Mukasey Frenchman Founding Partner Marc L. Mukasey was recently selected for the Lawdragon 500 Leading Lawyers in America which, according to Lawdragon, “seeks to highlight the 500 lawyers whose recent cases, deals and other contributions captured the most important legal matters of the prior year.” Lawdragon advocates “a new view of leadership in the legal profession, one that is more inclusive and focused on current contributions more than historical ones…. A Lawdragon 500 recognition is the product of a passion for legal professionals and those who aspire to new levels of excellence, bearing in mind always that people and justice are at the heart of what it is to be a lawyer.”
Bob Frenchman Quoted on Musk/Twitter Fight
Twitter’s fight with Elon Musk to enforce his $44 billion deal to buy the social media platform could attract scrutiny from the US securities regulator over whether Musk has misled the market during the course of the deal.
Twitter on Tuesday asked a Delaware court to order the Tesla boss and world’s richest person to complete the merger, setting in motion what promises to be one of the biggest legal showdowns in Wall Street history.
On Friday, Musk said he was terminating the deal because Twitter violated the agreement by failing to respond to requests for information regarding fake or spam accounts on the platform, which is fundamental to its business performance.
Bob Frenchman was also quoted in:
‘Love me tender’: how Musk wooed Twitter, only to leave it at the altar
Twitter wins first legal battle with Elon Musk as trial to go ahead in October
Crooked DEA Agent Sold Intel to Defense Attorneys, Feds Say…..
….In a statement emailed Friday to The Daily Beast, Costanzo’s lawyer, Marc Mukasey, said, “John Costanzo is a decorated DEA agent who risks his life every day to protect vulnerable communities and children from the scourge of illegal drugs. The theory of this case is misguided and he will be vindicated.”
Bob Frenchman Quoted in US News on Twitter Bots
(Reuters) – Elon Musk may find a way to prove his claim that spam accounts on Twitter Inc’s platform are significantly higher than the social media company has estimated, but showing that he and investors were misled will be difficult, legal experts say.
Musk tweeted on Tuesday that his $44 billion deal to acquire Twitter could not proceed until the company shows proof to back its estimate that spam accounts make up less than 5% of its user base. He has said he believes the figure is at least four times greater and that he will “defeat the bots or die trying.”
Independent researchers have projected that 9% to 15% of the millions of Twitter profiles may be bots.
For its part, Twitter has said in its regulatory filings that it applied “significant judgment” in coming up with the estimate and has cautioned that its disclosure may not accurately represent the actual number of spam accounts.
It is these disclaimers that give Twitter protection against potential lawsuits, be they from Musk over the deal or shareholders over the accuracy of the company’s regulatory statements, four securities law experts interviewed by Reuters said.
Marc Mukasey Featured In The New York Law Journal, Mukasey, Cahill Attorneys Repping Nikola Founder in SDNY Criminal Fraud Case
Nikola Corp. founder Trevor Milton has hired New York attorneys Marc Mukasey, Bradley Bondi and Nola Heller as defense counsel in a criminal case accusing the electric vehicle start-up’s former chair of lying about the company’s technology in order to boost stock sales. Milton, who surrendered to authorities Thursday morning,…
Bob Frenchman Quoted in Reuters on Robinhood
WASHINGTON, June 30 (Reuters) – Wall Street’s industry regulator fined Robinhood Financial LLC $70 million on Wednesday for “systemic” failures, including systems outages, providing “false or misleading” information, and weak options trading controls, saying those factors combined harmed millions of the app’s customers.
The Financial Industry Regulatory Authority (FINRA) fine is the latest hit to Robinhood’s reputation. The broker, which has been credited with democratizing trading, is under scrutiny by federal and state policymakers following this year’s meme-stock fiasco which raised questions over the California firm’s business model, risk management and customer treatment.
However, the sweeping agreement, which resolves alleged FINRA violations dating back to September 2016, likely paves the way for the firm to move forward quickly with a planned initial public offering that has been delayed due to meme-stock backlash and other regulatory queries.
Robinhood’s resolution with FINRA includes $12.6 million in restitution to thousands of customers and a $57 million penalty, the largest in the regulator’s history, and covers a range of issues dating back to September 2016, FINRA said in a statement.
“The fine… reflects the scope and seriousness of Robinhood’s violations, including FINRA’s finding that Robinhood communicated false and misleading information to millions of its customers,” said Jessica Hopper, Head of Enforcement at FINRA.
According to FINRA, those communications related to whether customers could place trades on margin, how much cash was in their accounts, how much buying power they had, the risk of loss customers faced in certain transactions, and whether customers faced margin calls.
FINRA noted that a Robinhood customer took his life in 2020 after becoming confused by messages in his account which appeared to show he had turned off margin trades and inaccurately showed a negative cash balance. Thousands of other customers suffered more than $7 million in losses due to similar mis-statements, FINRA alleged.
Between 2018 and late 2020 Robinhood also failed to properly supervise its technology, causing it to experience a “series of outages and critical systems failures,” including a major outage during the pandemic turmoil of March 2020, which led customers to lose money, FINRA said.
During the same period, Robinhood also failed to properly vet customers before allowing them to make risky options bets, FINRA alleged.
Robinhood neither admitted nor denied the charges, but consented to FINRA’s findings. The company said in a statement that it was overhauling its business, installing new supervisory and communications procedures, and has hired a slew of attorneys, including previous regulators.
“There’s a clear message: You can try to democratize investing and demystify finance, but you can’t cut corners,” said Robert Frenchman, an attorney with Mukasey Frenchman & Sklaroff, who added the settlement should be good news for the IPO.
“It’s good because it clears up such a wide range of issues that now they can say they have settled with regulators. I can see the value – it’s a lot of money – in settling on such a salad of FINRA violations.”
Marc Mukasey Featured in The Harvard Crimson, Lieber Prepares for Impending Trial on Federal Charges As He Battles Incurable Cancer
BY ANDY Z. WANG
Attorneys defending former Chemistry department chair Charles M. Lieber, who was charged with lying to federal authorities examining his ties to China, said during a status conference last month that Lieber’s cancer diagnosis and deteriorating health call for an expedient trial.
As the trial looms, legal experts spoke with The Crimson about Lieber’s possible defense strategies, which might implicate Harvard and draw attention to University policies around foreign funding disclosure.
Federal authorities arrested Lieber in January 2020, alleging that he made fraudulent statements to officials investigating his funding sources. Lieber reportedly lied to the Defense Department and the National Institutes of Health about ties he allegedly had to China’s Thousand Talents Plan, a talent recruitment program.
Last June, a federal grand jury indicted Lieber on charges of making false statements, to which he pled not guilty. The next month, Lieber was additionally charged with four tax offenses for failing to report income he allegedly received from Chinese sources.
Marc L. Mukasey, one of Lieber’s attorneys, said in a Feb. 26 hearing that Lieber had eliminated the potential of a plea deal and would be pursuing a trial.
“At this time, Your Honor, there is no possibility of a plea and there will be a trial,” Mukasey told Magistrate Judge Marianne B. Bowler of the U.S. District Court of Massachusetts at the February status conference.
‘Fighting for His Life’
“He is fighting for his life while also fighting the government,” Mukasey added in a Tuesday statement. “He is eager to show the world at trial how the government has it wrong.”
In a public letter released last month, 41 professors — including seven Nobel laureates — from several American universities questioned Harvard’s decision to not recoup Lieber for his legal costs, especially after he had been diagnosed with “an incurable lymphoma.”
“Our efforts are all the more urgent as Professor Lieber is fighting for his life on another front,” the letter reads. “Instead of devoting what may be the final months of his life to fulfilling his scientific and educational calling, he is tackling the monumental task of restoring his reputation.”
Lieber filed suit against Harvard in Middlesex County Superior Court in October 2020, alleging that the University broke its contract with him by refusing to reimburse him for his criminal defense.
Previously, Harvard officials have pointed to provisions in the University’s indemnification policy excluding individuals who have been “determined not to have acted in good faith” as justification for refusing reimbursement.
In the status conference, Mukasey said indemnification was necessary for Lieber’s health.
“We’re fighting Harvard in state court so that Lieber can afford experimental treatment to keep him alive,” he said.
Kristen M. Schwendinger — a senior counsel at Feldesman Tucker Leifer Fidell LLP specializing in practices including federal grants and compliance matters — said Lieber’s health condition would not stop the government from pursuing its case.
“I don’t think that usually stops a trial from occurring entirely,” she said. “I do think it absolutely factors into sentencing.”
‘So Much Ambiguity”
Derek Adams — a partner at Potomac Law Group in Washington who regularly defends clients facing Department of Justice investigations — said based on case filings, Lieber’s defense team will likely contend that Lieber was “sucked into” the federal government’s pre-existing efforts to combat intellectual property theft by Chinese state actors.
“The defense is going to be very focused on the bigger picture — the anti-China movement that’s happened over the last three or four years — and try to take the focus away from the specific statements and more generally paint this as part of a broader brush that the government has been taking,” Adams said.
“This case has been painted as an espionage case and a case about theft of intellectual property or other materials from the U.S., when in fact it’s just about allegedly a false statement to the government,” he added.
A federal charge for making false statements allows for a sentence of up to five years in prison, three years of supervised release, and a $250,000 fine.
Schwendinger said that there are “pretty standard defense arguments” for false claims charges.
“Usually it tackles whether or not the statement was done knowingly and willfully,” she said. “There’s another standard defense, and that’s when you respond ‘no’ to something in a very quick response, but you unpack what the question was and what the answer really meant at the time.”
Adams added that the false claims charges against Lieber allege that Lieber willfully lied when he informed the Department of Defense and National Institutes of Health that he was “not involved in a foreign talent plan in any way.”
“One of the defenses is going to be that there’s so much ambiguity in terms of whether somebody is truly a member in a foreign talent program or not, that it could have just not been clear to Charles Lieber what the question was being asked and whether his answer was accurate or not,” Adams said. “They’re probably going to take the position that he thought his answer was accurate.”
‘Going Back in Time’
In the March status conference, Mukasey alluded to how a trial might implicate Harvard in the Lieber case, saying there are those “who do not want their own misconduct to be laid bare at trial.”
“The indictment references Harvard 33 times,” he added in an emailed statement. “It’s hard to imagine a trial where Harvard will not be at the forefront.”
Peter R. Zeidenberg — a partner at Arent Fox specializing in espionage-related offenses and trade secret theft — said many universities do not clearly delineate guidelines for reporting foreign collaboration.
“Relationships like the Thousand Talents Program were something that universities thought were a good thing, and they were encouraged,” he said. “Then you have a complete lack of training by either the granting agencies or the universities to their staff on what the rules and requirements are of disclosure, and very vague definitions and explanations of what needs to be disclosed.”
Though he declined to comment specifically on the Lieber case, Zeidenberg said it was “completely unfair and unjust” for the Department of Justice to “change the rules in the middle of the game” in enforcing disclosure.
“[The Department of Justice is] going back in time, and they’re looking at disclosures made in 2016, ’17, ’18, and even further back and saying, ‘You didn’t do this,’” Zeidenberg said. “It’s a retroactive application of new standards.”
Schwendinger said Lieber could argue he was not fully aware of the required disclosures in his situation.
“One of the things that could be part of his overall defense is to say: what you’re talking about happened in an era where it was not clear what I needed to share,” she said.
Adams said Harvard would “come into the trial one way or another” due to its role in facilitating Lieber’s grant applications to the National Institutes of Health.
“[Harvard] definitely could come in, in terms of the way that they go about their due diligence on statements like this and on their internal policies and practices as it relates to foreign disclosures,” Adams said.
However, both Schwendinger and Adams said they were wary about the efficacy of such a defense.
“He actually may have violated some of Harvard’s policies that are more clear,” Schwendinger said. “It’s easier to make an argument that you might’ve been confused if it’s very clear that you were making an effort to follow all those policies.”
University spokesperson Jonathan L. Swain and FAS spokesperson Anna G. Cowenhoven declined to comment for this story.
‘Ghastly, Barbaric and Unnecessary’
Adams and Zeidenberg said they would like to see a shift in how the Department of Justice handles cases of individuals failing to disclose foreign funding. Zeidenberg specifically said the China Initiative — a Department of Justice task force targeting intellectual property theft by China — had “gotten badly off track.”
“It’s going after people who have not even a hint of allegation that they transferred any technology or intellectual property to anybody,” he said.
Mukasey maintains Lieber had no involvement in transferring proprietary knowledge.
“Through the DOJ’s China Initiative, the government wanted to root out spies and those who might be compromising American knowledge, intellectual property and intelligence,” he wrote. “There is nobody on earth who thinks Charlie Lieber was involved in that kind of activity and there is not a speck of evidence in that regard.”
Adams said, however, that a shift in policy around enforcing foreign funding disclosures would be unlikely to affect Lieber’s case.
“I hope we see some shifts to there being less criminal cases and more issues dealt with at the administrative or civil level under the new administration,” he said. “But this case has already been charged; it’s already moving forward.”
Schwendinger said the trial would prove instructive for future cases alleging academic espionage.
“It’s incredibly unfortunate that things have to go to a full trial, but I think all of us involved in this challenging era area of law will learn a lot from his outcome,” she said. “There is no precedent for a trial like this, and so we’ll all learn a lot from its outcome.”
Mukasey wrote that the U.S. government had overzealously executed its China Initiative, and in doing so, unfairly targeted Lieber.
“The entire prosecution of an innocent man dying of cancer is ghastly, barbaric and unnecessary,” he wrote.
Elizabeth O. McCarthy, a spokesperson for the U.S. Attorney’s Office in the District of Massachusetts, declined to comment, citing the pending trial.
Lieber’s next pretrial status conference has been tentatively scheduled for April 28.
—Staff writer Andy Z. Wang can be reached at email@example.com.
Bob Frenchman Featured On Newsmax to Discuss GameStop
Bob Frenchman Quoted in Bloomberg on Robinhood
Investors who sued online brokerages over claims they were unfairly blocked from trading shares of high-flying stocks like GameStop Corp. may have a long wait before their cases are resolved.
So far, at least 18 lawsuits have been filed against Robinhood Markets in California, Connecticut, Florida, Illinois, New Jersey, Oregon, Pennsylvania and Texas, mostly alleging restrictions by the trading platform that amounted to a breach of contract, court records show. Some also seek damages on behalf of other aggrieved investors.
While such claims already must overcome the broad powers brokerages have to block or restrict transactions on their platforms, the path through the courts could take months or even years to resolve, with mandatory arbitration in some cases and delays for consolidation of similar lawsuits, legal experts said.
Bob Frenchman Quoted in Reuters on GameStop
WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) is looking at every aspect of and parties involved in the “Reddit rally” of GameStop Corp and other stocks, said two people familiar with the matter, suggesting a swath of industry participants may be swept up in the regulator’s review of the trading frenzy.
The people added that the furious surge in shares of GameStop, AMC Entertainment Holdings and other stocks contained familiar patterns, in that it involves users of online platforms hyping up stocks – something seen in the past on bulletin boards and social media platforms.
However, manipulation cases can be complex and may rely on more than simply language posted on a message board, they said.
Thousands of Reddit users trading on low-cost retail platforms including Robinhood banded together to drive up the prices of GameStop and other “meme” stocks, squeezing hedge funds that had taken short positions, or bets against those shares.