This is Bloomberg Law with June Brusso from Bloomberg Radio.
To find the defendant Anddutiers guilty of involuntary manslaughter as Carshan count one. We find the dependent Andiboutiers not guilty. Put Tambre evidence chart should come too. After just two and a half hours of deliberations, a new Mexico jury found Hanna Guccierrez read the armorer on the set of the movie Rust, guilty of involuntary manslaughter for the death of cinematographer Helena Hutchins. She was shot and killed when a live round from a gun held by actor Alec
Baldwin fired during rehearsal. In twenty twenty one, Jura Alberto Sanchez explained why they came to their decision pretty much.
Is just that all the never did the safety checks, never checked the rounds, to pull him out, to look at him, shake them. I mean, if you'd have done that, this wouldn't happen.
The defense had argued that Guccierrez Reid was a fall guy and the ultimate responsibility rested with producers, including Baldwin.
Hanas being made a skatego for are deliberate heerrors and mistakes by production.
Now all eyes turned to Baldwin's own involuntary manslaughter trial, which begins on July tenth. Joining me is former prosecutor Joshua Castenberg, a professor at the University of New Mexico Law School. A two week trial, very short jury deliberations, what was the critical prosecution evidenced.
I think one is the prosecution did a very good job of proving that Hanna Goudiers Read had a duty and that she failed to perform the basic functions of that duty, and that is to make sure the firearms are safe. Now, the prosecution had not only the normal hurdle of proof beyond a reasonable doubt, they also understood that one of the defenses would be that, look, other people had access to the guns and the armor isn't
the only one responsible for this. But they focused on her specific responsibilities and they were able to get in some evidence of drug use, and I think those were the two strengths of the case. And frankly, the defense didn't put up a compelling defense, even though it's not their burden to do so. They didn't.
So one of the jurors said that they'd easily reached their decision by determining that Gucciera's Read had failed to properly carry out gun safety checks. The big question has been why was their live ammunition on the movie set, which is strictly forbidden. The prosecution said that Gucciera's Read brought the live rounds to the set and showed some photos to prove that.
Yeah, so, you know, I think there is evidence, you know, where the live rounds came from. I don't think it's you know, it's conclusive beyond a reasonable doubt, but there is evidence that it came from her. I think what that evidence really proved if she knew of the possibility that live rounds would be in the vicinity of the weapon and fail to do anything to stop it from entering the weapon or keeping it in the weapon.
I mean, let's talk about how this affects Baldwin's trial. If she's responsible for the live ammunition on the set, that helps him, doesn't it.
Well, his attorneys have looked at this case, I have no doubt, very carefully, and not only very carefully, but with an eye towards presenting evidence in their own case. And I think, ironically, the stronger the prosecution's case is against Hanne Goodyear's read the weaker it is against Baldwin, even though those are two separate trials with two different theories of guilt.
Does this verdict in any way absolve Baldwin of negligence, Well.
It doesn't absolve him of negligence, because you can have a criminal negligence series of crimes where there are multiple people who had duties to perform or avoid performing certain things, and yet they're all guilty, even though those duties are desparate. But then there's the human logic, and the human logic will go some thing like this, the more guilty she is, the less he is, because really, what was his role? Now, the prosecution did a great job in this first trial.
Their next focus has to be getting to the point where the individual who last had their hand on the gun had an independent responsibility to make sure the gun was safeguarded. That's a true statement, but whether it rises to the level of a crime, the failure to do that or not, that's a tough mountain to climb.
The prosecutors used videos from the set to portray a breakdown of movie industry firearms safety standards. The defense tried to show that the producers were trying to cut costs, They rushed the crew, They gave her too many things to do because she was both a part time armorer and a prop assistant. That's the producer's fault. But Baldwin is one of the producers.
And you know, if the prosecution pursues that line, they go up against Baldwin. He's not just an actor. He had a greater role in the movie, on the Russ movie that than a normal actor would have, and they'll try to tie him in as being complicit in those failures, and there's a possibility they'll be able to do so.
What I found interesting is that there was testimony that he exerted a disproportionate amount of power because he was serving as producer, writer, and lead actor. He was described by one witness as the boss and no one says no to him.
That's important, it's very important. Yeah, I mean, he's not just the lead act. You know that Hollywood is not the military, but there are defined leadership roles in the movie industry, and it's clear that he took one of them, and so there's responsibility that comes with taking one of them.
A firearms expert said that Balwin was basically instructing the armorer how to do their job.
Yeah, you know, the armorer would have an independent duty to push back. But I think the prosecution tried to tailor this case against Hannah Goodear as reeds preserving enough strong evidence against Baldwin to go after him in that trial, and I think they did a pretty good job of doing it. It's just that the prosecution of Alec Baldwin is going to be considerably harder than it was against the armorer.
I sort of wonder why they're going after Baldwin since they found out that the armorer, or they believe the armorer brought the ammunition to the set, she didn't do proper safety checks before the incident.
You're going to hear competing theories about why they're going after Baldwin. For example, one theory is they want publicity. I don't believe that's true, but that is going to be something that's advocating that he's a big person to take down in the like. You're going to hear another competing theory, which is we only have one system of justice in this country, and there's been this unfortunate narrative that there's two systems of us as one for the top one percent and one for the rest of us.
But I also think that there's a fundamental issue here, and that is the person who had their finger on the trigger, it should have the justice system focused on them as well at a fairness, because they're the one who pulled the trigger without looking at the gun, without doing the final safety check and the like. And I actually think that's the most basic and real reason why
the prosecution is going forward on it. Having said that, Baldwin is very gifted defense Council and you know, they're going to make an equation to for example, you rent a car when you land at the airport from a reputable cart rental company. Your assumption when you turn the ignition in on the car is the car is up to safety standards, you know, And so that's what they're going to equate it to.
Baldwin maintains and has maintained since day one, that he didn't pull the trigger, and there's going to be test stamoni from gun experts that it couldn't have fired without pulling the trigger. How important is that?
Well, that cuts both ways, because if you have an FBI, or you have a firearms expert or real expert saying, look, this gun was fired because the trigger was depressed, and it makes it appear that Baldwin wasn't telling the truth. That can hurt him. On the other hand, what I'd say about it is maybe he absolutely believes that he
didn't pull the trigger. Because the human mind is fallible, and that's why, for example, when a railroad accident occurs, or a plane crash accident occurs, the National Transportation Safety Board, when they do mass interviews with people, they don't give the interviews individualized credibility because everybody has a different story as to what they saw in Our minds are conditioned, particularly during a stressful moment, to capture and retain data
and then show the data in a manner that makes sense to us, even though it may not be an accurate reflection of what occurred. And so, if you remember, there was a plane after nine to eleven that crashed in Long Island. There were witnesses. They said there was a giant fireball. There were witnesses they said the wings fell off the airplane. All kinds of stories as to what happened. It turned out there was no fireball, there was no explosion. There was a plane crash because the
plane broke apart. But if you're the person with your finger on the trigger, your brain may actually synthesize the data that occurred, you know, the recall to say you had nothing to do with it. It just went off, even though your finger did it, you know. So I don't think that the prosecution is going to spend a lot of time trying to paint Baldwin as a liar. They're going to try to paint them as irresponsible.
And in this case, Hannah Gucciras Reid did not take the witness stand. But do we expect that Alec Ballwin will take the witness stand?
Well, you know, taking the witness stand is ultimately a defendant's choice, and it's not the defense council's choice. I mean, they can just advise. And it's a risk for him to take the stand. It's also a risk for him not to. The judge instructs the jury that they're to infer no guilt whatsoever from any defendant who does not testify in their own defense. That's true, But he's an actor, and him taking the witness stand, the risk is he
has to be genuine as to who he is. If he takes the stand and tells the truth as he sees it, but if the jury thinks he's acting through it, they're going to hold it a tense him. But he's in the most unique category of defendant that I could think of.
Looking at the evidence that came in and how it was received by the jury, which side do you think has the advantage, the prosecution or Baldwin Well.
I think that the prosecution tried to put deserve as much of the strength as they could in the evidence to be used against Baldwin. Having said that, I could see that Baldwin's attorneys might call the new Mexico OSHA person to testify. They may call witnesses who brought in evidence about Hanne Goudiera's read drug use to say that, look, my client wasn't aware that he was under the influence of marijuana or cocaine during this time on the movie set.
So I think that it felt slightly in favor of Baldwin. I mean, you could still get a conviction out of this evidence, but it's much harder to do so we'll find.
Out in July. Thanks so much, josh Deft. Professor Joshua Castenberg at the University of New Mexico Law School coming up next. What the liberal justices were worried about in the Supreme Court's decision keeping Trump on the ballot. I'm June Grosso and you're listening to Bloomberg. On the surface, the Supreme Court was unanimous on Monday in ruling that Donald Trump can appear on presidential ballots, but just below
the surface, there was plenty of conflict. In a procureum opinion, all nine justices concluded that states can't enforce the insurrection clause to bar federal candidates from the ballot, But the three liberal justices wrote a caustic concurrence which read like a dissent, saying the five conservatives had gone too far, and Conservative Justice Amy Cony Barrett wrote her own, more
restrained concurrence joining me. Is Jessica Levinson, a professor at Loyola Law School and host of the Passing Judgment podcast. Jessica explained the reasoning of the procureum opinion, which all nine justices agreed to. Why they decided that Donald Trump should remain on the ballot.
So I wouldn't frame this so much as should Donald Trump for me in on the ballot? Does any single state have the power under section three of the fourteenth Amendment to say that a presidential candidate is ineligible for office.
And the top line here is that nine of the justices agreed that when it comes to a state, they do not have the power for federal officials, particularly for the president, to say that they're disqualified for office having been previously serving in government, engaging in insurrection, and then trying to once again serve in government.
You have two concurrences, one by all three of the liberal justices and one by Amy Cony Barrett in the Liberal justice is concurrence that read more like a dissent. They said that the five conservatives went too far further than they needed to go. Explain they decide novel constitutional questions to insulate this court and petitioner that's trump future controversy. Explain what they were concerned about there.
So I think what the concurrence, which really does read more like a descent, is concerned about is one that the Court answered a question that wasn't asked. That they said, not only can a stake not by itself say that there's a federal candidate whose ineligible profice under section three of the fourteenth amendments. But here's who can It's just Congress,
and it's just through a certain type of legislation. And so the first problem the concurrence has, it's this idea that in fact, the procureum and as they phrased it, the majority is just going too far and they're answering a question that they didn't need to, and that that violates the principle of judicial restraint. And then the second thing they're saying about insulating, and I think this wasn't clear, and I wish they had just said what they mean.
But I suspect what they mean is that by the majority saying here's the way that you enforced Section three, it's congressional legislation that is specifically aimed at and narrowly
tailored aimed at the issue the Constitution lays out. What they're saying is does that mean then if Donald Trump, for instance, was to win the election and then Congress was to try not to certify under a different statute under the Electoral Count Act, would Congress then laugh the power to do that under this majority opinion?
And during the oral arguments, the lawyer for the Colorado voters had said that a rule requiring Congressional action to implement Section three could leave the door open to a renewed fight over trying to use the provision to disqualify Trump in the event that he wins the election. So those five conservatives knew what they were doing.
I think this conservatives did know what they were doing. This was discussed in oral arguments. I think that there's a question as to whether or not it's appropriate or not for the picureum to have gone further than just Colorado lacks this power. But it certainly is the case that there was a conversation about whether or not a specific type of judicial decision would just kick the can down the road. And I think that's what the concurrence
is really arguing her. The concurrence by the liberals, which is, you're just pushing off some big and complicated questions until later, and specifically those big questions, you're actually tilting the scale in favor of saying that Congress would lack the power to take any action outside of a new piece of legislation, and that that's helpful not just for Trump but for the Court itself in avoiding future controversy.
Well, do you think that there was a push, you know, to speak with one voice, and so the three liberals went along with that. Was this really a unanimous decision.
It really was a unanimous decision that was deeply fractured on everything else other than the one line of the outcome. So on the one hand, you can see that there's this enormous pressure because of the case with huge political consequences and huge consequences on an issue that really divides our country, that the court not look like they're policymakers. So the court look like they are judges, They are resolving disputes, they are not putting their thumb on the
scale of an election. And so I think that's how we do get to that one line saying based on federalism, based on all of these concerns about patchworks and chaos, we're going to say Colorado went outside of its power. But then the agreement dissipates, and that's where we lose all consensus, and that's where you have the majority, I think taking a very different stance thing, and here's exactly how you apply Section three. And the concurrent thing, why
are you going so far? And you're doing this in a way that not just avoids judicial restraints, but you're kind of tipping the scales in favor of somebody like the former president.
Justice amy Cony Barrett, in her separate, more temperate Concurrence, wrote, the Court has settled a politically charged issue in the volatile season of a presidential election, particularly in this circumstances, writings on the Court should turn the national temperature down, not up, but then goes on to say, well, the main messages.
We all agreed, right, And I think this is an understandable message by Justice Barrett, because she's very cognism of the past that she doesn't want this to be a bush by Gore reduct where it looks like by a thinly de court divided along ideological lines of who appointed the justices, that they make a decision that has huge effects on the presidential election. So what she's saying is he understands the concern that the majority went too far,
but she wishes that. I think the dissent gives me the Freudian slips with the concurrence hadn't used such strident language. And I wonder if there was some world in which the liberals actually could have gotten Justice Barrett to sign on if the tenor of the Concurrence had maybe been slightly different.
Well, she hasn't been sitting in those liberal seats for so long, particularly so to Mayor, and the emotion, shall we say or anger building up. Is Barrett on a sort of a mission because she appeared with Sonya so to Mayor at the National Conference of Governors to say, there are not Republican judges or democratic judges. We all wear black robes, not red, not blue. But she on a mission that you usually see the Chief Justice on.
I think that it's Justice Barrett, it's Justice Sonia Sodamayor, who's also spoken warmly about Justice Clarence Thomas. It's the Chief Justice, it's Elena Kagan, all of whom have said some version of please know that we're judges, not politicians and robes. And of course they need that right. The Supreme Court depends on our respect and it depends on us viewing them as something different from just political actors,
because ultimately they get their power from us. Saying that they have that power, I mean, they don't have an army to send in, they don't have a group of police officers to send in to enforce their opinions. In the sense that they have the power of the pen, and if we ignore that, then we have a real problem with our third branch.
So they don't want to appear as political actors. They want to appear as judges. Yet, over the space of six days, they gave Trump this outright victory in Colorado and a victory in putting off his criminal case after waiting for two weeks to decide whether or not they were going to take his claim of presidential immuni from prosecution, which may mean, probably will mean that he won't be tried in the election interference case because there won't be time. How is that not political?
I think what the justices would say is like, we decided to take this case because we decide big constitutional questions that are matters of first impression, and this is a big constitutional question that we've never confronted before. And I think what they might also say is, Jasonuth came to us in December and asked us to said this for arguments in March. We instead said you don't get to jump the line, and we set arguments for the end of April. Now is the end of April quite different?
In fact, when it comes to the court calendar and the electoral calendar than the beginning of March. Of course it is, but they can also say, look, we had a full calendar. We didn't push this off until next term. And they might say it's not our responsibility to make sure that this case can occur before the election. Now, on the other hand, of course, one would say, well, are they actually unnecessarily delaying things by setting this particular pace.
But I think the justices would say, actually, we're moving for us quite quickly.
Well, they set it for the last possible day they could for all arguments, and we saw how fast they did the Colorado case and that Trump immunity case has been briefed and rebriefed. I don't know what else there is left.
To say, right, I mean, what's left is the Supreme Court decision. And I think what we do need to think about is that we could get a decision that isn't just an up or down. It's not just there is absolute immunity or there isn't. We could get a decision that says, for instance, there is qualified immunity and send the case back to Judge chuckin the trial court judge in the DC case dealing with election interference and tell her to apply that standard that could also present a delay, and.
None of the justices dissented from that order delaying Trump's trial either.
One thing I would offer is, I know we're all very much focused on the question of whether or not the DC case, that election interference case does move forward
before the election. But there's also another question looming in that case, in an unrelated case before the Supreme Court, dealing with whether or not the federal statute that Trump is charged under, at least for I think half of the charges, whether or not that's appropriate to use in this type of case, and that similarly could have delayed.
This trick and not to be repetitive, but I will be taking these cases that basically put them in the middle of the presidential election is not going to help to make people think that they're judges in black robes and not politicians.
Well, I think when it came to the Section three case, as a fourteenth Amendment, they just didn't have a choice. That's the case that screams out for Supreme Court review when it comes to the cases dealing with January sixth and whether or not the obstruction statues that people are charged under is appropriate. I similarly think that probably does
cry out for Supreme Court resolution. And then when it comes to this question of presidential immunity, one could argue same things constitutional question matter first impressions, that means Supreme Court.
Well, I'm not sure their approval rating can get any lower, but we'll see. Thanks so much, Jessica. That's Professor Jessica Levinson of Loyola Law School, host of the Passing Judgment podcast. Coming up next is the SEC's multi billion dollar enforcement tool, in Jeopardy. I'm June Grosso and this is Bloomberg.
This is Bloomberg Law with June Grosso from Bloomberg Radio.
Whether or not a defendant has to cough up profits from illegal trading activity may come down to what court securities regulators filed in. That's because US appeals courts disagree about what the SEC needs to show to take back
profits from alleged wrongdoers. Is it about how much investors lost or is it about how much the defendant made from illegalas a lot is at stake for the SEC because disgorgement is one of the most powerful tools it has for taking back those illegal profits it brought in some three point thirty seven billion dollars in twenty twenty three. That's more than twice what the agency recovered in fines.
Joining me is Anthony Sabino, a professor in the Department of Law at the Peter J. Tobin College of Business at Saint John's University. Nice to have you back on the show, Anthony.
Well, first of all, let me say I'm delighted to be on the program with you again and especially today to discuss what I think is going to be the next landmark Supreme Court case in the realm of securities law. It's probably a year away, but again, this is an issue that certainly the Supreme Court should resolve and I think very much needs to resolve.
So how much a defendant will pay to the sec and disgorgement depends on where they are, what circuit they're in. Just explain this.
Problem, junior. Correct, It is very much a problem, which is why the Supreme Court is going to eventually have to step in, and I hope sooner as opposed to later.
And the reason is there is very much a sharp divide, a deep chest in between A decision from June to twenty two called Hall the Fifth Circuit, a very prominent circuit indeed, which basically said that disgorg is regulated by a statutory addition that Congress made in very early twenty twenty one with respect to recognizing disgorgements, and as the Fifth Circuit classifier, is a legal version of the remedy as opposed to the more recent decision called Goville from
October of last year. So it's very fresh from the eminent Second Circuit. And as we've said many times on the program before, the Second Circuit was long ago recognized by the Supreme Court as the mother court of the federal securities law, and the Justices pay a great deal
of attention, if not deference to it. The Second Circuit, in a more recent opinion authored by Circuit Judgement Nashi said, well, no disgordn even with this statutory revision, is still an equitable remedy that is regulated by equitable principles and paramounts among them is that in seeking discord and the amount of money related there too, the sec must prove that there are acts actually investors who were not only defrauded okay,
material misrepresentations or missions, et cetera, but they must prove the extent, they must quantify the amount of monetary damage to those investors. In other words, if the SEC can show there are investors with actual pecuniary harm, there is no basis for disgorgements, and therefore the SEC can recover. And the SEC has basically been using disgorgement for decades
to extract illegal profits from malefactors. But the bottom line is, and you now see this, this limitation placed upon it by the second circuit, that makes the SEC's case oil the much harder, especially in the contemporary environment where we have, for example, cryptocurrency cases where it's difficult and maybe impossible to basically show the quantitative damage the dollar value, the pecuniary harm to investors. So you have this very sharp chasm between these two circuits.
And how have the other circuits lined up.
There's appending case before the first circuit up in Boston that we have yet to hear from an eleventh circuit case pending down in Florida, and that there is prior eleventh circuit case law that sort of takes a middle of the road position. We're not too sure where they're at. The tenth circuit apparently said something about this. So both qualitatively and quantitatively, the circuits are deeply divided, and that
has to be reconciled by the Supreme Court. And finally, the reason the Court has to step in, in my estimation, is the fact that this situation was largely presaged by the Supreme Court's decision in Juna twenty twenty in the Liu versus SEC. Case, where the Court and the depinion by Justice Soto Mayor basically defined some of the parameters of disgorgement as an equiple revet remedy and set forth certain conditions and requirements for the SEC to prove it
and conversely how one defends against such a charge. But it left certain questions unanswered, and that in turn was exacerbated by some statutory revisions made by Congress in June of twenty twenty one. And in essence, that's why the Goville case from the Second Circuit and the Halem case from the Fifth Circuit or at odds, because they take startling different views of what Liu said or did not say and what the statutory revision by Congress did or
did not do. So, as the final arbitrar of our nation's laws is Supreme Court needs to step in and especially because again disgorgements both as a deterrent to wrongful behavior and as a just punishment for those who do wrong in the capital markets. We need resolution on this. So I'm looking forward to this case being keed up by one of these parties, one of these cases, hopefully the Goville case, to get to the justices, not this year but next year.
So can the SEC, in a lot of cases, file anywhere but the.
Second Circuit absolutely, absolutely okay. The securities laws give exclusive jurisdiction in most cases to the SEC, and it gives it broad authority to file and whatever district court they think appropriate, obviously the district court being the trial court. Then it percolates up to the circuit court level. But again they can get you where the SEC is doing business, where you are doing business with our investors who you're harmed.
Giving the quintessential interstate nature of securities transactions, that basically leaves open the old the fifty States. So again the SEC has Treman's choices. So right now, no doubt the folks doing good work at the Division of Enforcement. The SEC in Washington, d C. Not to mention, the regional offices are thinking very long and hard about Okay, where
do we bring these cases? If they're seeking disgorgements, they may very well decide, you know what, the second circuit is not exactly friendly to us at this point in time. So let's try the fifth circuit, which is clearly said, this is the legal remedy of disgorgement, and therefore you can ask for it, and here are the rules. And again they may decide to pick the fifth circuit over the second. They may avoid some of the circuits that are in transition, shall we say, such as the tenth
and especially the first and the eleft circuit. And you know, June, one of the I is here we can't lose sight of. Is this, as the Supreme Court pointed out of the Leo decision a couple of years ago, and as both the go Villain Allow decisions point out, is that disgorgements is really a modern remedy. It's really a judicially crafted remedy that goes back to, of all places, the second circuit.
The Second circuit really invented disforgements back around nineteen seventy one in the landmark securities fraud case called Texas Gulf sofur So. This is really the second circuit, having invented disgorgements or modifying it or applying it to modern securities transactions in the early seventies and sharpping it through its various transitions. And now we see how they're interpreting guidance from the Supreme Court two years ago in the LEO case.
How much does the pecuniary harm standard complicate how the SEC brings cases? I mean, does it need a lot more work up front? We just talked about how in cases where it could it would bring the actions elsewhere exactly?
Okay, yes, you're completely correct. The SEC will have to do a lot more front end work, if I may characterize it as such, where not only are they going to have to examine has fraud been committed as a metal of the parameters for securities fraud? And once again remember the test for securities fraud is rather arduous. The government must prove and again we're talking civil cases or just fifty one percent, okay, not beyond reasonable doubt that
there was a material misreperomission. There was cyenta in other words, evil intense. There was reliance, There was economic loss, causation, a chain of causation with respect to all those events and in connection with the purchase of sale of the
securities on the American markets. But the bottom line is the Commission is now not only going to have to prove the elements of fraud, they're going to have to get down into the weeds and assure themselves that there is a cognizable body of investors who have again been defrauded and not only flim flam, not only deceived, but they suffered pecuniary harm. And that has to be measurable, that has to be quantifiable, certainly in the Second Circuit's
opinion with respect to the gulfilled decision. And again, what this highlights you in is one of the conflicts for the tension between the existing law prior to the Supreme Court's decision in LIEU and the amends that Congress made basically six months later. LEU was predicated upon one subsection of Section seventy eight U. Okay, again, the complexity of the Federal Security's laws is astounding, but basically the existing.
Substounding, right, that's one thing that no one disagrees with.
That's for sure. We all know it's astounding, but it gives us something to talk about. Does it not so. The existing law talked about how the SEC can seek any equitable remedy as long as it's for the benefit of investors. And by the way, that's crucial to the Goville decision because it said, okay, benefit to investors means that to benefit them, you have to find someone who was harmed, and the purpose of the equitable remedy, whatever it might be, is to restore them to where they
should have been had they not been defrauded. Okay, And as judgment ashly points out well so well. He states, if there's no pecuniary harm, that means that if you give these folks money via disgorgement of some other remedy, you're not putting them back where they should have been. You're improving their position. It's a winfull, okay, And that's not what justice is all about. On the other hand, and this is where again we see the chas in
between the circuits. The fifth Circuit in Halam focused upon the amendment from January twenty twenty one that says disgorgement and again, the SEC may seek disgorgement if I just report, it doesn't define what disgorgement is. It does not say that the disgorgment has to be for the benefit of investors. And that's why Hallum basically says, you don't have to find investors suffering the pecuniary harms. That's where they basically
parted ways with the Second Circuit. And indeed, the bottom line is Goville was presaged by a prior Second Circuit case called Ahmed, and so the chronology limited chronology is second Circuit says such and such in Ahmed, the Fifth Circuit July twenty twenty two disagrees in Halam. And now the Second Circuit in October of twenty twenty three says no, no, no, we're right, you're wrong. And again you see this division.
But again that's the whole point because now, and this is why the Supreme Court very much needs to step in, because they have to say, Okay, wait a minute. When Congress enacted the newer provision that talks about disgorgements, did it adopt any of the Court's principles regarding equitable remedies from the Liu case. The irony is, if Congress had been more direct in defining its newer version of disgorgements, we wouldn't have this issue to start with, it is so complicated.
Thanks so much for your explanations, Anthony. That's Anthony Sabino, a professor in the Department of Law at the Peter J. Tobin College of Business at Saint John's University. And that's it for this edition of the Bloomberg Law Podcast. Remember you've can always get the latest legal news by subscribing and listening to the show on Apple Podcasts, Spotify, and at Bloomberg dot com, slash podcast, Slash Law. I'm June Grosso and this is Bloomberg