June 2024 - cypherpunks - lists.cpunks.org

'What Am I Supposed To Do?': Epic-Apple Doc Row Irks Judge
by Gunnar Larson 18 Jun '24

18 Jun '24

'What Am I Supposed To Do?': Epic-Apple Doc Row Irks Judge <https://www.law360.com/competition/articles/1848681?nl_pk=6416fd97-1dc4-4e0…> By Dorothy Atkins A California federal judge presiding over Epic Games' high-stakes antitrust compliance fight against Apple expressed frustration Monday with the parties' disagreement over the scope of Apple's document production, asking counsel repeatedly "What am I supposed to do?" and "Do I need to get somebody on the stand to explain this?" Read full article » <https://www.law360.com/competition/articles/1848681?nl_pk=6416fd97-1dc4-4e0…> | Save to favorites » <https://www.law360.com/competition/articles/1848681?nl_pk=6416fd97-1dc4-4e0…>

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Sullivan & Cromwell’s Legal Work for Sam Bankman-Fried’s Crypto House of Fraud Is Getting a Closer Look in Two Federal Court Cases
by Gunnar Larson 18 Jun '24

18 Jun '24

https://wallstreetonparade.com/2024/06/sullivan-cromwells-legal-work-for-sa… By Pam Martens and Russ Martens: June 17, 2024 ~ Ryne Miller, Former Sullivan & Cromwell Partner; Now General Counsel of FTX.US Ryne Miller, Former Sullivan & Cromwell Partner Who Became General Counsel of FTX.US Last Monday, Robert J. Cleary of law firm Patterson Belknap filed a motion in the bankruptcy proceeding of Sam Bankman-Fried’s collapsed fraud, the FTX crypto exchange, seeking to launch three new investigations into legal work done by Sullivan & Cromwell for Bankman-Fried and FTX prior to the collapse of the fraud. Cleary is the independent examiner appointed by the U.S. Department of Justice’s U.S. Trustee, which acts as a watchdog in federal bankruptcy cases. Adding to the embarrassment for Sullivan & Cromwell with the announcement of the new investigations is the fact that Sullivan & Cromwell fought against allowing the U.S. Trustee to appoint an independent examiner after it had maneuvered itself into the position of lead counsel to the FTX bankruptcy proceeding, despite its multitude of conflicts with FTX. The presiding judge in the bankruptcy case, John Dorsey, had sided with Sullivan & Cromwell in the matter. The U.S. Trustee was forced to take the issue to the Third Circuit Court of Appeals. On January 19, a sharp rebuke to Sullivan & Cromwell and the judge was handed down. The court wrote in its decision: “Under the Bankruptcy Court’s interpretation, the appointment of an examiner under either subsection of Section 1104(c) would be subject to a court’s discretion and a judge would have the final say as to whether an investigation was warranted. But this interpretation runs counter to the statute’s plain language and established canons of construction.” The court added this: “First, an examiner must be ‘disinterested’… This requirement of disinterest is particularly salient here, where issues of potential conflicts of interest arising from debtor’s counsel serving as pre-petition advisors to FTX have been raised repeatedly….” The independent examiner’s June 10 motion explains the three new areas it wants to investigate as follows: “The first recommendation concerns S&C’s representation of Sam Bankman-Fried… in connection with his purchase of the Robinhood Shares…This inquiry would focus on (1) the scope and contours of that representation, and (2) based on that representation, what, if anything, S&C knew or should have known about the FTX Group’s misconduct and/or fraud… “The second recommendation concerns potential claims against the former shareholders of Ledger Holdings, Inc [parent of LedgerX]…that sold their interests prepetition to West Realm Shires Inc. [a/k/a FTX.US]…This inquiry would (1) seek to determine whether an avoidance action(s) is warranted with respect to unreleased shareholders, and (2) enable the Examiner to report on the underlying details of the prepetition sale of LHI to WRS, which report and findings would be in the public interest… “The third recommendation concerns the ‘holes’ or balance sheet shortfalls at FTX.US…This inquiry would center on (1) the existence of and the reasons these holes arose at FTX.US, (2) whether the balance sheet holes were the result of commingling of customer or corporate assets, (3) the frequency and magnitude of the holes, and (4) how they were resolved and by whom….” The independent examiner is asking for 10 weeks and $3 million to conduct the three new investigations. A hearing on the matter is scheduled for today in the federal bankruptcy court in Delaware before Judge John Dorsey. The independent examiner had released a preliminary report on May 23, which found no wrongdoing on the part of Sullivan & Cromwell. That report, however, indicated that further investigations would be requested by the independent examiner. Adding pressure on the independent examiner is the fact that powerful sleuthing into Sullivan & Cromwell’s work on behalf of FTX is being done by law firms representing plaintiffs who are suing Sullivan & Cromwell (S&C) in federal district court in Florida. The plaintiffs write in their complaint: “For its part, S&C facilitated the scheme to defraud and RICO enterprise by agreeing to provide and providing legal services to FTX US and FTX Trading Ltd…S&C did so knowingly, recklessly, or with willful blindness to the nature of the RICO enterprise but within the scope of the S&C’s employment and in furtherance of the firm’s business. In fact, in exchange for S&C’s counsel in these matters, FTX paid S&C significant fees.” There is no question that Sullivan & Cromwell’s ties to FTX were significant. One of Sullivan & Cromwell’s law partners, Ryne Miller, moved to FTX.US and became its General Counsel. Another former Sullivan & Cromwell lawyer, Tim Wilson, became General Counsel for FTX Ventures, the venture capital arm of FTX. Sullivan & Cromwell had previously represented the kingpin of the fraud, Sam Bankman-Fried, who was convicted in November 2023 on seven counts of fraud and conspiracy. The law firm had also previously represented the Head of Engineering at FTX, Nishad Singh, who pled guilty to fraud charges. According to Sullivan & Cromwell’s own bankruptcy court declaration, it had been involved in more than 20 legal engagements for FTX before it filed for bankruptcy on November 11, 2022. According to the declaration, the law firm’s legal work began 15 months prior to the collapse of the firm. Among the three areas that the independent examiner is asking to investigate, the LedgerX deal may prove to be particularly problematic. The plaintiffs in the case in federal court in Florida allege the following: “According to some FTX Insiders, S&C decided to intentionally keep FTX US Derivatives (formerly LedgerX) out of the FTX bankruptcy proceedings, with knowledge that it was in possession of approximately a quarter billion dollars of diverted FTX customer funds from which it could (and has) extracted significant revenue. In fact, from November 2022 to mid-January 2024, S&C’s income from matters just related to FTX has surged, exceeding $180 million—or 10% of the total revenue the 900-lawyer firm publicly stated it collected in all of 2022—with paralegals billing $595/hr. and partners billing up to $2,165/hr.” The Florida complaint also raises the following bombshell allegation regarding the LedgerX deal: “Through its work on the LedgerX acquisition and work in connection with LedgerX (d/b/a FTX US Derivatives) thereafter, S&C was privy to a software audit of the FTX systems, which Mr. Miller and then-CEO of LedgerX, Zach Dexter, oversaw. According to FTX Insiders, Mr. Miller became aware through that audit of the ‘back door’ in the FTX Platform code that allowed SBF [Sam Bankman-Fried] and his inner circle to embezzle FTX customer funds by funneling them to Alameda [Sam Bankman-Fried’s hedge fund], and communicated that fact to his mentors, Messrs. Dietderich and Eitel [lawyers at S&C], and others at S&C.” The Florida case is Edwin Garrison, et al., v. Sullivan & Cromwell LLP. It has been filed in the U.S. District Court for the Southern District of Florida. The case number is 1:24-cv-20630. It is part of Multi-District Litigation (MDL) involving FTX. Sullivan & Cromwell ranks among the oldest law firms in America. It was founded 145 years ago by Algernon Sydney Sullivan and William Nelson Cromwell in the financial district of lower Manhattan. During the Wall Street crisis of the 1930s, Sullivan & Cromwell built a reputation for defending Wall Street firms against shareholder lawsuits and antitrust actions. Sullivan & Cromwell also played a pivotal role in the 2008 financial crisis, the worst since the Great Depression. As Wall Street On Parade previously detailed, the firm’s Senior Chair, Rodge Cohen, paved the way for the Fed’s unprecedented $29 trillion bailout of Wall Street banks after their corrupt activities collapsed the U.S. economy in 2008. Related Articles: No One Trusts the FTX Bankruptcy Case: News Outlets Intervene; Justice Department Trustee Demands Independent Examiner; SEC Orders Disclosures A Sam Bankman-Fried Company Loaned or Invested More than $1 Billion in Clients of its Law Firm, Sullivan & Cromwell Sullivan & Cromwell, FTX Lead Counsel in Bankruptcy, Says It Has No Adverse Relationships, Despite Representing Four of FTX’s Crypto Exchange Competitors Bombshell Emails Raise Questions about What Sullivan & Cromwell Knew about Fraud at Sam Bankman-Fried’s Crypto Firms

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White & Case-Led Ukraine Seeks Debt Relief By Aug. Deadline
by Gunnar Larson 18 Jun '24

18 Jun '24

White & Case-Led Ukraine Seeks Debt Relief By Aug. Deadline <https://www.law360.co.uk/financial-services-uk/articles/1848502?nl_pk=a94fc…> By Najiyya Budaly The Ukraine government, advised by White & Case LLP, appealed on Monday to bondholders to help restructure its $19.5 billion of eurobond debt before a payments freeze it agreed with international creditors expires on Aug. 1. Read full article » <https://www.law360.co.uk/financial-services-uk/articles/1848502?nl_pk=a94fc…> | Save to favorites » <https://www.law360.co.uk/financial-services-uk/articles/1848502?nl_pk=a94fc…>

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Ex-Energy Minister Revives Bid To Ax Libel Defense
by Gunnar Larson 18 Jun '24

18 Jun '24

Ex-Energy Minister Revives Bid To Ax Libel Defense <https://www.law360.co.uk/financial-services-uk/articles/1848501?nl_pk=a94fc…> By Sophia Dourou A lawyer for an Iraqi politician said an investigative journalism article about the Iraqi oil business is "cherry-picking" bits of a court judgment to "create a story of corruption," urging a judge Monday to throw out the journalists' defense to his libel claim. Read full article » <https://www.law360.co.uk/financial-services-uk/articles/1848501?nl_pk=a94fc…> | Save to favorites » <https://www.law360.co.uk/financial-services-uk/articles/1848501?nl_pk=a94fc…>

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SFO Intends To Charge Individuals In Glencore Bribery Case
by Gunnar Larson 18 Jun '24

18 Jun '24

SFO Intends To Charge Individuals In Glencore Bribery Case <https://www.law360.co.uk/financial-services-uk/articles/1848706?nl_pk=a94fc…> By Ronan Barnard The Serious Fraud Office is seeking permission to charge individuals in its bribery probe into international commodities trader and miner Glencore, the crime-fighting agency confirmed at a London court on Monday. Read full article » <https://www.law360.co.uk/financial-services-uk/articles/1848706?nl_pk=a94fc…> | Save to favorites » <https://www.law360.co.uk/financial-services-uk/articles/1848706?nl_pk=a94fc…>

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Right Wing
by Gunnar Larson 17 Jun '24

17 Jun '24

https://www.instagram.com/reel/C1z306mNBCw/?igsh=MXI5eHExcHl3OGEyMA==

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BREAKING: NJ Powerbroker, Law Firm CEO Brother Accused Of Racketeering
by Gunnar Larson 17 Jun '24

17 Jun '24

BREAKING: NJ Powerbroker, Law Firm CEO Brother Accused Of Racketeering <https://www.law360.com/governmentcontracts/articles/1823467?nl_pk=4126fe73-…> By George Woolston Powerful New Jersey businessman George E. Norcross III and his brother, who is the chief executive officer of law firm Parker McCay, have been criminally charged alongside others in a scheme to acquire waterfront property in the distressed town of Camden using threats of economic and reputational harm. Read full article » <https://www.law360.com/governmentcontracts/articles/1823467?nl_pk=4126fe73-…> | Save to favorites » <https://www.law360.com/governmentcontracts/articles/1823467?nl_pk=4126fe73-…>

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BREAKING: Justices Will Hear Philly Bridge Project Fraud
by Gunnar Larson 17 Jun '24

17 Jun '24

BREAKING: Justices Will Hear Philly Bridge Project Fraud Case <https://www.law360.com/governmentcontracts/articles/1842088?nl_pk=4126fe73-…> By Matthew Santoni The U.S. Supreme Court will decide whether a Pennsylvania Department of Transportation contractor's false promise to give a certain share of its business to minority-owned subcontractors rises to the level of depriving the state agency of property, the court announced Monday. 2 documents attached | Read full article » <https://www.law360.com/governmentcontracts/articles/1842088?nl_pk=4126fe73-…> | Save to favorites » <https://www.law360.com/governmentcontracts/articles/1842088?nl_pk=4126fe73-…>

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BREAKING: Justices To Decide If False Claims Act Applies To E-Rate
by Gunnar Larson 17 Jun '24

17 Jun '24

BREAKING: Justices To Decide If False Claims Act Applies To E-Rate <https://www.law360.com/governmentcontracts/articles/1847080?nl_pk=4126fe73-…> By Ali Sullivan The U.S. Supreme Court on Monday agreed to review whether reimbursement requests made to the Federal Communications Commission's E-rate program for schools and libraries are "claims" under the False Claims Act. Order List attached | Read full article » <https://www.law360.com/governmentcontracts/articles/1847080?nl_pk=4126fe73-…> | Save to favorites » <https://www.law360.com/governmentcontracts/articles/1847080?nl_pk=4126fe73-…>

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NY-DFS Proposed Guidance on Character and Fitness (Extension Appeal)
by Gunnar Larson 17 Jun '24

17 Jun '24

---------- Forwarded message --------- From: Gunnar Larson <g(a)xny.io> Date: Wed, Jun 28, 2023, 2:14 AM Subject: Re: NY-DFS Proposed Guidance on Character and Fitness (Extension Appeal) To: <kathleen.scott(a)dfs.ny.gov> Cc: <BankingComments(a)dfs.ny.gov>, <cypherpunks(a)cpunks.org> Ms. Scott: Additionally, xNY.io - Bank.org respectfully submits Coinbase's Brian Armstrong on Bloomberg.com: https://www.bloomberg.com/news/videos/2023-01-12/the-david-rubenstein-show-… as a matter for public comment for NY-DFS' "Proposed Guidance on Character and Fitness." The Bloomberg interview with Coinbase showed top journalistic integrity, yet, Coinbase failed to mention any NY-DFS investigation or pending action. The interview aired last December, before the 100M Coinbase settlement was announced by NY-DFS concerning Coinbase's BitLicense compliance. NY-DFS' approach to Coinbase and Goldman Sachs (who took Coinbase public) share independent insider trading scenarios that could disrespect the United States Department of Justice, Criminal Division, Fraud Section and Money Laundering and Asset Recovery Section compliance programs. We have collated 34 highlights that describe a corporate opportunity policy framework to gauge character and fitness of the "first Bitcoin loan" backed by a New York banking institution here: https://drive.google.com/file/d/1Yx88RMoeLyyfbNK0RtPl4r-m8N21_1Sp/view?usp=… . Per point one of NY-DFS' "Suggested Questions to Facilitate Initial and Ongoing Assessment of Designated Persons’ Character and Fitness," can you kindly acknowledge that you have reviewed and understand our appeal seeking extension for public comment to August 5, 2023? We feel extra time for public comment is warranted to ensure that xNY.io - Bank.org did not play a significant role or otherwise contribute in a meaningful way to the conduct that led to regulatory action or proceeding without ample notice. Thank you, Gunnar On Wed, Jun 28, 2023, 12:04 AM Gunnar Larson <g(a)xny.io> wrote: > Ms. Scott: > > NY-DFS recently asked for public comment concerning "Proposed Guidance on > Assessment of the Character and Fitness of Directors, Senior Officers, and > Managers" mentioned here: > https://www.dfs.ny.gov/industry_guidance/industry_letters/il20230509_guidan… > . > > xNY.io - Bank.org asks if the NY-DFS will extend deadline for public > comment to August 5, 2023 from June 30, 2023. > > As requested by NY-DFS, today we provide (in a separate attachment) > evidence of any documented exceptions to compliance with the "Suggested > Questions to Facilitate Initial and Ongoing Assessment of Designated > Persons’ Character and Fitness." > > We have collated 19 references comprising 205 highlights that touch on the > five key areas below: > https://drive.google.com/drive/folders/1FTRRFFhQHDxf-oR9WOZz0a2gRtC9ZWVO. > > -Harassment and Discrimination Policies > > -Conflict of Interest Policy > > -Insider Trading Policy > > -Records Management Policy > > -Corporate Opportunity Policy > > xNY.io - Bank.org is seeking NY-DFS' extension for public comment to > August 5, 2023 so that the New York Banking community has time to complete > Q2-23 earnings call disclosures. > > As documented in the above 19 references, we feel extra time for public > comment is warranted to ensure that xNY.io - Bank.org did not play a > significant role or otherwise contribute in a meaningful way to the conduct > that led to regulatory action or proceeding without ample notice. > > Per point one of NY-DFS' "Suggested Questions to Facilitate Initial and > Ongoing Assessment of Designated Persons’ Character and Fitness," can you > kindly acknowledge that you have reviewed and understand our appeal seeking > extension for public comment to August 5, 2023? > > We hope to hear from you before June 30, 2023 given obvious factors. > > Sending you the very best regards. > > Thank you, > > Gunnar > > -- > Gunnar Larson > xNY.io | Bank.org > MSc - Digital Currency > MBA - Entrepreneurship and Innovation (ip) > > G(a)xNY.io > +1-917-580-8053 > New York, New York 10001 > >

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