# Weekend Law: Jimmy Kimmel, Short Seller Trial & Trump vs Monuments

An episode of [Bloomberg Law](https://invisiblenetwork.ai/podcast/277975394), 16 May 2026, 39 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7c892d84-801f-4c0b-b0e9-ae2b0012ff5f/abf4bd3b-33e6-492b-b450-b44c015c45d5/audio.mp3?utm_source=Podcast&in_playlist=91224201-26a6-429d-ac3c-ae2b0012ff6d

Daniel Lyons, a professor at Boston College Law School and a telecommunications law expert, discusses the legal battle between ABC and the FTC. Then securities law expert James Park, a professor at UCLA Law School, discusses the prosecution of shortseller Andrew Left. And former federal prosecutor Neama Rahmani, president of West Coast Trial Lawyers, discusses the lawsuits against President Trump for his attempts to alter historic landmarks in Washington DC. 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: Here's the joke that made President Trump call for Jimmy
[0:11] Speaker 2: Kimmel to be fired for the second time in less
[0:15] Speaker 2: than a year.
[0:16] Speaker 3: Look at Moss, so beautiful, missus Trump, you have a
[0:18] Speaker 3: glow like an expectant widow.
[0:21] Speaker 2: Last September, Kimmel was suspended for six days after Trump
[0:25] Speaker 2: demanded he be fired for comments he made about the
[0:29] Speaker 2: killing of conservative activist Charlie Kirk that backfired when Kimmel's
[0:34] Speaker 2: ratings actually went off after his forced hiatus, and ABC
[0:39] Speaker 2: had to contend with Disney plus subscriber cancelations from the
[0:43] Speaker 2: program Blackout. Still, Federal Communications Commissioned Chairman Brendan Carr seems
[0:49] Speaker 2: to be taking Trump's grudge against Kimmel seriously. He's taken
[0:53] Speaker 2: the rare, almost unprecedented step of calling Disney's eight ABCTV
[0:59] Speaker 2: station licenses in for early review, ostensibly over Disney's diversity,
[1:05] Speaker 2: equity and inclusion practices, and Carr is also investigating ABC's
[1:11] Speaker 2: daytime talk show The View after declaring its subject to
[1:15] Speaker 2: equal time rules for political candidates. But there are signs
[1:19] Speaker 2: that Disney is taking a different approach, this time around
[1:23] Speaker 2: standing its ground and fighting back. The company fired back
[1:27] Speaker 2: at the FCC in a lengthy filing, accusing the agency
[1:32] Speaker 2: of seeking to chill critical protected speech and shape media
[1:37] Speaker 2: content to its liking. Joining me is Professor Daniel Lyons
[1:41] Speaker 2: of Boston College Law School, a telecommunications law expert. Is
[1:46] Speaker 2: FCC chair Brendan Carr taking a different approach from his
[1:51] Speaker 2: predecessors at the agency.
[1:53] Speaker 4: It's a good question, a good place to start the
[1:55] Speaker 4: conversation because SEC Chairman Brendan Carr has been so different
[1:59] Speaker 4: than his press assessors on the issues of old media speech.
[2:03] Speaker 4: So over the past twenty years or so, the FCC
[2:06] Speaker 4: has been focused significantly upon things like broadband right, expanding
[2:10] Speaker 4: broadband whether or not, net neutrality rules, things like that.
[2:13] Speaker 4: But prior to the Internet era right, the FCC was
[2:16] Speaker 4: America's communications regulator and developed a whole lot of doctrines
[2:21] Speaker 4: balancing the government's interest in regulating communications with the limits
[2:25] Speaker 4: on the government of the First Amendment. We thought for
[2:27] Speaker 4: a long time that most of these doctrines were relatively settled.
[2:31] Speaker 4: They haven't really changed much since the late nineties, but
[2:34] Speaker 4: Chairman Carr has shown an interest in aggressively exploring the
[2:39] Speaker 4: gray areas that were left unexplored by bipartisan commissions in
[2:45] Speaker 4: years past. So we say this with the comments that
[2:48] Speaker 4: he had with regard to Jimmy Kimmel's statements after Charlie
[2:51] Speaker 4: Kirks murder. We saw it even earlier than that, the
[2:54] Speaker 4: FCC began questioning PBS's sponsorship. The statements before shows which
[3:00] Speaker 4: zetorships are legal but commercials are not, and the line
[3:03] Speaker 4: between the two is not always being clear. So the
[3:05] Speaker 4: agency has shown an interest in revisiting all of these
[3:08] Speaker 4: doctrines and getting the sense of whether it should more
[3:11] Speaker 4: aggressively pursue the old media rules that had originally been
[3:15] Speaker 4: at sporte in the pre Internet era. This coincides with
[3:19] Speaker 4: the fact that we have a president who is much
[3:20] Speaker 4: more interested in old media than occupants of the White
[3:23] Speaker 4: House in years past. The President seems particularly interested in
[3:28] Speaker 4: questions about what broadcast news is doing, what cable news
[3:31] Speaker 4: is doing, which feel much more like nineteen nineties and
[3:33] Speaker 4: two thousands questions than they do the most relevant communications
[3:37] Speaker 4: law issues of twenty twenty.
[3:38] Speaker 2: Six and our car and Trump moving in lockstep.
[3:42] Speaker 4: Brending Carr's been pretty open about the fact that he's
[3:44] Speaker 4: responding to what his boss wants. That the FCC is,
[3:49] Speaker 4: Although it's structured as an independent agency, it lacks the
[3:53] Speaker 4: job protection that many other independent agencies have, which means
[3:57] Speaker 4: that the commissioners work at the whim of the President.
[4:00] Speaker 4: And Car has shown not just a realization about that,
[4:04] Speaker 4: but a zeal in kind of doing his part within
[4:07] Speaker 4: a Republican commission to tow the party line. There's another,
[4:10] Speaker 4: in think situation where the president has at least set
[4:13] Speaker 4: the direction and Car is following. I think the language
[4:16] Speaker 4: that Car is using in this context right, it's about
[4:18] Speaker 4: clarifying the scope of the equal time rule and the
[4:23] Speaker 4: broadcast music Central. It doesn't seem coincidental that the same
[4:27] Speaker 4: network is being picked on in all of these situations,
[4:30] Speaker 4: and they happen to be the same network that the
[4:32] Speaker 4: president has in his crosshairs.
[4:33] Speaker 2: The FCC is investigating the ABC talk show The View,
[4:38] Speaker 2: and in January, the FCC told broadcasters that talk shows
[4:43] Speaker 2: and late night programs hosting political candidates have to give
[4:47] Speaker 2: equal time to opponents. The View has had this exemption,
[4:51] Speaker 2: So tell us about equal time and the exemption.
[4:54] Speaker 4: Well, so, I think it's important to put this in
[4:56] Speaker 4: the broader context of how the First Amendment interacts with
[4:59] Speaker 4: FCC see Broadcast regulation.
[5:01] Speaker 5: Right.
[5:01] Speaker 4: So, the Supreme Court has made clear that in most contexts,
[5:05] Speaker 4: the government can't tell a particular platform or speaker what
[5:10] Speaker 4: they can and can't say.
[5:11] Speaker 3: Right.
[5:12] Speaker 4: This is Mammy Herald versus Tornillo, where the state of
[5:15] Speaker 4: Florida tried to adopt a rite a reply statute for
[5:18] Speaker 4: newspapers off a newspaper editorial criticized one candidate, that it
[5:21] Speaker 4: had to give equal space to that candidate to respond.
[5:24] Speaker 4: And of course this is a violation of the right
[5:26] Speaker 4: of editorial control, the right to decide what I say,
[5:28] Speaker 4: what I don't say, and what I choose to put
[5:31] Speaker 4: on page one versus what I choose to put on
[5:32] Speaker 4: page thirteen. The Supreme Court revisited this just recently with
[5:35] Speaker 4: regard to Facebook and Twitter and other Internet platforms in
[5:39] Speaker 4: the case just a couple.
[5:40] Speaker 5: Of years ago.
[5:41] Speaker 4: So broadcast is an exception to that strong limit on
[5:44] Speaker 4: government power, because broadcasters I have to apply for a
[5:48] Speaker 4: license to use the electromatic spectrum in order to send
[5:51] Speaker 4: their signal held over the airwaves. Broadcast television and radio,
[5:55] Speaker 4: the Supreme Court held did not have the same rights
[5:57] Speaker 4: of editorial control. The reason for this ostend simply was scarcity.
[6:02] Speaker 4: There's only so much electromagnetic spectrum, and so when the
[6:04] Speaker 4: government is handing out these limited licenses, it should have
[6:08] Speaker 4: the ability to decide that the users of these licenses
[6:11] Speaker 4: present both sides of a debate. This was a case
[6:14] Speaker 4: called Red Lion in the late nineteen sixties, but there
[6:17] Speaker 4: was always the concern that Red Lion was on a
[6:19] Speaker 4: very thin read at the time. Most America got its
[6:23] Speaker 4: television through broadcasters before the cable industry, and so broadcasters
[6:28] Speaker 4: had a very significant control over the pipe into people's homes.
[6:31] Speaker 4: And more importantly, the court said, we recognized that there
[6:35] Speaker 4: could be for somement problems with even this exception. If
[6:39] Speaker 4: broadcasters are unwilling to address political controversies because of fear
[6:45] Speaker 4: that they have to provide equal talking time to the
[6:48] Speaker 4: other side, and it causes them to chill political speech generally,
[6:51] Speaker 4: then it might be that even Red Lion isign constitutional.
[6:54] Speaker 4: We revisit this question. The FCC phased out the Fairness
[6:57] Speaker 4: Doctor of the nineteen eighties, but one vestige of it
[7:01] Speaker 4: still remains, which is the equal time rule. The equal
[7:04] Speaker 4: time rule says that if you have a qualified candidate
[7:06] Speaker 4: during an electoral period and to make an appearance, then
[7:09] Speaker 4: the other candidates in the election have the right to
[7:12] Speaker 4: demand equal opportunity to be heard on the broadcast network.
[7:16] Speaker 4: And that was an issue in the View. So ostensibly
[7:19] Speaker 4: the View had James tallerco on as a guest, and
[7:24] Speaker 4: Car's position was this could have implications for the equal
[7:27] Speaker 4: time rule, such that Telrico's opponent should be allowed time
[7:30] Speaker 4: on the View as well. Back in the nineteen fifties,
[7:33] Speaker 4: this became an issue in the Chicago mayoral election. Mayor
[7:37] Speaker 4: Daily was a welcoming a delegation from a foreign city
[7:41] Speaker 4: and it made the broadcast news. And this guy, Lars Daily,
[7:44] Speaker 4: who was no relation to Mayor Daily. He was a
[7:47] Speaker 4: perennial fringe candidate. He was on the ballot every year
[7:49] Speaker 4: and got like three votes. He would walk around wearing
[7:51] Speaker 4: like an Uncle Sam outfit. He wrote to the SEC
[7:54] Speaker 4: and demanded equal time. He said, if you're going to
[7:55] Speaker 4: put Mayor Daily on, then I deserve equal time. And lo,
[7:57] Speaker 4: and behold everyone's surprise, the FCC granted it. The Congress
[8:00] Speaker 4: freaked out about this and passed what they call the
[8:02] Speaker 4: bonafide news exemption. If a candidate appears on your broadcast
[8:06] Speaker 4: as part of a bonafide news broadcast, then it wouldn't
[8:10] Speaker 4: trigger the equal time rules. Partly in order to preserve
[8:13] Speaker 4: the spirit of the First Amendment, right this idea that
[8:16] Speaker 4: you should be able to cover newsworthy events. If you
[8:19] Speaker 4: decide you don't want to cover newsworthy events because of
[8:21] Speaker 4: fear of triggering the equal time rules, that's a problem
[8:24] Speaker 4: for society in general. So the scope of the bonafide
[8:28] Speaker 4: news exemption is what's an issue here. As news evolved
[8:32] Speaker 4: in format and as broadcasts became less and less of
[8:36] Speaker 4: a dominant information provider, the SEC traditionally has added more
[8:40] Speaker 4: and more programs to the exemption category. So in nineteen
[8:44] Speaker 4: eighty four, Phil Donna Hues Talk Show was recognized as
[8:46] Speaker 4: a bona fide news broadcast because it was covering topical issues.
[8:50] Speaker 4: Later on Politically Incorrect with Bill Maher Weirdly, the Howard
[8:53] Speaker 4: Stern Show and The Tonight Show is granted an exception,
[8:56] Speaker 4: and the View was granted an exception in two thousand
[8:58] Speaker 4: and two or two thousand and three. So it was
[9:01] Speaker 4: that exemption that car has announced the desire to kind
[9:05] Speaker 4: of tighten up, make it not as expansive as it
[9:09] Speaker 4: has been in FCC's past. So in January, the FCC
[9:14] Speaker 4: issued guidance saying, going forward, we're going to apply this
[9:18] Speaker 4: much more stringently, and those of you who have existing
[9:20] Speaker 4: exemptions should not assume they can be blanket exemptions. And
[9:23] Speaker 4: that's what now is being built on. With regard to
[9:26] Speaker 4: the specific inquiry into taller Eco's appearance on the View, Carr.
[9:29] Speaker 2: Is also reviewing whether to revoke the broadcast licenses for
[9:34] Speaker 2: Disney owned local ABC stations, and it's actually over Disney's
[9:39] Speaker 2: DEI practices. Carr said. The timing is purely coincidental, but
[9:44] Speaker 2: it came right after Trump demanded that Kim will be
[9:46] Speaker 2: fired for the second time. Is there any precedent for
[9:50] Speaker 2: revoking licenses like this?
[9:53] Speaker 4: These licenses to broadcasts, they are issued for an eight
[9:56] Speaker 4: year period and then they come up for renewal. But
[9:59] Speaker 4: there is a strong norm and in fact legal precedent
[10:02] Speaker 4: for a presumption that they would be renewed. The FCC
[10:05] Speaker 4: only doesn't renew a broadcast license in the event that
[10:09] Speaker 4: the broadcasters found to have engage in a repeated pattern
[10:11] Speaker 4: and practice of violating FCC rules. The only instance I'm
[10:16] Speaker 4: aware of was a religious broadcaster in the nineteen nineties
[10:20] Speaker 4: that lost its rights because it had represented itself as
[10:22] Speaker 4: a minority owned broadcaster to take advantage of the minority
[10:25] Speaker 4: preference rules, and it turns out it was more of
[10:28] Speaker 4: a straw man than a real minority owned business. And
[10:30] Speaker 4: so when it came time for the license to be renewed,
[10:33] Speaker 4: the sec chose not to renew it. But because broadcasters
[10:37] Speaker 4: invest a lot of money in the expectation that this
[10:40] Speaker 4: would be renewed, the DC circuits recognized the renewal is
[10:42] Speaker 4: almost like a property interest, and so there's a high
[10:45] Speaker 4: barrier to a license not being renewed. What's unusual in
[10:48] Speaker 4: this case is that most of ABC's licenses aren't due
[10:52] Speaker 4: for renewal for several years. The Commission has stepped up
[10:56] Speaker 4: and moved the timeline forward for starting the process and
[11:00] Speaker 4: asking for all the compliance measures, long before ABC expected
[11:04] Speaker 4: to given the Commission's history.
[11:06] Speaker 2: So even if it goes through the process and somehow
[11:09] Speaker 2: they revoke the licenses, there would be a huge court
[11:12] Speaker 2: battle after that right that might go up to the
[11:14] Speaker 2: Supreme Court.
[11:16] Speaker 4: Yeah, and ultimately it may be that ABC wins that challenge. Right,
[11:20] Speaker 4: Maybe that at the end of the day, the FCC
[11:22] Speaker 4: chooses not to revoke the licenses, or if they revoke
[11:25] Speaker 4: the licenses, ABC SUS and successfully get some reinstated. But
[11:28] Speaker 4: that in itself is a tremendous cost. And this is
[11:31] Speaker 4: what communications car sometimes call regulation by Ray's eyebrow, Right, the.
[11:35] Speaker 1: Situation where the FCC may or may not have legal
[11:39] Speaker 1: authority to what it wants to do, but it can
[11:41] Speaker 1: ask questions to try to nudge broadcasters to voluntarily comply
[11:46] Speaker 1: with requirements that the agency may not be able.
[11:49] Speaker 4: To outright demand. And there's a long history of that
[11:51] Speaker 4: in the FCC, as you might imagine.
[11:53] Speaker 2: Disney in twenty twenty four settled a fifteen million dollar
[11:57] Speaker 2: defamation lawsuit brought by Trump against George Stefanopolis and ABC
[12:02] Speaker 2: News anchor, and it did pull Kimmel off the air
[12:05] Speaker 2: for several days last fall after cars threats. But Disney's
[12:08] Speaker 2: taking an aggressive stance this time, and it's filing with
[12:12] Speaker 2: the FCC. It accused the agency of seeking to chill
[12:16] Speaker 2: critical protected speech and to shape media content to its liking.
[12:21] Speaker 2: Are they under less pressure for some reason? Why do
[12:24] Speaker 2: you think that they're deciding to really aggressively fight back.
[12:28] Speaker 4: Well, one, I think they're on pretty strong legal ground.
[12:31] Speaker 4: The constitutional ground for the equal time exception to the
[12:37] Speaker 4: first time and I think is relatively weak. The Red Lion,
[12:39] Speaker 4: I think was dubious when it was decided. I don't
[12:41] Speaker 4: know that it has very many supporters on the Supreme
[12:44] Speaker 4: Court today. Justice Thomas has come out explicitly to call
[12:47] Speaker 4: for overturning it in the right facts, I think if
[12:50] Speaker 4: it gets a spring what you don't get there. But
[12:51] Speaker 4: also the fact that the View has been granted an
[12:55] Speaker 4: exemption as a bona fide news broadcast in two thousand
[12:58] Speaker 4: and three makes it very hard or the FCC to
[13:01] Speaker 4: punish it for conduct it took under that exemption. The
[13:04] Speaker 4: SCC can make a decision going forward, but to the
[13:07] Speaker 4: extent that it's trying to sanction ABC for having Tall
[13:11] Speaker 4: Rico on during the time when the View has bonafide
[13:14] Speaker 4: news exemption license from the FCC, I think he's on
[13:18] Speaker 4: a very good ground in defending where it's at. So
[13:20] Speaker 4: I think this is the Word's decided to draw the
[13:21] Speaker 4: line in the sand, and I think it's a very
[13:22] Speaker 4: good line to draw. And you're right, it's Roy brought
[13:24] Speaker 4: in some heavy hitters. Paul Clement was the signatory on
[13:27] Speaker 4: the brief. Who is no stranger to taking on and
[13:31] Speaker 4: winning very difficult Supreme Court cases.
[13:34] Speaker 2: Certainly not. He is one of the premier Supreme Court litigators.
[13:38] Speaker 2: A former Solicitor General. I believe he's argued more cases
[13:42] Speaker 2: before the Supreme Court than any other lawyer. He's appeared
[13:45] Speaker 2: before the justices several times this term, including representing Federal
[13:51] Speaker 2: Reserve Governor Lisa Cook in her fight to prevent President
[13:55] Speaker 2: Trump from firing her. Thanks so much for taking us
[13:57] Speaker 2: through this latest saga involving ABC in the FCC. That's
[14:02] Speaker 2: Daniel Lyon's a professor at Boston College Law School. Short
[14:07] Speaker 2: Sellers are making money when others are losing it, so
[14:11] Speaker 2: they're generally not well liked. In fact, a short seller
[14:15] Speaker 2: was even cast as the super villain in the James
[14:18] Speaker 2: Bond film Casino Royale terrorist financier lashef uses a warlord's
[14:24] Speaker 2: money to short sell stock.
[14:28] Speaker 5: Can you believe in God, mister Lachief, No, I believe
[14:33] Speaker 5: in a reconable rate of return. I want no risk
[14:36] Speaker 5: in the portfolio.
[14:38] Speaker 4: I agreed, I have the money, so showed another million
[14:42] Speaker 4: shares of sky Fleet Stock. Sir, you must know you're
[14:46] Speaker 4: betting against the market. No one expects this stock to
[14:50] Speaker 4: go anywhere but up just do it.
[14:54] Speaker 2: And now one of the most prominent short sellers is
[14:57] Speaker 2: on trial for securities fraud. Andrew Left rose to fame
[15:01] Speaker 2: with sensational tweets that went viral, published reports claiming firms
[15:06] Speaker 2: were overvalued or had engaged in fraud, betting against companies
[15:11] Speaker 2: like Game Stock and Valiant Pharmaceuticals, and hyping his positions
[15:16] Speaker 2: on financial TV shows in a bit of irony. Left,
[15:20] Speaker 2: who accused so many others of fraud, is now on
[15:23] Speaker 2: trial for defrauding investors. Prosecutors say he used explosive social
[15:29] Speaker 2: media posts about dozens of companies to illegally move their
[15:33] Speaker 2: stock and make a quick profit, market manipulation that totalled
[15:38] Speaker 2: as much as twenty million dollars. The fifty five year
[15:42] Speaker 2: old denies misleading investors and says he genuinely believed in
[15:47] Speaker 2: his stock calls. My guest is securities law expert James Park,
[15:51] Speaker 2: a professor at UCLA Law School. Jim, give us a
[15:55] Speaker 2: picture of who Andrew Left is.
[15:57] Speaker 3: He started out by publishing research report companies through his
[16:01] Speaker 3: platform Citrin Research, often making negative recommendations. I think he's
[16:06] Speaker 3: mainly known for correctly identifying problems at a company called
[16:11] Speaker 3: Valiant Pharmaceuticals, a company that engaged in questionable practices with
[16:16] Speaker 3: respect to recognizing sales, and so, you know, he published
[16:19] Speaker 3: a report identifying some of the questionable practices. He also
[16:23] Speaker 3: came up interestingly in the game Stop Saga from a
[16:26] Speaker 3: few years ago, where he had taken a short position
[16:29] Speaker 3: in the company and retail investors basically rallied on Reddit
[16:34] Speaker 3: to squeeze the short ben You know, with those successes,
[16:37] Speaker 3: he's gained a high profile. You know, he makes recommendations
[16:41] Speaker 3: with respecta companies, emails them out, has an online platform
[16:46] Speaker 3: as using social media a lot, is frequently invited on
[16:49] Speaker 3: various shows, and has a lot of medium appearances. And
[16:53] Speaker 3: so he's somebody with a higher profile than most folks
[16:56] Speaker 3: who are doing research and you know, taking short positions
[17:00] Speaker 3: potentially in companies.
[17:02] Speaker 2: The government is accusing him of manipulating the stock market.
[17:06] Speaker 2: Tell us about the charges here.
[17:08] Speaker 3: He was indicted for various counts of securities fraud, manipulation
[17:13] Speaker 3: and fraud. More generally, the manipulation argument is that he
[17:18] Speaker 3: would basically establish positions in a stock, whether it was
[17:21] Speaker 3: long or short, issue a recommendation with respect to that position,
[17:27] Speaker 3: which he would disseminate to the public, presumably according to
[17:32] Speaker 3: the prosecutors, with the intent to either inflate or deflate
[17:36] Speaker 3: the stock, given his high profile, and then he would
[17:39] Speaker 3: quickly reverse his position. And I think the argument there
[17:42] Speaker 3: is that that shows he did not believe his recommendation,
[17:47] Speaker 3: that he was issuing these recommendations to artificially manipulate the
[17:52] Speaker 3: price of these stocks, and that his actions, which often
[17:57] Speaker 3: came very soon after the recommendation, indicates that he did
[18:01] Speaker 3: not sincerely believe, you know, his recommendation that you should
[18:05] Speaker 3: buy the stock or sell the stock, because he was
[18:07] Speaker 3: doing the reverse. And you know, there might have been
[18:09] Speaker 3: a dozen or so of these transactions, maybe more that
[18:13] Speaker 3: the prosecutors alleged he profited by around twenty million dollars
[18:17] Speaker 3: through this market manipulation.
[18:19] Speaker 2: Is this an aggressive legal theory for the prosecution. Is
[18:23] Speaker 2: it an uphill battle for prosecutors to prove this.
[18:26] Speaker 3: It's not a commonly prosecuted back pattern. I think that's
[18:31] Speaker 3: fair to say, you know, do the prosecutors have a
[18:35] Speaker 3: very well developed case. I think they have a lot
[18:38] Speaker 3: of evidence, right, They have a lot of evidence about
[18:41] Speaker 3: not only his recommendations, of course, which are public, but
[18:44] Speaker 3: what he did. And there is you know, some email
[18:47] Speaker 3: evidence that could be interpreted in a way that the
[18:51] Speaker 3: jury might be able to conclude that you know, he
[18:54] Speaker 3: knew that the information was false. Now that's up to
[18:56] Speaker 3: the jury, and emails have a lot of ways that
[18:59] Speaker 3: they can be interpreted. You know, market manipulation cases are
[19:04] Speaker 3: are tough, right, It's tough to prove the intent because
[19:08] Speaker 3: a lot of the actions that could potentially be manipulative,
[19:13] Speaker 3: you know, may be motivated by legitimate reason. You know,
[19:17] Speaker 3: he may legitimately believe part of his recommendation, some of
[19:20] Speaker 3: his recommendation, you know, maybe he changed his mind right
[19:23] Speaker 3: very soon after. And so, you know, market manipulation is challenging.
[19:28] Speaker 3: We've talked, you know, a few years ago about the
[19:29] Speaker 3: Bill Huang case. That's one where I noted that it's
[19:33] Speaker 3: hard to establish manipulation, and the prosecution did in that case.
[19:37] Speaker 3: And so I think that the cases is novel and
[19:41] Speaker 3: interesting because you know, manipulation is not prosecuted as much
[19:45] Speaker 3: as say insider trading, for example. It's a little bit
[19:48] Speaker 3: more straightforward when I've taken non public information, I'm an insider,
[19:52] Speaker 3: I trade on it. That is usually more straightforward than
[19:56] Speaker 3: a situation where somebody is is engaging in various training
[20:00] Speaker 3: activity and around recommendations that they've issued. And so I
[20:03] Speaker 3: think it's just less common to bring cases like this.
[20:07] Speaker 2: So far, prosecutors have focused on the stocks of two
[20:11] Speaker 2: companies they say Left tweeted about and then trade it
[20:14] Speaker 2: on Twitter, and Chronos Group, which is a cannabis company,
[20:18] Speaker 2: and they call stock analysts to the stand who disagreed
[20:22] Speaker 2: with Left's negative reports about the companies. On cross examination,
[20:27] Speaker 2: the defense attorney seem to be trying to highlight its
[20:30] Speaker 2: position that analysts can disagree about stocks and Left was
[20:35] Speaker 2: just telling the public what he believed.
[20:38] Speaker 3: I think the analyst recommendation or the analysts testimony is
[20:41] Speaker 3: probably serving as a baseline. You know, these are the
[20:44] Speaker 3: facts that were out there, and you know, without specific
[20:49] Speaker 3: facts contradicting that, if you're just kind of saying this
[20:54] Speaker 3: stuff without any basis and you're only doing it to
[20:56] Speaker 3: manipulate the stock price, that that's going to be problematic.
[21:00] Speaker 3: Disagreement is not broad. People have the ability to disagree,
[21:04] Speaker 3: But I think it shows the context of how the
[21:07] Speaker 3: stock was understood, and if you are deliberately issuing false
[21:11] Speaker 3: information that that is essentially what the cases is about.
[21:15] Speaker 3: But the testimony by the stock analyst by itself is
[21:18] Speaker 3: not going to be able to establish that these statements
[21:21] Speaker 3: were false, that he knew that they were false.
[21:24] Speaker 2: The defense hasn't said whether or not Left is going
[21:27] Speaker 2: to take the stand. Obviously, a defendant doesn't have to
[21:30] Speaker 2: take the stand and it can't be held against him,
[21:33] Speaker 2: But there are some instances. For example, prosecutors have introduced
[21:37] Speaker 2: testimony that the stock of Kronos plunged twenty eight percent
[21:43] Speaker 2: after Left's report that Kronos was misleading investors about its
[21:48] Speaker 2: distribution commitments, and prosecutors say, shortly after the tweet, about
[21:53] Speaker 2: twenty four minutes later, Left started closing out his short position.
[21:58] Speaker 2: How will the defense exps blame what happened in those
[22:01] Speaker 2: twenty four minutes if Left doesn't take the stand.
[22:05] Speaker 3: Yeah, I don't know how his operation works, whether he
[22:07] Speaker 3: does all the research himself or whether there's somebody else
[22:10] Speaker 3: who does that. I think that, you know, ideally he
[22:13] Speaker 3: would explain, you know, what was my basis for making
[22:16] Speaker 3: this this statement? About this company? What did I look
[22:20] Speaker 3: at and why did I quickly close out the position?
[22:23] Speaker 3: I think that's also a question that could be asked,
[22:27] Speaker 3: and it might be difficult to establish that without the
[22:32] Speaker 3: person who's making the recommendation taking the stand.
[22:35] Speaker 2: Jim, I've been reading some headlines that say is short
[22:38] Speaker 2: selling facing a reckoning referring to this trial. Do you
[22:43] Speaker 2: think it is?
[22:44] Speaker 3: I don't think so. You know, some of the transactions
[22:46] Speaker 3: were long positions. Now you know, he is maybe known
[22:50] Speaker 3: as a short seller, but he does make long recommendations
[22:54] Speaker 3: as well. There's a Facebook transaction where he says it's
[22:57] Speaker 3: going to one hundreds sixty dollars a share and he
[22:59] Speaker 3: sells out at much less than that after the price
[23:02] Speaker 3: goes up, And so, you know, you might think of
[23:04] Speaker 3: it as more perhaps a case involving the use of
[23:08] Speaker 3: social media, the use of kind of online recommendations. Is
[23:13] Speaker 3: that the place where you could have a bit of
[23:15] Speaker 3: a chilling effect, And so I think you might even
[23:18] Speaker 3: think of the case a bit broader than it being about,
[23:22] Speaker 3: you know, somebody who is specifically selling companies short and
[23:26] Speaker 3: making allegations that the price should go down. I think
[23:28] Speaker 3: it's a bit broader than that. It is the combination
[23:31] Speaker 3: of you know, do short sellers sometimes use social media? Sure,
[23:34] Speaker 3: I don't know that they do that to the extent
[23:37] Speaker 3: that mister Left did, and that might be kind of
[23:39] Speaker 3: what the case ultimately is about, is that technology has
[23:43] Speaker 3: you know, made it difficult to regulate conduct that might
[23:47] Speaker 3: manipulate markets because before social media, you couldn't move a
[23:50] Speaker 3: stock price like this, but now you know, there's some
[23:53] Speaker 3: individuals who can.
[23:54] Speaker 2: Short sellers were already spooked by Left's indictment, especially because
[24:00] Speaker 2: criminal investigators in DC and LA had been investigating short
[24:05] Speaker 2: selling for years. Some of Leff's biggest competitors have already
[24:09] Speaker 2: left the market, some came out with more extensive disclaimers.
[24:13] Speaker 2: So this case is really being watched closely.
[24:17] Speaker 3: No, I think it's it's tough being a short seller.
[24:19] Speaker 3: It's always been tough. Nobody likes you. And you know
[24:22] Speaker 3: there's long been scrutiny of short sellers and their statements.
[24:25] Speaker 3: You know, one that comes in mind. You know Bill
[24:27] Speaker 3: Ackman years ago, like in the early two thousands, was
[24:30] Speaker 3: investigated by the New York Attorney General's Office and maybe
[24:34] Speaker 3: the SEC about a report he published about a company
[24:37] Speaker 3: called Mbia and you know, I think that short sellers
[24:41] Speaker 3: that are sophisticated should know that their statements are going
[24:44] Speaker 3: to be scrutinized and that they cannot release information or
[24:49] Speaker 3: facts that they know are false. That's part of the
[24:51] Speaker 3: business right, is that you're violating Rule ten B five
[24:54] Speaker 3: if you issue false information relating to the purchaser sale
[24:58] Speaker 3: of security. Probably some other state law theories as well,
[25:03] Speaker 3: and so there's always been scrutiny. Taking it to a
[25:06] Speaker 3: criminal level, I think though, does raise some additional reason
[25:12] Speaker 3: to be cautious with these types of statements. So I
[25:15] Speaker 3: think in that regard, you know, when you have a
[25:17] Speaker 3: criminal case that really gets people's attention, and he is
[25:20] Speaker 3: known primarily as somebody who recommends short positions, has taken
[25:23] Speaker 3: short positions. He's an activist investor, and so I think
[25:27] Speaker 3: that's right that it is something that activist short investors
[25:31] Speaker 3: will be aware of.
[25:32] Speaker 2: The trial is expected to last another two weeks, so
[25:36] Speaker 2: we'll see what happens. Thanks so much, Jim. That's Professor
[25:39] Speaker 2: James Park of UCLA Law School coming up next. Then
[25:43] Speaker 2: many lawsuits over Trump's attempted makeover of the nation's capital.
[25:49] Speaker 2: I'm June Grosso and you're listening to Bloomberg.
[25:54] Speaker 5: You see that the trucks and trains and excavators in
[25:57] Speaker 5: the background, and you hear them, And every time I
[26:00] Speaker 5: hear them, I love the sound.
[26:02] Speaker 2: And there are plenty of other constructions sounds in the
[26:04] Speaker 2: nation's capital that would please President Trump, as well as
[26:09] Speaker 2: the sound of another lawsuit being filed every time he
[26:12] Speaker 2: attempts to remake a historic landmark. The latest is the
[26:17] Speaker 2: reflecting pool at the Lincoln Memorial, one of the most
[26:20] Speaker 2: iconic spots on the National Mall, but now the pool's
[26:24] Speaker 2: basin is being repainted from the neutral colors originally used
[26:28] Speaker 2: to a color called American Flag blue that was suggested
[26:32] Speaker 2: by one of Trump's former swimming pool contractors. And over
[26:37] Speaker 2: the years as a developer, I have probably built more
[26:40] Speaker 2: than one hundred swimming pools different buildings I built.
[26:42] Speaker 5: And I have some really good pool buildings. I also
[26:45] Speaker 5: had some really bad ones.
[26:46] Speaker 2: A nonprofit filed a lawsuit this week to stop Trump
[26:50] Speaker 2: from altering the Lincoln Memorial without the reviews and consultations
[26:55] Speaker 2: required before altering a registered historic landmark. The Cult Landscape
[27:01] Speaker 2: Foundation argues that the reflecting pool's neutral color is a
[27:05] Speaker 2: character defining feature of the site intended to convey greater
[27:09] Speaker 2: depth than reflection, it says, repainting. It follows the pattern
[27:14] Speaker 2: of Trump's other renovations like tearing down the East Wing
[27:18] Speaker 2: to build a ballroom, closing the Kennedy Center for two
[27:22] Speaker 2: years for renovations, and other projects that have drawn lawsuits
[27:26] Speaker 2: from historical societies and nonprofits for similar reasons. My guest
[27:32] Speaker 2: is former federal prosecutor Nima Romani, president of West Coast
[27:36] Speaker 2: Trial Lawyers. Nima tell us what the Cultural Landscape Foundation
[27:41] Speaker 2: is arguing in its lawsuit.
[27:43] Speaker 5: The lawsuit is alleging that the Trump administration didn't comply
[27:48] Speaker 5: with federal laws, specifically procedural law related to historic monuments
[27:54] Speaker 5: and environmental analyzes. This is similar to the Administrative Procedure
[27:59] Speaker 5: Act argument that many other planiffs have been using to
[28:02] Speaker 5: slow down the Trump administration. Now, those laws essentially say
[28:06] Speaker 5: that when a monument is altered in any way, there
[28:12] Speaker 5: has to be the opportunity for public comment, consultation with
[28:16] Speaker 5: other federal agencies, assessment of environmental impacts. And again this
[28:21] Speaker 5: is all procedural, but it can slow down this process,
[28:24] Speaker 5: which is what the planiniffs are trying to do.
[28:26] Speaker 2: The Trump administration is well aware of these requirements because
[28:31] Speaker 2: they're being sued in other cases. So ignoring similar requirements.
[28:36] Speaker 5: Oh, there's no question, And this really raises the fundamental
[28:41] Speaker 5: constitutional issue. What happens if the executive branch that is
[28:44] Speaker 5: tasked with enforcing the law doesn't follow the law. Who's
[28:48] Speaker 5: going to compel them to do so? Now, obviously, you know,
[28:51] Speaker 5: an Article three judge can step in and issue some
[28:54] Speaker 5: sort of order and injunction and hopefully there is compliance
[28:58] Speaker 5: with that. But yeah, this is a persistent problem by
[29:02] Speaker 5: this administration. I mean, there are these laws in the
[29:04] Speaker 5: books and they don't necessarily think that it applies to them.
[29:08] Speaker 5: And in this particular case with the reflecting Pool, the
[29:11] Speaker 5: president is trying to get this done before the two
[29:15] Speaker 5: hundred and fiftieth anniversary of our nation in just a
[29:17] Speaker 5: couple months, so we're really short on time and that's
[29:21] Speaker 5: why he's paying this company a significant sum of money
[29:25] Speaker 5: to get it done so quickly.
[29:27] Speaker 2: And the government awarded the firm a no bid contract
[29:31] Speaker 2: so bypassing the requirement to seek competing bids, and the
[29:36] Speaker 2: expected cost has now ballooned from one point eight million
[29:40] Speaker 2: to thirteen point one million.
[29:43] Speaker 5: It is, and the administration is saying that there's a
[29:46] Speaker 5: timing issue and that's why they're doing it. They have
[29:49] Speaker 5: to get this done, and that's why they're paying so much.
[29:51] Speaker 5: You know, from the Trump administration's perspective, the way they're
[29:56] Speaker 5: phrasing this for the litigation is that this is just
[29:58] Speaker 5: a necessary repair. This isn't an alteration because the executive
[30:03] Speaker 5: in their mandate to maintain these properties. Obviously they can
[30:07] Speaker 5: repair monuments, right and there's certain areas of the law
[30:12] Speaker 5: where the executive has much more discretion, obviously national security issues.
[30:16] Speaker 5: The other is routine maintenance and repair. So you see
[30:20] Speaker 5: the plaintiffs in these cases arguing that any of these
[30:23] Speaker 5: it could be the reflecting pool, it can be the
[30:26] Speaker 5: Kennedy Center of the White House, that these are fundamental
[30:29] Speaker 5: changes and alterations that would require approval of Congress or
[30:34] Speaker 5: others potentially, not just routine repairs. And of course the
[30:39] Speaker 5: government is arguing in their papers that this is just
[30:43] Speaker 5: a repair in the case of the reflecting pool, that
[30:45] Speaker 5: there are cracks, there's allergy, and that this isn't a
[30:49] Speaker 5: fundamentally different paint job changing the monument. It's simply just
[30:53] Speaker 5: a repair. In preparation for the big celebration.
[30:57] Speaker 2: And what do you think of their argument that the
[30:59] Speaker 2: urgency is the country's two hundred and fiftieth anniversary and
[31:03] Speaker 2: that warrants an exemption from the law's procedural requirements.
[31:08] Speaker 5: I don't think it's a particularly good argument, because the
[31:11] Speaker 5: President himself has come out and said that he wants
[31:14] Speaker 5: to paint an American blue. So you know, it seems
[31:17] Speaker 5: like he backtracked a little bit from that statement, but
[31:20] Speaker 5: it seems like it's an aesthetic change, and a significant
[31:23] Speaker 5: one at that. So obviously, time is an issue, and
[31:27] Speaker 5: we know that some of these government contracts can take
[31:30] Speaker 5: some time. In the case the Kennedy Center, we're talking
[31:32] Speaker 5: about two years. This has to happen in two months.
[31:35] Speaker 5: So that's something that I think should be taken into consideration.
[31:39] Speaker 5: But if it's a fundamental change, and this is something
[31:42] Speaker 5: that is really within Congress's authority and they haven't delegated
[31:47] Speaker 5: this to the executive and we also have the separation
[31:50] Speaker 5: of powers.
[31:50] Speaker 2: Issue here talking about the Kennedy Center, So the closure
[31:54] Speaker 2: is supposed to be for renovations, but that covers a
[31:58] Speaker 2: lot of ground. The issues the same basically as in
[32:02] Speaker 2: the Reflecting Pool lawsuit.
[32:05] Speaker 5: It's similar issues. The Kennedy Center is slightly different in
[32:08] Speaker 5: terms of how it's structured. It does get its authority
[32:11] Speaker 5: from Congress, but it's essentially a nonprofit with a board.
[32:14] Speaker 5: There's some board issues. There's labor issues as well, if
[32:17] Speaker 5: you're shutting something down, and there's you know, government employees
[32:21] Speaker 5: that are going to be essentially let go. So it's
[32:23] Speaker 5: a little bit more complicated than the Reflecting Pool, but
[32:26] Speaker 5: it does raise the same issues. So you see again
[32:30] Speaker 5: in their filing papers the government arguing that things are
[32:33] Speaker 5: going to be the same. Right that the bust of
[32:36] Speaker 5: John F. Kennedy will remain, the quotes on the walls
[32:40] Speaker 5: will remain. The changes are for repair purposes only. The
[32:45] Speaker 5: design of the center will not change. The Department of
[32:49] Speaker 5: Justice was saying that, look, these are necessary repairs because
[32:51] Speaker 5: the Kennedy Center was falling apart. There's cracks, you know,
[32:55] Speaker 5: the ceiling was going to collapse. This is dangerous and
[32:58] Speaker 5: judges are going to be obviously a lot more liberal
[33:02] Speaker 5: when it comes to the government making repairs necessary repairs
[33:06] Speaker 5: if it's a safety issue. And I think a little
[33:08] Speaker 5: bit different the Reflecting Pool extent that the repairs were made.
[33:11] Speaker 5: I don't think anyone was arguing that it was for safety,
[33:14] Speaker 5: but I think in the Kennedy Center, and again, that
[33:18] Speaker 5: case is going to come down to, is this an
[33:21] Speaker 5: esthetic redesign, a fundamental alteration of this historic building, or
[33:27] Speaker 5: is it just necessary repairs because attendees could get hurt,
[33:30] Speaker 5: and obviously we know if they get hurt and the
[33:32] Speaker 5: government can be sued in the Federal to Claims Act.
[33:35] Speaker 5: So I think that's the biggest issue in the case.
[33:39] Speaker 2: And the nonprofits lawyer pointed to the destruction of the
[33:43] Speaker 2: East Wing last year, when Trump had initially said that
[33:47] Speaker 2: constructing the ballroom wouldn't impact the existing structure.
[33:52] Speaker 5: I did want to interfere with the current building.
[33:53] Speaker 1: I won't be It'll be near it, but not touching it,
[33:59] Speaker 1: and pays total respect to the existing building, which I'm
[34:02] Speaker 1: the biggest fan of.
[34:03] Speaker 2: The cost of that has also ballooned and gone from
[34:05] Speaker 2: being paid for by private donations to being paid for
[34:09] Speaker 2: by taxpayers. And you mentioned national security before. The administration
[34:14] Speaker 2: is trying to frame the incident outside the White House
[34:18] Speaker 2: Correspondence Association's dinner as demonstrating that the ballroom is essential
[34:24] Speaker 2: for national security. Saturday night.
[34:26] Speaker 5: It was good for one thing.
[34:28] Speaker 2: People are loving my ballroom, now that's the only thing
[34:31] Speaker 2: I love my ballroom when they're using the Correspondence Center
[34:35] Speaker 2: and what happened there. But that's not the kind of
[34:37] Speaker 2: event that would even be held at the White House.
[34:40] Speaker 2: That's a private event. So that comparison doesn't work in.
[34:44] Speaker 5: Talking points immediately after the shooting that this is why
[34:48] Speaker 5: we need the president of WALDO. But you're absolutely right.
[34:51] Speaker 5: The White House Correspondent Center is a private event. It's
[34:53] Speaker 5: held at the Washington Hilton, one of the few venues
[34:56] Speaker 5: in Washington, DC that can accommodate proud of two thousand
[35:01] Speaker 5: or more people. Famously where Ronald Reagan was also shot.
[35:04] Speaker 5: The ball romans for a different purpose altogether. It's to
[35:09] Speaker 5: host heads of state. It's not like the White House
[35:12] Speaker 5: Correspondence can call and rent it or any other private
[35:17] Speaker 5: organization or group. So it wouldn't necessarily solve the problem.
[35:22] Speaker 5: But of course, you know, politically it makes for a
[35:25] Speaker 5: great talking point, so you see it parroted by a
[35:28] Speaker 5: lot of talking heads.
[35:30] Speaker 2: Seemingly lost in all this is that a federal judge,
[35:33] Speaker 2: Richard Leon found that Trump didn't have authority to tear
[35:37] Speaker 2: down the East Wing and build a new structure on
[35:41] Speaker 2: White House grounds. That decision is being appealed, but the
[35:45] Speaker 2: government has made a motion asking the judge to dissolve
[35:48] Speaker 2: his own ruling in light of the incident at the
[35:51] Speaker 2: Correspondent's dinner. These motion papers are so unusual that's putting
[35:57] Speaker 2: it mildly. They talk about Trump arrangement syndrome, and there
[36:02] Speaker 2: are multiple randomly capitalized words and exclamation points.
[36:07] Speaker 5: People the DOJ, they are jocking for position to appiece
[36:11] Speaker 5: of their boss, the President of the United States. The
[36:13] Speaker 5: way Acting Attorney General Todd blanche has handled the Comy case,
[36:17] Speaker 5: for instance, right eighty six forty seven. I don't think
[36:20] Speaker 5: that's a meritorious case at all, and I think most
[36:23] Speaker 5: former DOJ lawyers would agree. But I think that's probably
[36:27] Speaker 5: something that was done because Donald Trump dislikes Comy, and
[36:30] Speaker 5: I understand why he dislikes Colly, and I understand why
[36:33] Speaker 5: Democrats dislike call me. A lot of people dislike call me.
[36:35] Speaker 5: But if you want to prosecute and prosecute him for
[36:38] Speaker 5: what he allegedly did, which is leak information the Wall
[36:42] Speaker 5: Street Journal and compromise their national security, and you know,
[36:44] Speaker 5: you're prosecuting for Instagram posts. But I digress. Now you
[36:47] Speaker 5: have another DOJ official, high level who's filing emotion which
[36:52] Speaker 5: reads likely was written by Donald Trump on truth Social
[36:56] Speaker 5: It was bizarre, something I'd never seen is talk about
[36:59] Speaker 5: Trump drain syndrome. It's writing in caps. I mean, it
[37:03] Speaker 5: was really surreal. I mean I was just blown away.
[37:06] Speaker 5: But it was clearly something that was an attempt, in
[37:09] Speaker 5: my opinion, to pander to the president as opposed to
[37:12] Speaker 5: arguing the facts and the law.
[37:14] Speaker 2: This line struck me, saying that this frivolous and meritless
[37:17] Speaker 2: lawsuit was filed quote because it is Donald J. Trump,
[37:22] Speaker 2: solid caps, a highly successful real estate developer who has
[37:26] Speaker 2: abilities that others don't, especially those who assumed the office
[37:31] Speaker 2: of president. And it was signed by three political appointees.
[37:34] Speaker 2: No career attorneys signed that. I guess I didn't want
[37:37] Speaker 2: their name on that. But the appeals court has lifted
[37:40] Speaker 2: the injunction on the construction of the ballroom, so that's
[37:43] Speaker 2: going forward.
[37:44] Speaker 5: The problem is this, it's one thing that stopped construction
[37:48] Speaker 5: or stop painting or renovations. Once it's done, I don't
[37:53] Speaker 5: think a court is going to tell the government to
[37:58] Speaker 5: tear it down. That's a very different kind of order.
[38:03] Speaker 5: And what's going to happen with the reflecting pool, you know,
[38:06] Speaker 5: Jo just going to say we got to paint it back,
[38:08] Speaker 5: or you know, the Kennedy Center. Once those renovations are
[38:11] Speaker 5: being done, you can't restore it. It doesn't make any
[38:15] Speaker 5: sense legally or you know, practically. So I think this
[38:20] Speaker 5: is part and parcel of the government strategy let's move forward,
[38:23] Speaker 5: sort of a ask for forgiveness rather than asking for
[38:27] Speaker 5: permission type argument, but a.
[38:29] Speaker 2: Lot more litigation to come. Thanks so much, Nima. That's
[38:32] Speaker 2: former federal prosecutor Nima Romani, and that's it for this
[38:36] Speaker 2: edition of The Bloomberg Law Show. Remember you can always
[38:38] Speaker 2: get the latest legal news on our Bloomberg Law Podcast.
[38:42] Speaker 2: You can find them on Apple Podcasts, Spotify, and at
[38:45] Speaker 2: www dot Bloomberg dot com, slash podcast slash Law, and
[38:50] Speaker 2: remember to tune into The Bloomberg Law Show every weeknight
[38:53] Speaker 2: at ten pm Wall Street Time. I'm June Grosso and
[38:57] Speaker 2: you're listening to Bloomberg

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