February 2024 - cypherpunks - lists.cpunks.org

Jamie Dimon Is Desperate to Pin the Jeffrey Epstein Scandal on Jes Staley; Bloomberg News Is Carrying His Water — Again
by Gunnar Larson 16 Feb '24

16 Feb '24

https://wallstreetonparade.com/2024/02/jamie-dimon-is-desperate-to-pin-the-… By Pam Martens and Russ Martens: February 16, 2024 ~ Jeffrey Epstein (left); Jamie Dimon (right). Jeffrey Epstein (left); Jamie Dimon (right). After hurling salacious allegations for months against Jes Staley in a federal lawsuit JPMorgan Chase had brought against its former executive, the bank decided last September to quietly settle the case without disclosing the terms. The bank sued Staley after it had been sued by victims of sex trafficker Jeffrey Epstein and after it had been sued in a separate lawsuit by the Attorney General of the U.S. Virgin Islands, where Epstein owned a private island compound that was a frequent venue of Epstein’s sex trafficking of minors. Lawyers for the U.S. Virgin Islands charged that JPMorgan Chase had “actively participated in Epstein’s sex-trafficking venture from 2006 until 2019.” (Both cases were settled last year by the bank, with it paying a whopping $290 million to the victims and $75 million to the U.S. Virgin Islands.) The bank’s lawsuit against Staley appeared to be a damage control effort to redirect the media’s attention to Staley and away from the man he reported to – Jamie Dimon, the Chairman and CEO of JPMorgan Chase who has survived a breathtaking array of criminal charges against the bank while he has sat at its helm. (See JPMorgan’s Board Made Jamie Dimon a Billionaire as the Bank Rigged Markets, Laundered Money, and Admitted to Five Felony Counts.) While evidence submitted to the court showed Staley was deeply involved with Epstein, the evidence is also overwhelming that more than a dozen other bank personnel, including top executives, facilitated Epstein’s ability to keep his sex trafficking of minors’ scheme alive. A Memorandum of Law filed by the U.S. Virgin Islands made the following points: “Even if participation requires active engagement…there is no genuine dispute that JPMorgan actively participated in Epstein’s sex-trafficking venture from 2006 until 2019. The Court found allegations that the Bank allowed Epstein to use its accounts to send dozens of payments to then-known co-conspirators [redacted] provided excessive and unusual amounts of cash to Epstein; and structured cash withdrawals so that those withdrawals would not appear suspicious ‘went well beyond merely providing their usual [banking] services to Jeffrey Epstein and his affiliated entities’ and were sufficient to allege active engagement.” The U.S. Virgin Islands alerted the court to the unfathomable sums of hard cash that Epstein was able to take from the accounts he maintained at JPMorgan Chase without the bank filing the legally mandated Suspicious Activity Reports (SARs) to the Financial Crimes Enforcement Network (FinCEN). The U.S. Virgin Islands tallied up the hard cash dispersals as follows: “Between September 2003 and November 2013, or approximately ten years, JPMorgan handled more than $5 million in outgoing cash transactions for Epstein — ignoring its own policy discouraging large cash withdrawals….” The U.S. Virgin Islands’ attorneys cite to internal emails at JPMorgan Chase showing that employees at the bank were aware of Epstein’s “[c]ash withdrawals … made in amounts for $40,000 to $80,000 several times a month” while also being aware that Epstein paid his underage sexual assault victims in cash. On August 25 of last year, JPMorgan Chase filed a document with the court as part of a discovery demand showing that, in addition to Staley, 14 of its executives, private bankers and other staff had made visits to Epstein’s private residences. One of those employees, Justin Nelson, visited Epstein’s residences more times than Staley. Nelson was at Epstein’s Manhattan mansion – a key location of the sex trafficking operation – 12 times and one time at Epstein’s Zorro Ranch in New Mexico – an additional location of the sex trafficking ring. That’s a total of 13 visits to the residence of a sex trafficker. Staley’s visits to Epstein’s residences tally up to 11, according to JPMorgan’s chart. (See pages 3, 4 and 5 at this link.) Eight of Nelson’s visits to Epstein’s residences occurred after 2013, the year that the bank claims it fired Epstein as a client. Disbursements from Epstein accounts were occurring long after 2013 according to court documents, raising questions about just when, or if, Epstein was terminated as a client from the Private Bank or the bank’s brokerage unit, J.P. Morgan Securities. Nelson was dually employed at both units. Notwithstanding this hard evidence of JPMorgan Chase’s culpability in the Epstein saga, on February 7 of this year – months after the bank had quietly settled its case against Staley and the matter had disappeared from news headlines – Bloomberg News inexplicably decided to put Staley and Epstein back in its headlines. (Paywall.) In an article written by Harry Wilson, Ava Benny-Morrison, and Jason Leopold, one sentence jumps out. It reads: “The bank, which through Staley served Epstein as a client….” The bank’s own chart, linked above in the ninth paragraph, shows that the following 14 individuals, in addition to Staley, were making visits to Epstein’s private residences while employed at the bank: Paul Barrett (Managing Director, Private Bank); Mary Casey (Managing Director, Private Bank); John Duffy (CEO, Private Bank); Mary Erdoes (CEO, Asset & Wealth Management); David Frame (Global Chief Executive, Private Bank); Christopher French (Managing Director, Private Bank); Joanna Jagoda (Assistant General Counsel, Legal); Jeffrey Matusow (Managing Director, Private Bank); Thomas McGraw (Managing Director, Private Bank); Paul Morris (Banker, Private Bank); Justin Nelson (Managing Director, Private Bank); Carolyn Reers, Managing Director, Private Bank); James von Moltke (job title not provided by the bank). If Dimon is fearful of Staley providing evidence against the bank in the Epstein matter to the criminal division of the U.S. Department of Justice, it would have an incentive to continue to undermine Staley’s credibility in the press. What was JPMorgan Chase’s incentive to keep such a clearly dangerous man as Epstein as a client? The U.S. Virgin Islands makes a very credible case that the bank was getting lots of profits – both from trading in Epstein’s own accounts as well as his referrals of rich clients to the bank. It tells the court in one filing: “In 2003, Epstein was, by double, the top revenue generator in the Private Bank, and the source of Google co-founder Sergey Brin (‘one of the largest [relationships] in the Private Bank, of +$4BN’), Glenn Dubin (billionaire founder of Highbridge), and many other ultra-wealthy clients and connections, which would come to include Bill Gates, Leon Black, Larry Summers, the Sultan of Dubai, Prince Andrew, Ehud Barak, Thomas Pritzker, Lord Peter Mandelson, and Prime Minister Netanyahu.” And what would be the incentive for Bloomberg News to carry water for Jamie Dimon? Michael Bloomberg, the former Mayor of New York, is the majority owner of the publishing and data terminal empire that has, for years, published flattering articles about Jamie Dimon. In 2016, Michael Bloomberg even co-authored an opinion piece with Dimon. The same year, the New York Post reported that JPMorgan Chase was the second largest customer of Bloomberg’s data terminal business with 10,000 leases of Bloomberg’s terminals. At the time, the terminals cost around $21,000 each per lease, per year, or approximately $210 million being forked over by JPMorgan Chase to Michael Bloomberg’s company annually. Bloomberg’s data terminals are the cash cow of the company. During JPMorgan Chase’s London Whale scandal in 2012 and 2013, where the bank gambled with bank depositors’ money in its federally-insured bank by making exotic derivative trades in London and losing at least $6.2 billion, Michael Bloomberg was Mayor of New York City. Instead of condemning this outrageous risk-taking with federally-insured deposits, Mike Bloomberg was quoted in the Wall Street Journal calling Dimon “a very smart, honest, great executive,” adding “The controls failed. He’ll look at that and fix it.” That statement appeared in May of 2012. The five felony counts brought by the Justice Department and admitted to by the bank, followed from 2014 to 2020. Related Article: The Craziest Video You’ll Ever Watch on JPMorgan’s Jamie Dimon

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Attys Disbarred For Throwing Molotov Cocktails At NYPD Car
by Gunnar Larson 16 Feb '24

16 Feb '24

Attys Disbarred For Throwing Molotov Cocktails At NYPD Car <https://www.law360.com/newyork/articles/1549786?nl_pk=f05ccc12-7307-4199-85…> By Tracey Read Two lawyers who admitted throwing a Molotov cocktail at an empty NYPD police cruiser during protests over George Floyd's death have been disbarred, the First Judicial Department of the New York Supreme Court Appellate Division announced Tuesday. 2 documents attached | Read full article » <https://www.law360.com/newyork/articles/1549786?nl_pk=f05ccc12-7307-4199-85…>

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I looked up " Grarpamp Moron " and it said " See Alex Tabarokk "
by professor rat 16 Feb '24

16 Feb '24

At their best Mongo and his lickspittle upheld the core precept of cypherpunks. Mongs blacknet supplying transparency for the powerful and Eric emphasizing privacy for the poor. https://marginalrevolution.com/marginalrevolution/2024/02/the-erosion-of-fi… Reposts not dodgy Gramps style garbage from a known shit-pit called Mercatus

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Memo #4 - Goldman Sachs Deferred Prosecution Agreement
by Gunnar Larson 15 Feb '24

15 Feb '24

https://docs.google.com/document/d/1ajVVx6NGB9wd2GDXfLRftf0RVFpqjl8WWITvdNV… March 10, 2022 BY ELECTRONIC MAIL Mr. John Marzulli United States Department of Justice Eastern District of New York 271 Cadman Plaza East Brooklyn New York, 11201 John.Marzulli(a)usdoj.gov Re: Memo #4 - Goldman Sachs Deferred Prosecution Agreement Dear Mr. Marzulli: The Department of Justice has yet to respond to Memo #1, Memo #2 and Memo #3 with our recent inquiry to the 1Malaysia Development Berhad Deferred Agreement. Goldman Sachs' Deferred Prosecution Agreement <https://www.justice.gov/usao-edny/pr/goldman-sachs-resolves-foreign-bribery…> with the United States of America is in potential breach, with ethical enforcement being concerned. Memo #4 aims to associate the malfeasance in Malaysia with war crimes of aggression (in the planning, initiation, or execution of a large-scale and serious act of aggression), leveraging the world’s only military divided capital city Nicosia, Cyprus. 1. Additionally, Memo #4 aims to earn the DOJ’s assessment of New York State’s regulatory marketplace manipulation deriving the war crime against peace, related to the planning, preparation, initiation, waging or participation in a common plan or conspiracy related to a war of aggression, which can only apply in relation to international armed conflict. 2. In this case, the first challenge is to observe and consider the simple idea that the DOJ’s Deferred Prosecution Agreement with Goldman Sachs alone, through means of regulatory arbitrage naively fails to recognize the ‘cause and effect’ relationship at play at the inception of Memo #4’s assertion of war crimes. 3. Even with the best of intentions, perhaps unknowingly the DOJ may be amplifying the effect of potential war crimes by indirectly supplementing the root cause of the problem and financial model of the Deferred Agreement being self-policing. Mr. Marzulli, there has been an active United Nations peacekeeping mission in Cyprus since the 1964 Turkish military invasion and occupation of the northern third of Cyprus. Only Turkey recognises the Turkish Republic of Northern Cyprus, while there is broad recognition that the ongoing military presence constitutes occupation of territories that are under Turkish military control. - The graduate education behind Memo #4 is a product of the University of Nicosia’s (UNIC) main campus, located adjacent to the United Nations Buffer Zone that separates the invaded Turkish Republic of North Cyprus and the Republic of Cyprus, which joined the European Union in 2004. - Memo #4 is also a product of United Nations consultancy, based at its Manhattan headquarters, where (today, what is now xNY.io - Bank.org) was credited with increasing the breadth and accessibility of reference content from the world’s most important multinational organization. - Memo #4’s subject of war crimes has preeminent association with such projects as the Audio Visual Library of International Law. Over the following sections, Memo #4 will provide a detailed timeline that would constitute real concern of the war crime of aggression yielding the war crime against peace in active war conflict in the world’s only military divided capital, funded from Manhattan Island. The Bank of Cyprus and Illegal Short Selling Irregularities of Turkey’s Markets Mr. Marzulli, turn this matter as we will, and look at it from any side whatsoever, and it presents the appearance of a cross-border act of aggression. Goldman Sachs’ potential disrespect to the Deferred Agreement’s core values has cultivated new crimes that aim to manipulate cross-border war crime regulatory frameworks. - On April 02, 2021 the Financial Times reported that Turkey fined Goldman Sachs over alleged irregularities in short selling, just a week after foreign investors pulled $1.9B from the country’s stock and bond markets. Turkey’s Capital Markets Board said that Goldman Sachs was among 10 securities firms that had placed orders for short selling without proper notification, violating rules enacted previously that temporarily prohibited such transactions. - On April 20, 2021 the CyprusMail (Cyprus’ only English Language daily newspaper) reported Goldman Sachs International acted as Global Coordinators and Dealer Managers in a $330M bond issuance for the Bank of Cyprus. Given the active military conflict in Cyprus, Memo #4 notes that there is one place on the planet you are not supposed to do this sort of thing. Furthermore, the DOJ’s Deferred Agreement with Goldman Sachs may have been tainted with the potential war crime of aggression, risking international peace and the lives of United Nations peacekeepers, while jeopardizing the United States of America’s financial security. Concern of New York Prime Bank Instrument Fraud and Marketplace Manipulation The United States Department of the Treasury warns that Prime Bank Instrument Fraud schemes have attracted significant international attention, since individuals and organizations have lost billions of dollars worldwide. "Prime Bank Instrument Fraud" is the general term given to prime bank fraud schemes that go by many different names. During April 2021, Goldman Sachs could not in good faith (and, plausible deniability) make any reasonable claim of holding a pristine relationship with Turkey’s Central Bank or with Cyprus’ largest financial institutions, given the 1Malaysia Development Berhad scandal and then pending Deferred Prosecution Agreement with the United States of America. - Memo #4 suggests that Goldman Sachs developed a Prime Bank Instrument Fraud program to level out yo-yo market dynamics caused by failed marketplace manipulation exercises in Turkey and Cyprus. - Systematic bank fraud and/or marketplace manipulation of any kind between Turkey and Cyprus could constitute the war crime of aggression. - Furthermore, Memo #4 argues that Goldman Sachs may have tried to bambooze governments in New York, Cyprus and Turkey through regulatory arbitrage loopholes, while Goldman seemingly may have not considered the totality of such actions as war crimes. Turkey has the highest inflation in Europe. It has the second-highest rate of inflation among emerging markets, just behind Argentina. It has the 13th highest inflation rate in the world, ranking it between South Sudan and Nigeria. After Goldman Sachs was fined for illegal stock and bond market short selling by the Turkish government, logic would argue further malfeasance potentially could have been avoided by the DOJ’s 1Malaysia Development Berhad investigation. - On April 15, 2021 CNBC reported that Goldman Sachs (note, the previous section’s milestones of April 02, 2021 and April 20, 2021) crucially removed its bias toward Turkey tightening interest rates. Goldman issued guidance highlighting the fact that the bank thought that, “…the removal of the tightening bias against rising inflation expectations suggests that the TCMB (Turkish Central Bank) now has a more dovish reaction function.” - On August 14, 2021 the CyprusMail reported serious concern among economists about data reporting from the Turkish Statistical Institute. Ahmet Takan, a former official with the office of the Turkish prime minister, acted as a whistle blower, warning that Turkey potentially was manipulating inflation data. - On September 1, 2021 Reuters reported that Goldman Sachs hiked Turkish growth forecasts. Goldman economists issued guidance stating, "Overall, the Turkish economy has been able to grow faster than we thought without a deterioration in its external balances, as the pickup in foreign demand has been very supportive." - On November 30, 2021 Reuters reported that Goldman Sachs trimed Turkey’s 2022 growth forecast. Goldman Sachs' Murat Unur stated, "We think that the GDP figures released today tell us little about the pace of economic activity going forward as the recent sell-off in the Lira is likely to impact economic activity significantly" Mr. Marzulli, the DOJ’s Deferred Prosecution Agreement with Goldman Sachs was signed on October 21, 2021. The timeline of events above do not coincide with terms and conditions of the Deferred Agreement mandated by the United States of America. Furthermore, as an international graduate scholars of the world’s only military divided capital on the planet, xNY.io - Bank.org should be protected from any association of crimes against peace, related to the planning, preparation, initiation, waging or participation in a common plan or conspiracy related to a war of aggression, which can only apply in relation to international armed conflict. War Crimes Against Humanity Mr. Marzulli, xNY.io - Bank.org is concerned that potential breaches to the Deferred Agreement are impacting our global enterprise. Crimes against humanity can be committed in peacetime as well as during an armed conflict. Even a single act could fall under this exclusion ground provided it forms part of a widespread or systematic attack against a civilian population and the act is committed by any person (including a civilian) who had knowledge of the attack and the link of the act to the attack. 1. We are looking to learn more about the DOJ’s approach to assessing any potential breaches to the Deferred Agreement’s mandates as we determine New York State’s role in cross-border bank regulation and corresponding innovation beyond war crimes against humanity. 2. In order to establish whether a war crime or a crime against humanity has been committed, the case officer should consult the relevant international instruments and case law. 3. Crimes against humanity are fundamentally inhumane acts, committed as part of a systematic or widespread attack. Inhumane acts, which could reach this threshold when committed pursuant to or in furtherance of a State or organizational policy (potentially, New York State bank regulation). 4. Persecution against any identifiable group or collectivity on political, racial, national, ethnic, cultural, religious, gender, or other grounds that are universally recognised as impermissible under international law. 5. Furthermore, we have made 28 highlights to the Deferred Agreement providing supporting reference to Memo #4’s overarching premise. xNY.io - Bank.org submits Memo #4 for DOJ consideration of other inhumane acts of a similar character intentionally causing great suffering, or serious injury to body or to mental or physical health. Some crimes against humanity would require an additional specific intent, such as Goldman Sachs willfully disrespecting New York State and/or overall peace and security of the United States of America. Memo #1, Memo #2, Memo #3 and Memo #4 outline instances that correspond with the associated definitions of the potential war crimes abroad and jeopardize the future of bank innovation from New York, at great sacrifice to the Homeland. We hope to learn the DOJ’s approach to comment on Memo #4’s subject matter or, without delay refer these concerns to the International Criminal Court and/or International Court of Justice for comment. Respectfully yours with anticipation, Gunnar Larson - xNY.io <http://www.xny.io> | Bank.org <http://bank.org>MSc <https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&u…> - Digital Currency MBA <https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovat…> - Entrepreneurship and Innovation (ip) G(a)xNY.io +1-646-454-9107

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Potential Uptick in IP Finance and Investment on the Way - Litigation Finance Journal
by Gunnar Larson 15 Feb '24

15 Feb '24

Check out a recent article and the mention of "metaverse and money": https://litigationfinancejournal.com/potential-uptick-in-ip-finance-and-inv… Law Business Research’s IAM-Media.com has published new guidance that the United States and European patent and intellectual property marketplace will soon experience increased activity. West U Capital is making headlines in the United States as a powerhouse with a patent and trademark pedigree hard to match. In other news, Europe will soon open its Unified Patent Court (UPC), which is rumored to represent over 24 of the 27 European Union member states. Over 40 countries are eligible to join the UPC, helping to solidify the notion that increased IP marketplace activity should be expected forward. IAM-Media.com has collated an outline of several <https://www.iam-media.com/article/ipbc-global-2022-chicago-day-three-report…> global patent and trademark marketplace events for litigation investors to consider. Specifically, trends point to an inflow of capital in patent, trademark and intellectual property portfolio building. Trends also suggest a growing disparity between United States and European risk as trends point to Europe’s UPC being a conduit for aggressive IP claims against US enterprises. As an added bonus, Litigation Finance Journal has included 33 highlights <https://www.iam-media.com/article/ipbc-global-2022-chicago-day-three-report…> to Citibank’s Metaverse and Money report that includes several IP and trademark issues expressed by leaders in the United States, Europe and Russia, that could become part of UPC portfolios.

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United States: Russian State-Sponsored TV Network's Attempt To Dismiss Copyright Lawsuit On Fair Use Grounds Denied
by Gunnar Larson 15 Feb '24

15 Feb '24

In other news, related to Meta's (FB) logo being very similar to the Moscow Stock Exchange logo, something similar has been discussed in New York. I found this quote very interesting: - "Lastly, regarding the fourth factor, concerning the effect of the use on the potential market for or value of the copyrighted work, the Court noted that this factor "ask[s] not whether the second work would *damage* the market for the first (by, for example, devaluing it through parody or criticism), but whether it *usurps* the market for the first by offering a competing substitute." ---------- https://www.mondaq.com/unitedstates/copyright/1174834/russian-state-sponsor… TV-Novosti, a non-profit operating the Russian state-controlled RT(formerly Russia Today) television networks and 38 associated RT YouTube channels, has been sued for copyright infringement by Business Casual, an American media company that creates documentary content, based on its use of translated clips of Business Casual's documentaries in its own videos posted to YouTube. Business Casual creates short original historical documentaries which it posts to its YouTube channel. Its documentaries frequently feature photographs of historical figures, using a process called "parallax" which "transforms century-old low-resolution photographs into dramatically restored high-resolution photographs" and "turn[s] two-dimensional images into three-dimensional models . . . simulating a depth-of-field. This optical illusion provides Business Casual's videos with an immersive three-dimensional look and feel." The lawsuit relates to two of Business Casual's documentaries—"How Rockefeller Built His Trillion Dollar Oil Empire" and "J.P. Morgan Documentary: How One Man Financed America"—clips of which Business Casual alleges TV-Novosti incorporated into three separate videos on its "RT-Arabic" YouTube channel, including portions featuring parallax-enhanced images, altering the brightness and saturation of the copied content and replacing Business Casual's watermark with TV-Novosti's own in order to hide from YouTube's algorithms. TV-Novosti moved to dismiss the copyright claims, arguing that it's use of the clips is protected as fair use. However, after considering each of the four statutory factors, Judge Koeltl of the Southern District of New York denied TV-Novosti's motion, holding that while three of the four factors weighed against finding fair use, "[t]he fourth factor, which the Supreme Court has described as 'the single most important element of fair use,' cannot be determined without further factual development." Specifically, regarding the first factor, concerning the transformation of the use, Judge Koeltl found that while TV-Novosti's videos take portions of the plaintiff's videos, re-arrange them, and add new commentary to them, TV-Novosti had not made any meaningful changes to the visual clips themselves, and "[m]erely overlaying new audio does not effect a sufficient transformation . . . to find fair use as a matter of law." The Court further noted that TV-Novosti had "not changed the purpose of the parallax-enhanced images," i.e., to provide visual illustration for the overlain audio commentary, but had instead "simply lifted the copyrighted depictions . .. for the purpose of illustrating [TV-Novosti's] own video." In addition, the Court found that the fact that TV-Novosti could have sought to pay for the clips, but didn't, and tried to hide its use of the excerpts from YouTube's algorithms, also weighed against a finding a fair use under the first factor. Regarding the second factor, concerning the nature of the copyrighted work, the Court initially noted that factual material such as that at issue, "cuts less closely to the core of copyright." Nevertheless, the Court held that the fact that source material for Business Casual's videos was in the public domain weighed against finding fair use, because TV Novosti could have simply used public domain photos of the historical figures, rather than the modified clips, to create its videos. Regarding the third factor, concerning the amount of use in relation to the copyrighted work as a whole, the Court noted that while only "small portions of the entire copyrighted works were used"—excerpts of 7 seconds, 1 minute and 28 seconds, and 8 minutes and 50 seconds in length—the portions were "not so trivial as to warrant dismissal under the de minimis doctrine." Lastly, regarding the fourth factor, concerning the effect of the use on the potential market for or value of the copyrighted work, the Court noted that this factor "ask[s] not whether the second work would *damage* the market for the first (by, for example, devaluing it through parody or criticism), but whether it *usurps* the market for the first by offering a competing substitute." With this framing, the Court thus found that while one the one hand, TV-Novosti's "videos are alternative ways of learning about the lives of J.P. Morgan and John D. Rockefeller," on the other hand, they "have a broader focus and are in a different language, meaning that they cater to a different audience." These differences, the Court held, were significant enough to preclude the Court from "determining the effect of [TV-Novosti's] videos on the market for [Business Casual's] videos at this time." The Court's recognition of the weight of the fourth factor in determining fair use means that there may still be hope for TV-Novosti—time (and fact discovery) will tell. For now, the takeaway may very well be that parties seeking to raise a fair use defense should take care to emphasize any characteristics of their use that distinguish not just their work, but its target audience, including the scope of the work and the language (if any) which communicates it. -- *Gunnar Larson - xNY.io <http://www.xNY.io> | Bank.org <http://Bank.org>* MSc <https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&u…> - Digital Currency MBA <https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovat…> - Entrepreneurship and Innovation (ip) G(a)xNY.io +1-646-454-9107 New York, New York 10001

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Worldwide: DoD Updates Section 1260H List Of Chinese Military Companies Operating Directly Or Indirectly In The United States
by Gunnar Larson 15 Feb '24

15 Feb '24

Oh no! I think STX may fall under: Entities affiliated with the Chinese Ministry of Industry and Information Technology, including research partnerships and projects. - Stacks’ strong third-party presence in Hong Kong extends to China. > One of Stacks’ board members has served as a leader of a Shanghai based > incubator. ---- https://www.mondaq.com/unitedstates/export-controls--trade--investment-sanc… Worldwide: DoD Updates Section 1260H List Of Chinese Military Companies Operating Directly Or Indirectly In The United States 13 February 2024 On January 31, 2024, the Department of Defense (DoD) released an update to its list of "Chinese military companies" that are "operating directly or indirectly in the United States" in accordance with the statutory requirement of Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, P.L. 116-283. The revised Section 1260H List is available here. While designation on the Section 1260H List alone has no current legal consequences (unlike, e.g., sanctions and export controls restricted party lists), Section 805 of the FY 2024 NDAA, passed in December 2023, imposes new contracting restrictions on DoD with respect to entities on the Section 1260H List or any entity subject to the control of such an entity, which will become effective on June 30, 2026. Implementing regulations for this law are forthcoming by DoD. As many restricted party screening platforms include entities listed on the Section 1260H List, we expect companies to undertake closer scrutiny of entities on the Section 1260H List given the reputational considerations associated with such a listing. Background Section 1260H of the Fiscal Year (FY) 2021 National Defense Authorization Act (NDAA) (Section 1260H List) states that the Secretary of Defense shall annually (until the end of 2030) "identify each entity Secretary determines, based on the most recent information available, is operating directly or indirectly in the United States or any of its territories and possessions, that is a Chinese military company" (emphases added). See our prior client alert for additional background on this topic. For purposes of Section 1260H, "Chinese military company" means an entity that is "engaged in providing commercial services, manufacturing, producing, or exporting" and is either: (1) "directly or indirectly owned, controlled, or beneficially owned by, or in an official or unofficial capacity acting as an agent of or on behalf of, the People's Liberation Army or any other organization subordinate to the Central Military Commission of the Chinese Communist Party"; OR (2) "identified as a military-civil fusion contributor to the Chinese defense industrial base." 1 The term "military-civil fusion contributor" includes any of the following: (A) Entities knowingly receiving assistance from the Government of China or the Chinese Communist Party through science and technology efforts initiated under the Chinese military industrial planning apparatus. (B) Entities affiliated with the Chinese Ministry of Industry and Information Technology, including research partnerships and projects. (C) Entities receiving assistance, operational direction or policy guidance from the State Administration for Science, Technology and Industry for National Defense. (D) Any entities or subsidiaries defined as a "defense enterprise" by the State Council of the People's Republic of China. (E) Entities residing in or affiliated with a military-civil fusion enterprise zone or receiving assistance from the Government of China through such enterprise zone. (F) Entities awarded with receipt of military production licenses by the Government of China, such as a Weapons and Equipment Research and Production Unit Classified Qualification Permit, Weapons and Equipment Research and Production Certificate, Weapons and Equipment Quality Management System Certificate or Equipment Manufacturing Unit Qualification. (G) Entities that advertise on national, provincial and non-governmental military equipment procurement platforms in the People's Republic of China. (H) Any other entities the Secretary determines is appropriate. 2 (emphasis added) Department of Defense (DoD) published the initial Section 1260H List in June 2021 and last updated it in October 2022. New Additions to the Section 1260H List In announcing the updated Section 1260H List, DoD highlighted, as it has before, how this list is part of "an important continuing effort in highlighting and countering the [People's Republic of China's (PRC)] Military-Civil Fusion Strategy," which, according to DoD, "supports the modernization goals of the People's Liberation Army (PLA) by ensuring its access to advanced technologies and expertise are acquired and developed by PRC companies, universities, and research programs that appear to be civilian entities." The updated Section 1260H List includes 17 new entities, as noted in the appendix, and also removed three entities from the prior version. Several of these newly-listed entities (like some of those previously listed on the Section 1260H List) are also designated on other U.S. restricted party lists, such as the U.S. Department of Commerce, Bureau of Industry and Security's (BIS) Entity List and Military End User List (MEU List) and the U.S. Department of Treasury, Office of Foreign Assets Control's (OFAC) Non-Specially Designated Nationals (SDN) Chinese Military-Industrial Complex Companies List (NS-CMIC List). However, some of the newly listed entities are not listed on any other restricted party list at this time. Other than the new government contracts prohibitions described in more detail below that will take effect after June 2026, and unless the Section 1260H List entity appears on another restricted party list, mere designation on the Section 1260H List does not currently carry any independent legal effect. However, as described in more detail below, Congress is considering several legislative proposals to enhance the legal consequences of a Section 1260H List listing. New Government Contracts Prohibitions Associated with Section 1260H List Section 805 of the FY 2024 NDAA, which President Biden signed into law on December 22, 2023, (see here) imposes prohibitions on purchases by DoD of goods or services produced or developed by Chinese military companies identified on the Section 1260H List and entities that they control. Effective June 30, 2026, DoD will be prohibited from executing new contracts with entities on the Section 1260H List and entities under their control, as well as renewing or extending current contracts with such entities. And, effective June 30, 2027, DoD will be prohibited from purchasing end products or services produced or developed by affected entities indirectly through third parties. Notably, the contemplated prohibitions are not identical to prior contracting prohibitions, such as Section 889 of the FY 2019 NDAA. Unlike Section 889, for example, this new statute does not prohibit DoD from purchasing end products that contain components from affected entities as long as the purchase is not directly from one of these entities. Specifically, for indirect purchases, Section 805 has an exception excluding the purchase of components generally and as part of an end product. Additionally, the prohibition only applies to DoD, not the federal government writ large. DoD has one year to issue rules implementing the June 2026 restriction and 545 days for the June 2027 restriction. The specifics of the Section 805 implementing regulations will likely require prime contractors to DoD to conduct expanded diligence to determine whether there are goods or services produced or developed by the identified Chinese military companies (and entities under their control) in their supply chain in order to maintain its compliance with the outlined restrictions. Impact The updated Section 1260H List is consistent with the Biden administration's broader coordinated "strategic competition" strategy and approach to China, including under export controls administered by BIS, import laws administered by U.S. Customs and Border Protection (CBP), sanctions administered by OFAC and by other means, including other trade controls addressing U.S. foreign policy concerns associated with human rights, forced labor and other issues. While the legal impact of a Section 1260H List designation standing alone is limited, such a designation could nevertheless carry reputational risks as many reputable restricted party screening providers will screen against the Section 1260H List, requiring companies reviewing those screening results to consider their risk profile. In addition, companies should be mindful that some Section 1260H List entities are also designated on other restricted party lists, which can carry more severe consequences. U.S. Congress On January 29, 2024, two days prior to the publication of the new Section 1260H List, several Senators sent a letter to Secretary of Defense Lloyd Austin pressing DoD "to publish the names of 'Chinese military companies' operating directly or indirectly in the United States, as required by Section 1260H of the Fiscal Year 2021 National Defense Authorization Act." The senators also requested a briefing on why DoD had failed to publish a revised Section 1260H List in 2023 despite the annual requirement to do so. Despite the subsequent publication of the updated Section 1260H List, given the high degree of interest on the Hill regarding this topic, we expect members of Congress will continue to press their request for a briefing on the process for determining how DoD develops, updates and publishes the list. Finally, Congress is also actively considering legislation that could require the Executive Branch to impose more severe restrictions on Section 1260H List entities, e.g., CMIC or SDN blocking sanctions administered by OFAC. The interest by Congress signals that oversight of the matter continues and will likely result in additional congressional activity. Footnotes 1. Section 1260H(d)(1)(B) of the FY 2021 NDAA. 2. Section 1260H(d)(2) of the FY 2021 NDAA. Appendix Entities Identified as Chinese Military Companies Operating in the United States in accordance with Section 1260H of the William M. ("Mac") Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116-283)** 360 Security Technology Inc. (Qihoo 360) Advanced Micro-Fabrication Equipment Inc. China (AMEC) Aerospace CH UAV Co., Ltd (S-SEA) Aviation Industry Corporation of China Ltd. (AVIC) AVIC Aviation High-Technology Company Limited (AVIC Aviation Hi-Tech) AVIC Heavy Machinery Company Limited (AVIC Heavy Machinery) AVIC Jonhon Optronic Technology Co., Ltd. (AVIC Jonhon) AVIC Shenyang Aircraft Company Limited (AVIC Shenyang) AVIC Xi'an Aircraft Industry Group Company Ltd. (AVIC Xi'an) Jiangxi Hongdu Aviation Industry Co., Ltd. (Hongdu Aviation) Zhonghang Electronic Measuring Instruments Company Limited (ZEMIC) Beijing Megvii Technology Co., Ltd. (Megvii) Beijing Zhidao Chuangyu Information Technology Co., Ltd. (Knownsec) BGI Genomics Co., Ltd. (BGI) Chengdu JOUAV Automation Tech Co., Ltd. (JOUAV) Chengdu M&S Electronics Technology Co., Ltd. (M&S Electronics) China Aerospace Science and Industry Corporation Limited (CASIC) Aerosun Corporation (Aerosun) China Communications Construction Group (Limited) (CCCG) China Communications Construction Company Limited (CCCC) China Construction Technology Co., Ltd. (CCTC) China Electronics Corporation (CEC) China Electronics Technology Group Corporation (CETC) Hangzhou Hikvision Digital Technology Co., Ltd. (Hikvision) China General Nuclear Power Corporation (CGN) China Mobile Communications Group Co., Ltd. (China Mobile Comm) China Mobile Limited (China Mobile) China National Chemical Corporation Ltd. (ChemChina) China National Chemical Engineering Group Corporation (CNCEC) China National Nuclear Corporation (CNNC) China National Offshore Oil Corporation (CNOOC) CNOOC Limited China North Industries Group Corporation Limited (Norinco Group) Inner Mongolia First Machinery Group Co., Ltd. (Inner Mongolia) China Railway Construction Corporation Limited (CRCC) China South Industries Group Corporation (CSGC) Costar Group Co., Ltd. (Costar) China SpaceSat Co., Ltd. (China SpaceSat) China State Construction Engineering Corporation Limited (CSCEC) China State Construction Group Co. China State Shipbuilding Corporation Limited (CSSC) China Marine Information Electronics Company Limited (China Marine Info Elec) China Telecom Group Co., Ltd. (China Telecom) China Telecom Corporation Limited China Telecommunications Corporation China Three Gorges Corporation (CTG) China United Network Communications Group Co., Ltd. (China Unicom) China Unicom (Hong Kong) Limited (China Unicom HK) CloudWalk Technology Co., Ltd (CloudWalk) CRRC Corporation Limited (CRRC) Dawning Information Industry Co., Ltd. (Sugon) Global Tone Communication Technology Co Ltd. (GTCOM) Guizhou Aviation Technical Development Co., Ltd. (Guizhou Aviation Tech) Hesai Technology Co., Ltd. (Hesai) Huawei Investment & Holding Co., Ltd. (Huawei Holding) Huawei Technologies Co., Ltd. (Huawei) IDG Capital Partners Co., Ltd. (IDG Capital) Inspur Group Co., Ltd. (Inspur) NetPosa Technologies, Ltd. (NetPosa) Semiconductor Manufacturing International Corporation (SMIC) Semiconductor Manufacturing International (Beijing) Corporation (SMIC Beijing) Semiconductor Manufacturing International (Shenzhen) Corporation (SMIC Shenzhen) Semiconductor Manufacturing International (Tianjin) Corporation (SMIC Tianjin) Semiconductor Manufacturing South China Corporation (SMIC South China) SMIC Holdings Limited (SMIC Holdings) SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd (SMIC NICM) SMIC Semiconductor Manufacturing (Shanghai) Co., Ltd (SMIC Shanghai) Shanghai Yitu Network Technology Co., Ltd. (Yitu) ShenZhen Consys Science & Technology Co., Ltd. (Consys) Shenzhen DJI Innovation Technology Co., Ltd. (DJI) Wuhan Geosun Navigation Technology Co., Ltd. (Geosun) Yangtze Memory Technologies Co., Ltd. (YMTC) Zhejiang Dahua Technology Co., Ltd. (Dahua) * Bold typeface indicates that the entity is new to this list as of January 31, 2024

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2nd Circ. Backs Goldman's Victory In 401(k) Self-Dealing Suit
by Gunnar Larson 15 Feb '24

15 Feb '24

Subject: 2nd Circ. Backs Goldman's Victory In 401(k) Self-Dealing Suit 2nd Circ. Backs Goldman's Victory In 401(k) Self-Dealing Suit <https://www.law360.com/newyork/articles/1797894?nl_pk=ac5a3855-e47c-4403-be…> By Kellie Mejdrich The Second Circuit upheld Goldman Sachs' win in a class action from 29,000 employee 401(k) plan participants who said the banking giant violated federal benefits law by including underperforming proprietary investment funds in their investment roster, citing evidence Wednesday of a "robust process" to manage potential conflicts. Order attached | Read full article » <https://www.law360.com/newyork/articles/1797894?nl_pk=ac5a3855-e47c-4403-be…> | Save to favorites » <https://www.law360.com/newyork/articles/1797894?nl_pk=ac5a3855-e47c-4403-be…>

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NYCB Faces Another Class Action Over CRE Challenges
by Gunnar Larson 15 Feb '24

15 Feb '24

NYCB Faces Another Class Action Over CRE Challenges <https://www.law360.com/newyork/articles/1797651?nl_pk=ac5a3855-e47c-4403-be…> By Brent Godwin A New York Community Bank investor has brought a proposed class action alleging that executives falsely boasted of the bank's financial condition after making two large acquisitions, when the deals in fact weighed down its balance sheet and led to a significant dividend reduction. Complaint attached | Read full article » <https://www.law360.com/newyork/articles/1797651?nl_pk=ac5a3855-e47c-4403-be…> | Save to favorites » <https://www.law360.com/newyork/articles/1797651?nl_pk=ac5a3855-e47c-4403-be…>

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Ref Says Suspended Fla. Atty Needs To Take Ethics Class
by Gunnar Larson 15 Feb '24

15 Feb '24

Ref Says Suspended Fla. Atty Needs To Take Ethics Class <https://www.law360.com/legalethics/articles/1797945?nl_pk=153d4a8a-6fb9-4a5…> By Carolina Bolado An ethics referee on Tuesday recommended not reinstating a suspended Tampa attorney to the Florida Bar because he failed to complete the ethics training required by the 2021 order that suspended him for making unfounded claims of racial bias against judges and opposing counsel. Report attached | Read full article » <https://www.law360.com/legalethics/articles/1797945?nl_pk=153d4a8a-6fb9-4a5…> | Save to favorites » <https://www.law360.com/legalethics/articles/1797945?nl_pk=153d4a8a-6fb9-4a5…>

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