed that there was

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Speaker 1: a mismatch. Is Justice Katanji Brown Jackson put it between

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Speaker 1: the remedy the plaintiffs were seeking and the harm they suffered.

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Speaker 1: She and Justice Scorsich asked, you know, if the problem

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Speaker 1: here is that doctors may have to act against their conscience,

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Speaker 1: why can't those doctors just get a conscience based objection.

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Speaker 1: Why do they have to go all the way to

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Speaker 1: taking a drug potentially off the market for all Americans.

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Speaker 1: So there were clearly problems withithstanding from the beginning, and

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Speaker 1: that's why we saw it being such a focal point

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Speaker 1: at the argument.

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Speaker 2: So just as Brett Kavanaugh asked only one question in

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Speaker 2: the ninety minute argument, and he said, just to confirm

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Speaker 2: on the standing issue, under federal law, no doctors can

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Speaker 2: be forced against their consciences to perform or assist in

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Speaker 2: an abortion. Correct. He asked this listener, general, it's unusual

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Speaker 2: to have any justice just ask one question. Do you

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Speaker 2: think he was trying to, you know, not give ammunition

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Speaker 2: to opponents who've been focusing on him.

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Speaker 1: I think Kavanaugh just thought this was an easy case.

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Speaker 1: I mean, I think there was a signal that, you know,

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Speaker 1: these doctors, if they had conscience based harms, they weren't

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Speaker 1: going to be forced to do anything they didn't want

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Speaker 1: to do because they already had protect actions under federal law,

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Speaker 1: and that that made the kinds of injury they were

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Speaker 1: talking about even more speculative. I don't think, you know,

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Speaker 1: a lot of the justices seemed to think this was

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Speaker 1: an easy case, and I think Kavanaugh may have been

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Speaker 1: more unplugged from the argument for that reason.

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Speaker 2: Now, there was also a claim we talked about the

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Speaker 2: claims of the doctors, the for organizational standing, and Justice

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Speaker 2: Elena Kagan said, you need a person who's your person?

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Speaker 2: I thought it was sort of amusing when you know,

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Speaker 2: he said, refer to the district court, and she said,

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Speaker 2: I don't really care. I'm not sure I care all

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Speaker 2: that much about the district court, sort of dismissing Judge

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Speaker 2: kes Merrick. Did the organizational standing claim fall even worse

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Speaker 2: than the claim of the doctors?

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Speaker 1: I think so. I mean, I think even Justice Thomas

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Speaker 1: seemed doubtful about the organizational standing claim, suggesting that it

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Speaker 1: just proved way too much. So the argument that the

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Speaker 1: organization had made was that it was expanding resources and

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Speaker 1: time to fight for Christine that it would have liked

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Speaker 1: to use on other pro life work. And several of

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Speaker 1: the justices, again including Justice Thomas, who you would think

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Speaker 1: would have been one of the most sympathetic to the point,

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Speaker 1: has said, well, if that's true, then put in any

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Speaker 1: social movement group, bring any lawsuit and say simply the

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Speaker 1: fact that the lawsuit was an expensive resources they wouldn't

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Speaker 1: otherwise need to bring, and that gives them standing. So

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Speaker 1: there was arguably even more skepticism of that claim than

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Speaker 1: the ones involving the doctors.

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Speaker 2: The Conservatives sort of tore into the nationwide injunction, and

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Speaker 2: we've heard this so many times about so just as

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Speaker 2: Gorsig question whether a suit by a handful of individuals

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Speaker 2: who've asserted a conscious objection was grounds for a federal

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Speaker 2: court to topple the FDA changes nationwide, and he talked

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Speaker 2: about the spike and universal injunctions. They've done this before.

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Speaker 2: The justices have talked about the harm of universal injunctions,

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Speaker 2: but yet they don't ever do anything about it. Do

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Speaker 2: you think they might do something about it?

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Speaker 1: In this case, it's possible. I mean, clearly Justice Gorsuch

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Speaker 1: would like you know, I think there was sort of

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Speaker 1: a soapbox moment where this is been a pet peeve

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Speaker 1: of his, and he took an opportunity to hold this

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Speaker 1: case up as an example of what's wrong with universal injunctions.

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Speaker 1: I don't know if that's going to be too far

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Speaker 1: afield from the issues at hand. Given that this ruling

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Speaker 1: is likely to center on standing, Justice Corsich may write

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Speaker 1: separately to complain about universal injunctions. I don't know if

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Speaker 1: the majority is going to do anything in this case.

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Speaker 1: I'd be sort of surprised if they did so.

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Speaker 2: Mary. If, as everyone thinks, they take the off ramp

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Speaker 2: and rule there's no standing here, I mean, does that

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Speaker 2: leave the question open for other groups to try to

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Speaker 2: challenge if a pristone.

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Speaker 1: It potentially does.

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Speaker 5: So.

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Speaker 1: We know that in the trial court several conservative states

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Speaker 1: have sought to intervene. The US Supreme Court allowed this

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Speaker 1: case to proceed without joining those cases or those parties

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Speaker 1: to the present matter. But they are before Judge Tasmeerk.

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Speaker 1: If they don't end up having standing, it's not hard

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Speaker 1: to manage that Other Conservatives will try to assert it.

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Speaker 1: General Prelogger yesterday alluded to the possibility that, you know,

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Speaker 1: she thought those other parties don't have standing either, and

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Speaker 1: that was a point Justice Alito wanted to make a

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Speaker 1: big deal about, essentially to say, well, if these people

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Speaker 1: don't have standing and nobody has standing, isn't that a problem.

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Speaker 1: But I don't think we know at this point that

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Speaker 1: support would rule out other people potentially having standing.

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Speaker 2: So this challenge to mitha pristone reached the Supreme Court

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Speaker 2: so quickly, and it was a result of judge shopping.

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Speaker 2: Do you think that with the judicial conference changes that

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Speaker 2: this kind of a case would not be able to

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Speaker 2: be judge shopped?

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Speaker 1: It's interesting. I don't know. I mean, I would hope

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Speaker 1: we have to see. I think how those changes play

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Speaker 1: out in practice. That's certainly the outcome they're designed to achieve.

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Speaker 1: But I guess I would say, we'll have to wait

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Speaker 1: and see how they work in practice.

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Speaker 2: And states have been stockpiling MiFi pristone in the event

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Speaker 2: that the Supreme Court ruled against it.

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Speaker 6: Yeah, they have.

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Speaker 1: And they've been also stout filing missuprostal, another drug that

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Speaker 1: would be used as an alternative you know, so methroprostone

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Speaker 1: and mister prostal are used together now in medication abortions.

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Speaker 1: Misuprostal on its own can also be used to produce

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Speaker 1: a medication abortion, so there's a possibility that that would

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Speaker 1: also occur.

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Speaker 2: The Supreme Court is also going to hear a case

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Speaker 2: from Idaho, where there's a total ban on all abortions

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Speaker 2: except when necessary to save the mother's life. Why do

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Speaker 2: you think they took that case.

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Speaker 1: I don't know. I mean, I think it's likely they

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Speaker 1: don't agree with the Biden administration's interpretation of the law.

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Speaker 1: They've let Idaho's ban, which has some of the narrowest

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Speaker 1: exceptions in the nation's stand while the litigation continues. I

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Speaker 1: think they clearly think that there's something wrong with what

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Speaker 1: the Biden administration is doing. The interesting question is what

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Speaker 1: they think that this statute simply has nothing to do

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Speaker 1: with abortion, or that they think it's likely that the

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Speaker 1: language of the statute, which refer to an unborn child,

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Speaker 1: actually limits in some ways what doctors, potentially even in

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Speaker 1: blue states, could do. So I'm not sure which of

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Speaker 1: those possibilities we'll see.

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Speaker 2: Will that case be more of a test of the

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Speaker 2: Dobbs decision than the Mifipress Stone cases.

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Speaker 1: Yeah, it definitely will, in the sense that we're much

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Speaker 1: more likely to see a ruin on the actual merits

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Speaker 1: of the question rather than a decision on standing, which

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Speaker 1: I mean, obviously, it's important that the court still recognizes

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Speaker 1: guardrails on who can sue, but it doesn't give us

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Speaker 1: much of a sense of the substance of abortion law

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Speaker 1: post Dobbs in the same way that this other case could.

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Speaker 2: Thanks for being on the show, Mary, that's Professor Mary

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Speaker 2: Ziegler of UC Davis Law School. Coming up next on

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Speaker 2: the Bloomberg Law Show, Can the Government beat Apple in

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Speaker 2: its antitrust lawsuit? And later in the show, Sam Bankman

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Speaker 2: Freed is facing decades in prison when he's sentenced tomorrow.

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Speaker 2: I'm June Grosso and you're listening to Bloomberg. The Justice

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Speaker 2: Department has filed a sweeping anti trust lawsuit against Apple,

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Speaker 2: accusing the tech giant of engineering an illegal monopoly and

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Speaker 2: smartphones that boxes out competitors, stifles innovation, and keeps prices

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Speaker 2: artificially high. Attorney General Merrick Garland said the company's strict

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Speaker 2: restrictions against third party technology forces consumers and developers to

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Speaker 2: only use items under Apple's umbrella, including Apple Watches and

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Speaker 2: Apple Pay. Apple says, we'll see you in court. Joining

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Speaker 2: me is Jennifer Ree, Bloomberg Intelligence senior litigation analyst. Jen

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Speaker 2: tell us a little about the lawsuit.

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Speaker 6: Well, what the DOJ's alleging is generally that Apple is

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Speaker 6: maintaining its monopoly position, or at least attempting to monopolize

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Speaker 6: a couple different markets. They say, either a smartphone market

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Speaker 6: in the US or a smaller market that they call

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Speaker 6: premium smartphones in the US, which I guess are the

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Speaker 6: more expensive smartphones essentially. And what the DOJ says is

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Speaker 6: that Apple has monopoly power in these markets and that

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Speaker 6: it uses its control in this power over the technologies

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Speaker 6: that are needed for functionality with the iPhone, in other words,

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Speaker 6: for other software or hardware to interoperate with it in

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Speaker 6: a way that blocks out competitors but also locks in users.

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Speaker 6: So the goal the DOJ says here is that Apple's

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Speaker 6: trying to make it harder for people to switch to

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Speaker 6: a non Apple smartphone in that way it can protect

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Speaker 6: its monopolies. And they do lay out a few specific examples.

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Speaker 6: Now they say it's really a course of conduct. But

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Speaker 6: they lay out some very specific examples that they say

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Speaker 6: achieve this for Apple. And one thing is prohibiting super apps. Now,

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Speaker 6: these are apps that have broad functionality in a single app.

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Speaker 6: Apparently they're very popular in Asia, and Apple prohibits these apps,

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Speaker 6: and the Department of Justice says, well, it's because it

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Speaker 6: would reduce the dependence on the iOS on the operating

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Speaker 6: system that Apple runs. It also bans cloud streaming gay apps,

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Speaker 6: and these kinds of cloud streaming game apps make it

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Speaker 6: easier to switch because you don't really need sophisticated hardware

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Speaker 6: to play the games if they're being streamed from the cloud.

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Speaker 6: So it's kind of like examples like that. There are

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Speaker 6: several others, and they align the suit with a very

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Speaker 6: old suit in the nineteen nineties that was against Microsoft,

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Speaker 6: where the company blocked middleware and its operating system that

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Speaker 6: it thought would threaten its operating system monopoly. They're basically

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Speaker 6: saying it's the same kind of conduct here.

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Speaker 2: So Jen, what's surprising is there are people who are

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Speaker 2: devoted Apple users and wouldn't use anything else and the iPhone.

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Speaker 2: I have to say, I'm one, you know, I've had

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Speaker 2: the iPhone forever. Aren't there those kinds of people too.

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Speaker 2: There are so many people who just love.

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Speaker 6: The iPhone listen absolutely, And this will be Apple's defense

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Speaker 6: that what the Department of Justice is basically trying to

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Speaker 6: do is make it just like Android, and right now

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Speaker 6: people have a choice. You have an Android, which is

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Speaker 6: a more open system phone, and then you have Apple,

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Speaker 6: which is a closed ecosystem technically to give you more

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Speaker 6: privacy and to give you more security. This is what

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Speaker 6: Apple would say. And there are devotees and people who

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Speaker 6: prefer Apple for that reason, and Apple saying, look, you're

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Speaker 6: going to take away a choice if you make us

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Speaker 6: open up the way Android is open. And this will

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Speaker 6: be the basis for Apple's defense because in general, in

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Speaker 6: these kinds of monopolization suits, if a company has legitimate

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Speaker 6: pro competitive justifications for its decisions and its conduct and

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Speaker 6: its contracts, then usually they're not deemed harmful under the

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Speaker 6: antitrust laws. And Apple will say, we have these justifications.

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Speaker 6: We do what we do because it enhances ease of use,

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Speaker 6: it makes it seamless for consumers, it's more private, it's

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Speaker 6: more secure, and the consumers that buy the iPhone can

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Speaker 6: depend on us because of that, But what the Department

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Speaker 6: of Justice has said is that's really just a pretext.

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Speaker 6: You know, that's what Apple likes to put out there

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Speaker 6: in the world. But in truth, if you look at

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Speaker 6: some of their internal documents, some of what they do

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Speaker 6: at least is simply meant to make it hard to

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Speaker 6: switch and to maintain their monopoly. And so a judge

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Speaker 6: is going to have to look at this evidence and

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Speaker 6: soft that out. You know, which one is true?

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Speaker 2: What would the government have to prove in a lawsuit?

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Speaker 6: So in a monopolization lawsuit, it's really important to look

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Speaker 6: at the conduct. It's really all about the market definition

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Speaker 6: and all about the conduct. And I say that because

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Speaker 6: if you are going to try to prove that a

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Speaker 6: company's maintaining its monopoly, you have to first prove it

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Speaker 6: has a monopoly. And there are a number of ways

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Speaker 6: you can prove that. One of the easiest or most

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Speaker 6: obvious ways is to show what market share they have

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Speaker 6: in the market. And to do that, the market has

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Speaker 6: to be defined. And so here the government has said

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Speaker 6: it's a US market for smartphones or US market for

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Speaker 6: premium smartphones, where they say Apple has shares it reach

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Speaker 6: up to about seventy five percent. Now they're going to

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Speaker 6: have to prove all that. They're going to have to demonstrate,

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Speaker 6: probably through economic analysis, that these are proper markets, because

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Speaker 6: Apple will say no, they are not. There isn't a

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Speaker 6: separate market for premium smartphones, or it shouldn't be limited

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Speaker 6: to just the US because June, when you change the

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Speaker 6: market definition, you change the market shares, and if those

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Speaker 6: market shares were to come down, Apple no longer has

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Speaker 6: a monopoly, and the DJ has to prove that it does. Second,

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Speaker 6: the second most important thing is to conduct, because under

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Speaker 6: US laws, it is not illegal to have a monopoly.

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Speaker 6: What is illegal is to engage in conduct that has

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Speaker 6: really no legitimit business purpose other than to exclude your

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Speaker 6: rivals in order to get to that monopoly or to

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Speaker 6: keep that monopoly. So the main thing that's looked at

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Speaker 6: in these lawsuits is the conduct. What is the conduct,

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Speaker 6: what does it do, and what is its purpose. So

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Speaker 6: here the DOJ is going to have to prove that

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Speaker 6: Apple's decisions about the apps that it prevents about let's

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Speaker 6: say it's smart watch not working well with non Apple smartphones,

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Speaker 6: with respect to putting up some obstacles to the messaging

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Speaker 6: in an I message between an Android phone and an

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Speaker 6: Apple phone, some of the things that the DOJ has

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Speaker 6: complained about here, they're going to have to show that

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Speaker 6: these are anti competitive, that they're intended only to block

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Speaker 6: out rivals and have no pro competitive legitimate business justifications,

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Speaker 6: and that they actually harmed consumers if they can show that.

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Speaker 6: But then Apple can show we have some legitimate business justifications.

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Speaker 6: What the judge is asked to do is weigh the

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Speaker 6: two against each other, not an easy task at all.

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Speaker 2: Apple is expected to move to dismiss the lawsit I

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Speaker 2: think with it in sixty days. Could it get some

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Speaker 2: of the lawsuit dismissed, do you think? Or all of it?

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Speaker 6: You know, it's really hard to get anti trust suits,

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Speaker 6: especially monopolization suits dismissed, generally, because they're so fact based. Right,

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Speaker 6: it's about the evidence and it's about the fact, and

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Speaker 6: usually you can't do that in emotion. To dismiss an

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Speaker 6: emotion to dismiss, depleting itself has to be insufficient. So

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Speaker 6: I really doubt here. I don't even think the suit

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Speaker 6: would be narrowed in emotion dismissed. It's possible that it would.

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Speaker 6: I believe Apple would probably argue that it is under

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Speaker 6: no duty under the anti trust laws to deal with

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Speaker 6: its competitors or to make its products in a way

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Speaker 6: that makes it easier for competitors to work with those products.

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Speaker 6: But again, I think because it's such a fact based determination,

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Speaker 6: the judge is going to say, look, we're going to

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Speaker 6: have to collect some evidence and dig in, and that's

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Speaker 6: basically how you get past that motion to dismiss as

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Speaker 6: a plaintiff.

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Speaker 2: You know, Apple seems to have unlimited resources to fight

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Speaker 2: these legal challenges, But at what point does a challenge

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Speaker 2: like this take its toll on Apple.

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Speaker 6: I think Apple will fight, and they do have resources,

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Speaker 6: and I think this is going to go for a

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Speaker 6: long time. But the interesting thing about the toll that

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Speaker 6: it takes, especially because Apple's facing so many other anti

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Speaker 6: trust challenges around the world right now and also from

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Speaker 6: private parties in the US, is that it does take resources.

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Speaker 6: You know, as you fight the litigation the two three

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Speaker 6: four years that it takes, it takes resources. It can

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Speaker 6: take your eye off the ball in a sense in

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Speaker 6: your own business that you do from day to day,

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Speaker 6: and sometimes it can actually cause companies to become a

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Speaker 6: little more cautious. Generally, in the decisions they're making in

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Speaker 6: their business as they go forward to pull their competitive

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Speaker 6: punches a little bit, you know, not sort of toe

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Speaker 6: the line which can make them fall back in the

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Speaker 6: market a bit. I mean, this is kind of what

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Speaker 6: happened to Microsoft as it was fighting the Department of

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Speaker 6: Justice in the nineteen nineties.

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Speaker 2: But Apple has been effective in fighting off other antitrust challenges.

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Speaker 6: They have been real effective over the years. And you know,

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Speaker 6: the reason, I think is because, as I said, it's

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Speaker 6: very hard for a plaintiff to win a monopolization suit

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Speaker 6: when the defendants have legitimate and when I say legitimate,

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Speaker 6: I mean something that's not just made up for the litigation,

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Speaker 6: that's not a pretext, but a legitimate, pro competitive business

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Speaker 6: justification for the conduct. We did this conduct because it

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Speaker 6: made our business more efficient, because it made our product

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Speaker 6: better for consumers. When you have reasons like that and

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Speaker 6: they're backed up by the evidence, by your ordinary course,

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Speaker 6: normal business documents, even if that conduct has excluded your

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Speaker 6: rivals and caused some harm, usually it's considered legitimate and

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Speaker 6: legal under the antitrust laws, and a plaintiff's going to lose.

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Speaker 6: And I think it's been really for those reasons that

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Speaker 6: Apple generally over the years has most of its cases,

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Speaker 6: certainly in the Epic Games litigation against Apple, where Apple

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Speaker 6: largely won most of it, they won all the federal

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Speaker 6: law claims. Part of the reason for that win is

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Speaker 6: because the judge did determine that some of its business

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Speaker 6: most of it's actually business justifications, were legitimate and we're

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Speaker 6: good for consumers.

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Speaker 3: Jed.

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Speaker 2: What does the Justice Department want? Let's say it wins

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Speaker 2: this lawsuit, what does it want? You know?

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Speaker 6: I think when it comes to remedies, when the complaints

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Speaker 6: are filed, the government tends to be really vague. You know,

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Speaker 6: they're going to get into that later after the liability

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Speaker 6: and be much more precise about what they want. The

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Speaker 6: one thing I'll say here that's different from all the

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Speaker 6: other government cases against the big tech platforms is that

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Speaker 6: they have not specifically specified that they want some structural remedy.

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Speaker 6: So in all the other cases against Meta, against Google,

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Speaker 6: against Amazon, there has been a suggestion that they are

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Speaker 6: looking for some sort of a breakup or separation of business.

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Speaker 6: They have not done that here, but they've asted for

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Speaker 6: an injunction. I think what they're simply trying to do

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Speaker 6: is break open Apple's closed ecosystem. I don't really think

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Speaker 6: that they're going to get that, even if they win here.

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Speaker 6: I would think it's much more likely that a remedy

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Speaker 6: would be very narrowly tailored and probably wouldn't as a

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Speaker 6: whole in that way impact Apple's business model. I think

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Speaker 6: it would be more piecemeal, like allow super apps on

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Speaker 6: the phone, you know, something like that, June, rather than

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Speaker 6: really kind of drastically changing their business model.

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Speaker 2: And Apple in the years it takes to go to trial,

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Speaker 2: could make some adjustments on its own, you.

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Speaker 6: Know what, absolutely, And you know from people who know

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Speaker 6: the business far better than I do that study Apple

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Speaker 6: know Apple really well. I've already seen quite a few

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Speaker 6: news reports and articles and analyzes that say that actually

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Speaker 6: some of what's in the complaint is stale, that they

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Speaker 6: have made changes already that make some of the complaint stale,

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Speaker 6: or that they're actually about to implement changes that make

437
00:22:34,680 --> 00:22:37,280
Speaker 6: some of these things that thej is complaining about go away.

438
00:22:37,480 --> 00:22:39,080
Speaker 6: So yes, absolutely, so.

439
00:22:39,160 --> 00:22:44,000
Speaker 2: We've talked many times about how the Biden administration has

440
00:22:44,040 --> 00:22:47,240
Speaker 2: tried to rein in the big tech companies with Andy

441
00:22:47,320 --> 00:22:52,719
Speaker 2: Druss lawsuits. If the administration changes could this just go away?

442
00:22:53,560 --> 00:22:57,720
Speaker 6: You know, maybe I would say ten years ago, I

443
00:22:57,760 --> 00:23:00,200
Speaker 6: would have said likely. I think I would it have

444
00:23:00,280 --> 00:23:02,359
Speaker 6: said ten years ago, there's a good chance that the

445
00:23:02,400 --> 00:23:05,000
Speaker 6: case could settle, and in fact, the Microsoft suit settled

446
00:23:05,040 --> 00:23:08,800
Speaker 6: after administration changed from Democrat to Republican. But I think

447
00:23:08,840 --> 00:23:12,440
Speaker 6: in this day and age, no, it's less likely. It's

448
00:23:12,440 --> 00:23:15,400
Speaker 6: only a maybe. It's kind of a wild card because

449
00:23:15,840 --> 00:23:19,159
Speaker 6: right now you do have a wing of the Republican

450
00:23:19,240 --> 00:23:23,240
Speaker 6: Party that really actually are happy about very aggressive anti

451
00:23:23,240 --> 00:23:26,680
Speaker 6: trust enforcement, that agree that anti trust enforcements to lax,

452
00:23:26,760 --> 00:23:29,639
Speaker 6: and wants to go after these big tech platforms. So

453
00:23:29,840 --> 00:23:32,760
Speaker 6: what this will depend on, let's just say Donald Trump

454
00:23:32,800 --> 00:23:35,840
Speaker 6: wins the next election, is who is appointed leadership at

455
00:23:35,840 --> 00:23:38,199
Speaker 6: the Department of Justice, because that would ultimately be the

456
00:23:38,240 --> 00:23:39,000
Speaker 6: decision maker.

457
00:23:39,440 --> 00:23:41,600
Speaker 2: So how long do you think before this gets to trial?

458
00:23:41,760 --> 00:23:42,600
Speaker 2: Just ballpark?

459
00:23:42,760 --> 00:23:44,560
Speaker 6: Oh, I think a couple of years.

460
00:23:44,720 --> 00:23:47,200
Speaker 2: A lot can happen in that time. Thanks so much, Jen.

461
00:23:47,680 --> 00:23:51,840
Speaker 2: That's Bloomberg Intelligence Senior litigation analyst Jennifer Reed. For more

462
00:23:51,840 --> 00:23:54,200
Speaker 2: of Jens analysis, you can go to Bigo on the

463
00:23:54,200 --> 00:23:57,480
Speaker 2: Bloomberg Terminal. Coming up next on the Bloomberg Law Show,

464
00:23:58,000 --> 00:24:01,240
Speaker 2: Sam Bankman Freed will be sentenced to and he's facing

465
00:24:01,400 --> 00:24:05,119
Speaker 2: decades in prison. Four of the charges he was convicted

466
00:24:05,160 --> 00:24:09,679
Speaker 2: of involved wire fraud. Even though overall white collar crime

467
00:24:09,720 --> 00:24:14,320
Speaker 2: cases have dropped, prosecutions built around wire fraud have reached

468
00:24:14,320 --> 00:24:18,200
Speaker 2: an all time high. Last year, prosecutors used wire fraud

469
00:24:18,320 --> 00:24:22,240
Speaker 2: in more than thirteen hundred instances, up from about nine

470
00:24:22,320 --> 00:24:25,280
Speaker 2: hundred and twenty sixteen. I'll give you a hint why

471
00:24:25,680 --> 00:24:29,440
Speaker 2: it corresponds with a flurry of crypto cases. Remember, you

472
00:24:29,480 --> 00:24:31,560
Speaker 2: can always get the latest legal news by listening to

473
00:24:31,600 --> 00:24:34,760
Speaker 2: our Bloomberg Lawn podcasts. You can find them wherever get

474
00:24:34,760 --> 00:24:38,399
Speaker 2: your favorite podcasts. I'm June Grosso and you're listening to Bloomberg.

475
00:24:39,640 --> 00:24:43,320
Speaker 2: Sam Bankman Freed faces decades in prison when he sentence

476
00:24:43,359 --> 00:24:46,160
Speaker 2: tomorrow for his role in the collapse of the FTX

477
00:24:46,240 --> 00:24:50,640
Speaker 2: cryptocurrency exchange. Prosecutors have recommended the thirty two year old

478
00:24:50,640 --> 00:24:54,280
Speaker 2: get forty to fifty years in prison, while his attorneys

479
00:24:54,320 --> 00:24:56,760
Speaker 2: have asked for six and a half years or less.

480
00:24:57,520 --> 00:25:01,600
Speaker 2: Federal Judge Lewis Kaplan, who oversaw on SBF's trial, will

481
00:25:01,640 --> 00:25:05,720
Speaker 2: decide his sentence. Four of the eight charges against SBF

482
00:25:05,840 --> 00:25:10,080
Speaker 2: involved wire fraud. It's become prosecutor's weapon of choice to

483
00:25:10,160 --> 00:25:13,400
Speaker 2: hone in on crypto crime as the debate plays out

484
00:25:13,440 --> 00:25:17,960
Speaker 2: over whether cryptocurrencies are securities. Joining me is Bloomberg Legal

485
00:25:18,000 --> 00:25:21,320
Speaker 2: reporter Crystal Mesh. We hear that people are charged with

486
00:25:21,440 --> 00:25:24,280
Speaker 2: wire fraud all the time, and I'm not sure that

487
00:25:24,359 --> 00:25:28,600
Speaker 2: most people know what that really means. What is wirefraud?

488
00:25:28,640 --> 00:25:29,639
Speaker 2: What is an encompass?

489
00:25:30,280 --> 00:25:33,440
Speaker 5: So it's a pretty basic charge. It just means that,

490
00:25:33,760 --> 00:25:37,600
Speaker 5: you know, it stems from the old mail fraud statute,

491
00:25:37,760 --> 00:25:41,320
Speaker 5: but obviously people don't use the mail as often nowadays,

492
00:25:41,600 --> 00:25:46,520
Speaker 5: so wirefraud has kind of overtaken that in importance. But basically,

493
00:25:46,600 --> 00:25:50,840
Speaker 5: all it requires is that somebody uses a wire, you know,

494
00:25:50,840 --> 00:25:55,639
Speaker 5: an electronic form of money transfer to further a scheme,

495
00:25:56,160 --> 00:25:59,280
Speaker 5: you know, whether it be a you know, any kind

496
00:25:59,320 --> 00:26:02,920
Speaker 5: of fraudgilant scheme. You know. That could be for commodities,

497
00:26:02,960 --> 00:26:06,600
Speaker 5: it could be for pretty much anything. It encompasses all

498
00:26:06,680 --> 00:26:11,000
Speaker 5: kinds of different transactions, and in the modern world where

499
00:26:11,560 --> 00:26:14,960
Speaker 5: nearly everything goes through an electronic payment, it can really

500
00:26:15,080 --> 00:26:20,080
Speaker 5: encompass the whole universe of transactions and commerce. And across

501
00:26:20,080 --> 00:26:21,320
Speaker 5: the globe, white.

502
00:26:21,000 --> 00:26:25,760
Speaker 2: Collar crime cases have dropped but prosecutions around wire fraud

503
00:26:26,119 --> 00:26:27,520
Speaker 2: have reached an all time high.

504
00:26:28,160 --> 00:26:31,879
Speaker 5: Yeah, so this is based Those statistics come from Syracuse

505
00:26:32,040 --> 00:26:37,439
Speaker 5: University's Transactional Records Access clearing House, which gathers data on

506
00:26:38,240 --> 00:26:41,240
Speaker 5: all kinds of things statistics by the federal government, but

507
00:26:41,280 --> 00:26:46,320
Speaker 5: more specifically tracks the DOJ's how they charge cases. You know,

508
00:26:46,400 --> 00:26:49,359
Speaker 5: what charge they use is the lead charge, which is

509
00:26:49,440 --> 00:26:51,840
Speaker 5: usually the mosterious charge or the charge that led to

510
00:26:51,880 --> 00:26:55,879
Speaker 5: the referrals to the Justice Department for prosecution. They started

511
00:26:55,920 --> 00:26:58,760
Speaker 5: tracking this data in the nineteen eighties, so you know,

512
00:26:58,920 --> 00:27:01,240
Speaker 5: just to be to be clear, this is when we

513
00:27:01,280 --> 00:27:03,640
Speaker 5: talk about all time high. We talked about going back

514
00:27:03,680 --> 00:27:07,480
Speaker 5: to say nineteen eighty six or so. But white collar

515
00:27:07,560 --> 00:27:12,440
Speaker 5: crime prosecutions and that encompasses all kinds of different kind

516
00:27:12,560 --> 00:27:17,359
Speaker 5: of violations in securities, fraud, anti trust violations. It's not

517
00:27:17,560 --> 00:27:20,359
Speaker 5: everything that you might it's not all Wall Street related.

518
00:27:20,400 --> 00:27:23,040
Speaker 5: It could be you know, as simple as kind of

519
00:27:23,200 --> 00:27:26,679
Speaker 5: defrauding a program or something like that. Some of the

520
00:27:26,720 --> 00:27:31,400
Speaker 5: COVID related fraud cases fall under that canon, but they've

521
00:27:31,440 --> 00:27:36,840
Speaker 5: been dropping consistently over the past say twenty years or so.

522
00:27:36,880 --> 00:27:40,879
Speaker 5: They peaked in twenty eleven, which makes sense given you know,

523
00:27:41,040 --> 00:27:43,760
Speaker 5: the financial crisis was just a few years before that,

524
00:27:44,119 --> 00:27:46,920
Speaker 5: but it's kind of every pretty much every year since then,

525
00:27:47,080 --> 00:27:51,040
Speaker 5: say for a couple of small upticks in twenty eighteen

526
00:27:51,720 --> 00:27:55,160
Speaker 5: and in twenty twenty one, which is probably also attributable

527
00:27:55,240 --> 00:27:58,439
Speaker 5: to some of the COVID stuff. They've been dropping consistently,

528
00:27:58,480 --> 00:28:01,679
Speaker 5: and there's lots and lots of reasons for that. Just

529
00:28:02,119 --> 00:28:05,800
Speaker 5: Number one, in terms of you know, securities fraud, as

530
00:28:05,840 --> 00:28:08,280
Speaker 5: we've talked about, has become used less and less just

531
00:28:08,320 --> 00:28:12,439
Speaker 5: because it can be hard with cryptocurrencies to prove that

532
00:28:12,800 --> 00:28:17,920
Speaker 5: a cryptocurrency is security, and what that means is that

533
00:28:18,680 --> 00:28:22,280
Speaker 5: it's a complicated test, but basically would mean that the

534
00:28:22,400 --> 00:28:26,680
Speaker 5: person who is purchasing the instrument believes that they are

535
00:28:26,720 --> 00:28:29,840
Speaker 5: sharing in the common profits of the enterprise by no

536
00:28:30,880 --> 00:28:33,359
Speaker 5: activity of their own. Just basically means that they are

537
00:28:33,400 --> 00:28:37,160
Speaker 5: expecting to get some potential return on their investment from

538
00:28:37,160 --> 00:28:40,640
Speaker 5: the activities of the people who are promoting, say the cryptocurrency.

539
00:28:41,280 --> 00:28:43,960
Speaker 5: And in a lot of these cryptocurrencies, the main question

540
00:28:44,120 --> 00:28:47,200
Speaker 5: is whether or not they're security or not, so using

541
00:28:47,240 --> 00:28:50,560
Speaker 5: wire fraud basically allows them to get around that question

542
00:28:51,120 --> 00:28:53,480
Speaker 5: and just kind of charge it as a straight fraud case,

543
00:28:54,320 --> 00:28:54,520
Speaker 5: and I.

544
00:28:54,680 --> 00:28:59,160
Speaker 2: Charged wire fraud in Sam Beckmann Freed's case and Elizabeth

545
00:28:59,160 --> 00:28:59,800
Speaker 2: Holmes case.

546
00:29:00,400 --> 00:29:02,520
Speaker 5: You know, I can't tell you exactly, you know what

547
00:29:02,640 --> 00:29:05,920
Speaker 5: the reasoning is. Is there a nose case, But certainly

548
00:29:06,200 --> 00:29:09,280
Speaker 5: in Sam's case, it didn't really matter to them whether

549
00:29:09,840 --> 00:29:12,240
Speaker 5: and to his case, whether he was selling securities or not.

550
00:29:12,440 --> 00:29:14,320
Speaker 5: It was more of a straight up fraud. And that's

551
00:29:14,400 --> 00:29:18,400
Speaker 5: kind of the overarching reason why they're going to it.

552
00:29:18,400 --> 00:29:21,880
Speaker 5: It's an old, old statute. Prosecutors know it very well.

553
00:29:22,160 --> 00:29:24,760
Speaker 5: It simplifies the arguments they can make to the jury.

554
00:29:24,840 --> 00:29:27,200
Speaker 5: They don't have to go into this kind of complicated

555
00:29:27,800 --> 00:29:30,040
Speaker 5: past as to whether something is a security or not,

556
00:29:30,160 --> 00:29:32,440
Speaker 5: and just kind of it's just kind of a straight

557
00:29:32,520 --> 00:29:33,480
Speaker 5: up fraud claim.

558
00:29:33,720 --> 00:29:37,200
Speaker 2: Federal Judge Jed Rakoff, who is one of the most

559
00:29:37,320 --> 00:29:41,680
Speaker 2: well known and respected judges on the federal bench, wrote

560
00:29:41,680 --> 00:29:45,040
Speaker 2: a paperback in nineteen eighty calling it the true love

561
00:29:45,040 --> 00:29:49,280
Speaker 2: of prosecutors. Quote to federal prosecutors of white collar crime,

562
00:29:49,440 --> 00:29:54,000
Speaker 2: the male fraud statue is our strativarius, our cold forty five,

563
00:29:54,440 --> 00:29:58,040
Speaker 2: our Louisville slugger, our couason art, and our true love

564
00:29:58,400 --> 00:29:59,880
Speaker 2: that remains I suspect.

565
00:30:00,320 --> 00:30:03,880
Speaker 5: Yeah, that's I mean that nearly everyone I talked to

566
00:30:04,000 --> 00:30:06,720
Speaker 5: brought up that quote. And it's kind of funny because

567
00:30:06,760 --> 00:30:09,080
Speaker 5: as I sit here in the courthouse, we have Judge

568
00:30:09,400 --> 00:30:13,080
Speaker 5: Raycoff is presiding over a civil trial in the SEC's

569
00:30:13,200 --> 00:30:17,520
Speaker 5: case against terror Form, which is No Kwan's company, at

570
00:30:17,520 --> 00:30:20,760
Speaker 5: which he's not even present because he's fighting he's fighting

571
00:30:20,800 --> 00:30:24,400
Speaker 5: an extradition fight. And Judge Racoff is actually already ruled

572
00:30:24,440 --> 00:30:26,880
Speaker 5: in this case that they were selling securities, so it

573
00:30:26,920 --> 00:30:29,880
Speaker 5: isn't even in that case. So it's very unusual that,

574
00:30:30,120 --> 00:30:31,920
Speaker 5: you know, at the same time we see this uptick

575
00:30:32,000 --> 00:30:35,400
Speaker 5: in wire fraud prosecutions, that we see Judge Racoff kind

576
00:30:35,400 --> 00:30:38,760
Speaker 5: of making similar decisions, especially given his famous quote.

577
00:30:38,960 --> 00:30:42,240
Speaker 2: Yeah, and other judges have ruled in different ways, but

578
00:30:42,320 --> 00:30:44,600
Speaker 2: it hasn't reached an appellet court yet.

579
00:30:44,760 --> 00:30:47,680
Speaker 5: No, it has. There have been mixed rulings, you know.

580
00:30:47,920 --> 00:30:51,920
Speaker 5: There's Ripple Labs famously kind of one a big porsche

581
00:30:51,960 --> 00:30:55,240
Speaker 5: of its fight against the SEC. When a judge in

582
00:30:55,320 --> 00:30:57,280
Speaker 5: the same courthouse, well I shouldn't say, it's been a

583
00:30:57,280 --> 00:31:00,640
Speaker 5: different courthouse across the street, but she found that they

584
00:31:00,640 --> 00:31:03,959
Speaker 5: weren't selling securities when they were selling their XRP token

585
00:31:04,520 --> 00:31:07,160
Speaker 5: on exchanges, but that they were when they were selling

586
00:31:07,160 --> 00:31:10,200
Speaker 5: them to institutional investors because those people had kind of

587
00:31:10,240 --> 00:31:12,440
Speaker 5: a greater expectation that they were going to share in

588
00:31:12,480 --> 00:31:15,880
Speaker 5: profits and were more sophisticated investors. But we've had others

589
00:31:15,920 --> 00:31:19,280
Speaker 5: that have found, you know, the opposite thing, but some

590
00:31:19,320 --> 00:31:22,320
Speaker 5: of the other things they've you know, federal prosecutors here

591
00:31:22,320 --> 00:31:24,880
Speaker 5: in New York who prosecuted Sam Bankman Free to have used

592
00:31:24,880 --> 00:31:28,880
Speaker 5: it in is a couple of things that are not

593
00:31:29,120 --> 00:31:33,200
Speaker 5: really what we would consider traditional white collar fraud kind

594
00:31:33,240 --> 00:31:37,959
Speaker 5: of things, which are you know, fraud associated with trading NFTs,

595
00:31:38,240 --> 00:31:41,400
Speaker 5: which is really kind of your best example for the

596
00:31:41,480 --> 00:31:45,600
Speaker 5: use of this wire fraud statute. Because NFTs are a

597
00:31:45,720 --> 00:31:49,840
Speaker 5: new product, they're not really well known, or they at

598
00:31:49,920 --> 00:31:52,920
Speaker 5: least they weren't when they were surging their use and

599
00:31:52,960 --> 00:31:55,040
Speaker 5: their sale was surging a few years ago. They weren't

600
00:31:55,080 --> 00:31:57,520
Speaker 5: really well known to the courts. And in the end

601
00:31:57,680 --> 00:32:01,320
Speaker 5: it didn't matter because they just charged They charged a

602
00:32:01,400 --> 00:32:04,440
Speaker 5: former open See employee, which is the exchange that they

603
00:32:04,480 --> 00:32:07,680
Speaker 5: trade NFPs on. They charged him with wire fraud for

604
00:32:07,840 --> 00:32:11,400
Speaker 5: insider trading based on knowledge that he got about which

605
00:32:11,680 --> 00:32:14,360
Speaker 5: tokens would be featured on the website before they were.

606
00:32:15,040 --> 00:32:18,600
Speaker 5: So it allows the prosecutors, like I said earlier, to

607
00:32:18,720 --> 00:32:22,920
Speaker 5: kind of just use, you know, a more broad statue,

608
00:32:22,960 --> 00:32:25,720
Speaker 5: to kind of address fraud as a whole at a

609
00:32:26,240 --> 00:32:30,440
Speaker 5: most basic form, regardless of the trappings of that scheme,

610
00:32:30,480 --> 00:32:33,320
Speaker 5: whether it's NFPs or cryptocurrency or anything else.

611
00:32:33,440 --> 00:32:37,240
Speaker 2: So let's talk about Sam Bankman free sentencing tomorrow. Tell

612
00:32:37,320 --> 00:32:42,840
Speaker 2: us what the various recommendations are from prosecutors, the Probation Department,

613
00:32:43,200 --> 00:32:43,920
Speaker 2: and the defense.

614
00:32:44,600 --> 00:32:49,600
Speaker 5: So prosecutors so US criminal sentencing guidelines, which are a

615
00:32:49,640 --> 00:32:55,120
Speaker 5: complicated set of factors that are determined by the parties,

616
00:32:55,200 --> 00:33:00,800
Speaker 5: the prosecutors and the defense, and then eventually the judge.

617
00:33:01,600 --> 00:33:07,200
Speaker 5: They determined that he was recommended one hundred years, which

618
00:33:07,240 --> 00:33:10,520
Speaker 5: is outside of Bernie Madoff and some others, would be

619
00:33:10,560 --> 00:33:14,440
Speaker 5: one of the highest white collar crime sentences ever. His

620
00:33:14,600 --> 00:33:18,240
Speaker 5: lawyers are seeking six and a half years. They're arguing that,

621
00:33:18,920 --> 00:33:21,840
Speaker 5: you know, obviously one hundred years is way too much,

622
00:33:22,280 --> 00:33:26,120
Speaker 5: and that the prosecutors who are seeking forty to fifty years,

623
00:33:26,680 --> 00:33:30,320
Speaker 5: they argue that's tra codian as well. So there will

624
00:33:30,480 --> 00:33:33,920
Speaker 5: likely be a rather vigorous debate at the beginning of

625
00:33:33,960 --> 00:33:37,560
Speaker 5: the sentencing hearing over the individual factors that go into

626
00:33:37,600 --> 00:33:41,160
Speaker 5: those guideline calculations. They probably in the end that the

627
00:33:41,160 --> 00:33:44,760
Speaker 5: guidelines may that the judge decides on maybe a little

628
00:33:44,880 --> 00:33:47,880
Speaker 5: more or a little less, but that probably won't really

629
00:33:47,960 --> 00:33:51,840
Speaker 5: inform his sentence as much. He's gonna he's gonna weigh

630
00:33:51,880 --> 00:33:55,479
Speaker 5: all kinds of different factors here, including his age, you know,

631
00:33:55,560 --> 00:33:58,440
Speaker 5: his lack of any criminal history before this, and of

632
00:33:58,440 --> 00:34:03,360
Speaker 5: course the eyes of the multi billion dollar size of

633
00:34:03,400 --> 00:34:06,040
Speaker 5: his fraud. So there's a lot of things that go

634
00:34:06,120 --> 00:34:08,640
Speaker 5: into it. It's going to be probably take a few

635
00:34:08,680 --> 00:34:11,880
Speaker 5: hours to take place and for the judge pronounced sentence,

636
00:34:12,239 --> 00:34:14,840
Speaker 5: but it will be a very vigorous debate between the

637
00:34:14,880 --> 00:34:17,920
Speaker 5: two sides, and we would expect to hear from Sam himself,

638
00:34:18,120 --> 00:34:20,480
Speaker 5: and it's going to be very interesting.

639
00:34:21,160 --> 00:34:25,799
Speaker 2: Chris, So, I've been reading that the victims of the

640
00:34:25,920 --> 00:34:28,840
Speaker 2: collapse of FTX, a lot of most are going to

641
00:34:28,840 --> 00:34:33,200
Speaker 2: get their money back. Does that play into the judge's sentence?

642
00:34:33,680 --> 00:34:36,799
Speaker 5: That is an argument that his lawyers are making. It

643
00:34:36,840 --> 00:34:40,960
Speaker 5: may go into more that may not matter in the

644
00:34:40,960 --> 00:34:43,799
Speaker 5: grand scheme of things. The judge may find that whether

645
00:34:43,880 --> 00:34:46,319
Speaker 5: or not people are made whole by It doesn't mean

646
00:34:46,360 --> 00:34:49,919
Speaker 5: that he didn't, you know, try to defraud them. That

647
00:34:50,560 --> 00:34:54,120
Speaker 5: is more likely to inform whatever kind of you know,

648
00:34:55,080 --> 00:34:58,040
Speaker 5: restitution or forfeiture he might have to pay after the

649
00:34:58,120 --> 00:35:00,480
Speaker 5: fact because his lawyers of our gu there was no

650
00:35:00,600 --> 00:35:03,600
Speaker 5: loss in this case because of what you just said,

651
00:35:03,680 --> 00:35:07,000
Speaker 5: because that it's likely that there will be enough money

652
00:35:07,000 --> 00:35:10,920
Speaker 5: to repay the victims. But of course the government disagrees

653
00:35:10,960 --> 00:35:13,600
Speaker 5: with that convention, and it's likely going to argue that

654
00:35:13,640 --> 00:35:15,440
Speaker 5: he should pay back billions of dollars.

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00:35:15,680 --> 00:35:18,879
Speaker 2: And Judge Caplan, you know, we've talked before about he

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00:35:18,920 --> 00:35:23,600
Speaker 2: was very tough with sbfs. But how is he at sentencing?

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00:35:24,239 --> 00:35:27,080
Speaker 5: He's not from the cases we look he is, he doesn't.

658
00:35:27,200 --> 00:35:30,920
Speaker 5: He doesn't. Really. He's definitely going to impose a serious

659
00:35:30,960 --> 00:35:34,920
Speaker 5: sentence and a sentence that sends a message to deter others.

660
00:35:35,640 --> 00:35:39,040
Speaker 5: But he does not appear to be as heavy handed

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00:35:39,080 --> 00:35:42,239
Speaker 5: in at white collar sentencings as his demeanor during the

662
00:35:42,320 --> 00:35:48,400
Speaker 5: trial would suggest. He seems to understand the individual arguments

663
00:35:48,440 --> 00:35:51,239
Speaker 5: for defendants. And let's be clear, this is not a

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00:35:51,360 --> 00:35:57,120
Speaker 5: violent crime. That usually is a big factor in whether

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00:35:57,200 --> 00:36:00,600
Speaker 5: or not a judge decides that somebody should you know,

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00:36:00,719 --> 00:36:03,239
Speaker 5: get out while they still have a life ahead of

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00:36:03,280 --> 00:36:07,480
Speaker 5: them or not. And people have varying views obviously of

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00:36:08,080 --> 00:36:11,960
Speaker 5: Sam Bankmin Freed and the conduct that he employed. But

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00:36:13,239 --> 00:36:16,400
Speaker 5: nobody can argue that there was a violence crime employee

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00:36:16,440 --> 00:36:20,520
Speaker 5: here that anyone was physically injured, So that may play

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00:36:20,640 --> 00:36:25,080
Speaker 5: greatly into his decision. And the big question is whether

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00:36:25,200 --> 00:36:29,120
Speaker 5: he's going to kind of give him a penalty for

673
00:36:29,239 --> 00:36:33,160
Speaker 5: determining if he lied on the stand. That's really that

674
00:36:33,160 --> 00:36:35,280
Speaker 5: could be one of the main factors that could drive

675
00:36:35,400 --> 00:36:37,840
Speaker 5: his sentence higher. And we really don't know what his

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00:36:37,960 --> 00:36:40,640
Speaker 5: thinking is on that. That's entirely up to Judge Kaplan.

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Speaker 2: I know you'll be watching the sentencing. Chris, thanks so

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Speaker 2: much for joining us on the show. That's Bloomberg Legal

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00:36:45,560 --> 00:36:48,560
Speaker 2: Reporter Chris dol Mesh. Of course, we'll have full coverage

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Speaker 2: of the sentencing of Sam Bankman Freed on tomorrow's show.

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Speaker 2: And that's it for this edition of The Bloomberg Law Show.

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Speaker 2: Remember you can always get the latest legal news by

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Speaker 2: subscribing to the Bloomberg Law Podcast or downloading this show

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