- cypherpunks - lists.cpunks.org

The 6th Anniversary of the Peter Thiel / Hulk Hogan / Gawker Case: What Have We Learned? - Litigation Finance Journal
by Gunnar Larson 02 Feb '23

02 Feb '23

"This week marks the sixth anniversary of Terry Bollea (AKA professional wrestler Hulk Hogan) suing Gawker media for publishing a sex tape of him with a married woman. The suit made national news not just for its salacious nature—but because of the questions it raised regarding privacy versus journalistic freedom. Once news emerged that billionaire and PayPal co-founder Peter Thiel was funding Hogan’s claim, the case became even more sensational. In this piece, we’ll take a look at exactly what happened in the case, and how it impacted (or hasn’t impacted) Litigation Finance. The Facts of the Case In 2007, Gawker, a website known for celebrity scandals and salacious content, published a piece with the headline: “Peter Thiel is totally gay, people.” Was this newsworthy? Did the piece have journalistic integrity? Reasonable people can disagree. Peter Thiel is in fact gay, which means the truth of the article protected Gawker from a libel suit. In 2009, an outed Thiel gave an interview in which he called Gawker ‘destructive,’ even as he acknowledged that the site wasn’t focused on ruining him personally. Thiel also speculated that Gawker maintained a disdainful attitude toward Big Tech, and may be focusing on punishing industry leaders as a result. Fast forward to 2012, when Gawker published a lewd video featuring wrestler Hulk Hogan (AKA Terry Bollea) having sex with Heather Clem—wife of radio personality “Bubba the Love Sponge.” This led to Bollea suing the media outlet for infringement of rights of publicity, invasion of privacy, and intentional infliction of emotional distress. Bollea was represented by famed Los Angeles attorney Charles Harder. The published video, which Bollea claims was recorded without his knowledge or consent, contained a 2-minute section of a 30+ minute video—ten seconds of which included explicit sex acts. In 2016, Forbes magazine revealed that it was indeed Peter Thiel who was bankrolling Bollea’s case against Gawker. Speculation soared over what was viewed by many as Thiel’s revenge against Gawker for outing him. Did he want to ruin the media company, or purchase it, or simply malign the company that caused him personal and professional anguish? Thiel maintained that his involvement was philanthropic at heart, and meant to protect people from being bullied by unscrupulous media outlets. If anything, the lawsuit was meant to deter Gawker from intentionally releasing damaging content that lacked legitimate news value. Gawker founder Nick Denton, who was named personally in Bollea’s claim, made a statement about Thiel’s involvement in the case: “Just because Peter Thiel is a Silicon Valley Billionaire, his opinion does not trump our millions of readers who know us for routinely driving big news stories.” Also in 2016, a jury awarded Bollea compensatory damages of $115 million, plus punitive damages of $25 million—finding Gawker liable. A few months later, Gawker filed Chapter 11 bankruptcy, and began looking for a buyer. Several media outlets owned by Gawker were sold. By November 2016, Gawker and Bollea reached a settlement of $31 million. Today, Gawker’s flagship gossip site is still active. Gawker media sold off several of its prominent sites including Gizmodo, Jezebel, Deadspin, and io9. The LF Connection The case itself was of particular interest in and around the Litigation Finance community. Opponents of third-party legal funding asserted that Thiel’s actions in the case laid out an effective blueprint for the very wealthy to bankroll frivolous, but eye-catching cases. Billionaires could, some posited, use their wealth and legal connections to target specific companies, forcing them into bankruptcy. This speculation took place alongside the typical accusations that third-party litigation funding could clog court dockets with meritless actions meant to be quick paydays for funders and their clients. For example, Peter Sheer, a First Amendment expert, suggested that Thiel and others might abuse the power of third-party legal funding to intimidate media outlets. According to Sheer: “Winning is the ultimate chilling effect, but if you can’t win the case, you at least want the editors to think twice before writing another critical story about you.” To the keen-eyed observer though, it’s clear that Peter Thiel neither incited this case, nor had any real control over its outcome. Bollea initiated the case before Thiel’s involvement. At the time the case was decided, the jury was unaware that Bollea had a benefactor. And since the jury ruled in favor of Bollea, not Gawker, it’s clear that the case had merit. Thiel was always adamant that funding Bollea’s case (to the tune of $10 million) was about deterrence, not revenge. He explains that he wanted to “fight back” against Gawker’s practice of damaging reputations and bullying those with no means to pursue a claim to conclusion. As Thiel explains, “…even someone like Terry Bollea, who is a millionaire and famous and a successful person didn’t quite have the resources to do this alone.” While one could view Thiel’s actions as being contradictory to the principles of free speech—he disagrees. In fact, Thiel has donated to free speech defenders like the Committee to Protect Journalists. Thiel maintains that there is a profound difference between journalism in the public interest, and the type of media Gawker traffics in. That’s why he decided to take action. Thiel told the New York Times, “It’s less about revenge and more about specific deterrence. I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.” Now, six years after the case has concluded—what have we learned? We haven’t seen a rash of billionaires funding cases, frivolous or not, with the intention of bringing down specific companies. That’s not to say billionaires aren’t financing claims the way Thiel did, only that they aren’t doing so publicly. Unlike traditional litigation funders, Thiel did not stand to make any money from Bollea’s lawsuit. Technically, Thiel should still be considered the litigation funder, though his term sheet wouldn’t be one most funders would want to imitate. The Gawker case has not led to a slew of frivolous, funded claim. Among other reasons, it simply doesn’t make financial sense to invest in a case lacking in merit. Bollea’s accusations against Gawker were affirmed by the jury, which resulted in a large award. So this claim was meritorious, even if Thiel’s motivation for funding the claim were not ROI-based. Media outlets are not cowering en masse over fears of punitive lawsuits from billionaires. That was much ado about nothing. Holding media outlets accountable for what they print (and occasionally, their motivations for doing so) is a vital and essential part of the free press. Free speech is not freedom to print anything—even something as personal as a sex tape—merely as an attention-getting device. Final Takeaways Can a lawsuit fall under the purview of Free Speech? Thiel believes so, and many others agree. This case addressed questions of privacy, free speech, and litigation funding. The end results demonstrated that we are all entitled to some element of privacy—even the celebrities among us. The Gawker case also affirmed that litigation funding still serves the interests of justice by enhancing the ability of claimants to bring lawsuits when they are wronged. The takeaway here should be that Peter Thiel afforded Hulk Hogan access to justice. Of course, when a billionaire backs a professional wrestler against a media company, sometimes the moral of the story can get lost beneath the headlines." https://litigationfinancejournal.com/the-6th-anniversary-of-the-peter-thiel… .

1 0

Entrapment
by Gunnar Larson 02 Feb '23

02 Feb '23

Hello: I am under entrapment, now for several hours. I have asked the agents to stop. Apparently, they refuse decorum. Obstruction of justice is a crime. Tampering is a crime. Intimidation is a crime. Gunnar Larson

1 0

28 U.S. Code § 1658 - Time limitations on the commencement of civil actions arising under Acts of Congress | U.S. Code | US Law | LII / Legal Information Institute
by Gunnar Larson 02 Feb '23

02 Feb '23

https://www.law.cornell.edu/uscode/text/28/1658 (a)Except as otherwise provided by law, a civil action arising under an Act of Congress enacted after the date of the enactment of this section may not be commenced later than 4 years after the cause of action accrues. (b)Notwithstanding subsection (a), a private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), may be brought not later than the earlier of— (1)2 years after the discovery of the facts constituting the violation; or (2)5 years after such violation. (Added Pub. L. 101–650, title III, § 313(a), Dec. 1, 1990, 104 Stat. 5114; amended Pub. L. 107–204, title VIII, § 804(a), July 30, 2002, 116 Stat. 801.)

1 0

Re: [EXT]Re: Confirmation of Zoom Orientation
by Gunnar Larson 02 Feb '23

02 Feb '23

Obstruction of justice is a crime. On Wed, Feb 1, 2023, 9:08 AM Denae Knight <DKnight(a)nadap.org> wrote: > No, we cannot keep pushing orientation back. If you are not able to make > orientation this week, I will need to remove you from our list. You can > reach back out when you are ready to move forward with the process without > rescheduling appointments. > > > > > > *Denae Knight* > Career Services Coordinator > NADAP > 1825 Park Avenue, 5th Floor > New York, NY 10035 > T: (646) 809-4865 > F: (646) 791-4959 > DKnight(a)nadap.org > <https://www.facebook.com/NADAPInc> <https://twitter.com/NADAP_Inc> > <https://www.linkedin.com/company/nadap> > <https://www.youtube.com/user/NADAP1971> > <https://www.pinterest.com/user_name_here> > <https://www.instagram.com/nadap_inc/>. > www.nadap.org > > > > Confidentiality Note: This e-mail, and any attachment to it, contains > privileged and confidential information intended only for the use of the > individual(s) or entity named on the e-mail. If the reader of this e-mail > is not the intended recipient, or the employee or agent responsible for > delivering it to the intended recipient, you are hereby notified that > reading it is strictly prohibited. If you have received this e-mail in > error, please immediately return it to the sender and delete it from your > system. > > *From:* Gunnar Larson <g(a)xny.io> > *Sent:* Wednesday, February 1, 2023 8:49 AM > *To:* Denae Knight <DKnight(a)nadap.org> > *Subject:* [EXT]Re: Confirmation of Zoom Orientation > > > > *CAUTION:* This email originated from outside of NADAP's network. Please > use caution before clicking any links or attachments. Do not follow a link > that asks you to sign in with your credentials. > > Denae: > > > > Can I please schedule our conversation for next Monday at 2:00pm? > > > > Hope you have a great day. > > > > Thank you, > > > > Gunnar > > > > > > On Mon, Jan 30, 2023, 12:21 PM Gunnar Larson <g(a)xny.io> wrote: > > Denae: > > > > Would it be possible to schedule this meeting for tomorrow or Wednesday at > the same time? > > > > Thank you, > > > > Gunnar > > > > On Fri, Jan 27, 2023, 10:24 AM Gunnar Larson <g(a)xny.io> wrote: > > Denae: > > > > Thank you for the call today. > > > > My CV is attached. > > > > Have a great day. > > > > Thank you, > > > > Gunnar > > > > Gunnar Larson > > 646-454-9107 > > > > On Fri, Jan 27, 2023, 10:21 AM Denae Knight <DKnight(a)nadap.org> wrote: > > Hi Gunner, > > > > As discussed, I have registered you for our zoom orientation which will > take place next Monday (1/30) at 2pm. You should have received a separate > email with the zoom link. Here is the zoom link if you have not received > the registration email: > > > > > https://us06web.zoom.us/w/84261393031?tk=Z3XDgLOJ-eEPyoBM4q4ZfqcLP1auPGGLjZ… > <https://urldefense.proofpoint.com/v2/url?u=https-3A__us06web.zoom.us_w_8426…> > > > > In the meantime, if you have an existing resume, please forward it along > with any diplomas/certifications. If you have any questions or concerns, > please don’t hesitate to reach out at the phone number below. You can also > text me at 516-995-1745. > > > > Regards, > > > > > > > > [image: Image removed by sender.] > > *Denae Knight* > Career Services Coordinator > NADAP > 1825 Park Avenue, 5th Floor > New York, NY 10035 > T: (646) 809-4865 > F: (646) 791-4959 > DKnight(a)nadap.org > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.facebook.com_NADAP…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__twitter.com_NADAP-5FIn…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.linkedin.com_compa…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.youtube.com_user_N…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.instagram.com_nada…> > . > www.nadap.org > <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.nadap.org&d=DwQFaQ&…> > > > > > Confidentiality Note: This e-mail, and any attachment to it, contains > privileged and confidential information intended only for the use of the > individual(s) or entity named on the e-mail. If the reader of this e-mail > is not the intended recipient, or the employee or agent responsible for > delivering it to the intended recipient, you are hereby notified that > reading it is strictly prohibited. If you have received this e-mail in > error, please immediately return it to the sender and delete it from your > system. > >

2 1

CNN Report on Personal Injury Advertising Trends - Litigation Finance Journal
by Gunnar Larson 02 Feb '23

02 Feb '23

Check out my new article: https://litigationfinancejournal.com/cnn-report-on-personal-injury-advertis… In 1977, the United States Supreme Court ruled that legal advertisements are protected by the first amendment. The court highlighted that restrictions on legal marketing hampered access to justice “particularly for the not-quite-poor and the unknowledgeable.” The 1980s spawned a renaissance in attorney advertising, and today, the market for legal advertising tops well over $1.2B a year in the United States. CNN Business reports ( https://www.cnn.com/2022/12/25/business/personal-injury-lawyers-advertising…) that many personal injury firms are seeking to advertise to the public, in a bid to attract attention with clever TV commercials and newspaper promotions. Direct response methods are even engaged to target potential clients who are currently in the hospital recovering from injury. Hedge funds and savvy litigation investment networks invest vast sums of capital to attract business in the personal injury market, according to CNN. The U.S. Chamber’s Institute for Legal Reform (a longstanding opponent of the litigation funding industry) claims that aggressive attorney advertising is problematic and can increase the number of frivolous lawsuits. In contrast, CNN reports that the overall amount of claims filed in the United States is declining, partly due to stricter state laws to curb social inflation, and also due to the increasing cost of bringing cases to court. That latter point is exactly why consumer legal funding exists in the first place.

1 0

The perfect privacy blockchain has not yet been built
by professor rat 01 Feb '23

01 Feb '23

"How Nym fights surveillance and control with blockchain technology" - BeinCrypto (German) “There are already some blockchains that offer privacy features…But they can't do smart contract execution, so they purposefully have quite a limited feature set. I think that offering privacy features for smart contract execution, which Nym is just about to get on mainnet, is the next obvious step…We think it's going to change the way people think about privacy and blockchains. Looking to the future, there's a huge protocol design space for privacy features to do things like protecting transaction gossip, stop MEV extraction, and allow people to control their privacy levels. The perfect privacy blockchain has not yet been built.” FROM NYM newsletter - caveat emptor

1 0

Anarchism to the Max
by professor rat 01 Feb '23

01 Feb '23

WOLFIE "When I first read The Ego and Its Own, I recognized that there was a great deal of humor, sarcasm, and satire throughout the book. I never understood how anyone could call Stirner “humorless”—yet certain critics (particularly those who wanted to present him as a precursor of the political right or some other sort of “supreme evil” in their eyes) accused him of precisely this. After translating Stirner’s Critics and “The Philosophical Reactionaries,” I realized the extent of his mocking, sarcastic, and, at times, bawdy humor and the breadth of his wordplay. My play with these translations and talks with Jason McQuinn {1} clarified some of the flaws I had recognized in the existing English translation of Der Einzige und sein Eigentum, and the pleasure I find in the activity of translating moved me to take up the project... you could do what Stirner did and see the humor in the ultimate absurdity, recognizing that this lack of universal meaning and purpose is what gives you and I the capacity to willfully create our lives for ourselves. Stirner willfully grasped his own self-creative power and took aim at all that was considered sacred with the intention of demolishing it. He knew the best weapon for demolishing the sacred is mocking laughter. Instead of being a wise man, Stirner chose to be a wise guy, and if you don’t get the joke, the jokes on you... Stirner’s ideas and words have quite a bit to offer, but even more, his method provides a most useful and enjoyable weapon: merciless and mirthful mockery, the sarcastic use of his opponents’ methods to twist their own ideas back against them, the cruel and joyful laughter of one who sees past the delusions that keep others in chains. Stirner combined the small jokes of wordplay, (mostly) subtle lewdness, and sarcasm with an overarching joke that undermined the edifices of philosophy, religion, politics and all systems of overarching thought to demolish the foundations of the sacred. But this is a battle that each one of us has to fight for her or himself. Stirner found enjoyment in writing this. His grin stretches across the pages and reminds all of us who rebel and create for ourselves that this is all one great, wild, joyful joke played on every “higher value,” a book intended to pull the rug out from under everything that anyone holds sacred. . . " LANDSREICHER Cheap plastic-toy imitation Nietzsche fellators GO FUCK YOURSELF

1 0

United States v. Samuel Bankman-Fried, 22 Cr. 673 (LAK)
by Gunnar Larson 01 Feb '23

01 Feb '23

https://wallstreetonparade.com/wp-content/uploads/2023/02/January-30-2023-L… BY ECF Honorable Lewis A. Kaplan United States District Judge Daniel Patrick Moynihan United States Courthouse 500 Pearl Street New York, NY 10007-1312 Re: United States v. Samuel Bankman-Fried, 22 Cr. 673 (LAK) Dear Judge Kaplan: The Government writes in reply to the defendant’s opposition to the Government’s motion to impose two new conditions of pretrial release, and its request to remove the existing condition prohibiting the defendant from accessing or transferring any FTX or Alameda assets or cryptocurrency. For the reasons below, and those in the Government’s motion filed on January 27, 2023 (see Dkt. 50), the Court should impose the Government’s proposed conditions of pretrial release and maintain the already-imposed conditions. 1. The Proposed No-Contact Condition Is Warranted The first proposed condition—that the defendant shall not contact or communicate with current or former employees of FTX or Alameda (other than immediate family members), except in the presence of counsel or as approved by the Government—is necessary to prevent witness tampering and obstruction of justice. See 18 U.S.C. § 3142(c)(1)(B)(iv) & (v) (providing that a court may impose conditions of bail that restrict personal association and avoid contact with victims and potential witnesses). The defendant’s messages to Witness-1, attached as Exhibit 1, illustrate why such a condition is appropriate. The defense argues that these messages were merely an “innocuous attempt to offer assistance in FTX’s bankruptcy process,” similar to the defendant’s earlier outreach to John Ray, the CEO of the FTX Debtor entities. Dkt. 51 (“Def. Letter”) at 5; see also Ex. 2 (January 2, 2023 email from the defendant to John Ray). Putting aside that the defendant is trying to participate in FTX asset recovery despite being charged with crimes related to the misuse of FTX customer assets that precipitated FTX’s bankruptcy, the defendant’s messages to Witness- 1 cannot bear his interpretation The differences between the defendant’s contacts with Witness-1 and John Ray are instructive. First, Witness-1, unlike John Ray, is a witness to the charged crimes and not the steward of FTX’s bankruptcy. Second, the messages to Witness-1 are not of the same character as those to John Ray. In reaching out to John Ray, the defendant copied his attorneys and was explicit that he wanted to assist with asset recovery. The defendant’s messages to Witness-1 omit both Witness-1’s and the defendant’s attorneys and are comparatively oblique, making no mention of asset recovery, and referring instead to a “constructive relationship,” “us[ing] each other as resources,” and “vet[ting] things with each other.” Ex. 1. This goes beyond offering “assistance to FTX ‘as a resource.’” Def. Letter at 2. The defendant refers to “resources” plural; he not only offered himself as a resource, but also asked Witness-1 to be a resource for him in return. Asking a potential witness to be a resource to him, and to “vet things” with him—without any clarification of a supposedly benign intent—shows an effort to improperly influence Witness-1. Tellingly, the defense proffers no permissible or innocuous means by which Witness-1 could be a “resource” to the defendant. Although, as the defense points out, Witness-1 did not respond to the message, Witness-1’s attorney promptly alerted the Government to the defendant’s concerning overture. Regardless, a defendant can engage in improper witness contacts even without explicitly seeking to shape the witness’s testimony. Improper tampering with a witness can be achieved by both “direct and indirect means,” and whether an “overt threat or implied intimidation,” the “taint” of such “improper contacts . . . cannot easily be overcome.” United States v. Grisanti, No. 91 Cr. 299A, 1992 WL 265932, at *6 (W.D.N.Y. 1992). Because “[w]itness tampering by its very nature strikes at the fairness and perverts the integrity of the judicial process,” id., the bail statute expressly recognizes that a condition that prohibits “all contact with an alleged victim of the crime and with a potential witness who may testify concerning the offense,” is among the conditions that may be necessary to protect the safety of the community, 18 U.S.C. § 3142(c)(1)(B)(v). Here, the defendant’s position of authority with respect to his former employees, combined with his recent outreach to a former employee about the case, raises a sufficient specter of witness tampering to justify the proposed condition. The defendant asserts that “many” of the former employees who would fall under the proposed bail condition are the defendant’s friends and an “important source of personal support.” Def. Letter at 6. While that may be true, it is also true that many of the defendant’s former employees are not only potential witnesses, but also his victims. The defendant perpetrated his scheme with the assistance of a few high-level executives, but many of his employees were in the dark until FTX’s collapse, and themselves lost money as a result of the defendant’s crimes. These employees had assets on FTX.com, including compensation the defendant had paid in the form of FTT, FTX.com’s cryptocurrency token that collapsed in value in November 2022 as the defendant’s misconduct was exposed. The defense notes that FTX and Alameda had approximately 350 employees. Def. Letter at 6. That merely highlights the Government’s informational disadvantage; while the Government has conducted dozens of interviews, it has not communicated with every former FTX and Alameda employee, let alone defined the complete universe of former employees with information relevant to the charged crimes. The defendant, on the other hand, can more readily identify for the Government or the Court the close friends whose support he considers critical to his mental health and wellbeing. See Def. Letter at 5. The Government does not seek to deprive the defendant of personal support—it acquiesced in the defendant’s request to live with his parents in California and has already indicated no objection to the defendant communicating with his therapist and several friends (and former employees) identified by the defense as continued close friends of the defendant. In an email on January 27, 2023, at 11:42 a.m., the Government thanked defense counsel for their “engagement” on the proposed bail condition, informed defense counsel of the conditions it intended to seek from the Court, and noted the Government’s view that it is “more administrable to approve proposed contacts than to give you a potential witness list, particularly because our investigation is ongoing and we continue to identify former/current employees with relevant information.” Notably, while the defendant’s proposed bail modification includes a category of witnesses whom the defendant would be prohibited from contacting, even in the presence of his attorneys, the Government seeks no such restriction. Under the Government’s proposal, the defendant would remain free to contact and communicate with potential witnesses, as long as his attorneys are present, thereby preserving his constitutional right to participate in and prepare his defense. The defendant’s claims that that the proposed condition would impinge upon his First Amendment right of association and ability to participate in his defense are therefore without merit. See Def. Letter at 5. As the cases relied upon by the defendant themselves makes clear, a district court may impose a bail condition that restricts a defendant’s right to associate upon a finding that such a condition is necessary. See United States v. Lillemoe, No. 15 Cr. 25, 2015 WL 9694385, at *2 (D. Conn. May 28, 2015); United States v. Arzberger, 592 F. Supp. 2d 590, 603-04 (S.D.N.Y. 2008). Indeed, Section 3142 specifically contemplates that judges may make such a finding. 18 U.S.C. § 3142(c)(1)(B)(iv) (conditions of release may include “that condition that the person . . . abide by specified restrictions on personal associations”). The defendant makes no persuasive showing that the proposed condition would impede participation in his defense. If anything, the proposed condition ensures that to the extent the defendant participates directly in his own defense, he does so consistent with the rules that require contact through a represented person’s attorney and without improperly influencing or intimidating witnesses. The defense cites several cases that included a bail condition similar to that proposed by the defense. Notably, those cases too imposed restrictions on a defendant’s association with others. But to the extent that the defendant advances those cases to support his proposed restrictions as opposed to the Government’s, those cases are readily distinguishable. Ruiz, for example, involved charges against a drug courier, and the government needed to identify the “witnesses and alleged co-conspirators” to which the no-contact restriction applied because there was not an easily identifiable category of witnesses, such as employees, investors, or victims to use in the restriction. United States v. Ruiz, 21 Cr. 596 (LAK) (S.D.N.Y. Jan. 29, 2021). Similarly, Ospina involved charges against an individual who helped to move proceeds of an elder fraud scheme, and it was necessary for the government to identify “witnesses and victims” to which the no-contact restriction applied because the defendant did not know the identities of all the witnesses and victims. United States v. Ospina, 20 Cr. 102 (VEC) (S.D.N.Y. Jan. 10, 2020). Courts in this District have routinely imposed a condition like that proposed by the Government here in cases where the defendant perpetrated a fraud in a corporate setting and the defendant’s former employees, co-workers, or investors were among the potential witnesses or victims. See, e.g., United States v. Chastain, 22 Cr. 305 (JMF) (S.D.N.Y. June 1, 2022).(“Defendant to have no contact with present or former employees of OpenSea except in presence of counsel”); United States v. Milton, 21 Cr. 478 (ER) (S.D.N.Y. July 29, 2021) (“Defendant is not to have contact with any investors except individuals the defendant has an independent relationship with”); United States v. Wynder, 20 Cr. 470 (PKC) (S.D.N.Y. July 13, 2020) (“No contact with past or present employees, agents, board members of LEEBA or LEEBA funds, except in presence of counsel”); United States v. Petit and Taylor, 19 Cr. 850 (JSR) (S.D.N.Y. Dec. 4, 2019) (“absent the advance written approval of the Government, deft shall have no contact (direct or indirect) outside of the presence of counsel, with (a) current or former Mimedx employees (b) current or former employees/representatives of Mimedx distributors or auditors; (c) current or former Mimedx counsel; except for inadvertent/nonsubstantive social contact”); United States v. Cole, 19 Cr. 869 (ER) (S.D.N.Y. Dec. 5, 2019) (defendant “to have no contact, direct or indirect, outside of the presence of counsel, with current or former employees of Iconix Brand Group, GBG, or BDO, except for defendant’s family members”); United States v. Wong, 18 Cr. 737 (JGK) (S.D.N.Y. May 5, 2018) (“No Contact with Current or Former MCU Employees or Board Members”); United States v. Abghari, 14 Cr. 518 (JFK) (S.D.N.Y. Aug. 7, 2014) (defendant “shall have no contact with any current or former employees or representative of Vortex Financial Management, d/b/a Professional Legal Network, Attorneys Legal Network, Attorneys Alliance Union, Legal Exchange Group, and Professional Marketing Group; The Rory M. Alarcon Law Firm, d/b/a RMA Legal Network, National Legal Associates, and R.A. Legal Group and the Brian Butler Law Firm”). The proposed no-contact condition is similarly justified here. 2. The Proposed Prohibition on Using Encrypted and Ephemeral Messaging Is Warranted In opposing the Government’s second proposed condition—that the defendant not use any encrypted or ephemeral call or messaging application—the defense asks the Court to disregard evidence that the defendant used Slack and Signal, and their autodelete functions, to obstruct detection of his underlying crimes, claiming that this is “irrelevant to the bail analysis.” Def. Letter at 6. But this evidence is precisely why the Government’s concerns about the defendant’s continued use of Signal are not “unfounded,” as the defense insists. Def. Letter at 6. The Court is expressly directed when determining bail conditions to consider the “nature and circumstances of the offense charged,” 18 U.S.C. § 1342(g)(1), and here that includes the defendant’s deliberate destruction of inculpatory communications with his coconspirators using Signal and Slack’s autodelete function. While the specific messages to Witness-1 were not set to autodelete at the time they were sent, Signal allows either party to unilaterally delete existing messages. The defendant’s continued use of Signal to communicate with a former employee about the case, combined with his previous use of Signal to obstruct justice, warrants the proposed condition. Moreover, the proposed condition does not burden the defendant’s ability to communicate or to prepare his defense. The defense identifies no compelling need for the defendant to use encrypted and ephemeral messaging applications, as opposed to standard forms of communication, such as unencrypted text messages, emails, and phone calls.3. The Existing Prohibition on Accessing or Transferring any FTX or Alameda Assets Remains Warranted In asking the Court to remove the existing bail condition that prohibits the defendant from accessing or transferring any FTX or Alameda assets, the defense relies on a mistaken premise. Contrary to the defense’s assertion, this condition does not solely depend on whether the defendant is responsible for the access and transfer of Alameda funds that occurred shortly before the initial conference (a matter that the Government continues to investigate). Instead, that incident highlighted that despite the Government’s property seizures and the extensive assets already secured by the bankruptcy estate, there remain FTX and Alameda cryptocurrency assets that are vulnerable to exploitation and in need of protection from the defendant. Given the “nature and circumstances of the offense charged,” 18 U.S.C. § 1342(g)(1), the existing condition is justified because the defendant is charged with defrauding customers of FTX, investors in FTX, and Alameda’s lenders—meaning that the very assets that the defendant seeks to access are the potential proceeds of his crimes. The Government continues to identify and trace assets that are potentially forfeitable in this case but that remain at risk of diversion. Because FTX’s and Alameda’s remaining assets may include stolen customer funds, fraud proceeds, or assets that are otherwise recoverable by FTX’s creditors, there is no justifiable basis for the defendant to access these assets, and he identifies none. Moreover, although the Government has not identified the source of the hack that occurred shortly before the initial conference, the defendant’s misuse of FTX and Alameda assets during November 2022 independently justifies the bail condition. As FTX struggled to meet customer withdrawal requests in early November, Bankman-Fried approved halting customer withdrawals from the exchange. Shortly thereafter, however, he reopened withdrawals only for customers in the Bahamas. In an email to Ryan Pinder, Attorney General of the Bahamas on November 10, 2022, Bankman-Fried wrote in part, “We are deeply grateful for what The Bahamas has done for us, and deeply committed to it. We are also deeply sorry about this mess. As part of this: we have segregated funds for all Bahamian customers on FTX. And we would be more than happy to open up withdrawals for all Bahamian customers on FTX, so that they can, tomorrow, fully withdraw all of their assets, making them fully whole. It’s your call whether you want us to do this--but we are more than happy to and would consider it the very least of our duty to the country, and could open it up immediately if you reply saying you want us to. If we don’t hear back from you, we are going to go ahead and do it tomorrow.” Opening withdrawals exclusively for Bahamians resulted in millions of dollars being withdrawn from the exchange, while other customers of FTX had no ability to access withdrawals. In addition, and as noted at the initial conference, after FTX declared bankruptcy, the defendant worked with foreign regulators to transfer FTX assets to foreign regulators, when he knew that FTX’s lawyers were seeking to secure those very assets for the U.S. bankruptcy, and he told Gary Wang—FTX’s Chief Technology Officer who has pleaded guilty to a cooperation agreement with the Government—in substance and in part, that he wanted to stall with the U.S. bankruptcy in order to assist the foreign regulators, whom he thought would be more lenient with him and who might permit him to regain control of FTX.1 Finally, in December, the defendant moved to take control of approximately $500 million of Robinhood shares that were purchased using misappropriated FTX customer funds by a special purpose entity owned primarily by the defendant. The Government has since seized the shares after demonstrating probable cause to believe that they are the proceeds of wire fraud and are property involved in money laundering. Since the Government’s seizure, the defendant has claimed that he would direct the majority of these funds toward making customers whole, but the original circumstances of the purchase of these shares, through a foreign special purpose vehicle with no public connection to FTX or Alameda, further indicate the steps the defendant has taken to obscure his criminal misuse of FTX customer property. For these reasons, the defendant’s request to remove this bail condition should be denied. Respectfully submitted, DAMIAN WILLIAMS United States Attorney by: /s/ Danielle R. Sassoon Nicolas Roos Danielle R. Sassoon Samuel Raymond Thane Rehn Andrew Rohrbach Assistant United States Attorneys (212) 637-1115

1 0

A Document Implicating Powerful People Is Blocked from Public Viewing in Sam Bankman-Fried Criminal Case
by Gunnar Larson 01 Feb '23

01 Feb '23

https://wallstreetonparade.com/2023/02/a-document-implicating-powerful-peop… By Pam Martens and Russ Martens: February 1, 2023 ~ Sam Bankman-Fried Sam Bankman-Fried Five pages of a deeply sensitive document that is both embarrassing and potentially a legal threat to people in positions of power vanished yesterday from public viewing in the criminal case against former crypto-kingpin Sam Bankman-Fried. The document is a letter written by five federal prosecutors in the U.S. Attorney’s Office for the Southern District of New York. The courthouse where the five pages vanished from view is where the case is being heard: the U.S. District Court for the Southern District of New York. According to personnel in the Press Office and Records Management Office of that District Court that we spoke to yesterday, all six pages of the document had been filed electronically on Monday, January 30, and all six pages of the document were able to be viewed in the court’s ECF system (Electronic Case Files) according to those personnel. ECF is the federal judiciary’s system that allows case documents, such as pleadings and motions, to be filed electronically. What’s available for viewing on the ECF system should also be available for attorneys, the press and the general public to view through the Public Access to Court Electronic Records (PACER) system at a cost of ten cents per page. We’ve been using PACER for many years and our experience yesterday was a first. We learned of the situation as follows: On Monday evening, CNN reporter Kara Scannell quoted a portion of one paragraph from this document. We didn’t come across that CNN story until Tuesday morning. When we went to PACER to view and download the full document, only the first page of the six-page document appeared with text. The other five pages were completely blank except for the case number and page number at the top of page six. That is, the five blank pages were not redacted using thick black lines which is the customary technique for redacting court documents; they were simply blank with no text other than the header on page six. We checked the Court Docket to see if a redaction or sealing request had been made for this document. We could find none. After learning from the Press Office and Records Management Office that all six pages had been filed by the federal prosecutors, we were referred to the Courtroom Deputy for the Presiding Judge in the case, Lewis A. Kaplan. We left a voice mail explaining the problem, along with our email address and a request to receive the full document via email. We promptly received via email from the Courtroom Deputy a complete copy of the document and its two exhibits. You can view the six-page document and exhibits here. In a return email, we thanked the Courtroom Deputy for the document and asked that the problem be corrected so that all six pages could be accessed and viewed via PACER. As of this morning, the five pages are still blank on PACER. It was immediately obvious to us that multiple powerful persons might have had an interest in suppressing further press coverage of the material on those five pages. We’ve broken down the most sensitive areas into two parts below, along with essential background information. Information Embarrassing to, and/or a Legal Threat to, Big Law Firm Sullivan & Cromwell, Which Has Already Been Under a Barrage of Negative Publicity for Aggressively Pushing to Become Lead Counsel in the FTX Bankruptcy Case, Despite a Mountain of Conflicts of Interest: Page Six of the document carries this information: “…the defendant [Sam Bankman-Fried] moved to take control of approximately $500 million of Robinhood shares that were purchased using misappropriated FTX customer funds by a special purpose entity owned primarily by the defendant. The Government has since seized the shares after demonstrating probable cause to believe that they are the proceeds of wire fraud and are property involved in money laundering. Since the Government’s seizure, the defendant has claimed that he would direct the majority of these funds toward making customers whole, but the original circumstances of the purchase of these shares, through a foreign special purpose vehicle with no public connection to FTX or Alameda, further indicate the steps the defendant has taken to obscure his criminal misuse of FTX customer property.” (Italics added.) On January 17, Sullivan & Cromwell law partner, Andrew Dietderich, filed a document with the bankruptcy court acknowledging that the law firm had not only done extensive legal work for FTX but personally represented its CEO, Sam Bankman-Fried, from April 14, 2022 through August 5, 2022. The disclosure noted that “This matter was arranged, and paid for, by Alameda.” That’s Bankman-Fried’s hedge fund which prosecutors have charged he used to loot FTX customer funds. The specific nature of the work Sullivan & Cromwell did for Bankman-Fried involved “a position that had been established in the stock of Robinhood Markets, Inc.” according to the Dietderich declaration. So the paragraph above, that has vanished from public viewing, adds the smoking gun that federal prosecutors believe that some lawyer or law firm created “a foreign special purpose vehicle” to hide more than half a billion dollars of looted funds. It also means that it is highly likely that federal prosecutors know who that lawyer or law firm is. This information comes at a delicate time for Sullivan & Cromwell. Next Monday, February 6, the U.S. Trustee in the FTX bankruptcy case, who represents the U.S. Department of Justice, is scheduled to present its case at a hearing as to why an independent examiner should be appointed so that Sullivan & Cromwell is not afforded the ability to investigate its own conduct in its previous legal dealings with FTX and Sam Bankman-Fried. Sullivan & Cromwell has aggressively opposed that intervention. The government’s newly disclosed position that the half billion dollars of Robinhood shares – on which Sullivan & Cromwell provided legal guidance to Sam Bankman-Fried – came from “the proceeds of wire fraud” and “money laundering” isn’t a good look for Sullivan & Cromwell. The Document Is Deeply Embarrassing and a Potential Legal Threat to the Government of the Bahamas: The third paragraph on page three of the document carries this revelation, backed by an explosive email from Bankman-Fried: “Moreover, although the Government has not identified the source of the hack that occurred shortly before the initial conference, the defendant’s misuse of FTX and Alameda assets during November 2022 independently justifies the bail condition. As FTX struggled to meet customer withdrawal requests in early November, Bankman-Fried approved halting customer withdrawals from the exchange. Shortly thereafter, however, he reopened withdrawals only for customers in the Bahamas. In an email to Ryan Pinder, Attorney General of the Bahamas on November 10, 2022, Bankman-Fried wrote in part, ‘We are deeply grateful for what The Bahamas has done for us, and deeply committed to it. We are also deeply sorry about this mess. As part of this: we have segregated funds for all Bahamian customers on FTX. And we would be more than happy to open up withdrawals for all Bahamian customers on FTX, so that they can, tomorrow, fully withdraw all of their assets, making them fully whole. It’s your call whether you want us to do this–but we are more than happy to and would consider it the very least of our duty to the country, and could open it up immediately if you reply saying you want us to. If we don’t hear back from you, we are going to go ahead and do it tomorrow.’ Opening withdrawals exclusively for Bahamians resulted in millions of dollars being withdrawn from the exchange, while other customers of FTX had no ability to access withdrawals.” This is not the first time that something less than transparent has occurred in FTX cases. In fact, a dark curtain has been drawn around much of what is going on in both the FTX bankruptcy case in Delaware and the criminal case in lower Manhattan. For starters, the media has been unable to obtain a list of customer names in the FTX bankruptcy case and had to hire a lawyer to get creditors’ names released. After the creditors names were finally released, and mega banks on Wall Street were included on the list of creditors, a clarifying statement was issued saying that not all of the names on the creditors’ list might actually be creditors. So, almost three months after the FTX bankruptcy petition was filed, the public has no clarity on who the creditors or customers are. In the criminal case against Sam Bankman-Fried, media outlets had to intervene to ask the court to reveal the names of two unnamed persons who guaranteed bonds of $500,000 and $200,000 to secure Bankman-Fried’s release on bail, in addition to his parents who put up their California home as collateral. Judge Kaplan ruled in favor of the media but has put his decision on hold pending an appeal. The criminal court case also suffered an embarrassment when the first judge assigned to the case, Judge Ronnie Abrams, had to later recuse herself because her husband, Greg Andres, is a law partner at Davis Polk & Wardwell LLP, which handled a deal involving crypto exchanges FTX and BlockFi, both of which are now in bankruptcy. See our report: Sam Bankman-Fried’s Criminal Trial Judge Is Married to Law Partner of Firm that Arranged the FTX-BlockFi Deal. The polling organization, Gallup, reported last September that American adults’ trust in the federal judicial branch had fallen from a high of 80 percent in 1999 to a new low of just 47 percent last year. If American democracy is to survive, our federal institutions must do a far better job at providing transparency to the public and policing conflicts of interest.

1 0

Re: [EXT]Re: Confirmation of Zoom Orientation
by Gunnar Larson 01 Feb '23

01 Feb '23

Ms. Knight: Ms. James and Ms. Harris know what is going on here. Again, obstruction of justice is a crime. Gunnar Larson On Wed, Feb 1, 2023, 10:01 AM Denae Knight <DKnight(a)nadap.org> wrote: > Duly noted, thank you. Once again, I will be here when you are ready to > truly commit to this process and can keep your scheduled appointments. If > this was a job interview, you would not be able to continually reschedule > that either. > > > > > > *Denae Knight* > Career Services Coordinator > NADAP > 1825 Park Avenue, 5th Floor > New York, NY 10035 > T: (646) 809-4865 > F: (646) 791-4959 > DKnight(a)nadap.org > <https://www.facebook.com/NADAPInc> <https://twitter.com/NADAP_Inc> > <https://www.linkedin.com/company/nadap> > <https://www.youtube.com/user/NADAP1971> > <https://www.pinterest.com/user_name_here> > <https://www.instagram.com/nadap_inc/>. > www.nadap.org > > > > Confidentiality Note: This e-mail, and any attachment to it, contains > privileged and confidential information intended only for the use of the > individual(s) or entity named on the e-mail. If the reader of this e-mail > is not the intended recipient, or the employee or agent responsible for > delivering it to the intended recipient, you are hereby notified that > reading it is strictly prohibited. If you have received this e-mail in > error, please immediately return it to the sender and delete it from your > system. > > *From:* Gunnar Larson <g(a)xny.io> > *Sent:* Wednesday, February 1, 2023 9:53 AM > *To:* Denae Knight <DKnight(a)nadap.org>; letitia.james(a)ag.ny.gov; Harris, > Adrienne A (DFS) <Adrienne.Harris(a)dfs.ny.gov> > *Cc:* cypherpunks <cypherpunks(a)lists.cpunks.org> > *Subject:* Re: [EXT]Re: Confirmation of Zoom Orientation > > > > Obstruction of justice is a crime. > > > > On Wed, Feb 1, 2023, 9:08 AM Denae Knight <DKnight(a)nadap.org> wrote: > > No, we cannot keep pushing orientation back. If you are not able to make > orientation this week, I will need to remove you from our list. You can > reach back out when you are ready to move forward with the process without > rescheduling appointments. > > > > > > [image: Image removed by sender.] > > *Denae Knight* > Career Services Coordinator > NADAP > 1825 Park Avenue, 5th Floor > New York, NY 10035 > T: (646) 809-4865 > F: (646) 791-4959 > DKnight(a)nadap.org > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.facebook.com_NADAP…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__twitter.com_NADAP-5FIn…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.linkedin.com_compa…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.youtube.com_user_N…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.instagram.com_nada…> > . > www.nadap.org > <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.nadap.org&d=DwQFaQ&…> > > > > > Confidentiality Note: This e-mail, and any attachment to it, contains > privileged and confidential information intended only for the use of the > individual(s) or entity named on the e-mail. If the reader of this e-mail > is not the intended recipient, or the employee or agent responsible for > delivering it to the intended recipient, you are hereby notified that > reading it is strictly prohibited. If you have received this e-mail in > error, please immediately return it to the sender and delete it from your > system. > > *From:* Gunnar Larson <g(a)xny.io> > *Sent:* Wednesday, February 1, 2023 8:49 AM > *To:* Denae Knight <DKnight(a)nadap.org> > *Subject:* [EXT]Re: Confirmation of Zoom Orientation > > > > *CAUTION:* This email originated from outside of NADAP's network. Please > use caution before clicking any links or attachments. Do not follow a link > that asks you to sign in with your credentials. > > Denae: > > > > Can I please schedule our conversation for next Monday at 2:00pm? > > > > Hope you have a great day. > > > > Thank you, > > > > Gunnar > > > > > > On Mon, Jan 30, 2023, 12:21 PM Gunnar Larson <g(a)xny.io> wrote: > > Denae: > > > > Would it be possible to schedule this meeting for tomorrow or Wednesday at > the same time? > > > > Thank you, > > > > Gunnar > > > > On Fri, Jan 27, 2023, 10:24 AM Gunnar Larson <g(a)xny.io> wrote: > > Denae: > > > > Thank you for the call today. > > > > My CV is attached. > > > > Have a great day. > > > > Thank you, > > > > Gunnar > > > > Gunnar Larson > > 646-454-9107 > > > > On Fri, Jan 27, 2023, 10:21 AM Denae Knight <DKnight(a)nadap.org> wrote: > > Hi Gunner, > > > > As discussed, I have registered you for our zoom orientation which will > take place next Monday (1/30) at 2pm. You should have received a separate > email with the zoom link. Here is the zoom link if you have not received > the registration email: > > > > > https://us06web.zoom.us/w/84261393031?tk=Z3XDgLOJ-eEPyoBM4q4ZfqcLP1auPGGLjZ… > <https://urldefense.proofpoint.com/v2/url?u=https-3A__us06web.zoom.us_w_8426…> > > > > In the meantime, if you have an existing resume, please forward it along > with any diplomas/certifications. If you have any questions or concerns, > please don’t hesitate to reach out at the phone number below. You can also > text me at 516-995-1745. > > > > Regards, > > > > > > > > [image: Image removed by sender.] > > *Denae Knight* > Career Services Coordinator > NADAP > 1825 Park Avenue, 5th Floor > New York, NY 10035 > T: (646) 809-4865 > F: (646) 791-4959 > DKnight(a)nadap.org > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.facebook.com_NADAP…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__twitter.com_NADAP-5FIn…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.linkedin.com_compa…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.youtube.com_user_N…> > [image: Image removed by sender.] > <https://urldefense.proofpoint.com/v2/url?u=https-3A__www.instagram.com_nada…> > . > www.nadap.org > <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.nadap.org&d=DwQFaQ&…> > > > > > Confidentiality Note: This e-mail, and any attachment to it, contains > privileged and confidential information intended only for the use of the > individual(s) or entity named on the e-mail. If the reader of this e-mail > is not the intended recipient, or the employee or agent responsible for > delivering it to the intended recipient, you are hereby notified that > reading it is strictly prohibited. If you have received this e-mail in > error, please immediately return it to the sender and delete it from your > system. > >

1 0