June 2024 - cypherpunks - lists.cpunks.org

The Gov’s Plan from Hell: Disgusted With Wall Street Fees Eating Into Your 401(k), You Can Move It To Even Higher Fees At an Insurance Company
by Gunnar Larson 02 Jun '24

02 Jun '24

https://wallstreetonparade.com/2013/05/the-gov%E2%80%99s-plan-from-hell-dis… By Pam Martens: May 13, 2013 Did you just find out your 401(k) is leaking 8 percent in a hodgepodge of Wall Street management fees, transactions costs, sales commissions, and marketing schemes. Maybe you did the math and realized your account value, without your new additions, is still where it was in 2007. Or did you just check BrightScope and find out that your 401(k) is so abysmal that you’ll need 18 additional years of work to make up for the $215,500 in lost retirement savings. Or maybe you tuned in to the April 23 Frontline documentary on PBS to learn that it is quite possible for Wall Street to gobble up two-thirds of your retirement savings in your 401(k) while keeping you in the dark for the next 50 years. If so, there’s no reason to seethe in silence. The U.S. Department of Labor wants to hear from you about a potential plan to move you from the clutches of Wall Street to the warm embrace of the insurance industry where companies like AIG – that needed a $182 billion bailout from the U.S. taxpayer to avoid defaulting on its annuity payouts to widows and orphans around the world – would be able to take over the slimmed down assets in your 401(k) in exchange for the promise of a fixed income stream in retirement. The U.S. Department of Labor is nothing if not persistent. It rolled out this same idea back in 2010 and received a flood of hate mail for its effort. On February 2, 2010, the U.S. Department of Labor and the U.S. Treasury published a notice in the Federal Register asking for public comment on a multitude of issues pertaining to 401(k) plans. Three of the requests for comment were posed as follows: “Should some form of lifetime income distribution option be required for defined contribution plans (in addition to money purchase pension plans)? If so, should that option be the default distribution option, and should it apply to the entire account balance? To what extent would such a requirement encourage or discourage plan sponsorship? “Should an individual benefit statement present the participant’s accrued benefits as a lifetime income stream of payments in addition to presenting the benefits as an account balance? “If the answer to question [above] is yes, how should a lifetime stream of income payments be expressed on the benefit statement? For example, should payments be expressed as if they are to begin immediately or at specified retirement ages? Should benefit amounts be projected to a future retirement age based on the assumption of continued contributions? Should lifetime income payments be expressed in the form of monthly or annual payments? Should lifetime income payments of a married participant be expressed as a single-life annuity payable to the participant or a joint and survivor-type annuity, or both?” The government received 793, mostly vitriolic, responses with the common refrain that the government should keep its “grubby” hands off private savings. The government, however, was not suggesting that it would take over the accounts, it was asking if the insurance industry should issue an immediate annuity (fixed income stream) as the default option on a 401(k) when the retiree made no other election. More reasoned responses went like this May 19, 2010 one from William Galvin, the highly respected Secretary of the Commonwealth of Massachusetts: “We note that, at this time, an annuity may not be an effective tool to create a stream of revenue to support retirees. The payouts from fixed annuities are substantially based on prevailing interest rates, and in the current low interest rate environment those payouts will tend to be low. Annuities can also be problematic because they are often complex, high commission, and high-fee products. The Securities Division has seen multiple instances where securities salespeople and advisers have sold older customers annuity products, particularly variable annuities, that were unsuitable for them. My office has taken enforcement action in several such cases. All too often, the high selling compensation payable for these annuities drove these inappropriate recommendations.” An anonymous commenter from the state of Washington posted the following comment on February 21, 2010: “I don’t believe requiring an annuity distribution option to 401k plans will result in consumer change. I have been managing benefits for large employers for more than 20 years. A lifetime annuity was an option in a number of the plans I managed; not once has an employee elected the annuity. Employees have two primary concerns that stand in the way of purchasing an annuity: (1) insurer insolvency (insurer may be stable now but what about 20 years from now?) (2) Desire to leave unused 401k balance to beneficiaries.” Despite the overwhelming outpouring of responses against this idea, like the Dracula option that is never really dead, the Labor Department has tweaked and resurrected the proposal in a May 8, 2013 request for comment in the Federal Register. The tweak reads like this: “…the Department is considering the following ideas: A participant or beneficiary’s pension benefit statement would contain that individual’s current account balance. In addition, the current account balance would be converted to an estimated lifetime income stream of payments. The conversion illustration would assume the participant or beneficiary had reached normal retirement age under the plan as of the date of the benefit statement, even if he or she is much younger. “For participants who have not yet reached normal retirement age, the pension benefit statement would show the projected account balance, as well as the lifetime income stream generated by it. “A participant or beneficiary’s current account balance would be projected to normal retirement age, based on assumed future contribution amounts and investment returns. The projected account balance would be converted to an estimated lifetime income stream of payments, assuming that the person retires at normal retirement age. “Both lifetime income streams (i.e., the one based on the current account balance and the one based on the projected account balance) would be presented as estimated monthly payments based on the expected mortality of the participant or beneficiary. In addition, if the participant or beneficiary has a spouse, the lifetime income streams would be presented based on the joint lives of the participant or beneficiary and his or her spouse.” The Labor Department admits in its background statement that the idea is to force workers to look at how inadequately prepared for retirement they are and save more. That benefits Wall Street now as it lives off the high fees embedded in darkness in the 401(k). (The expense ratios the Labor Department required to appear on statements beginning last Fall fail to capture all the hidden commissions, fees and transaction costs eating away at 401(k) balances like a swarm of locusts.) Down the road, the insurance industry will get the final bite of what’s left as uninformed retirees, mentally brainwashed for decades to expect that lifetime income stream option, take the road of least resistance. None of this addresses the real issue: that the 401(k) has proven itself as a get rich scheme for Wall Street and a poverty driver for retirees. Even JPMorgan admitted in a comment letter that one of its own studies in 2009 found that “Two-thirds of 401(k) plan participants admitted they don’t read the plan information they receive from their employers or providers” and that “58% of participants indicated they did not have enough time to pay attention to their retirement investments on a regular basis.”

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Now That You Know Wall Street Can Eat Up Two-Thirds of Your 401(k) With Fees, You Should Also Know It Formed a Coalition to Block Full Disclosure of That Fact
by Gunnar Larson 02 Jun '24

02 Jun '24

https://wallstreetonparade.com/2013/04/now-that-you-know-wall-street-can-ea… By Pam Martens: April 30, 2013 Last week we reported on a PBS Frontline program showing that a 2 percent mutual fund management fee can gobble up two-thirds of your nest egg for retirement over a span of 50 years of saving. Now comes an equally ugly truth. Since at least 1998 the U.S. Department of Labor, which oversees the nation’s 401(k) plans, has known that fee gouging was eroding the ability of workers to adequately build wealth for retirement in 401(k) plans. It took more than a decade for the Federal agency to pass a regulation mandating that 401(k) recipients receive fee disclosure in an annual mailing. Leading the charge against full disclosure was a coalition of trade associations dominated by Wall Street. On April 13, 1998, the U.S. Department of Labor published a “Study of 401(k) Plan Fees and Expenses,” noting the following: “Expenses of operating and maintaining an investment portfolio that are debited against the participant’s account constitute an opportunity cost in the form of foregone investments in every contribution period. The laws of compound interest dictate that these small reductions in investment are magnified greatly over the decades in which many employees will be 401(k) plan participants. Observers have concluded that some plan providers are charging as much as 100 basis points in fees and expenses over the prevailing average rates (Benna; Butler, November 12, 1997). The effect of such higher levels of expenses would be to reduce the value of potential future account balances for these participants… “A second issue of concern to many observers is that sponsors (and participants) lack adequate information on the structure and extent of fees and expenses to make informed choices about service providers and investment options. Thus, the inadequate disclosure of information may be a factor in the existence of the large variance in fees and expenses of 401(k) plans…” Today, the U.S. Department of Labor web site carries a candid statement of what is happening to the unsophisticated in their efforts to save for retirement in 401(k)s: “Do you or your loved ones know how much you are paying for your retirement accounts? You could be losing tens or even hundreds of thousands of dollars because of excessive and hidden fees.” Back in 2007, when the Department of Labor put out for public comment its proposed rules on making fuller and clearer disclosures on 401(k) fees, a swat team of Wall Street related trade associations organized together to beat back too much disclosure. Noteworthy among the members was the infamous U.S. Chamber of Commerce, the Financial Services Roundtable and the Securities Industry and Financial Markets Association (SIFMA). In a letter dated July 24, 2007, the group argued the following points: “More disclosure will not always be better…” “More detail about the components of asset-based fees is not relevant to the total cost of investing…” “Fee information should not be elevated so as to suggest that fees are the most important factor in selecting investments…” “The Pension Protection Act of 2006 (PPA) requires that participants have access to investment education materials and a new requirement in this area is not needed…” The trade coalition produced no surveys, no research to back up the proposition that keeping 401(k) participants blissfully ignorant of grainy fee details was in their best interests. In fact, the preposterous idea that investors already had adequate information or that “more disclosure will not always be better” was discredited in a February 2011 study conducted on behalf of AARP. Titled “401(k) Participants’ Awareness and Understanding of Fees,” the report found that seven in ten (71percent) participants were not aware that they pay fees to their 401(k) plan provider. When participants were told there were fees, 62 percent did not know the amount of fees they pay. Beginning last August, 72 million participants holding some $3 trillion in 401(k) assets were to begin receiving an annual statement of the fees they are being charged. The statements for assets with a varying return (such as stock, bond and money market mutual funds) are to show the total annual operating expenses expressed as both a percentage of assets and a dollar amount for each $1,000 invested. In addition, commissions, front end and back end sales loads, surrender charges, account fees were also to be spelled out. For investment options that have a fixed rate of return (such as fixed-rate annuities), information was to be provided on any shareholder-type fees or restrictions on the ability to purchase or withdraw from the investment. Additional information for the 401(k) investor is provided at the following Department of Labor web pages: Understanding Your Retirement Plan Fees A Look at 401(k) Plan Fees – video A Look at 401(k) Plan Fees – publication FAQs on Disclosure to Help Employees Understand Their Retirement Plan Fees Maximize Your Retirement Savings – Tips on Using the Fee and Investment Information From Your Retirement Plan What You Should Know About Your Retirement Plan Before It’s Too Late Newsletter Retirement Plan Fee Disclosure Rule Fact Sheet

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High Court Ethics Bill In 'High Consideration,' Schumer Says
by Gunnar Larson 02 Jun '24

02 Jun '24

High Court Ethics Bill In 'High Consideration,' Schumer Says <https://www.law360.com/mergersacquisitions/articles/1839562?nl_pk=a34c25b5-…> By Courtney Bublé Senate Majority Leader Chuck Schumer, D-N.Y., said on Tuesday that a bill to institute an ethics code for the U.S. Supreme Court was in "high consideration" to come before the full Senate for a vote, following the report last week that an upside-down flag, which has become a symbol for former President Donald Trump's claims that the 2020 election was stolen, was flown outside Justice Samuel Alito's house after the attack on the U.S. Capitol a month later. Letter attached | Read full article » <https://www.law360.com/mergersacquisitions/articles/1839562?nl_pk=a34c25b5-…> | Save to favorites » <https://www.law360.com/mergersacquisitions/articles/1839562?nl_pk=a34c25b5-…>

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NY Expects Crypto Cos. To Meet Customer Service Standards
by Gunnar Larson 02 Jun '24

02 Jun '24

NY Expects Crypto Cos. To Meet Customer Service Standards <https://www.law360.com/fintech/articles/1842444?nl_pk=d2b3e7ef-ab62-4a62-80…> By Aislinn Keely The New York State Department of Financial Services on Thursday told the crypto firms under its purview that it expects them to resolve customer service issues promptly and fairly, according to newly issued guidance. Read full article » <https://www.law360.com/fintech/articles/1842444?nl_pk=d2b3e7ef-ab62-4a62-80…> | Save to favorites » <https://www.law360.com/fintech/articles/1842444?nl_pk=d2b3e7ef-ab62-4a62-80…>

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Sullivan & Cromwell Seeks To Ax Claims Of Aiding FTX Fraud
by Gunnar Larson 02 Jun '24

02 Jun '24

Sullivan & Cromwell Seeks To Ax Claims Of Aiding FTX Fraud <https://www.law360.com/legalethics/articles/1836822?nl_pk=153d4a8a-6fb9-4a5…> By Madison Arnold Sullivan & Cromwell LLP wants a Florida federal court to dismiss a proposed class action alleging the firm knew about and helped facilitate the massive fraud by FTX, saying customers of the cryptocurrency exchange platform fail to claim anything beyond a "series of speculative allegations with no factual basis." Motion attached | Read full article » <https://www.law360.com/legalethics/articles/1836822?nl_pk=153d4a8a-6fb9-4a5…> | Save to favorites » <https://www.law360.com/legalethics/articles/1836822?nl_pk=153d4a8a-6fb9-4a5…>

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492 Highlights to UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 22-CV-14102-MIDDLEBROOKS DONALD J. TRUMP, Plaintiff, v. HILLARY R. CLINTON, et al., Defendants. ____________________
by Gunnar Larson 02 Jun '24

02 Jun '24

492 Highlights to UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 22-CV-14102-MIDDLEBROOKS DONALD J. TRUMP, Plaintiff, v. HILLARY R. CLINTON, et al., Defendants. ____________________ INTRODUCTION March 24, 2022 158 Highlights: https://drive.google.com/file/d/1zggK7lgptlZ6Qn11EndzbDloqqVxRifv/view?usp=… 1. In the run-up to the 2016 Presidential Election, Hillary Clinton and her cohorts orchestrated an unthinkable plot – one that shocks the conscience and is an affront to this nation’s democracy. Acting in concert, the Defendants maliciously conspired to weave a false narrative that their Republican opponent, Donald J. Trump, was colluding with a hostile foreign sovereignty. The actions taken in furtherance of their scheme—falsifying evidence, deceiving law enforcement, and exploiting access to highly-sensitive data sources - are so outrageous, subversive and incendiary that even the events of Watergate pale in comparison. 2. Under the guise of ‘opposition research,’ ‘data analytics,’ and other political stratagems, the Defendants nefariously sought to sway the public’s trust. They worked together with a single, self-serving purpose: to vilify Donald J. Trump. Indeed, their far-reaching conspiracy was designed to cripple Trump’s bid for presidency by fabricating a scandal that would be used to trigger an unfounded federal investigation and ignite a media frenzy. 3. The scheme was conceived, coordinated and carried out by top-level officials at the Clinton Campaign and the DNC—including ‘the candidate’ herself—who attempted to shield her involvement behind a wall of third parties.1 To start, the Clinton Campaign and the DNC enlisted the assistance of their shared counsel, Perkins Coie, a law firm with deep Democrat ties, in the hopes of obscuring their actions under the veil of attorney-client privilege. Perkins Coie was tasked with spearheading the scheme to find—or fabricate—proof of a sinister link between Donald J. Trump and Russia. To do so, Perkins Coie launched parallel operations: on one front, Perkins Coie partner Marc Elias led an effort to produce spurious ‘opposition research’ claiming to reveal illicit ties between the Trump Campaign and Russian operatives; on a separate front, Perkins Coie partner Michael Sussmann headed a campaign to develop misleading evidence of a bogus ‘back channel’ connection between e-mail servers at Trump Tower and a Russian-owned bank. 4. Marc Elias, in his mission to obtain derogatory anti-Trump ‘opposition research,’ commissioned Fusion GPS, an investigative firm, and its co-founders, Peter Fritsch and Glenn Simpson, and directed them to dredge up evidence—actual or otherwise—of collusion between Trump and Russia. Fritsch and Simpson, in turn, enlisted the assistance of Orbis Ltd. and its owner, Christopher Steele, to produce a series of reports purporting to contain proof of the supposed collusion. Of course, the now fully debunked collection of reports, known as the “Steele Dossier,” was riddled with misstatements, misrepresentations and, most of all, flat out lies. In truth, the Steele Dossier was largely based upon information provided to Steele by his primary sub-source, Igor Danchenko, who was subsequently indicted for falsifying his claims. Even more damning, Danchenko had close ties to senior Clinton Campaign official, Charles Halliday Dolan, Jr., who knowingly provided false information to Danchenko, who relayed it to Steele, who reported it in the Steele Dossier and eagerly fed the deceptions to both the media and the FBI. This duplicitous arrangement existed for a singular self-serving purpose – to discredit Donald J. Trump and his campaign. 5. At the same time, Michael Sussmann, in his hunt for damaging intel against the Trump Campaign, turned to Neustar, Inc., an information technology company, and one of its top executives, Rodney Joffe, a fervent anti-Trumper who had recently been promised a high-ranking position with the Clinton Administration, to exploit their access to non-public data in search of a secret “back channel” connection between Trump Tower and Alfa Bank. When it was discovered that no such channel existed, the Defendants resorted to truly subversive measures – hacking servers at Trump Tower, Trump’s private apartment, and, most alarmingly, the White House. This ill-gotten data was then manipulated to create a misleading “inference” and submitted to law enforcement in an effort to falsely implicate Donald J. Trump and his campaign.2 All of these acts were carried out in coordination with the Clinton Campaign and the DNC, at the behest of certain Democratic “VIPs.”3 6. While their multi-pronged attack was underway, the Defendants seized on the opportunity to publicly malign Donald J. Trump by instigating a full-blown media frenzy. Indeed, the Clinton Campaign and DNC—admittedly on a “mission” to “raise the alarm” about their contrived Trump-Russia link4—repeatedly fed disinformation to the media and shamelessly promoted their false narratives. All the while, Hillary Clinton, Jake Sullivan, Debbie Wasserman Schultz, and others did their best to proliferate the spread of those dubious and false claims through press releases, social media, and other public statements. 7. The fallout from the Defendants’ actions was not limited to the public denigration of Trump and his campaign. The Federal Bureau of Investigation (FBI)—relying on the Defendants’ fraudulent evidence—commenced a large-scale investigation and expended precious time, resources and taxpayer dollars looking into the spurious allegation that the Trump Campaign had colluded with the Russian Government to interfere in the 2016 presidential election. The effects of this unfounded investigation were prolonged and exacerbated by the presence of a small faction of Clinton loyalists who were well-positioned within the Department of Justice and the FBI – James Comey, Andrew McCabe, Peter Strzok, Lisa Page, Kevin Clinesmith, and Bruce Ohr. These government officials were willing to abuse their positions of public trust to advance the baseless probe to new levels, including obtaining an extrajudicial FISA warrant and instigating the commencement of an oversight investigation headed by Special Counsel Robert Mueller. As a result, Donald J. Trump and his campaign were forced to expend tens of millions of dollars in legal fees to defend against these contrived and unwarranted proceedings. Justice would ultimately prevail – following a two-year investigation, Special Counsel Mueller went on to exonerate Donald J. Trump and his campaign with his finding that there was no evidence of collusion with Russia. 8. The full extent of the Defendants’ wrongdoing has been steadily and gradually exposed by Special Counsel John Durham, who has been heading a DOJ investigation into the origins of the Trump-Russia conspiracy. To date, he has already issued indictments to Sussmann and Danchenko, among others, for proffering false statements to law enforcement officials. As outlined below, these ‘speaking’ indictments not only implicate many of the Defendants named herein but also provide a great deal of insight into the inner-workings of the Defendants’ conspiratorial enterprise. Based on recent developments and the overall direction of Durham’s investigation, it seems all but certain that additional indictments are forthcoming. 9. In short, the Defendants, blinded by political ambition, orchestrated a malicious conspiracy to disseminate patently false and injurious information about Donald J. Trump and his campaign, all in the hopes of destroying his life, his political career and rigging the 2016 Presidential Election in favor of Hillary Clinton. When their gambit failed, and Donald J. Trump was elected, the Defendants’ efforts continued unabated, merely shifting their focus to undermining his presidential administration. Worse still, the Defendants continue to spread their vicious lies to this day as they unabashedly publicize their thoroughly debunked falsehoods in an effort to ensure that he will never be elected again. The deception, malice, and treachery perpetrated by the Defendants has caused significant harm to the American people, and to the Plaintiff, Donald J. Trump, and they must be held accountable for their heinous acts. ____________________ BACKGROUND September 8, 2022 190 Highlights: https://drive.google.com/file/d/1JUQtPF8f6ckSRHwLcu3S_joyF5xQoA-A/view?usp=… Plaintiff initiated this lawsuit on March 24, 2022, alleging that “the Defendants, blinded by political ambition, orchestrated a malicious conspiracy to disseminate patently false and injurious information about Donald J. Trump and his campaign, all in the hopes of destroying his life, his political career and rigging the 2016 Presidential Election in favor of Hillary Clinton.” (DE 177, Am. Compl. ¶ 9). On this general premise, Plaintiff brings a claim for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), predicated on the theft of trade secrets, obstruction of justice, and wire fraud (Count I). He additionally brings claims for: injurious falsehood (Count III); malicious prosecution (Count V); violations of the Computer Fraud and Abuse Act (“CFAA”) (Count VII); theft of trade secrets under the Defend Trade Secrets Act of 2016 (“DTSA”) (Count VIII); and violations of the Stored Communications Act (“SCA”) (Count IX). The Amended Complaint also contains counts for various conspiracy charges and theories of agency and vicarious liability. (Counts II, IV, VI, and X–XVI). Plaintiff’s theory of this case, set forth over 527 paragraphs in the first 118 pages of the Amended Complaint, is difficult to summarize in a concise and cohesive manner. It was certainly not presented that way. Nevertheless, I will attempt to distill it here. The short version: Plaintiff alleges that the Defendants “[a]cting in concert . . . maliciously conspired to weave a false narrative that their Republican opponent, Donald J. Trump, was colluding with a hostile foreign sovereignty.” (Am. Compl. ¶ 1). The Defendants effectuated this alleged conspiracy through two core efforts. “[O]n one front, Perkins Coie partner Mark Elias led an effort to produce spurious ‘opposition research’ claiming to reveal illicit ties between the Trump campaign and Russian operatives.” (Id. ¶ 3). To that end, Defendant Hillary Clinton and her campaign, the Democratic National Committee, and lawyers for the Campaign and the Committee allegedly hired Defendant Fusion GPS to fabricate the Steele Dossier. (Id. ¶ 4). “[O]n a separate front, Perkins Coie partner Michael Sussman headed a campaign to develop misleading evidence of a bogus ‘back channel’ connection between e-mail servers at Trump Tower and a Russian- owned bank.” (Id.). Clinton and her operatives allegedly hired Defendant Rodney Joffe to exploit his access to Domain Name Systems (“DNS”) data, via Defendant Neustar, to investigate and ultimately manufacture a suspicious pattern of activity between Trump-related servers and a Russian bank with ties to Vladimir Putin, Alfa Bank. (Id. ¶ 3). As a result of this “fraudulent evidence,” the Federal Bureau of Investigations (“FBI”) commenced “several large-scale investigations,” which were “prolonged and exacerbated by the presence of a small faction of Clinton loyalists who were well-positioned within the Department of Justice”—Defendants James Comey, Andrew McCabe, Peter Strzok, Lisa Page, Kevin Clinesmith, and Bruce Ohr. (Id. ¶ 7). And while this was ongoing, the Defendants allegedly “seized on the opportunity to publicly malign Donald J. Trump by instigating a full-blown media frenzy.” (Id. ¶ 6). As a result of this “multi-pronged attack,” Plaintiff claims to have amassed $24 million in damages.1(Id. ¶ 527). Defendants now move to dismiss the Amended Complaint as “a series of disconnected political disputes that Plaintiff has alchemized into a sweeping conspiracy among the many individuals Plaintiff believes to have aggrieved him.” (DE 226 at 1). They argue that dismissal is warranted because Plaintiff’s claims are both “hopelessly stale”—that is, foreclosed by the applicable statutes of limitations—and because they fail on the merits “in multiple independent respects.” (Id. at 2). As they view it, “[w]hatever the utilities of [the Amended Complaint] as a fundraising tool, a press release, or a list of political grievances, it has no merit as a lawsuit.” (Id.). I agree. In the discussion that follows, I first address the Amended Complaint’s structural deficiencies. I then turn to subject matter jurisdiction and the personal jurisdiction arguments raised by certain Defendants. Finally, I assess the sufficiency of the allegations as to each of the substantive counts. ____________________ BACKGROUND October 31, 2022 25 Highlights: https://drive.google.com/file/d/1QynNCV7iSPi-8b6dt605jmFTTNSaXtuD/view?usp=… PlaintifP’s pleadings and theories were obviously and fatally defective from the very inceptionof this action. Plaintiff's initial Complaint spanned 108 pages and S08 paragraphs. DE 1 (March 24, 2022). It named 28 individual defendants, as well as 10 John Does and 10 ABC Corporations. /d. Less than a month after the Complaint was filed, Hillary Clinton moved to dismiss it with prejudice. DE 52 (Apr. 20,2022). Defendant Clinton’s motion identified manyofthe fundamentalfactual deficiencies and legal flaws that would ultimately lead this Court to dismiss the Amended Complaint: namely, (1) that Plaintifs claims were untimely on their face, DE 52 at 1-5; (2) that Plaintiff's own tweets confirmed his knowledge ofhis supposed claimsno later than October 2017, DE 52 at 2-3; (3) that Plaintiffs Complaint was replete with inadequate and conclusory allegations, DE 52 at 6; (4) that Plaintiff failed to allege a RICO enterprise, DE 52 at 7; (5) that Plaintiff failed to allege the predicate act of theft of trade secrets based on DNS information, DE 52 at 8-9; (6) thatPlaintifffailedtoallege the predicate act ofobstructionofjustice in part because he identified no “official proceeding,” DE 52 at 9-10; (7) that Plaintiff failed to allege a patter of racketeering activity, DE 52 at 11-12; (8) that Plaintiff failed to adequately allege RICO standing because his supposed injuries were almostentirely undescribed, DE 52.at 12-14; (9) that Plaintiffs injurious falsehood claim was barred by the First Amendment, DE 52 at 15-17; (10) that Plaintiff failed to allege almost every necessary clementof injurious falsehood under Florida law, DE 52 at 17-18; (11) that Plaintiff failed to allege a malicious prosecution claim as to any official proceeding and, in particular, as to the properly predicated Crossfire Hurricane investigation, DE 52 at 19-20; and (12) that Plaintiff failed to allege a claim for “agency” because it is not an independent cause of action under Florida law. In response, Plaintiff's counsel indicated that they planned to amend the Complaint. DE 66 (Apr. 21, 2022). Defendant Clinton did not oppose counsel's request for an extension of time in whichto amend. See, e.g., DE 102 (Apr. 27,2022). In the intervening period, other Defendants joined Clinton's motion to dismiss and filed their own motions alertingPlaintiff and his counsel to additional fatal defects in the Complaint. See DE 124 (John Podesta), 139 (Peter Fritsch, Fusion GPS, Glenn Simpson); 141 (DNC Services Corporation, Democratic National Committee, Debbie Wasserman Schultz); 143 (Perkins Coie); 144 (Nellie Ohr); 145 (Robby Mook): 146 (Michael Sussmann); 147 (Mare Elias); 149 (HFACC); 157 (Rodney Joffe); 159 (Igor Danchenko); 160 (Neustar, Inc.); 162 & 163 (Charles Halliday Dolan, Jr.); 165 (Jake Sullivan). With respect to each motion, Plaintiff's counsel indicated that they planned to amend in response to the motions, and Defendants did not oppose extensionsof time to allow them to do so. See DE 153 (May 17,2022). PlaintifP’s counsel filed the Amended Complaint approximately two months after receiving Defendant Clinton’s motion to dismiss and with the benefit of Defendants” additional motions in the interim. DE 177 (June 21, 2022). “But despite this briefing, PlaintifPs Amended Complaint failed to cureanyofthe deficiencies.”DE 267 at 63-64 (Sept. 8, 2022) (“0p.”). “Instead, Plaintiff added eighty new pages of largely irrelevant allegations that did nothing to salvage the legal sufficiency of his claims.” Op. at 64. The Amended Complaint is “193 pages in length, with 819 numbered paragraphs,” and “contains 14 counts, names 31 defendants, 10 “John Does” described as fictitious and unknown persons, and 10 *ABC Corporations’ identified as fictitious and unknown entities.” Op. at 4. ____________________ BACKGROUND November 10, 2022 66 Highlights: https://drive.google.com/file/d/1ppCsJe6sSJKIionWtII4rI4qRMbKzBn3/view?usp=… The Complaint. In March 2022, Charles Dolan was among 29 defendants initially sued by Mr. Trump. (DE 1). He was identified as a former chairman of the DNC, a senior official in the Clinton Campaign, and a close associate of and advisor to Hillary Clinton. The Complaint alleged that in April 2016, Mr. Dolan participated in discussions about the creation of a “dossier” to smear Mr. Trump and disseminate false accusations to the media (Compl. ¶ 79), and at the direction of Ms. Clinton assisted in preparation of the dossier (Compl. ¶ 81). According to the Complaint, an allegation contained within the dossier that Mr. Trump engaged in salacious sexual activity in a Moscow hotel was derived from Mr. Dolan. (Compl. ¶ 91). Mr. Dolan was sued for RICO conspiracy (Count II), conspiracy to commit injurious falsehood (Count IV), and conspiracy to commit malicious prosecution (Count VI). The Warning Letter. On May 31, 2022, counsel for Mr. Dolan wrote the attorneys for Mr. Trump. They warned: 1. That Mr. Dolan had no role in any conspiracy related to the Steele dossier. 2. That Mr. Dolan was not a source for the allegations of sexual activity. 3. That Mr. Dolan had not been in contact with any defendant other than Igor Danchenko, and that Mr. Dolan’s contacts with Mr. Danchenko involved business interests and help for a conference in Moscow. 4. That Mr. Dolan had never been chairman of the DNC. 5. That Ms. Clinton was on record through a spokesperson as stating she had no recollection of Mr. Dolan. (DE 268-1). The letter requested that Mr. Dolan not be named as a defendant in any forthcoming Amended Complaint. The letter further warned that if he were to be named, or if he was not dropped from the original Complaint, Rule 11 sanctions would be sought. The Amended Complaint. On June 21, 2022, Plaintiff filed an Amended Complaint, as had been expected. It ballooned to 193 pages, 819 paragraphs and 31 defendants. With respect to Mr. Dolan, the allegations remained essentially the same. But in the Amended Complaint, Mr. Dolan was identified somewhat more vaguely as the former chairman of a “national Democratic political organization.” (Am. Compl. ¶ 96). Elsewhere, he was described as a “senior Clinton Campaign Official.” (Am. Compl. ¶ 4). Moreover, and somewhat inexplicably, Mr. Dolan was identified in the Amended Complaint as a citizen and resident of New York, despite a declaration that Mr. Dolan had provided to Plaintiff’s lawyers explaining that Mr. Dolan was a resident of Virginia. (Am. Compl. ¶ 20; DE 268-2). The Sanctions Motion and Memorandum. On July 15, 2022, Mr. Dolan served on Mr. Trump’s lawyers a motion seeking sanctions pursuant to Rule 11. The motion pointed out that the change in Mr. Dolan’s purported title from “former chairman of the DNC” in the original Complaint to “former chairman of a national Democratic political organization,” in the Amended Complaint did not solve the problems identified in the warning letter because Mr. Dolan had never been the chairman of any such organization. The motion further explained that Mr. Dolan’s role in the Clinton Campaign was limited to knocking on doors as a volunteer. The motion also stated that Mr. Dolan had never been a resident of New York, that Mr. Dolan had told Plaintiff’s lawyers so, and that the allegations of the Amended Complaint to that effect demonstrated a lack of diligence over something easily checked. Mr. Dolan’s motion for sanctions went on to place the Trump lawyers on notice of a critical failure in their claims, warning them that the Danchenko Indictment referenced throughout the Amended Complaint not only failed to support their allegations against Mr. Dolan but contradicted them. That warning continues to be unheeded. ____________________ BACKGROUND January 19, 2023 53 Highlights: https://drive.google.com/file/d/1sf0y-bIBdwaa1PO0Y3hKWhhImoXXCfbR/view?usp=… Plaintiff initiated this lawsuit on March 24, 2022, alleging that “the Defendants, blinded by political ambition, orchestrated a malicious conspiracy to disseminate patently false and injurious information about Donald J. Trump and his campaign, all in the hope of destroying his life, his political career, and rigging the 2016 Presidential Election in favor of Hillary Clinton.” (DE 1 ¶ 9). The next day, Alina Habba, Mr. Trump’s lead counsel told Fox News’ Sean Hannity: You can’t make this up. You literally cannot make a story like this up . . . and President Trump is just not going to take it anymore. If you are going to make up lies, if you are going to try to take him down, he is going to fight you back. And that is what this is, this is the beginning of all that.1 She then explained on Newsmax: What the real goal [of the suit] is, is democracy, is continuing to make sure that our elections, continuing to make sure our justice system is not obstructed by political enemies. That cannot happen. And that’s exactly what happened. They obstructed justice. They continued the false narrative . . . This grand scheme, that you could not make up, to take down an opponent. That is un-American.2 On April 20, 2022, less than a month after the Complaint was filed, Hillary Clinton moved for dismissal with prejudice. Her motion identified substantial and fundamental factual and legal flaws. Each of the other Defendants followed suit, pointing to specific problems with the claims against them. The problems in the Complaint were obvious from the start. They were identified by the Defendants not once but twice, and Mr. Trump persisted anyway. Despite this briefing and the promise “to cure any deficiencies,” Plaintiff’s counsel filed the Amended Complaint on June 21, 2022. (DE 177). The Amended Complaint failed to cure any of the defects. See DE 267, Order of Dismissal (September 8, 2022). Instead, Plaintiff added eighty new pages of largely irrelevant allegations that did nothing to salvage the legal sufficiency of his claims. (DE 267 at 64). The Amended Complaint is 193 pages in length, with 819 numbered paragraphs, and contains 14 counts, names 31 defendants, 10 John Does described as fictitious and unknown persons, and 10 ABC Corporations identified as fictitious and unknown entities. On July 14, 2022, the United States moved pursuant to the Westfall Act, 28 U.S.C. § 2679 (d)(i), to substitute itself as Defendant for James Comey, Andrew McCabe, Peter Strzok, Lisa Page, and Kevin Clinesmith. (DE 224). On July 21, 2022, I granted the motion to substitute. (DE 234). On September 8, 2022, I dismissed the case with prejudice as to all Defendants except for the United States. 3 I issued a detailed and lengthy Order, which I incorporate by reference here. (DE 267). I found that fatal substantive defects which had been clearly laid out in the first round of briefing, precluded the Plaintiff from proceeding under any of the theories presented. I found that the Amended Complaint was a quintessential shotgun pleading, that its claims were foreclosed by existing precedent, and its factual allegations were undermined and contradicted by the public reports and filings upon which it purported to rely. I reserved jurisdiction to adjudicate issues pertaining to sanctions. Undeterred by my Order and two rounds of briefing by multiple defendants, Ms. Habba continued to advance Plaintiff’s claims. In a September 10, 2022, interview with Sean Hannity, the host asked her “Why isn’t [Hillary Clinton] being held accountable for what she did?” Ms. Habba’s response reiterated misrepresentations on which this lawsuit was based: Because when you have a Clinton judge as we did here, Judge Middlebrooks who I had asked to recuse himself but insisted that he didn’t need to, he was going to be impartial, and then proceeds to write a 65-page scathing order where he basically ignored every factual basis which was backed up by indictments, by investigations, the Mueller report, et cetera, et cetera, et cetera, not to mention Durham, and all the testimony we heard there, we get dismissed. Not only do we get dismissed, he says that this is not the proper place for recourse for Donald Trump. He has no legal ramifications. Where what [sic] is the proper place for him? Because the FBI won’t help when you can do anything, obstruct justice, blatantly lie to the FBI, Sussmann’s out, he gets acquitted, where do you go? That’s the concern for me, where do you get that -- that recourse?4 She also indicated that, while Mr. Trump doubted the suit would succeed, she nevertheless “fought” to pursue it: You know, I have to share with you a story, Sean, that I have not shared with anybody. The recourse that I have at this point is obviously to appeal this to the 11th Circuit as Gregg said. But when I brought this case and we were assigned you know, this judge and we went through the recusal process, we lost five magistrates, including Reinhart [sic] who’s dealing with the boxes as we know. The former president looked at me and he told me, you know what Alina. You’re not going to win. You can’t win, just get rid of it, don’t do the case. And I said, no, we have to fight. It’s not right what happened. And you know, he was right, and it’s a sad day for me personally because I fought him on [it] and I should have listened, but I don’t want to lose hope in our system. I don’t. So, you know I’m deciding whether we’re going to appeal it.5 Defendants now move to recover attorneys’ fees and costs under Fed. R. Civ. P. 11, 28 U.S.C. § 1927, the Defend Trade Secrets Act, and/or this Court’s inherent power. (DE 280 at 1). In Part II, I find that a sanction under this Court’s inherent power is appropriate. I do so by examining Plaintiff’s (and his lawyers’) conduct throughout this litigation. In Part III, I look to Plaintiff’s conduct in other cases. And in Part IV, I determine the reasonableness of Defendants’ attorneys’ fees and costs.

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United States - Arbitration & Dispute Resolution - Supreme Court Requires Federal District Courts To Stay Cases Pending Arbitration
by Gunnar Larson 01 Jun '24

01 Jun '24

https://www.mondaq.com/unitedstates/arbitration--dispute-resolution/1470848… On May 16, 2024, in Smith v. Spizzirri, the Supreme Court of the United States resolved a long-standing circuit split that affects motions to compel arbitration in federal court. Specifically, the Court answered whether Section 3 of the Federal Arbitration Act (FAA), 9 U.S.C. § 3, permits a federal district court to dismiss a case, as opposed to staying it, when the action is subject to arbitration and a party requests a stay pending arbitration. Justice Sonia Sotomayor, writing for the unanimous Court, succinctly explained that the statute "does not" permit dismissal. Instead, when a motion to compel arbitration is granted, the district court must enter a stay. Brief Factual Background The petitioners in this case (the plaintiffs below) are current and former delivery drivers for an on-demand delivery service operated by the respondents. Petitioners sued respondents in Arizona state court alleging violations of federal and state employment laws. Respondents removed the case to federal court, where they also moved to compel arbitration and to dismiss the case. Although the parties agreed that the claims were arbitrable, petitioners argued that Section 3 required the district court to stay the action pending arbitration, whereas respondents argued that the district court should dismiss the action. Supreme Court's Decision Section 3 of the FAA provides that in any case subject to mandatory arbitration, the district court "shall ... stay the trial of the action until such arbitration has been had." The federal courts of appeals had long been split over whether that text permits a district court ordering arbitration not only to stay the action, but also to dismiss it. The U.S. Courts of Appeals for the Second, Third, Sixth, Tenth, and Eleventh Circuits had held that Section 3 means a district court may only stay the case pending arbitration, whereas the U.S. Courts of Appeals for the First, Fifth, and Ninth Circuits held that courts still retained authority to dismiss the suit. The Supreme Court resolved that split in Smith, holding in a concise, unanimous opinion that the plain language of Section 3 requires the district courts to stay cases subject to mandatory arbitration and does not permit dismissal. Justice Sotomayor's majority opinion explained, "When §3 says that a court 'shall . . . stay' the proceeding, the court must do so. Just as 'shall' means 'shall,' 'stay' means 'stay.'" The Supreme Court's opinion also explains that permitting dismissal under Section 3 would frustrate the intended appellate procedure. Section 16 of the FAA, 9 U.S.C. § 16, authorizes an immediate interlocutory appeal of an order denying a request for arbitration but not of an order granting such a request. If a court ordered the dismissal of a case subject to arbitration, then it would create an appealable order not intended under the FAA. By foreclosing such dismissal orders, the Court's opinion ensures only that orders denying requests for arbitration are immediately appealable—as Congress intended. This result favors parties seeking to arbitrate by affording them an interlocutory appellate right that is not available to parties seeking to avoid arbitration. Key Takeaways Businesses and employers with arbitration agreements should be aware of the Supreme Court's ruling and discuss with their counsel the procedural impact of moving to compel arbitration in federal court. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Authors Photo of Michael Huston Michael Huston Photo of Brittany A. Sachs Brittany A. Sachs Photo of David Watnick David Watnick

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United States - Arbitration & Dispute Resolution - Supreme Court Holds That The Court, Not The Arbitrator, Should Decide Whether A Later Forum Selection Clause Supersedes An Earlier Arbitration Agreement
by Gunnar Larson 01 Jun '24

01 Jun '24

https://www.mondaq.com/unitedstates/arbitration--dispute-resolution/1471232… SUMMARY The Supreme Court has held that when parties have agreed to two contracts—one delegating arbitrability disputes to the arbitrator, and the other either explicitly or implicitly reserving arbitrability disputes for the courts—a court must decide which contract governs. The case centers on a proposed class action brought by the plaintiffs who had entered a sweepstakes offered by Coinbase. They allege that Coinbase told consumers they were required to purchase a specific cryptocurrency called Dogecoin in order to enter the sweepstakes, when in fact they could enter for free. The plaintiffs had created accounts with Coinbase's platform and agreed to its User Agreement. The User Agreement contained an arbitration agreement and a delegation clause. The plaintiffs then entered into a second contract when they submitted entries to the sweepstakes and, in doing so, agreed to the Official Rules of the sweepstakes. Unlike the User Agreement, the Official Rules contained a forum selection clause sending disputes to California courts. Once the sweepstakes concluded, the plaintiffs filed a class-action complaint in the U. S. District Court for the Northern District of California, alleging that the sweepstakes violated California's False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act. Invoking the User Agreement and its delegation clause, Coinbase moved to compel arbitration. In a unanimous decision by Justice Ketanji Brown Jackson, the Court affirmed the Ninth Circuit's holding that the court, not the arbitrator, should decide whether the forum selection clause of the Official Rules superseded the earlier arbitration agreement contained in the User Agreement. In doing so, the Court emphasized that this is a matter of “basic legal principles,” which dictate that “[a]rbitration is a matter of contract and consent,” and thus “disputes are subject to arbitration if, and only if, the parties actually agreed to arbitrate those disputes.” The Court reiterated that consent is a threshold matter because “a party who has not agreed to arbitrate will normally have a right to the court's decision about the merits of its dispute.” Accordingly, “courts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” The Court explained that these principles govern the parties' dispute about whether they had agreed to send the given dispute to arbitration, “and, per usual, that question must be answered by a court.” The Court did not accept that under the doctrine of severability, “an arbitration or delegation provision is severable from the remainder of the contract,” and “unless the challenge is to the arbitration or delegation clause itself, the issue of the contract's validity is considered by the arbitrator in the first instance.” The Court reasoned that the severability principle “does not require that a party challenge only the arbitration or delegation provision. Rather, where a challenge applies equally to the whole contract and to an arbitration or delegation provision, a court must address that challenge.” The Court disagreed that its ruling would invite “chaos by facilitating challenges to delegation clauses.” The Court explained that its holding would have no implications for cases where the parties agreed to only one contract, and that contract contains an arbitration clause with a delegation provision. But where parties have agreed to two contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs, as a contrary ruling would “impermissibly elevate a delegation provision over other forms of contract.'” WHAT THIS MEANS This narrow decision is yet another example of the Court's continued emphasis on the contractual nature of arbitration. Arbitration agreements are contracts, and the courts will interpret them according to the rules that govern contracts—not through any special rules regarding arbitration. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Authors Photo of Linda T. Coberly Linda T. Coberly Photo of Thania Charmani Thania Charmani

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Cyprus - Arbitration & Dispute Resolution - Cancellation Of Arbitration Procedure When Fraud Issues Are Raised In The Referred Dispute
by Gunnar Larson 01 Jun '24

01 Jun '24

https://www.mondaq.com/cyprus/arbitration--dispute-resolution/1471558/cance… Arbitration serves as an alternative to court proceedings when there is a dispute between two contracting parties regarding the fulfillment of obligations or the exercise of rights within the framework of their contractual relationship. The ability of the contracting parties to resort to arbitration instead of court depends on the existence of necessary arbitration clauses in their contract. This significance is highlighted in a recent case involving a public interest construction contract between a Municipality and a contracting company. In the context of the said contract, disagreements arose between the Municipality and the contracting company regarding the executed works and their payments. As a result, the contracting company was accused of insufficient oversight to the detriment of the Municipality's interests and of engaging in collusion aimed at maximizing the profits of individuals involved in the works. The contracting company activated the arbitration clause and initiated the arbitration process despite the Municipality's refusal. The Municipality filed a civil lawsuit (OR 2.1.) against the contracting company in the District Court and simultaneously submitted an interim application seeking to cancel the arbitration agreement contained in the construction contract and to annul any arbitration proceedings initiated under it. In Cyprus, arbitration is provided for by the Arbitration Law (Cap. 4), where, according to Article 9(2), the Court has the authority to cancel arbitration proceedings when a fraud issue is raised in the referred dispute. It is understood that the party alleging fraud and seeking the cancellation of the arbitration process bears the burden of prima facie proving fraud by presenting the facts supporting its claims. In no case is it sufficient to make vague allegations of fraud. The First Instance Court concluded that the evidence presented by the Municipality met all the criteria of the Law and proceeded with issuing orders prohibiting the contracting company from proceeding with the arbitration process based on the arbitration clause contained in the disputed construction contract. The contracting company did not accept the first instance decision and filed a civil appeal challenging its correctness, presenting six grounds for appeal. Additionally, to support its appeal and dispute the correctness of the First Instance Decision, the contracting company submitted new evidence in the appeal proceedings related to the Municipality's allegation of fraud and deceit against the contracting company. The Civil Court of Appeal, in a unanimous decision on April 23, 2024, dismissed all the grounds of appeal presented by the contracting company, emphasizing that "the First Instance Court rightly concluded that sufficient details were provided by the Municipality regarding the contracting company's involvement in the alleged fraud during the execution of the construction contract. It is evident that the parties' dispute does not constitute an ordinary construction contract dispute regarding the extent and quality of the construction works that could be resolved within the framework of arbitration. Instead, detailed allegations of very serious fraudulent actions and collusion by various individuals involved in the construction works are made, resulting in the Municipality's financial damage. These allegations are so serious and specific that they can only be examined and decided in a court proceeding." The attempt by the contracting company to present new evidence regarding the facts of the case did not pass unnoticed by the Judges, who specifically stated that the new evidence did not change the situation at all, as it remains a fact that the Municipality presented sufficient and detailed evidence at the first instance to justify the conclusion of the First Instance Court that very serious fraud issues are raised in the case, which should only be heard by the Court. Additionally, it was emphasized that in such cases, what needs to be proven is a prima facie case of fraud committed by the contracting company, not whether it is substantively involved in fraud. Undoubtedly, this decision has established that participation in arbitration is not a contractual right that can be enforced like any other contractual right. Elements of compulsory arbitration participation reflect possibly outdated legal approaches globally. Furthermore, in public contracts, the preference for access to the Courts after the failure of amicable settlement is better aligned with the institution of public contracts aiming to protect the public interest. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Authors Photo of Katerina Andreou Katerina Andreou

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X Corp. Aims For 'Jugular' In Defamation Suit, Watchdog Says
by Gunnar Larson 01 Jun '24

01 Jun '24

X Corp. Aims For 'Jugular' In Defamation Suit, Watchdog Says <https://www.law360.com/competition/articles/1842388?nl_pk=6416fd97-1dc4-4e0…> By Spencer Brewer Media Matters for America says X Corp. shouldn't be allowed to target the left-leaning media watchdog's "financial jugular" by accessing its donor lists or its most sensitive financial documents, asking a federal judge Wednesday to reject the social platform's attempt to force production of the documents in a defamation suit. Complaint attached | Read full article » <https://www.law360.com/competition/articles/1842388?nl_pk=6416fd97-1dc4-4e0…> | Save to favorites » <https://www.law360.com/competition/articles/1842388?nl_pk=6416fd97-1dc4-4e0…>

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