# Weekend Law: Iran War, Live Nation Trial Back On & War Bets

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 14 Mar 2026, 38 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/e9654b91-5c5a-4782-8ecb-b40d01731141/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

International law expert Kal Raustiala a professor at UCLA Law School, discusses the legality of the war in Iran. Then antitrust law expert Harry First, a professor at NYU Law School, discusses the states resuming the antitrust lawsuit against Live Nation. And business law expert, Eric Talley, a professor at Columbia Law School, discusses wagering on the Iran war. June Grasso hosts. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: This is Bloomberg Law with June Grossel from Bloomberg Radio.
[0:08] Speaker 2: We've won. Let me tell it. We've won. You know,
[0:11] Speaker 2: you'd never like to say too early. You won. We won.
[0:14] Speaker 2: We won the best in the first hour, it was over.
[0:16] Speaker 3: They are absolutely being destroyed. Iran is being absolutely decimated.
[0:24] Speaker 3: The situation with Iran is moving along very rapidly.
[0:28] Speaker 2: It's doing very well. Our military is unsurpassed, has never
[0:33] Speaker 2: been anything like it. Nobody's ever seen anything like it.
[0:36] Speaker 4: President Trump declared victory over Iran on Wednesday, as the
[0:40] Speaker 4: war that's in Gulf, the Middle East and upended energy
[0:44] Speaker 4: flows and global markets hits the two week mark with
[0:48] Speaker 4: no end in sight, and several Democratic lawmakers like Senator
[0:52] Speaker 4: Tammy Baldwin, have labeled it an illegal war.
[0:56] Speaker 5: We were not under attack, We were not even under
[1:00] Speaker 5: imminent threat of attack, which means this is a war
[1:04] Speaker 5: of choice, and it means that the President has violated
[1:08] Speaker 5: both the Constitution and law to go to war.
[1:13] Speaker 4: Joining me to discuss whether the Iran war is a
[1:15] Speaker 4: violation of US law or international law. Is cal Rostiella,
[1:20] Speaker 4: a professor at UCLA Law School and an expert in
[1:24] Speaker 4: international law. So Cal under the Constitution, the President commands
[1:29] Speaker 4: the armed forces and directs foreign relations, but only Congress
[1:34] Speaker 4: has the power to declare war. So is the Iran
[1:38] Speaker 4: war illegal under US law?
[1:41] Speaker 6: I would say that yes, it's correct that Congress is
[1:45] Speaker 6: empowered to declare war under the Constitution. But Congress has
[1:48] Speaker 6: only done so five times in American history, and we've
[1:51] Speaker 6: used force over two hundred times. So it's pretty well
[1:54] Speaker 6: established that there's lots of uses of force that the
[1:57] Speaker 6: president can engage in without a declaration of war. And
[2:01] Speaker 6: in fact, in the post un Charter world, a declaration
[2:04] Speaker 6: of war doesn't even really make sense. The system is
[2:07] Speaker 6: predicated on the idea of self defense as the main
[2:10] Speaker 6: rationale for the use of force. But in any event,
[2:12] Speaker 6: the main thing is what's the role of Congress in this?
[2:14] Speaker 6: And I think in many other instances we see Congress
[2:18] Speaker 6: doing something short of a declaration, like an authorization of
[2:22] Speaker 6: some kind. You go back to the Gulf of Tonkin
[2:24] Speaker 6: resolution during the Vietnam War, or the authorization to use
[2:27] Speaker 6: military force before the Iraq War two thousand and one
[2:30] Speaker 6: in Afghanistan. And so it is often the case that
[2:34] Speaker 6: Congress plays some supportive role short of a declaration. We
[2:38] Speaker 6: obviously don't have that here, and so then would.
[2:41] Speaker 4: You say that this is not legal under US law?
[2:46] Speaker 1: I wouldn't say it's not legal.
[2:47] Speaker 6: It's difficult to answer that because the parameters of Congress's
[2:51] Speaker 6: powers and the president's.
[2:52] Speaker 1: Powers have sort of evolved over time.
[2:55] Speaker 6: I mean, even the Framing generation understood the idea that
[2:58] Speaker 6: the president had the authority to hell sudden attacks.
[3:01] Speaker 1: What exactly that means.
[3:02] Speaker 6: And what role Congress should play has been sort of
[3:05] Speaker 6: a you know, a bit of a struggle, a bit
[3:07] Speaker 6: of a dance between the two branches. All of that said,
[3:10] Speaker 6: I think, you know, it is certainly a kind of
[3:12] Speaker 6: customary practice generally to seek some degree of Congressional approval.
[3:18] Speaker 6: But it's also the case that the executive branch has
[3:19] Speaker 6: always resisted the idea that they have to do it.
[3:21] Speaker 6: And so the War Power's Act was a nineteen seventies era,
[3:25] Speaker 6: maybe a high point of Congress's attempt to claw back
[3:28] Speaker 6: some of its control and the wake of President Nixon
[3:31] Speaker 6: and the kind of idea that the presidency was.
[3:33] Speaker 1: A bit wayward, But the executive branch has always been.
[3:35] Speaker 6: Resistant to it and always kind of argued either that
[3:38] Speaker 6: it doesn't apply or it isn't fully legal, or they're
[3:40] Speaker 6: providing information but they don't have to. They've given different
[3:43] Speaker 6: articulations over time, but they don't like it, and they
[3:45] Speaker 6: don't feel that they're really, you know, forced.
[3:48] Speaker 1: To do a lot of things that congressponts to do.
[3:50] Speaker 6: So it's really hard to say whether this is fully
[3:53] Speaker 6: a violation without Congress actually asserting itself in some way.
[3:57] Speaker 6: It's more of an invitation to struggle between these two
[4:00] Speaker 6: branches rather than clear, brightline rules.
[4:03] Speaker 4: What about international law, does the Iran war violate the
[4:07] Speaker 4: UN Charter?
[4:08] Speaker 1: Also a difficult question.
[4:09] Speaker 6: I would say most international lawyers outside the US government,
[4:13] Speaker 6: and maybe outside state departments and foreign ministries generally would
[4:16] Speaker 6: say yes. The framework that's laid out in the UN
[4:19] Speaker 6: Charter is essentially that you can use force if an
[4:23] Speaker 6: armed attack occurs, and then there's a kind of secondary
[4:25] Speaker 6: question about what if it's about to occur, about the
[4:28] Speaker 6: imminence to mention of that, or you can use force
[4:30] Speaker 6: if the Security Council authorizes it, And those are the
[4:33] Speaker 6: only two instances, and neither of those are true here
[4:38] Speaker 6: in the view of I think the majority of international
[4:40] Speaker 6: lawyers around the world, again, outside governments, outside the US government,
[4:44] Speaker 6: the Israeli government, maybe some other governments. So one of
[4:46] Speaker 6: the interesting features about this particular conflict is a bit
[4:50] Speaker 6: like the Maduro raid earlier this year, there's not an
[4:54] Speaker 6: enormous amount of approbrium headed in the direction of the US.
[4:58] Speaker 6: So there is some, of course, but there's more approval
[5:01] Speaker 6: or acquiescence than you might have expected. And I think
[5:04] Speaker 6: that partly reflects the fact that in both of those cases,
[5:07] Speaker 6: Venezuela and Iran, these are states that are not widely liked,
[5:11] Speaker 6: that are generally viewed as bad actors, and so politically
[5:14] Speaker 6: it's more difficult.
[5:15] Speaker 1: But it's also the.
[5:16] Speaker 6: Case that there's an argument that the US, certainly I
[5:18] Speaker 6: think is making and will make. The administration is not
[5:21] Speaker 6: great at making its case. In fact, they really have
[5:24] Speaker 6: not made much of an effort at all to do that.
[5:26] Speaker 6: But to degree they have, it's sort of sounding in
[5:28] Speaker 6: some kind of self defense rationale, and you can make
[5:30] Speaker 6: the argument, I don't know if it's really persuasive, but
[5:33] Speaker 6: you can make the argument that we are in a
[5:34] Speaker 6: long term conflict with eromic dates back decades, and that
[5:39] Speaker 6: in a sense is the continuation of an ongoing conflict
[5:42] Speaker 6: rather than a new conflict. If you accept that idea,
[5:45] Speaker 6: then it can be seen as lawful. I think it's
[5:48] Speaker 6: a stretch, but there isn't really clear rules about that
[5:51] Speaker 6: about how much time passes before a conflict is over.
[5:55] Speaker 4: Aren't there strict legal requirements for whether it's considered self
[5:59] Speaker 4: defense under Article fifty one of the un Charter? You know,
[6:03] Speaker 4: whether you actually need an armed attack, not just a
[6:07] Speaker 4: potential threat.
[6:08] Speaker 6: Yes, I mean, the black Letter law is pretty clear
[6:10] Speaker 6: that if an armed attack occurs, you have a customer
[6:15] Speaker 6: international law and a treaty based un Charter based right
[6:18] Speaker 6: of self defense.
[6:19] Speaker 1: And that could be collective or individual.
[6:20] Speaker 6: In other words, you know, you could protect an ally
[6:22] Speaker 6: and vice versa, which obviously has relevance for Israel in
[6:25] Speaker 6: the United States. But if an armed attack occurs, that
[6:29] Speaker 6: language in the un Charter makes it sound as if
[6:31] Speaker 6: you have to wait for the attack, But it's long
[6:34] Speaker 6: that understood, dating back to the nineteenth century, that that's
[6:36] Speaker 6: not the case, and that an imminent attack is sufficient
[6:40] Speaker 6: grounds for engaging in self defense. Now, the question of
[6:43] Speaker 6: how imminent has been a difficult one. Obviously, you know,
[6:47] Speaker 6: just conceptually it's not really clear what does that mean.
[6:49] Speaker 6: Does the missiles have to be in the air or
[6:51] Speaker 6: something like that over time, especially in the last let's
[6:54] Speaker 6: say a couple of decades. This was relevant for the
[6:56] Speaker 6: Iraq War. The position the US has taken has been
[7:00] Speaker 6: to extend the time period of imminence such that it's
[7:04] Speaker 6: more in the role of preemptive war or even preventative war,
[7:08] Speaker 6: and that isn't widely accepted, but I think it's fair
[7:11] Speaker 6: to say that a lot of states do sort of
[7:14] Speaker 6: agree that you can't in a time of let's say,
[7:16] Speaker 6: high technology with warfare, weapons of mass destruction, etc. You
[7:20] Speaker 6: can't really wait till the attack is ongoing or even
[7:24] Speaker 6: about to be launched. You may need to act a
[7:26] Speaker 6: bit beforehand. But you know, that's a very slippery slope,
[7:29] Speaker 6: and many international lawyers find that concerning. And of course
[7:32] Speaker 6: most countries in the world are going to find a
[7:34] Speaker 6: rule like that concerning because they are much more likely
[7:37] Speaker 6: to be attacked than to be attacking, so they worry
[7:40] Speaker 6: about that.
[7:41] Speaker 4: Broading this out, there's been a string of unilateral military
[7:45] Speaker 4: actions taken by the Trump administration since December. The US
[7:51] Speaker 4: bombed Nigeria, killed alleged drug smugglers in more than forty
[7:55] Speaker 4: strikes in the Caribbean and the Pacific, attacked Venezuela and
[7:59] Speaker 4: kidnap app It's president and now attacked Auran. Would those
[8:03] Speaker 4: other strikes be considered a violation of international law?
[8:08] Speaker 6: Yeah, I mean, it's an amazing string of events, disturbing string.
[8:13] Speaker 6: Some of them are really blatant violations of international law. So,
[8:17] Speaker 6: for example, the boat strikes would maybe be the most
[8:20] Speaker 6: blatant in the sense that really they haven't even offered
[8:23] Speaker 6: a very coherent argument about it. But taking out those
[8:27] Speaker 6: are civilians by almost all accounts, we're not actually in
[8:30] Speaker 6: a conflict with cartels, so that may be the most
[8:33] Speaker 6: extreme kind of clear case. And then maybe Iran might
[8:36] Speaker 6: be at the other end, if you buy the argument
[8:38] Speaker 6: that we're in some kind of long standing conflict that's
[8:40] Speaker 6: continuing on. But when you put them all together, stepping
[8:43] Speaker 6: out of the law for a second, obviously the political
[8:45] Speaker 6: pattern is really striking and disturbing for a number of reasons.
[8:48] Speaker 6: One because the United States is increasingly using force abroad
[8:53] Speaker 6: in ways that are I think upsetting to many states
[8:57] Speaker 6: violating many rules of international law. Let just many norms
[9:01] Speaker 6: of behavior, whether they're legal or not. A good example
[9:04] Speaker 6: would be threatening Greenland, even if that was not a
[9:06] Speaker 6: serious threat, sort of an offhand threat or something like that.
[9:09] Speaker 6: First of all, you're not allowed to threaten to use
[9:11] Speaker 6: force under the UN Charter. That's also a violation. But
[9:14] Speaker 6: regardless of whether the threat was really a serious one
[9:16] Speaker 6: or not, just the very idea that a NATO ally
[9:19] Speaker 6: would be subjected to some kind of threat is really
[9:23] Speaker 6: shocking and was shocking to many of.
[9:25] Speaker 1: Our closest allies. So when you put all.
[9:27] Speaker 6: Of these things together, it does seem sort of incredible.
[9:30] Speaker 6: The amount of intervention that's taking place, the amount of
[9:33] Speaker 6: military force. Why is it happening? I cannot answer that question.
[9:37] Speaker 6: I think no one really knows. There are so many
[9:40] Speaker 6: different theories of various conspiratorial levels about whether there's a
[9:43] Speaker 6: pattern here. It does seem like the Trump administration often
[9:46] Speaker 6: acts without any of the elaborate process that would go
[9:50] Speaker 6: on normally in an administration, and maybe even occurred in
[9:53] Speaker 6: the first Trump administration with regard to the use of force,
[9:56] Speaker 6: meaning lots of process through the National Security Council, through
[9:59] Speaker 6: the State Department, through DoD, et cetera. Thinking these things through,
[10:03] Speaker 6: elaborating a strategy, examining risks, that all seems to be
[10:06] Speaker 6: short circuited in a lot of these cases, and so
[10:09] Speaker 6: it's not clear that there is a strategy.
[10:12] Speaker 1: In fact, I sort of doubt it.
[10:13] Speaker 4: So there are reports that Iran maybe planning to retaliate
[10:19] Speaker 4: against the US with drone strikes in California. How would
[10:23] Speaker 4: international law view that.
[10:25] Speaker 6: I have to say, it seems, you know, maybe a
[10:27] Speaker 6: bit far fetched. But Iran has shown that it has
[10:29] Speaker 6: power to take actions, either through itself or its proxies
[10:32] Speaker 6: in other places.
[10:32] Speaker 1: So it's not to be dismissed completely under the laws
[10:35] Speaker 1: of war.
[10:36] Speaker 6: If we are in fact in a conflict, then Iran
[10:38] Speaker 6: can attack us as we are attacking them. But you
[10:41] Speaker 6: can't attack civilians. You can't deliberately target civilians, and so
[10:46] Speaker 6: those same rules would apply on either side. Deliberate targeting
[10:50] Speaker 6: of civilians is not permitted. You know, there's a bunch
[10:53] Speaker 6: of rules about proportionality and distinction and so forth. Complicated
[10:56] Speaker 6: set of rules that sometimes can seem academic when you
[10:59] Speaker 6: actual apply the munch real cases. But either way, drone
[11:02] Speaker 6: strikes against a school or a hospital or something like
[11:05] Speaker 6: that randomly in California, no, that would be a violation.
[11:09] Speaker 6: But against a military target. If we are in fact
[11:11] Speaker 6: in an armed conflict, then that's part of war. For example,
[11:14] Speaker 6: the ship that was targeted by the United States thousands
[11:16] Speaker 6: of miles from Iran and sung would be an example
[11:19] Speaker 6: of an attack like that.
[11:20] Speaker 1: Wasn't a drone, but it's the same idea.
[11:22] Speaker 4: And talking about strikes against a school, Defense Secretary Pete
[11:27] Speaker 4: Hegseth says the airstrike that killed more than one hundred
[11:30] Speaker 4: and eighty people, mostly children at a girls' school in
[11:34] Speaker 4: Iran is being investigated. Thanks for joining me, cal that's
[11:38] Speaker 4: Professor kl Rostiella of UCLA Law School. Coming up next
[11:43] Speaker 4: is Live Nation Off the Hook. I'm June Grosso and
[11:46] Speaker 4: you're listening to Bloomberg.
[11:49] Speaker 7: It's a pretty bad deal. So the core issue here
[11:52] Speaker 7: was that Live Nation and a ticketmaster. When they merged
[11:55] Speaker 7: a few years back, they became so powerful that they
[11:57] Speaker 7: were able to raise ticket prices.
[12:00] Speaker 4: Mark anti trust trial against Live Nation was supposed to
[12:03] Speaker 4: fix the exorbitant fees that have made concert tickets a
[12:07] Speaker 4: luxury item, not to mention the technology that makes them
[12:11] Speaker 4: a headache to purchase. But then on Monday, only four
[12:15] Speaker 4: days into the trial, it came crashing to a stop
[12:19] Speaker 4: with an unexpected settlement between the Justice Department and the
[12:23] Speaker 4: world's largest live events ticket seller. It even took the
[12:27] Speaker 4: trial judge by surprise. But the trial isn't over yet.
[12:31] Speaker 4: A bipartisan group of more than thirty states has refused
[12:35] Speaker 4: to settle and will resume the anti trust trial on Monday,
[12:39] Speaker 4: taking over the lead from the Justice Department. Like North
[12:43] Speaker 4: Carolina's Attorney General Jeff Jackson, the state ags say it's
[12:48] Speaker 4: a bad deal for consumers that keeps Live Nations monopoly
[12:52] Speaker 4: in place.
[12:54] Speaker 7: The vast majority of the ages who started on this
[12:56] Speaker 7: lawsuit are going to stay on this lawsuit. That's Republicans
[12:59] Speaker 7: and Democrats, a couple dozen of us from across the country.
[13:03] Speaker 7: We're working out the timeline, but we've told Life Nation
[13:06] Speaker 7: they can expect to see us back in court very.
[13:08] Speaker 4: Soon, in fact, as soon as Monday at eight thirty am.
[13:12] Speaker 4: My guest is Anti Truss law expert Harry First, a
[13:16] Speaker 4: professor at NYU Law School. Harry, let's start with the
[13:19] Speaker 4: trial judge's reaction to this surprise settlement. Judge of Runs
[13:24] Speaker 4: Subramani scolded the parties that are hearing on Tuesday. He
[13:28] Speaker 4: said the DOJ's lack of transparency about its settlement negotiations
[13:33] Speaker 4: was mind boggling, and the party's actions strain the boundaries
[13:37] Speaker 4: of acceptable conduct. I mean, four days into the trial,
[13:41] Speaker 4: the secrecy, what's up here?
[13:44] Speaker 8: Well, these are great questions. You know, we can speculate.
[13:48] Speaker 8: I'm glad to speculate, but we don't know for sure.
[13:50] Speaker 8: Here's my guess. My guess is the trial staff. They
[13:54] Speaker 8: have really top people trying this case. My guess is
[13:58] Speaker 8: they were blindsided. Is that they were not involved in
[14:03] Speaker 8: this settlement. These are real, long serving professionals, both in
[14:08] Speaker 8: and out of the Justice Department. I think that this
[14:11] Speaker 8: was done above them, That's a guess. And the termsheet
[14:16] Speaker 8: I've never seen. This is the crazy term sheet. What
[14:19] Speaker 8: is this a deal? The term sheet is signed by
[14:22] Speaker 8: the acting Assistant Attorney General, not by anyone on the
[14:25] Speaker 8: trial staff. And for this to become a what's called
[14:30] Speaker 8: a consent to cree that the judge enters, it's got
[14:33] Speaker 8: to look a little more formal than this. So whether
[14:36] Speaker 8: they'll sign it or not, I think would be a
[14:38] Speaker 8: good question. And I don't know. I think that's to
[14:41] Speaker 8: look forward to. And I would be close to certain
[14:45] Speaker 8: that the states were completely out of the loop on this.
[14:48] Speaker 8: I think everyone was concerned that this case was going
[14:51] Speaker 8: to be sold out, and I mean sold out in
[14:54] Speaker 8: the literal sense that this was a political deal. And
[15:00] Speaker 8: and you know, whether it's actual money changing hands or
[15:03] Speaker 8: just straight lobbying that this is another example of, you know,
[15:07] Speaker 8: something happening like that, and you know, people were watching
[15:10] Speaker 8: this case to see if was ever going to go
[15:12] Speaker 8: to trial, you know, whether it would be settled out
[15:15] Speaker 8: before with exactly the thing that we see, which is
[15:18] Speaker 8: that Live Nation doesn't have to give up Ticketmaster.
[15:21] Speaker 4: You're right that Live Nation CEO Michael Rapino was apparently
[15:26] Speaker 4: in DC signing the last minute deal with the acting
[15:29] Speaker 4: head of the Antitrust Division. Under the terms, Live Nation
[15:33] Speaker 4: will open up concert venues it owns to rival ticketing services,
[15:38] Speaker 4: and it will allow rival concert promoters to put on
[15:41] Speaker 4: shows at its venues and cap fees at fifteen percent.
[15:45] Speaker 4: That doesn't address the main relief sought in the case,
[15:47] Speaker 4: which is Live Nations selling Ticketmaster. So what does the
[15:51] Speaker 4: public get from this settlement?
[15:55] Speaker 8: A little bit older and deeper in debt. Wasn't that
[15:58] Speaker 8: the song? I don't think the public interest is served
[16:01] Speaker 8: and the public gets very much. There may be some money.
[16:04] Speaker 8: Who knows how much the states have to agree to it.
[16:07] Speaker 8: There's some pullback. They were negotiating the terms you know,
[16:11] Speaker 8: Sunday night before this term sheet was released, so it
[16:15] Speaker 8: really isn't clear and if they have to, you know,
[16:18] Speaker 8: go back on some of the contracts, the exclusivity. The
[16:22] Speaker 8: problem is not in the formal contracts. The problem is
[16:25] Speaker 8: in the economics of this business and tying the ticket
[16:29] Speaker 8: sellers to the talent. I mean, that's what it is.
[16:33] Speaker 8: And you're not going to solve it by saying, excuse me,
[16:35] Speaker 8: don't insist on a contract. That's where they started out
[16:38] Speaker 8: in twenty ten. It never worked, it never will work.
[16:42] Speaker 8: So it's just really not something to advance the public interest.
[16:47] Speaker 8: The second part is some access to ticket Master's API
[16:51] Speaker 8: so some other ticketing company can do something. They actually
[16:56] Speaker 8: tried this before, that was part of the twenty ten settlement,
[17:00] Speaker 8: and one of the things that happened is the company
[17:02] Speaker 8: that was supposed to be given access to it didn't
[17:04] Speaker 8: want it. I mean, it's just it's filed, failed, failed,
[17:07] Speaker 8: and it fails because venues will not want to offend
[17:12] Speaker 8: Live Nation by using a different ticketing company. And Live
[17:15] Speaker 8: Nation has said they said in testimony, they said, you know,
[17:19] Speaker 8: we're going to make the choice that makes us the
[17:20] Speaker 8: most money. Guess what. So it's sad, but overlaying it
[17:25] Speaker 8: is this question of political influence, which has been the
[17:30] Speaker 8: song of anti trust from the beginning, and here we
[17:33] Speaker 8: are again.
[17:34] Speaker 4: I think the states had asked for a mistrial and
[17:37] Speaker 4: for sixty days so that their attorneys could get up
[17:40] Speaker 4: to speed, because the Justice Department had been leading the litigation,
[17:44] Speaker 4: but the judge ordered them to negotiate this week and
[17:47] Speaker 4: six Republican led states did settle with Live Nation. But
[17:52] Speaker 4: thirty four states are going to resume the trial on Monday.
[17:56] Speaker 4: Won't the state's attorneys be at a disadvantage?
[17:59] Speaker 8: The state are now in a tough spot. They were
[18:02] Speaker 8: sitting there watching the trial. They knew that this could
[18:05] Speaker 8: blow up at any point. I don't think they're surprised
[18:08] Speaker 8: in that sense. But of course there's a difference between
[18:11] Speaker 8: sitting there watching the trial and stepping up there and
[18:15] Speaker 8: trying the case before jury. I don't know how it goes.
[18:18] Speaker 8: You know, you can see why they'd want to mistrial,
[18:20] Speaker 8: not want to have to come before the jury without
[18:23] Speaker 8: the Justice Department there and say hi, we're your new friends.
[18:27] Speaker 8: You remember those those other folks. Do you explain thission?
[18:31] Speaker 8: I don't know how exactly that would work. This is
[18:33] Speaker 8: really weird. There have been cases, well, one case in
[18:37] Speaker 8: which I'm familiar is the Microsoft case where states and
[18:41] Speaker 8: the federal government tried the case together and then the
[18:44] Speaker 8: Justice Department settled with Microsoft, but not all the states did,
[18:48] Speaker 8: and they continued to litigate the remedy but not you know,
[18:52] Speaker 8: whether there's a liability, so it's still a little different.
[18:55] Speaker 8: Didn't go so well for them, so it's hard. They're
[18:58] Speaker 8: in a hard position. There are two reasons to do it.
[19:02] Speaker 8: One is to get good law made, is to get
[19:04] Speaker 8: a verdict against Live Nation, and Ticketmaster will help in
[19:09] Speaker 8: some other private litigation, maybe not so much help, but
[19:13] Speaker 8: a little. And the second is that relief to get
[19:16] Speaker 8: to vestiture and you know, maybe they can make the
[19:20] Speaker 8: case if they've got the right experts and that this
[19:22] Speaker 8: is the only way to solve this problem. Meant to
[19:24] Speaker 8: have competition in ticketing is to change the incentives of
[19:28] Speaker 8: the parties in this industry.
[19:30] Speaker 4: Ensuing Live Nation is also popular with the public because
[19:35] Speaker 4: buying concert tickets has become a luxury item. Every time
[19:39] Speaker 4: you go to buy tickets on Ticketmaster. It seems like
[19:42] Speaker 4: the prices have climbed yet again. So what do the
[19:46] Speaker 4: states have to lose by going forward with the trial.
[19:49] Speaker 8: Well, part of the answer is that the remedy of
[19:52] Speaker 8: splitting them apart will not, you know, the day after,
[19:55] Speaker 8: produce lower ticket prices. It's a market process, and you
[19:59] Speaker 8: hope that new companies will enter the ticketing business particularly
[20:03] Speaker 8: and bring some competition there. But you know, Taylor Swift
[20:07] Speaker 8: concerts are still going to be really expensive and there'll
[20:11] Speaker 8: still be resale markets, so it's a slow fix. So yes,
[20:15] Speaker 8: it looks attractive from the point of view of the
[20:18] Speaker 8: states that you know, pushing on and being the public interest,
[20:21] Speaker 8: but it is a longer term public interest. So maybe
[20:24] Speaker 8: there's some quick fix or something. Everybody who bought a
[20:27] Speaker 8: Taylor Swift ticket gets free out, I don't know, you know,
[20:32] Speaker 8: get some money, so maybe they'll increase the money in
[20:35] Speaker 8: the pot. There's a lot of money here.
[20:37] Speaker 4: So when the judge rejected the request and said that
[20:40] Speaker 4: if the parties truly want to settle, a deal could
[20:43] Speaker 4: be made within the week, and the Innaus attorney for
[20:46] Speaker 4: Live Nations. Dan Wall said, I've done this for forty
[20:49] Speaker 4: five years and there's zero chance we get this done
[20:51] Speaker 4: by Friday. And the judge said, not with that attitude.
[20:56] Speaker 2: I love that.
[20:56] Speaker 8: That was great. Yeah, Dan Wall is very sure of himself.
[21:00] Speaker 8: But the States have now apparently hired a very very
[21:03] Speaker 8: successful anti trust trial lawyer, Jeffrey Kessler. It's a smart,
[21:07] Speaker 8: sharp move, but they are up against a difficult tactical
[21:12] Speaker 8: position here, and they have to be sure that they
[21:15] Speaker 8: really want to go ahead and push for divestiture. It's
[21:19] Speaker 8: not impossible, but the States don't generally do so well
[21:23] Speaker 8: once they've been deserted by the Justice Department. There are
[21:26] Speaker 8: past cases, not always, but it's hard now. You know,
[21:30] Speaker 8: they need the experts, the economists, industry experts. They need
[21:34] Speaker 8: a top lawyer. I guess they have good lawyers in
[21:37] Speaker 8: the house, but they've hired a guy who could go
[21:39] Speaker 8: up against Dan Wall.
[21:41] Speaker 4: I don't envy the State's lawyers walking in on Monday
[21:44] Speaker 4: and just picking up where the Justice Department left off.
[21:48] Speaker 8: Yeah, I don't know how actively involved they've been in
[21:52] Speaker 8: trial prep. Is always an underlying tension between the States
[21:56] Speaker 8: and the Fed, even when they're trying cases together. You know,
[22:00] Speaker 8: playing with your friends doesn't always go smoothly, even if
[22:03] Speaker 8: you're good friends. But my guess also is that the
[22:07] Speaker 8: professionals on the staff, the trial staff, will not be
[22:12] Speaker 8: the roadblocks, but the front office. Who knows what they'll
[22:16] Speaker 8: do with the witnesses they've got and the information they've
[22:18] Speaker 8: got and how hard they'll make it for the states,
[22:21] Speaker 8: I don't know.
[22:22] Speaker 4: And also the judge can always reject the settlement.
[22:26] Speaker 8: Right, So there's a legal process for the settlement itself.
[22:30] Speaker 8: They have to file what's called a competitive impact statement,
[22:33] Speaker 8: they have to let it open for public comment for
[22:36] Speaker 8: a period of time. Then there's a hearing before the judge.
[22:40] Speaker 8: It's called a Tonny Act, and the judge has to
[22:43] Speaker 8: approve the settlement as in the public interest. Now that,
[22:47] Speaker 8: as it's been interpreted over time, does not give the judge,
[22:52] Speaker 8: you know, the broadest power to say this is a
[22:54] Speaker 8: crappy settlement, forget it, I want you to try this case.
[22:58] Speaker 8: But the judge does have some power and this will
[23:02] Speaker 8: certainly provoke a lot of public comment, and that's a
[23:06] Speaker 8: process that will go forward while the case is being tried. Apparently,
[23:10] Speaker 8: I mean, this has to be put into a formal decree, yes,
[23:14] Speaker 8: and the judge has to eventually review it and approve it,
[23:18] Speaker 8: and then it can be appealed. Actually, so we're not
[23:21] Speaker 8: at the end of this process.
[23:23] Speaker 4: Also, under this agreement, the government could sue them again.
[23:27] Speaker 8: So as it's written, this is not we're forever done.
[23:32] Speaker 8: It's hard to know what to make of that. I mean,
[23:34] Speaker 8: the government did sue in twenty ten when Ticketmaster acquired
[23:38] Speaker 8: Live Nation and entered into a consent decree. They re
[23:42] Speaker 8: up the consent decree in twenty nineteen where they threatened
[23:46] Speaker 8: to sue again. And then this is a suit with
[23:49] Speaker 8: a different legal theory that they filed in twenty twenty four.
[23:53] Speaker 8: So the standard rule is the government is not stopped
[23:57] Speaker 8: from unless they've signed a piece of paper, from bringing
[24:00] Speaker 8: a new suit. So the answer to that is, yes,
[24:04] Speaker 8: they could bring another suit. I mean, in a way,
[24:06] Speaker 8: it's cold comfort. We've now had from twenty ten to
[24:10] Speaker 8: twenty twenty six this monopoly. You know, they've made a
[24:14] Speaker 8: lot of money off of this, Thank you very much.
[24:16] Speaker 8: We could eventually sue them at some point when Yeah.
[24:19] Speaker 4: It seems like a lot of litigation that's gone nowhere.
[24:22] Speaker 4: Thanks so much. Harry. That's Professor Harry First of NYU
[24:26] Speaker 4: Law School. Coming up next was insider trading involved in
[24:30] Speaker 4: betting on the Iran war. I'm June Grosso. When you're
[24:33] Speaker 4: listening to Bloomberg as US and Israeli bombs fell on
[24:39] Speaker 4: Iran on February twenty eighth, better is on poly Market?
[24:42] Speaker 4: We're cashing in. Cryptoanalytics firm bubble Maps pointed to six
[24:47] Speaker 4: accounts that had all been funded within the previous twenty
[24:50] Speaker 4: four hours and made about a million dollars in profit
[24:54] Speaker 4: by betting that the US would strike around by the
[24:57] Speaker 4: twenty eighth, raising suspicions advanced knowledge of the attacks. The
[25:02] Speaker 4: Commodity's Future Trading Commission, which regulates prediction markets in the US,
[25:07] Speaker 4: bars contracts tied to assassination, terrorism, or war themes. Poly
[25:13] Speaker 4: Market as an offshore venue continues to list. This week,
[25:17] Speaker 4: the CFTC gave its first official response to the controversies
[25:22] Speaker 4: that have surrounded prediction markets by issuing new guidance. But
[25:27] Speaker 4: will it help joining me? Is business?
[25:29] Speaker 2: Law?
[25:29] Speaker 4: Professor Eric Talley of Columbia Law School Eric tell us
[25:33] Speaker 4: about the bets on polymarket that are causing concern.
[25:37] Speaker 3: Polymarket is one of two major event driven contract websites
[25:44] Speaker 3: that people use that are basically prediction market you know,
[25:46] Speaker 3: sort of platforms, and both Polymarket and calse had various
[25:51] Speaker 3: types of events, including events that might occur in Iran,
[25:55] Speaker 3: and many of those pertained to the continued in tech
[26:00] Speaker 3: of the Ayatola Kamenes and whether it would still be
[26:05] Speaker 3: you know, in power, say by the end of February
[26:08] Speaker 3: or by the end of the first week of March.
[26:10] Speaker 3: And these were essentially binary bets, you know, they call
[26:14] Speaker 3: them contracts, but they're essentially bets where you can bet
[26:17] Speaker 3: on yes or bet on no. And it became pretty
[26:20] Speaker 3: apparent in the hours before the Israelian US strike on
[26:25] Speaker 3: Iran that ended up killing both Iotola Khamene and many
[26:29] Speaker 3: other senior members of the Iranian government that was essentially
[26:33] Speaker 3: betting against the continuing viability of the Hominy government passed.
[26:39] Speaker 2: Some future date.
[26:40] Speaker 3: The interesting part about this June is that while there
[26:43] Speaker 3: were a lot of bets that were being placed on
[26:45] Speaker 3: this most were small scale and.
[26:47] Speaker 2: Kind of went on both sides of the transaction.
[26:50] Speaker 3: But there were some really big ones that got placed
[26:53] Speaker 3: literally within hours of the bombing that were all betting
[26:56] Speaker 3: against the Iotola's fate, and all of them at least
[27:00] Speaker 3: purportedly paid out. That gave rise, unsurprisingly to a pretty
[27:05] Speaker 3: significant kerfuffle about who created these brand new accounts, Why
[27:09] Speaker 3: were they placing hundreds of thousands, even millions of dollars
[27:12] Speaker 3: in betting on this particular event when these accounts hadn't
[27:16] Speaker 3: made any bets before.
[27:17] Speaker 4: And Bubble Maps, which is a company that tracks data
[27:21] Speaker 4: on crypto transactions, identified what it called six suspected insiders
[27:27] Speaker 4: who made one point two million dollars in wagers that
[27:30] Speaker 4: the US would strike Iran Senator Chris Murphy was one
[27:34] Speaker 4: of the people who said, you know, it's insane that
[27:37] Speaker 4: this is legal, and that the unusual betting suggested that
[27:42] Speaker 4: even decision makers might have had a stake in the outcome,
[27:47] Speaker 4: which the White House denied. But insider trading look.
[27:51] Speaker 3: So a couple of points to pick apart in that statement.
[27:53] Speaker 3: The first has to do with is this in fact
[27:57] Speaker 3: legal or not legal?
[27:58] Speaker 2: Now?
[27:59] Speaker 3: You know, because predict markets are new in the US,
[28:01] Speaker 3: there's still a battle raging about how exactly these contracts
[28:06] Speaker 3: get classified. I think most people think that they are
[28:09] Speaker 3: a type of derivative contract that's kind of my belief
[28:13] Speaker 3: as well. They tend to have a lot of the
[28:15] Speaker 3: look and feel of a lot of other call options,
[28:17] Speaker 3: put options, various exotic options that you can buy and
[28:21] Speaker 3: sell on the Chicago mercantele Exchange. And so those are
[28:26] Speaker 3: in fact, to the extent that they are derivative contracts.
[28:29] Speaker 3: They are in fact regulated by the Commodities Future Trading
[28:33] Speaker 3: Commission or CFTC, and that commission has a pretty robust
[28:38] Speaker 3: insider trading prohibition. But I think that the Senator, all
[28:42] Speaker 3: due respect, might be leaping to conclusions to say that
[28:45] Speaker 3: this wasn't prohibited by law. In addition, there are a
[28:49] Speaker 3: lot of state laws that might also sweep in to
[28:52] Speaker 3: prohibit this type of inside trading that can also.
[28:56] Speaker 2: Have criminal implications.
[28:57] Speaker 3: So, irrespective of you know, bills pending in Congress, this
[29:02] Speaker 3: is definitely something that I would expect that CFTC lawyers
[29:07] Speaker 3: might be kicking the tires of As to who did it,
[29:10] Speaker 3: we still.
[29:10] Speaker 2: Don't really know. We don't know who the owners of
[29:13] Speaker 2: these accounts were.
[29:14] Speaker 3: And you know, the fact of the matter is this
[29:16] Speaker 3: could range from anyone from senior decision makers in the
[29:20] Speaker 3: process in the room of making these decisions to potentially
[29:24] Speaker 3: mid level staffers or even White House interns who are
[29:27] Speaker 3: asked to run papers back and forth.
[29:30] Speaker 5: Plum.
[29:30] Speaker 3: Thing is kind of interesting, June, is that you know,
[29:33] Speaker 3: I don't know whether you have a polymarket or Calci account.
[29:36] Speaker 1: Absolutely not.
[29:37] Speaker 3: Yeah, I'm just gonna say that there is a definite
[29:40] Speaker 3: generational skew on who has these accounts.
[29:44] Speaker 2: I have them.
[29:45] Speaker 3: But the only reason that I have these accounts is
[29:47] Speaker 3: that I teach finance to twenty four year olds and
[29:50] Speaker 3: they all have them, and so I have to kind
[29:52] Speaker 3: of get inside their head to figure out, you know,
[29:54] Speaker 3: how I'm going to present the material. So I would say, yeah,
[29:57] Speaker 3: it's certainly possible that senior leadership in that Trump administration
[30:01] Speaker 3: White House was engaged in some of this trading. But
[30:04] Speaker 3: I wouldn't be surprised if a twenty four year old
[30:07] Speaker 3: intern wasn't also asked to shuffle some papers back and forth,
[30:11] Speaker 3: put two and two together and then got on Calshi
[30:13] Speaker 3: and you borrowed a bunch of money to make a
[30:16] Speaker 3: one directional bet.
[30:17] Speaker 4: The CFTC has the authority to investigate this, but doesn't
[30:21] Speaker 4: seem to be doing that now. Last month, Israeli authorities
[30:25] Speaker 4: arrested several people and charged to a civilian and a
[30:29] Speaker 4: military reservist with using classified information to place bets on polymarket.
[30:35] Speaker 4: Anyone in the US who used classified information to place
[30:39] Speaker 4: a bet, I mean it would be subject to criminal prosecution.
[30:44] Speaker 4: Right Is anybody looking into that? Is there an agency
[30:47] Speaker 4: besides the CFTC.
[30:49] Speaker 3: I'm pretty positive there are some state attorneys general that
[30:52] Speaker 3: are looking at this as well. One of the things
[30:55] Speaker 3: that's kind of interesting about this tune is that it
[30:57] Speaker 3: gets a little bit into the details of how inside
[31:00] Speaker 3: trading law works, and there are a couple of theories
[31:03] Speaker 3: behind it, but the one that would most likely apply
[31:05] Speaker 3: to this situation is something that lawyers call the misappropriation theory,
[31:10] Speaker 3: and what it basically means is if my employer or
[31:14] Speaker 3: someone with whom I have some kind of a relationship
[31:17] Speaker 3: of trust and confidence reveals inside information to me that
[31:22] Speaker 3: is going to happen with either the stated or implied
[31:26] Speaker 3: restriction that I have to keep that confidential. So if
[31:29] Speaker 3: I go out and trade on it, then I have
[31:31] Speaker 3: breached that confidentiality and that is effectively what triggers a
[31:36] Speaker 3: lot of criminal and civil liability for inside of trading,
[31:39] Speaker 3: the fact that I've misappropriated I've violated this order or
[31:44] Speaker 3: this command of confidentiality that came from the source. Maybe
[31:47] Speaker 3: it's my employer or someone else. But the thing it's
[31:50] Speaker 3: always been weird about this theory, and that applies also
[31:52] Speaker 3: in the derivatives context, is that it hinges very very
[31:57] Speaker 3: critically on what does your employer permit and not permit, right,
[32:02] Speaker 3: And so you could, in principle, have an employer who
[32:06] Speaker 3: develops a lot of confidential information, and their inside employee
[32:09] Speaker 3: policies say, you know what, rather than paying you salaries,
[32:13] Speaker 3: We're just going to let you trade rampantly on this
[32:15] Speaker 3: inside information. And the third party is the third party
[32:18] Speaker 3: suckers who trade with.
[32:19] Speaker 2: These informed folks.
[32:20] Speaker 3: They have no idea even who they're trading with or
[32:22] Speaker 3: what the inside policy is of the employer. But that's
[32:25] Speaker 3: going to have a huge effect on whether there will
[32:27] Speaker 3: be civil or criminal liability, whether there was such a prohibition.
[32:31] Speaker 3: So you transport this over to the administration, in which
[32:35] Speaker 3: clearly for classified information there's both an implicit and an
[32:39] Speaker 3: explicit prohibition on, you know, trying to make money off
[32:43] Speaker 3: of your own private knowledge of classified information. On the
[32:47] Speaker 3: other hand, as we learned from the first Trump administration's
[32:52] Speaker 3: you know, classified Documents Gate. There's a big question about, well,
[32:55] Speaker 3: what constitutes classified and not classified and who gets to
[32:59] Speaker 3: determine when something is suddenly classified or declassified and went,
[33:03] Speaker 3: and President Trump basically made the claim on behalf of
[33:07] Speaker 3: himself that as he spirited these documents out of the
[33:10] Speaker 3: White House at the end of his first administration, he
[33:13] Speaker 3: basically declared, possibly to himself or possibly in passing, that
[33:17] Speaker 3: they're all declassified now and therefore he doesn't have any liability.
[33:22] Speaker 3: So query whether I don't know some staffer or employee
[33:26] Speaker 3: or person higher up in the administration was placing some
[33:29] Speaker 3: of these bets. The way that it would trigger, you know,
[33:33] Speaker 3: most directly inside of trading prohibitions is because they were classified.
[33:37] Speaker 3: If you know, President Trump said, oh no, I declassified
[33:40] Speaker 3: that in a meeting. I did it orally, But it's
[33:42] Speaker 3: totally fine. Who knows what's going to happen there now.
[33:45] Speaker 3: Having said that, that doesn't necessarily take these folks off
[33:48] Speaker 3: the hook for state level offenses, and there are some
[33:50] Speaker 3: state level offenses that easily could be applied here. California
[33:53] Speaker 3: and New York have pretty rigorous prohibitions on inside trading transactions.
[33:57] Speaker 3: There are also various other types of provisions out there,
[34:01] Speaker 3: the wire fraud acts, the computer fraud and abuse acts
[34:04] Speaker 3: that might also kind of play a peripheral role in
[34:08] Speaker 3: this context. You know, at the federal level, that's only
[34:11] Speaker 3: going to be as strong as the stomach of the
[34:13] Speaker 3: federal prosecutors who are going to bring these cases, and
[34:17] Speaker 3: if they've gotten a command from on high that they
[34:19] Speaker 3: shouldn't bring any of them, that I think is largely
[34:22] Speaker 3: going to be left up to state attorneys general?
[34:25] Speaker 4: Are they difficult to investigate? Because the main prediction platform
[34:29] Speaker 4: operates offshore, the bets are placed on the blockchain, the
[34:34] Speaker 4: identities of the accounts making the trades are anonymous. So
[34:38] Speaker 4: let's say state attorneys general investigating, would it be difficult
[34:42] Speaker 4: for them to get through all those layers?
[34:44] Speaker 3: This has always been a difficult thing in investigating trades
[34:47] Speaker 3: made on the blockchain. Compared to ten years ago, it's
[34:50] Speaker 3: much easier to trace the identity of who was making
[34:53] Speaker 3: these trades. You know, where was this wallet created, Who
[34:56] Speaker 3: did the creation of this wallet? It's possible to get
[34:58] Speaker 3: that information. LIVA would rest on subpoena power that might
[35:02] Speaker 3: have to be applied extra territorially because ice companies are
[35:05] Speaker 3: based in Ireland or England and so forth. So that
[35:08] Speaker 3: creates a stumbling block, not one that is necessarily insurmountable.
[35:13] Speaker 3: I could certainly imagine various regulators inside the EU or
[35:17] Speaker 3: the UK being equally worried about the use of prediction
[35:21] Speaker 3: markets for insider trading and being perfectly willing to assist
[35:26] Speaker 3: a request from say the New York State Attorney General
[35:29] Speaker 3: or the California State Attorney General for some of that information,
[35:32] Speaker 3: or at least to say, yeah, we were willing to
[35:34] Speaker 3: serve your subpoena.
[35:35] Speaker 2: In Europe.
[35:36] Speaker 4: On Thursday, the CFTC issued new guidance for prediction markets.
[35:41] Speaker 4: Will that solve any of the problems we've been talking about, It.
[35:44] Speaker 2: Remains to be seen. This is going to be a
[35:46] Speaker 2: long road ahead.
[35:47] Speaker 3: The CFTC has put out a notice of proposed rule
[35:51] Speaker 3: making and guidance that basically tries to do two things.
[35:55] Speaker 3: First of all, it tries to convince everyone that CFTC
[35:59] Speaker 3: is the only regulator for these event driven contracts, and
[36:04] Speaker 3: that's in dispute, by the way. And then the second
[36:07] Speaker 3: is that it basically tries to remind people that because
[36:11] Speaker 3: the CFTC is the regulator of these contracts. They are
[36:14] Speaker 3: subject to CFTC rules, including rules on insider trading and
[36:19] Speaker 3: various types of fraudulent activities. But to back up a
[36:23] Speaker 3: little bit June, the question about whether these prediction market
[36:27] Speaker 3: contracts constitute derivatives or whether they constitute some form of
[36:33] Speaker 3: gambling or gaming is still very very much up in
[36:37] Speaker 3: the air. A lot of state attorneys general as well
[36:40] Speaker 3: as Native American tribes as well as organized groups of
[36:44] Speaker 3: gaming outfits have challenged the CFTC's ability to claim a
[36:49] Speaker 3: lot of the types of event driven contracts that would
[36:52] Speaker 3: have traditionally fit into the category of sports betting.
[36:56] Speaker 2: And the CFTC has in its own rules.
[36:58] Speaker 3: That it's there to basically regulate commodities and derivatives but
[37:02] Speaker 3: not gaming. And so there's going to be an interesting
[37:05] Speaker 3: question about whether the CFTC's jurisdiction extends across all of
[37:10] Speaker 3: the different types of prediction market contracts.
[37:13] Speaker 4: More questions than answers, it seems. Thanks so much, Eric.
[37:17] Speaker 4: That's Professor Eric Tally of Columbia Law School. And that's
[37:21] Speaker 4: it for this edition of the Bloomberg Law Show. Remember
[37:23] Speaker 4: you can always get the latest legal news on our
[37:25] Speaker 4: Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,
[37:30] Speaker 4: and at www dot bloomberg dot com, slash podcast slash Law,
[37:35] Speaker 4: and remember to tune into The Bloomberg Law Show every
[37:38] Speaker 4: weeknight at ten pm Wall Street Time. I'm Jim Grosso
[37:42] Speaker 4: and you're listening to Bloomberg

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