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National Enquirer legal counsel considered harmful
by pro2rat＠yahoo.com.au 28 Apr '24

28 Apr '24

National Enquirer legal counsel considered harmful https://thehill.com/opinion/criminal-justice/4625253-on-alvin-bragg-and-the… Oh the weather inside is frightful

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Cypherpunk Bitstream Hosts Talk Crypto-Anarchy, Dropgangs, & Importance of Real Life Connections
by pro2rat＠yahoo.com.au 28 Apr '24

28 Apr '24

Cypherpunk Bitstream Hosts Talk Crypto-Anarchy, Dropgangs, and Importance of Real Life Connections https://news.bitcoin.com/cypherpunk-bitstream-hosts-share-importance-of-pay… Gunnar Larson keeps polishing that Bloomberg turd to perfection

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Athens vs. Freedom Video
by Gunnar Larson 28 Apr '24

28 Apr '24

Athens vs. Freedom Video: https://www.instagram.com/reel/C6TKpmXtIji/?igsh=Z2l4anlpYzh0OG9x

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Three very good police officers
by pro2rat＠yahoo.com.au 28 Apr '24

28 Apr '24

when the officers responded to three false emergency calls, authorities said. The officers were attacked in their vehicle with heavy-caliber weapons and burned, the authorities said. https://www.reuters.com/world/americas/chiles-president-boric-declares-nati… Gunnar Larson smells like pig cop and will go the same way authorities say

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How anarchists robbed a bank & destroyed police servers (AntiSec) using only a keyboard.
by pro2rat＠yahoo.com.au 28 Apr '24

28 Apr '24

how anarchists robbed a bank (Phineas Fisher) and destroyed police servers (AntiSec) using only a keyboard. https://www.anarchistnews.org/content/anarsec-tech-guides-anarchists Reposted not endorsed. Caveat emptor. Own onus. He's behind you.

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NY-DFS Proposed Guidance on Character and Fitness (Extension Appeal)
by Gunnar Larson 28 Apr '24

28 Apr '24

Coinbase is up 40% this month: https://www.google.com/finance/quote/COIN:NASDAQ?sa=X&ved=2ahUKEwjO3sCmxrCE… Goldman's first Bitcoin backed loan to COIN back in 2022 would of had fantastic returns: Goldman Offers Its First Bitcoin-Backed Loan in Crypto Push https://www.bloomberg.com/news/articles/2022-04-28/goldman-offers-its-first… We will always have the Bloomberg Crypto Summit. ---------- Forwarded message --------- From: Gunnar Larson <g(a)xny.io> Date: Wed, Jun 28, 2023, 2:14 AM Subject: Re: NY-DFS Proposed Guidance on Character and Fitness (Extension Appeal) To: <kathleen.scott(a)dfs.ny.gov> Cc: <BankingComments(a)dfs.ny.gov>, <cypherpunks(a)cpunks.org> Ms. Scott: Additionally, xNY.io - Bank.org respectfully submits Coinbase's Brian Armstrong on Bloomberg.com: https://www.bloomberg.com/news/videos/2023-01-12/the-david-rubenstein-show-… as a matter for public comment for NY-DFS' "Proposed Guidance on Character and Fitness." The Bloomberg interview with Coinbase showed top journalistic integrity, yet, Coinbase failed to mention any NY-DFS investigation or pending action. The interview aired last December, before the 100M Coinbase settlement was announced by NY-DFS concerning Coinbase's BitLicense compliance. NY-DFS' approach to Coinbase and Goldman Sachs (who took Coinbase public) share independent insider trading scenarios that could disrespect the United States Department of Justice, Criminal Division, Fraud Section and Money Laundering and Asset Recovery Section compliance programs. We have collated 34 highlights that describe a corporate opportunity policy framework to gauge character and fitness of the "first Bitcoin loan" backed by a New York banking institution here: https://drive.google.com/file/d/1Yx88RMoeLyyfbNK0RtPl4r-m8N21_1Sp/view?usp=… . Per point one of NY-DFS' "Suggested Questions to Facilitate Initial and Ongoing Assessment of Designated Persons’ Character and Fitness," can you kindly acknowledge that you have reviewed and understand our appeal seeking extension for public comment to August 5, 2023? We feel extra time for public comment is warranted to ensure that xNY.io - Bank.org did not play a significant role or otherwise contribute in a meaningful way to the conduct that led to regulatory action or proceeding without ample notice. Thank you, Gunnar On Wed, Jun 28, 2023, 12:04 AM Gunnar Larson <g(a)xny.io> wrote: > Ms. Scott: > > NY-DFS recently asked for public comment concerning "Proposed Guidance on > Assessment of the Character and Fitness of Directors, Senior Officers, and > Managers" mentioned here: > https://www.dfs.ny.gov/industry_guidance/industry_letters/il20230509_guidan… > . > > xNY.io - Bank.org asks if the NY-DFS will extend deadline for public > comment to August 5, 2023 from June 30, 2023. > > As requested by NY-DFS, today we provide (in a separate attachment) > evidence of any documented exceptions to compliance with the "Suggested > Questions to Facilitate Initial and Ongoing Assessment of Designated > Persons’ Character and Fitness." > > We have collated 19 references comprising 205 highlights that touch on the > five key areas below: > https://drive.google.com/drive/folders/1FTRRFFhQHDxf-oR9WOZz0a2gRtC9ZWVO. > > -Harassment and Discrimination Policies > > -Conflict of Interest Policy > > -Insider Trading Policy > > -Records Management Policy > > -Corporate Opportunity Policy > > xNY.io - Bank.org is seeking NY-DFS' extension for public comment to > August 5, 2023 so that the New York Banking community has time to complete > Q2-23 earnings call disclosures. > > As documented in the above 19 references, we feel extra time for public > comment is warranted to ensure that xNY.io - Bank.org did not play a > significant role or otherwise contribute in a meaningful way to the conduct > that led to regulatory action or proceeding without ample notice. > > Per point one of NY-DFS' "Suggested Questions to Facilitate Initial and > Ongoing Assessment of Designated Persons’ Character and Fitness," can you > kindly acknowledge that you have reviewed and understand our appeal seeking > extension for public comment to August 5, 2023? > > We hope to hear from you before June 30, 2023 given obvious factors. > > Sending you the very best regards. > > Thank you, > > Gunnar > > -- > Gunnar Larson > xNY.io | Bank.org > MSc - Digital Currency > MBA - Entrepreneurship and Innovation (ip) > > G(a)xNY.io > +1-917-580-8053 > New York, New York 10001 > >

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Fwd: Your Freedom of Information Law (FOIL) Request FOIL-2024-097305-022021
by Gunnar Larson 28 Apr '24

28 Apr '24

---------- Forwarded message --------- From: Gunnar Larson <g(a)xny.io> Date: Fri, Apr 26, 2024, 3:08 AM Subject: Fwd: Your Freedom of Information Law (FOIL) Request FOIL-2024-097305-022021 To: <cypherpunks(a)cpunks.org> ---------- Forwarded message --------- From: Gunnar Larson <g(a)xny.io> Date: Wed, Apr 24, 2024, 4:00 AM Subject: Re: Your Freedom of Information Law (FOIL) Request FOIL-2024-097305-022021 To: <Idel.Lendoff(a)dfs.ny.gov>, <letitia.james(a)ag.ny.gov> Cc: JeanBaptiste, Pascale (DFS) <Pascale.JeanBaptiste(a)dfs.ny.gov>, < cypherpunks(a)cpunks.org>, Reader, Shaun <sreader(a)curtis.com>, Harris, Adrienne A (DFS) <Adrienne.Harris(a)dfs.ny.gov>, Paasewe, Siaka (DHR) < Siaka.Paasewe(a)dhr.ny.gov> Madam Attorney General: Kindly following up. Have a nice day. Thank you, Gunnar -- Gunnar Larson xNY.io - Bank.org 917-580-8053 On Tue, Apr 16, 2024, 4:11 AM Gunnar Larson <g(a)xny.io> wrote: > Dear Madam Attorney General: > > xNY.io - Bank.org today contacts your esteemed office seeking to engage > New York State's False Claims Act under urgent pretences. > > Attorney General James, xNY.io - Bank.org contacted NY-DHR to assess if > they have any records of NY-DFS Superintendent recusal records mentioned by > New York Magazine (below). NY-DHR has responded that they have no NY-DFS > Superintendent recusal records. > > As a matter of risk arbitrage, xNY.io - Bank.org is not in a position to > placate any obstruction by NY-DFS on such important matters as our rights > as New Yorkers. > > For these obvious reasons, xNY.io - Bank.org seeks the Attorney General's > blessing to engage New York State's False Claims Act to mitigate any undue > losses to New Yorkers given conflicts of interest in virtual currency > marketes, including overall pure financial innovation across New York State. > > The very best with regards, > > Gunnar > > -- > Gunnar Larson > > xNY.io | Bank.org > > MSc - Digital Currency > MBA - Entrepreneurship and Innovation (ip) > > G(a)xNY.io > > +1-917-580-8053 > > New York, New York 10001 > > On Sat, Apr 13, 2024, 8:08 AM Gunnar Larson <g(a)xny.io> wrote: > >> Dear Idel Lendoff: >> >> NY-DFS has delayed answering if there are any Superintendent recusal >> records mentioned by New York Magazine several times. >> >> xNY.io - Bank.org today kindly petitions New York State Department of >> Financial Services' esteemed action against any worry of public corruption >> concerning recusal records of the current Superintendent. >> >> Given the history of NY-DFS Superintendent durability, especially given >> the previous NY-DFS Superintendent, it would seem that New York Magazine's >> mention of NY-DFS Superintendent recusals is evidently prudent for >> follow-up by xNY.io - Bank.org. >> >> Being clear, it was not xNY.io - Bank.org who first mentioned NY-DFS >> Superintendent recusals, it was New York Magazine. >> >> NY-DFS' latest response of delaying response of any recusal records until >> May 10, 2024 sparks further worry of public corruption (similar to that of >> Superintendent Lacewell). >> >> Simply, can NY-DFS answer if there are any Superintendent recusal records >> by 5:00pm Monday April 15, 2024? After Monday, we will need to confirm with >> New York Magazine if their reporting is correct. >> >> We cannot assume these recusal records away. >> >> Warm regards, >> >> Gunnar >> >> 2024-097305: 3/11/24: Dear Madam or Sir: On March 30, 2022 New York >> Magazine published a profile of NY-DFS Superintendent Adrienne Harris >> titled "Crypto’s Most Powerful Regulator Is Here Adrienne Harris, New >> York’s financial watchdog, has enormous sway over the industry’s future" ( >> https://nymag.com/intelligencer/2022/03/adrienne-harris-is-cryptos-most-pow…) >> The profile of Superintendent Harris quotes "... that she would recuse >> herself from any dealings with companies she has conflicts with." xNY.io - >> Bank.org seeks access to any and all records specific to Superintendent >> Harris' recusal(s) as of February 1, 2024. Thank you, Gunnar -- Gunnar >> Larson xNY.io | Bank.org MSc - Digital Currency MBA - Entrepreneurship and >> Innovation (ip) G(a)xNY.io +1-917-580-8053 New York, New York 10001 >> >> -- >> Gunnar Larson >> >> xNY.io | Bank.org >> >> MSc - Digital Currency >> MBA - Entrepreneurship and Innovation (ip) >> >> G(a)xNY.io >> >> +1-917-580-8053 >> >> New York, New York 10001 >> >> >> On Thu, Apr 11, 2024, 2:53 PM <Idel.Lendoff(a)dfs.ny.gov> wrote: >> >>> Good afternoon, >>> >>> Attached please find correspondence from the NYS Department of Financial >>> Services, pertaining to your FOIL request. >>> >>> >>> >>> Thank you. >>> >>> Tracking Number:FOIL-2024-097305-022021 >>> >>

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Bankruptcy Law Expert, Senator Elizabeth Warren, Asks FTX Bankruptcy Judge to Boot Sullivan & Cromwell from the Case
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2023/01/bankruptcy-law-expert-senator-elizab… By Pam Martens and Russ Martens: January 11, 2023 ~ Senator Elizabeth Warren Grilling Fed Chairman Jerome Powell at September 28, 2021 Senate Banking Hearing Senator Elizabeth Warren In what is likely a first of its kind effort, four sitting U.S. Senators, including former Harvard Law Professor Elizabeth Warren, who is a bankruptcy law expert, have asked the Judge overseeing the bankruptcy proceedings of collapsed crypto exchange, FTX, to dump the Big Law firm of Sullivan & Cromwell as the lead law firm in the case because of its conflicts of interest in the matter. The case has garnered international media attention because more than $8 billion of customers’ money is said to be missing and the fact that high profile U.S. sports figures and celebrities promoted the company. On Monday, Senator Warren (D-MA) joined Senator John Hickenlooper (D-CO) along with Republican Senators Thom Tillis (R-NC) and Cynthia Lummis (R-WY) in a letter outlining the conflicts to Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware. The political news website, Punchbowl News, broke the story of the Senators’ letter yesterday morning. Hickenlooper then gave the story more momentum by Tweeting a link with the comment: “Get this: FTX’s legal advisors *pre-collapse* want to be appointed to oversee investigations INTO the collapse.” The Senators’ letter includes this blunt assessment of Sullivan & Cromwell’s conflicted role: “To name just one challenge: will the firm’s lawyers be able to effectively investigate their current and former partners who were central in FTX’s conduct? Additionally, given their longstanding legal work for FTX, they may well bear a measure of responsibility for the damage wrecked on the company’s victims. Put bluntly, the firm is simply not in a position to uncover the information needed to ensure confidence in any investigation or findings.” Yesterday, another objector to Sullivan & Cromwell serving as lead law firm in the bankruptcy proceedings filed an amended objection with a scathing assessment of the law firm’s conduct. The objector is Warren Winter, a man described by his attorneys as “a United States citizen residing abroad” who had “several hundred thousand dollars of assets in his FTX account when the exchange collapsed, which he has since been unable to access.” The amended objection made the following points, among numerous others, to the bankruptcy court: “Sullivan & Cromwell is not only an inappropriate candidate for appointment as the FTX Group’s bankruptcy counsel—it is a target for investigation with its own potential liability. Its appointment as counsel would endanger the estate and create a rigged game, undermining creditors’ and the public’s faith in the bankruptcy process. The Court should therefore reject Sullivan & Cromwell’s application and disqualify it from appointment as Debtors’ counsel.” And this: “Two former Sullivan & Cromwell lawyers are General Counsel to FTX Group entities. Sullivan & Cromwell did not disclose these connections in its Application and therefore violated Federal Rule of Bankruptcy Procedure 2014, which requires a statement ‘all of [the firm’s] connections with the debtor … [and the debtor’s] attorneys.’ What’s more, disclosed or not, these connections create a conflict of interest and are disqualifying. FTX US General Counsel Ryne Miller is a former partner at Sullivan & Cromwell…Miller is alleged to have played a key role— perhaps the key role—in wresting control of the FTX Group from Sam BankmanFried and directing this extremely valuable bankruptcy matter to his former firm. According to Bankman-Fried, and supported by what appears to be genuine evidence, Miller proclaimed to have usurped control of the FTX Group by November 8th. He immediately secured a $12 million retainer for his former firm and allegedly mounted an ‘extreme pressure’ campaign to put the FTX Group into bankruptcy with Sullivan & Cromwell and its hand-picked CEO at the helm. “FTX Ventures General Counsel Tim Wilson is another former Sullivan & Cromwell lawyer. The Securities and Exchange Commission has alleged that FTX Ventures made at least $200 million in venture-capital investments using customer funds that had been misappropriated through Alameda Research….” A hearing in the FTX bankruptcy case is scheduled for 8:55 a.m. this morning. It is unclear as to what issues will be discussed today. A live stream of the hearing is available on YouTube at this link. Wall Street On Parade has been pointing out the myriad conflicts with Sullivan & Cromwell since two days after the bankruptcy petition was filed for FTX on November 11 of last year. Yesterday, we reported that Sullivan & Cromwell was also currently serving as legal counsel to four of the largest crypto exchange competitors to FTX. (See Related Articles below.) Related Articles: Sullivan & Cromwell, FTX Lead Counsel in Bankruptcy, Says It Has No Adverse Relationships, Despite Representing Four of FTX’s Crypto Exchange Competitors Big Law Firm, Sullivan & Cromwell, Did Significant Legal Work for Bankrupt Crypto Exchange, FTX No One Trusts the FTX Bankruptcy Case: News Outlets Intervene; Justice Department Trustee Demands Independent Examiner; SEC Orders Disclosures

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FTX Bombshell: Former FTX Lawyer, Daniel Friedberg, Alleges Fraud by Sullivan & Cromwell in Court Filing Today
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2023/01/ftx-bombshell-former-ftx-lawyer-dani… By Pam Martens and Russ Martens: January 19, 2023 ~ Ryne Miller, Former Sullivan & Cromwell Partner; Now General Counsel of FTX.US Ryne Miller, Former Sullivan & Cromwell Partner; Now General Counsel of FTX.US Daniel Friedberg, a former attorney at the collapsed crypto exchange, FTX, has filed a heart-stopping declaration today with the U.S. bankruptcy court in Delaware. He is effectively accusing one of the oldest law firms in America, Sullivan & Cromwell (S&C), of engaging in a fraudulent scheme in the FTX bankruptcy case. Friedberg further alleges that this fraudulent conspiracy was helped from the inside of FTX by S&C’s former law partner, Ryne Miller. According to new management at FTX, at least $8 billion of customer funds are missing, with the bulk of the money illegally diverted for use by Alameda Research, a hedge fund owned by the former co-founder and CEO of FTX, Sam Bankman-Fried, who has pleaded not-guilty to 8 criminal felony counts brought by the U.S. Department of Justice. Two of his top lieutenants, Caroline Ellison and Gary Wang, have pleaded guilty and are cooperating with prosecutors. A hearing is scheduled at the bankruptcy court tomorrow at 10:00 a.m. to take testimony on Sullivan & Cromwell’s petition to become the lead counsel in the case. The U.S. Trustee in the case, which represents the Justice Department in bankruptcy matters, had already filed objections to Sullivan & Cromwell becoming lead counsel. Another objector, a former customer of FTX, Warren Winter, has said it would be like allowing the fox to guard the hen house if Sullivan & Cromwell is put in charge. Four sitting U.S. Senators were so alarmed about Sullivan & Cromwell’s conflicts that they took the unusual step of filing an objection with the Court. But none of the prior objections can hold a candle to the breathtaking charges being made by Friedberg. In one section of Friedberg’s declaration involving former S&C law partner, Ryne Miller, Friedberg writes as follow: “In 2021, the then President of FTX.US made the decision to hire Ryne Miller (‘Mr. Miller’) as general counsel of FTX.US and counsel for Alameda, and FTX International. Mr. Miller’s salary was paid by FTX.US and Alameda, but services were also performed by Mr. Miller for FTX International in addition to FTX.US and Alameda… “After being hired, Mr. Miller came to me and asked if he could engage Sullivan & Cromwell, LLP (‘S&C’) as counsel for the Debtors. I responded that as general counsel, it was his role to generally approve outside counsel for FTX.US. “Mr. Miller informed me that it was very important for him personally to channel a lot of business to S&C as he wanted to return there as a partner after his stint at the Debtors. This bothered me very much and I told him that his job was to only hire the best outside counsel for the job, and that his allegiance was now to the Debtors and not S&C. This continued to be a problem throughout his work at the Debtors as further described below. “Mr. Miller quickly engaged S&C on many matters for FTX.US and S&C acted as primary counsel for FTX.US, FTX Derivatives (formerly Ledger X) which was a subsidiary of FTX.US (‘LedgerX’), and Emergent (an entity owned by Sam that invested in Robinhood shares). S&C also acted as personal counsel to Nishad [Nishad Singh, an FTX executive] and Sam….” Later in the filing, Friedberg makes even bolder allegations, writing: “On November 7, 2023, certain FTX personnel including Sam informed certain executives in the Bahamas of the existence of an $8 billion customer deficit with respect to FTX International. “The FTX International general counsel contacted me by zoom to inform me of this shocking development. “Prior to this disclosure, I had no idea of any customer deficit. It was not my job as regulatory counsel to conduct a customer proof of reserves; indeed, I would have no idea how to do this. I relied on the executives, the finance team, and the auditors, and believed that the customer assets were fully funded on a 1:1 basis as advertised to the customers. “I was in the New York office of FTX.US at the time and went to Ryne Miller to inform him of the development. Mr. Miller was already aware of the development and said that he was busy contacting ‘all the billionaires that he knew’ to provide emergency financing to cover the customer deficit. “I explained to Mr. Miller that he had to review his ethical obligations before continuing to represent FTX.US under such circumstances, and soliciting financing under the circumstances might conflict with his ethical duties. He dismissed my concerns and remained optimistic about helping Sam get future financing. “I reviewed my ethical obligations that evening and felt that there was substantial risk that I would be used to further additional fraud in connection with the additional investment efforts if I stayed on. In addition, I no longer trusted Sam, Gary, or Nishad, and did not think that I could proceed under such circumstances. “I therefore tendered my resignation the following day. “A day or two later, I had a final call with Ryne Miller as I was concerned about the direction of the companies. This was after CZ of Binance [a crypto exchange competitor] had announced that he was abandoning the purchase of the Debtors and it looked like bankruptcy was the only answer for the FTX International Group and the Alameda Group. “On that call, I first informed Mr. Miller that we had been counseled by all our other law firms that the bankruptcy filings of FTX International Group and the Alameda Group should occur outside the United States, and likely in Bahamas or Europe. This was in part because of the unnecessary expense of the US bankruptcy system, the situs of the primary regulator, as well as the fact that creditors of the FTX International Group were outside the United States, amongst other legal issues. “Mr. Miller told me that the bankruptcy filings of FTX International Group, the Alameda Group, and the FTX.US Group had to be in the United States because otherwise S&C couldn’t do the job. “I then told Mr. Miller that FTX.US should not file bankruptcy at all until it was certain that there were insufficient assets at FTX.US. Indeed, the tech team checked the wallets and had told the FTX International general counsel at the time of the disclosure of the customer deficit that FTX.US was not affected. I told Mr. Miller that the FTX.US crypto exchange needed to be retained if at all possible and sold as a going concern to allow the preferred shareholders to be paid back. Mr. Miller stated that he needed to include FTX.US as part of the bankruptcy because FTX.US had the cash to pay S&C its retainer. Without this retainer from FTX.US, S&C wouldn’t file. I told him that it wasn’t proper for FTX.US to pay for the expenses of the bankruptcy of FTX International Group or the Alameda Group. “Mr. Miller informed me that S&C was installing ‘S&C’s guy’ to run all the companies. [That refers to John J. Ray III who has been put in the post of CEO of the FTX group of companies and has appointed a new Board of Directors.] I told Mr. Miller that S&C was not the proper law firm to select because of the claims and conflicts, as well as the exorbitant costs of the firm. Mr. Miller told me that there was over $200 million cash in LedgerX and that he was going to send these funds to S&C, and that bankruptcy legal costs were therefore not a problem. “I was horrified at this response and started to try to remind him of his ethical obligations and that he was stealing further funds from customers, but he hung up the phone on me and terminated the call….” If that is not enough to take one’s breath away, Friedberg goes on to provide a chart of the legal causes of action that could be leveled against the various separate business entities of FTX to demonstrate why it was improper for the new CEO and Sullivan & Cromwell to lump all of these companies together as one pot of money. Friedberg writes: “Based on advice of counsel, each of these groups were intended to be separated. For example, the FTX International exchange was operated from a server housed in Japan, while the FTX.US exchange was operated from a server in Virginia. The wallets and assets of FTX International and FTX.US were separated in these different instances. There are conflicting claims that arise between each of these entities as set forth below, and each of these groups deserve separate independent counsel as described in the chart below. Note that the chart below raises just a few of the myriad of conflicts between the group entities requiring separate counsel.” Equally striking, Friedberg notes the following: “Each of these groups have different creditor classes which each deserve separate legal representation as well as separate creditor committees. “S&C represented all of these groups simultaneously without proper conflict waiver. S&C also represented Sam and Nishad personally. The lawyers in this important bankruptcy proceeding should be independent and not have a history of representing all of the various groups and the principals at one time….” Sullivan & Cromwell did provide a document previously to the court that confirmed that Sam Bankman-Fried and Nishad Singh were former clients of the firm. Next, Friedberg goes on to detail the claims that creditors would likely have against Sullivan & Cromwell, which should disqualify it from serving as lead counsel. Friedberg writes in part: “The first claim involves a breach of ethical obligations and overbilling by S&C during their representation of Alameda in its credit bid in the Voyager bankruptcy. “At the time that this Voyager credit bid matter commenced, S&C sent me their retention letter which I signed with respect to that particular matter. Regretfully, I did not fully read the exhibit to the letter. S&C was our prior counsel and I did not imagine that they would try to slip something in the engagement letter. I was proved to be wrong. “S&C represented Alameda for a few months on this matter without tendering a bill. I saw that there were an unnecessary number of S&C lawyers working on the matter, and assumed that it would be a high bill, and expected a cost of $500,000. This sounds like a shocking fee but this would be normal for S&C. “Andrew Dietrich [Dietderich] sent me a bill for $6.5 million as a flat fee for the entire matter and stated that the engagement letter I had signed provided for ‘value billing’ and this was a $1 billion transaction. I was absolutely shocked and told him that we only pay by the hour. “To be clear, Alameda engaged S&C to place a bid on assets in a bankruptcy that took a few months and they charged $6.5 million for the matter! “I told Ryne Miller to fix the problem and Mr. Miller told me that we should help Andy on this as he needed the bankruptcy work. I angrily told Mr. Miller to get them to bill us by the hour or I would have to involve Sam. Mr. Miller told me not to tell Sam and promised to fix the matter. “I later learned that Ryne Miller authorized payment of $2.5 million to S&C for the matter.” Friedberg also lists what he alleges are numerous false statements made to the court by Sullivan & Cromwell partners. For example, he writes the following about law partner Andrew Dietderich: “In paragraph 5 of the Dietderich Supplemental Declaration, Mr. Dietderich states that Mr. Ray was the one who decided to file the Debtors for Chapter 11 protection. As stated above, S&C and Ryne Miller selected this route and chose ‘their guy’ to run it….” Friedberg closes this bombshell by indicating that he expects to be targeted by S&C for making these allegations and declares under penalty of perjury that his statements are truthful.

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Serially-Charged Robinhood Doubles in Price in Three Days – But Appears to Have Forgotten about Its Second Quarter Earnings Report after Losing $1.4 Billion in First Quarter
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2021/08/serially-charged-robinhood-doubles-i… By Pam Martens and Russ Martens: August 5, 2021 ~ NY Stock Exchange Trading Floor-150pixRobinhood is the poster boy for the craziest, most unregulated stock market era since 1929. That one ended in tears. This one will also. Robinhood is the trading app used by millions of young, inexperienced retail investors to trade stocks and options on their mobile phones. The company went public last Thursday on the Nasdaq stock market (the wonderful folks who brought us the dot.com crash in 2000). Robinhood closed the trading week last Friday with a share price of $35.15 – an embarrassing 7.5 percent below its IPO price of $38. Curiously, so far this week, through Wednesday’s closing price of $70.39, the stock has soared 100.256 percent from Friday’s closing price. In an efficient, regulated stock market that is capable of engaging in its core function of price discovery, Robinhood would not have doubled in price in three trading sessions. The company lost $1.4 billion in the first quarter of this year and has yet to report its second quarter earnings or even announce the date that it will report those earnings – or lack thereof. But in this crazy stock market era, earnings are just pesky details. The business media actually reports on how many times a company’s name is mentioned on Reddits’ Wall Street Bets forum. For example, Reuters – an international business wire – reported yesterday that Robinhood “was the most mentioned stock on WallStreetBets, the Reddit platform at the center of this year’s ‘meme stock’ rally, over the past 24 hours, according to sentiment tracker SwaggyStocks.” After its big runup in price, Robinhood reported after the market closed yesterday that another 97.9 million Class A shares will be sold over time – meaning shareholders who bought in the IPO will be diluted. That sent the price of the stock down about 10 percent in pre-market trading this morning. Big losses in the first quarter are far from the only negative about Robinhood. On December 17 of last year, the SEC brought charges against the company “for repeated misstatements that failed to disclose the firm’s receipt of payments from trading firms for routing customer orders to them, and with failing to satisfy its duty to seek the best reasonably available terms to execute customer orders.” The company paid a fine of $65 million to settle the SEC charges. The day before the SEC’s action, the state of Massachusetts brought an enforcement action against Robinhood for “1) aggressive tactics to attract new, often inexperienced, investors; 2) failure to implement policies and procedures reasonably designed to prevent and respond to outages and disruptions on its trading platform; 3) use of strategies such as gamification to encourage and entice continuous and repetitive use of its trading applications; 4) failure to follow its own written supervisory procedures regarding the approval of options trading; and 5) breach of the fiduciary conduct standard required by the Act and Regulations.” Six months later, Robinhood was back in the crosshairs of regulators. Wall Street’s self-regulator, FINRA, charged the company for causing “widespread and significant harm suffered by customers, including millions of customers who received false or misleading information from the firm, millions of customers affected by the firm’s systems outages in March 2020, and thousands of customers the firm approved to trade options even when it was not appropriate for the customers to do so.” FINRA fined the company $57 million and ordered it to pay $12.6 million in restitution, plus interest, to customers. FINRA previously fined Robinhood $1.25 million in 2019 for failing to provide “best execution” for its customers’ trades. The negative news about this company does not stop there – by a long shot. On February 18 the House Financial Services Committee hauled Robinhood’s CEO, Vlad Tenev, before a hearing to answer questions about its dodgy business model. The most revealing part of the hearing was this exchange between Congresswoman Cindy Axne of Iowa and Tenev: Axne: “Right now, what I’m seeing is gambling in the stock market and that’s not a real solution to income inequality and I don’t think we should pretend that it is. “Just last June when Hertz declared bankruptcy, after that Robinhood was actively pushing the stock on its site, it was trending on Robinhood, and the promotion of that worthless stock I don’t think is good for investors. That’s a gamble that they shouldn’t have taken. That’s just one example… “Generally, 99 percent of short-term traders underperform the market. So, Mr. Tenev, you say Robinhood’s mission is to democratize finance. Is that correct?” Tenev: “That’s correct Congresswoman, yes.” Axne: “Okay. So I want to ask you then, you’ve invested significantly in behavioral research. And just so you know, I own a digital design firm with my husband so I’m familiar with what behavioral research can do for platforms and websites. That behavioral research has really shaped how your app is designed, is that correct?” Tenev: “Congresswoman, like many technology companies we employ data scientists, user researchers, and designers to provide a better customer experience.” Axne: “So on the specifics, when people sign up they get a scratch-off ticket to see what they get; confetti falls every time they place an order; they get push notifications; they’re encouraged to trade; if a friend signs up they get a free stock. On and on. Why have you added specific gaming design elements to look like gambling to your app that encourages more frequent trading?” Tenev: “Congresswoman, as I mentioned earlier, we want to get people what they want in a responsible, accessible way. We don’t believe in gamification. We know investing is serious and that’s why most of our customers are buy and hold. A very small percentage of our customers utilize margin.” Axne: “I appreciate that but you know, folks like my nephew actually aren’t your customer. They’re your product. Your customer is sitting right next to you, Mr. Griffin with Citadel.” Billionaire Ken Griffin’s Citadel Securities is a so-called internalizer or market-maker. It pays Robinhood to send its retail orders to it to execute the trades, thus allowing Robinhood to offer commission-free trading on its trading app. While Robinhood has payment-for-order-flow agreements with other internalizers, the bulk of its trade orders are going to Citadel Securities. The vast majority of Robinhood’s revenue stream comes from this payment-for-order flow. Thus, its priority would appear to be to please its true customer, Citadel Securities. The rationale behind the idea that the young people placing trades on Robinhood’s mobile phone app are “the product” that Robinhood is selling to Citadel Securities is that Wall Street has long viewed retail orders as the “dumb money” it wants to trade against. That’s because the retail investor is typically unaware that they are trading in the dark market offered by internalizers rather than on a lit market like the New York Stock Exchange, where bids and offers on stocks are publicly displayed. CNBC has this statement appearing under a news article about Robinhood: “Robinhood is a five-time CNBC Disruptor 50 company and topped this year’s list.” We agree that Robinhood is disrupting markets – but it certainly is not in a good way. A frequent commentator on CNBC, Steve Weiss, summed up his feelings about Robinhood on CNBC last Thursday: “They’re not disruptors. They’re going into a business and they’re offering prices which are free, which many, many others are doing. So I don’t think they’re a disruptor. Number two – they haven’t democratized investing. That’s been democratized a long, long time ago. And they’re talking out of two sides of their mouth. Cause they are gonna own – I believe – about 16 percent of the company but control over 60 percent of the vote. So let’s go where their intentions are – which is not one shareholder, one vote. That’s really poor governance.” Update: This article has been updated to add the word “Securities” after the word “Citadel” in the fifth paragraph from the bottom, second sentence.

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