Nate Chastain has been convicted of fraud and money laundering. He profited from his insider knowledge of which NFTs would be featured on OpenSea. If the second sentence in that short paragraph might as well be in Greek to your ears, allow me to translate. NFTs are "non-fungible tokens." This means that they are a now-faded financial fad, sort of like the tulips of the cryptocurrency realm. That is all you need to know about the term. OpenSea is an online marketplace for the trading of NFTs created in 2017. Daily trading volume there hit an impressive record of $2.7 billion on May 1, 2022. But that has dropped 99 percent over the following four months, and it has not recovered since. (As I say, this is a faded fad.) But OpenSea also contains a b log and newsy features. And there the opportunity for chicanery yawned. Chastain was in a position to know which NFTs would be featured on the newsy portions of the site, and to take a position on those NFTs on the trading portions of...
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In the old days he built his reputation as a tough prosecutor on insider trading and other securities fraud cases. Later he leveraged that reputation to become Mayor of New York. Through the luck of the draw, it was Giuliani who happened to be Mayor when airplanes flew into the twin towers, and he became "America's Mayor." That is the history to which people allude when they ask "whatever happened to" the old Rudi witht he tough cop rep. The reputation was never based on much, except for the fact that for an ambitious man, seeking higher office and finding himself in possession of prosecutorial discretion. That was enough: the idea of going after Wall Street tycoons made perfect sense. Tom Wolfe coined the phrase years ago: "the great white defendant." THAT is what a prosecutor wants and what Giuliani triumphantly found is such as Michael Milken and Ivan Boesky. I argued years ago, on general pro-capitalism grounds, and from the pages of The Pr...
Another term of the U.S. Supreme Court has come and gone and, once again as in years past, I’d like to say something about it in this blog. Since it’s my blog, I hereby award myself that wish, over the course of this and the next three posts. I don’t plan to discuss Jevic Holding . That was a very important decision, re-affirming ideas foundational to bankruptcy law, but … I’ve already taken a couple of cracks at it in this blog, and would have nothing new to say now. I was tempted, in my earliest outlining of this discussion, by the idea of discussing at some length recent events in the public finance and politics of Puerto Rico. These events (including a very strikingly pro- statehood referendum result) in large part follow from the Supreme Court’s decisions on Puerto Rican matters last term. But I’ll save myself some time and give the matter the ‘elevator’ treatment: subsequent events have been entirely consistent with my treatment of those decisions at the time. ...
Yesterday I discussed the history of Valeant Pharmaceuticals, and mentioned its unsuccessful effort to acquire Allergan. Valeant never did acquire Allergan, but its effort made some fascinating law. Some of the key questions arose from the fact that Valeant was acting in concert with a hedge fund manager, Pershing Square. So closely in concert, indeed, as to raise the question whether what was going on amounted to insider trading as SEC rules understand it? Pershing Square acquired a 9.7% stake in Allergan during the period of this collaboration, and it is was willing to vote those shares in favor of ousting the company directors that were resisting the takeover attempt. Allergan responded with a lawsuit, asking that Pershing Square be enjoined from voting its shares giving the "likelihood" that this would be deemed to be insider trading. Was there such a “likelihood” and would that have supported a preliminary injunction? The U.S. District Court for the ...
From a recent book by Howard Blum: Dark Invasion (2014). Ever since the 1880s, when Kansas City undertaker Almon Strowger invented what became known as the Strowger switch, it had become easy to listen in on a telephone call. Strowger's circuit-switched system, an ingenious electromagnetic contraption that clicked and clacked noisily like a telegraph key, did the operator's work. The Strowger switch automatically connected the relays and slides at the central telephone offices, completing the circuit that allowed people to talk to each other. Twist another wire around the right switch at the central office and a party line was created: you could hear someone's conversation and he'd never know it....It didn't take long for Wall Street speculators to realize fortunes could be made with the sort of inside information collected by eavesdropping on telephone conversations....
According to the FBI, as mediated by Vanity Fair , accused inside-info trader Jesse Tortora e-mailed the following to his buddies and co-conspirators: "Rule number one about email list. There is no email list, fight club reference." Okay, here's a rule. If you have to explain that your previous sentence (or, strictly, the first half of the sentence you're still writing) was a Fight Club reference, don't. Delete, abort, retry. Especially since he didn't really get the allusion right, anyway.