This is Bloomberg Law with June Brusso from Bloomberg Radio.
On Tuesday, the Supreme Court justices took up the divisive issue of abortion for the first time since overturning the constitutional right to an abortion in twenty twenty two, but even some of the conservative justices who voted to overturn Roe v. Wade appeared wary of the legal attack on mifa pristone, a drug now used in more than half
of the nation's abortions. Justices from across the ideological spectrum expressed skepticism that the anti abortion doctors challenging the FDA's loosening of regulations for mifa pristone have standing or the type of direct harm that gives them legal grounds to bring the suit. Here are Justices Katanji, Brown Jackson, and Neil Gorsich.
I mean, it makes perfect sense for the individual doctors to seek an exemption, but as I understand that they already had that, and so what they're asking for here is that in order to prevent them from possibly ever having to do these kinds of procedures, everyone else should be prevented from getting access to this medication.
So why isn't that plainly overbroad.
We've had. One might call it a rash of universal injunctions or vacatures, and this case seems like a prime example of turning what could be a small lawsuit into a nationwide legislative assembly on an FDA rule or any other federal government action.
Joining me is an expert in reproductive rights, Mary Ziegler, a professor at UC Davis Law School. Mary, just about everyone who listened to the oral arguments is of the opinion that a majority of the justices will turn away this challenge to mif A pristone. Is that your opinion as well?
Yeah, it is. I think that it seemed that most of the justices were convinced that the plaintiffs in the case didn't outstanding.
So the main issue, I mean, the real issue before we get to standing, was whether the FDA acted unlawfully when it relaxed the rules and expanded access to MiFi pristone back in twenty sixteen. Where did the justices stand on that issue?
The argument, at least that the alliance for hippocratic medicine the plaintiffs wanted to make was twofold right one, that the FDA didn't have the authority either to approve mif pristone back in two thousand, or to lift subsequent restrictions on the drug in twenty sixteen or twenty twenty one, the argument being that the FDA hadn't been careful enough with the science to make all of those decisions, And there was a related argument on the twenty twenty one changes,
which are what permitted abortion for reasons of telehealth. Their activists argued that the federal Comstock Act, which is in nineteenth century obscenity statute, prohibited the mailing of abortion related items, So the FDA couldn't have had the authority to approve telehealth because doing sowhat of violated federal law. So those were a lot of the arguments that in herey the
court could consider. We don't imagine they'll be in a majority opinion because we think the plaintiffs will likely be held not to have standing, but some of those arguments seem to capture the interests of some of the conservative justices for down the road.
Abortion opponents have looked at the Comstocked Act as a possible way to stop medication abortions. Do you think that that is a fight that will happen down the road in night.
I mean, so in this case, you know, if these plaintiffs don't have standing, other plaintiffs could we know that, at least on the Comstock Act front, that both Justices Thomas and Alito signaled some interest in the idea that the Comstock Act bans mailing abortion pills and maybe other abortion related items as well. So I think, you know, whatever comes out of this case may not be a final resolution.
So, as you said, the justice is from across the eyedelogical spectrum expressed doubt that the doctors and the organizations had standing to try to overturn the FDA changes. What do you think was the heart of that argument.
The plaintiff's argument essentially was a speculative argument, right, So they said, there are complications that inevitably ensue when people take mitha pristone, and some percentage of those people with complications will end up in the emergency room. And then they said, it's reasonable to assume that some of those patients might end up in our emergency rooms and it may be the case that we have to treat them, and then that may cause us a conscience based injury.
The problem with that, according to many of the justices was one, none of that may happen. This is all just possibilities, and two that it seemed that there was a mismatch. Is Justice Katanji Brown Jackson put it between the remedy the plaintiffs were seeking and the harm they suffered. She and Justice Scorsich asked, you know, if the problem here is that doctors may have to act against their conscience, why can't those doctors just get a conscience based objection.
Why do they have to go all the way to taking a drug potentially off the market for all Americans. So there were clearly problems withithstanding from the beginning, and that's why we saw it being such a focal point at the argument.
So just as Brett Kavanaugh asked only one question in the ninety minute argument, and he said, just to confirm on the standing issue, under federal law, no doctors can be forced against their consciences to perform or assist in an abortion. Correct. He asked this listener, general, it's unusual to have any justice just ask one question. Do you think he was trying to, you know, not give ammunition to opponents who've been focusing on him.
I think Kavanaugh just thought this was an easy case. I mean, I think there was a signal that, you know, these doctors, if they had conscience based harms, they weren't going to be forced to do anything they didn't want to do because they already had protect actions under federal law, and that that made the kinds of injury they were
talking about even more speculative. I don't think, you know, a lot of the justices seemed to think this was an easy case, and I think Kavanaugh may have been more unplugged from the argument for that reason.
Now, there was also a claim we talked about the claims of the doctors, the for organizational standing, and Justice Elena Kagan said, you need a person who's your person? I thought it was sort of amusing when you know, he said, refer to the district court, and she said, I don't really care. I'm not sure I care all that much about the district court, sort of dismissing Judge kes Merrick. Did the organizational standing claim fall even worse than the claim of the doctors?
I think so. I mean, I think even Justice Thomas seemed doubtful about the organizational standing claim, suggesting that it just proved way too much. So the argument that the organization had made was that it was expanding resources and time to fight for Christine that it would have liked
to use on other pro life work. And several of the justices, again including Justice Thomas, who you would think would have been one of the most sympathetic to the point, has said, well, if that's true, then put in any social movement group, bring any lawsuit and say simply the fact that the lawsuit was an expensive resources they wouldn't otherwise need to bring, and that gives them standing. So there was arguably even more skepticism of that claim than the ones involving the doctors.
The Conservatives sort of tore into the nationwide injunction, and we've heard this so many times about so just as Gorsig question whether a suit by a handful of individuals who've asserted a conscious objection was grounds for a federal court to topple the FDA changes nationwide, and he talked about the spike and universal injunctions. They've done this before. The justices have talked about the harm of universal injunctions,
but yet they don't ever do anything about it. Do you think they might do something about it?
In this case, it's possible. I mean, clearly Justice Gorsuch would like you know, I think there was sort of a soapbox moment where this is been a pet peeve of his, and he took an opportunity to hold this case up as an example of what's wrong with universal injunctions. I don't know if that's going to be too far afield from the issues at hand. Given that this ruling is likely to center on standing, Justice Corsich may write
separately to complain about universal injunctions. I don't know if the majority is going to do anything in this case. I'd be sort of surprised if they did so.
Mary. If, as everyone thinks, they take the off ramp and rule there's no standing here, I mean, does that leave the question open for other groups to try to challenge if a pristone.
It potentially does.
So.
We know that in the trial court several conservative states have sought to intervene. The US Supreme Court allowed this case to proceed without joining those cases or those parties to the present matter. But they are before Judge Tasmeerk. If they don't end up having standing, it's not hard to manage that Other Conservatives will try to assert it.
General Prelogger yesterday alluded to the possibility that, you know, she thought those other parties don't have standing either, and that was a point Justice Alito wanted to make a big deal about, essentially to say, well, if these people don't have standing and nobody has standing, isn't that a problem. But I don't think we know at this point that support would rule out other people potentially having standing.
So this challenge to mitha pristone reached the Supreme Court so quickly, and it was a result of judge shopping. Do you think that with the judicial conference changes that this kind of a case would not be able to be judge shopped?
It's interesting. I don't know. I mean, I would hope we have to see. I think how those changes play out in practice. That's certainly the outcome they're designed to achieve. But I guess I would say, we'll have to wait and see how they work in practice.
And states have been stockpiling MiFi pristone in the event that the Supreme Court ruled against it.
Yeah, they have.
And they've been also stout filing missuprostal, another drug that would be used as an alternative you know, so methroprostone and mister prostal are used together now in medication abortions. Misuprostal on its own can also be used to produce a medication abortion, so there's a possibility that that would also occur.
The Supreme Court is also going to hear a case from Idaho, where there's a total ban on all abortions except when necessary to save the mother's life. Why do you think they took that case.
I don't know. I mean, I think it's likely they don't agree with the Biden administration's interpretation of the law. They've let Idaho's ban, which has some of the narrowest exceptions in the nation's stand while the litigation continues. I think they clearly think that there's something wrong with what
the Biden administration is doing. The interesting question is what they think that this statute simply has nothing to do with abortion, or that they think it's likely that the language of the statute, which refer to an unborn child, actually limits in some ways what doctors, potentially even in blue states, could do. So I'm not sure which of those possibilities we'll see.
Will that case be more of a test of the Dobbs decision than the Mifipress Stone cases.
Yeah, it definitely will, in the sense that we're much more likely to see a ruin on the actual merits of the question rather than a decision on standing, which I mean, obviously, it's important that the court still recognizes guardrails on who can sue, but it doesn't give us much of a sense of the substance of abortion law post Dobbs in the same way that this other case could.
Thanks for being on the show, Mary, that's Professor Mary Ziegler of UC Davis Law School. Coming up next on the Bloomberg Law Show, Can the Government beat Apple in its antitrust lawsuit? And later in the show, Sam Bankman Freed is facing decades in prison when he's sentenced tomorrow.
I'm June Grosso and you're listening to Bloomberg. The Justice Department has filed a sweeping anti trust lawsuit against Apple, accusing the tech giant of engineering an illegal monopoly and smartphones that boxes out competitors, stifles innovation, and keeps prices artificially high. Attorney General Merrick Garland said the company's strict restrictions against third party technology forces consumers and developers to only use items under Apple's umbrella, including Apple Watches and
Apple Pay. Apple says, we'll see you in court. Joining me is Jennifer Ree, Bloomberg Intelligence senior litigation analyst. Jen tell us a little about the lawsuit.
Well, what the DOJ's alleging is generally that Apple is maintaining its monopoly position, or at least attempting to monopolize a couple different markets. They say, either a smartphone market in the US or a smaller market that they call premium smartphones in the US, which I guess are the
more expensive smartphones essentially. And what the DOJ says is that Apple has monopoly power in these markets and that it uses its control in this power over the technologies that are needed for functionality with the iPhone, in other words, for other software or hardware to interoperate with it in a way that blocks out competitors but also locks in users.
So the goal the DOJ says here is that Apple's trying to make it harder for people to switch to a non Apple smartphone in that way it can protect its monopolies. And they do lay out a few specific examples. Now they say it's really a course of conduct. But they lay out some very specific examples that they say achieve this for Apple. And one thing is prohibiting super apps. Now, these are apps that have broad functionality in a single app.
Apparently they're very popular in Asia, and Apple prohibits these apps, and the Department of Justice says, well, it's because it would reduce the dependence on the iOS on the operating system that Apple runs. It also bans cloud streaming gay apps, and these kinds of cloud streaming game apps make it easier to switch because you don't really need sophisticated hardware to play the games if they're being streamed from the cloud.
So it's kind of like examples like that. There are several others, and they align the suit with a very old suit in the nineteen nineties that was against Microsoft, where the company blocked middleware and its operating system that it thought would threaten its operating system monopoly. They're basically saying it's the same kind of conduct here.
So Jen, what's surprising is there are people who are devoted Apple users and wouldn't use anything else and the iPhone. I have to say, I'm one, you know, I've had the iPhone forever. Aren't there those kinds of people too. There are so many people who just love.
The iPhone listen absolutely, And this will be Apple's defense that what the Department of Justice is basically trying to do is make it just like Android, and right now people have a choice. You have an Android, which is a more open system phone, and then you have Apple, which is a closed ecosystem technically to give you more privacy and to give you more security. This is what
Apple would say. And there are devotees and people who prefer Apple for that reason, and Apple saying, look, you're going to take away a choice if you make us open up the way Android is open. And this will be the basis for Apple's defense because in general, in these kinds of monopolization suits, if a company has legitimate pro competitive justifications for its decisions and its conduct and its contracts, then usually they're not deemed harmful under the
antitrust laws. And Apple will say, we have these justifications. We do what we do because it enhances ease of use, it makes it seamless for consumers, it's more private, it's more secure, and the consumers that buy the iPhone can depend on us because of that, But what the Department of Justice has said is that's really just a pretext. You know, that's what Apple likes to put out there
in the world. But in truth, if you look at some of their internal documents, some of what they do at least is simply meant to make it hard to switch and to maintain their monopoly. And so a judge is going to have to look at this evidence and soft that out. You know, which one is true?
What would the government have to prove in a lawsuit?
So in a monopolization lawsuit, it's really important to look at the conduct. It's really all about the market definition and all about the conduct. And I say that because if you are going to try to prove that a company's maintaining its monopoly, you have to first prove it has a monopoly. And there are a number of ways you can prove that. One of the easiest or most obvious ways is to show what market share they have in the market. And to do that, the market has
to be defined. And so here the government has said it's a US market for smartphones or US market for premium smartphones, where they say Apple has shares it reach up to about seventy five percent. Now they're going to have to prove all that. They're going to have to demonstrate, probably through economic analysis, that these are proper markets, because
Apple will say no, they are not. There isn't a separate market for premium smartphones, or it shouldn't be limited to just the US because June, when you change the market definition, you change the market shares, and if those market shares were to come down, Apple no longer has a monopoly, and the DJ has to prove that it does. Second, the second most important thing is to conduct, because under US laws, it is not illegal to have a monopoly.
What is illegal is to engage in conduct that has really no legitimit business purpose other than to exclude your rivals in order to get to that monopoly or to keep that monopoly. So the main thing that's looked at in these lawsuits is the conduct. What is the conduct,
what does it do, and what is its purpose. So here the DOJ is going to have to prove that Apple's decisions about the apps that it prevents about let's say it's smart watch not working well with non Apple smartphones, with respect to putting up some obstacles to the messaging in an I message between an Android phone and an Apple phone, some of the things that the DOJ has complained about here, they're going to have to show that these are anti competitive, that they're intended only to block
out rivals and have no pro competitive legitimate business justifications, and that they actually harmed consumers if they can show that. But then Apple can show we have some legitimate business justifications. What the judge is asked to do is weigh the two against each other, not an easy task at all.
Apple is expected to move to dismiss the lawsit I think with it in sixty days. Could it get some of the lawsuit dismissed, do you think? Or all of it?
You know, it's really hard to get anti trust suits, especially monopolization suits dismissed, generally, because they're so fact based. Right, it's about the evidence and it's about the fact, and usually you can't do that in emotion. To dismiss an emotion to dismiss, depleting itself has to be insufficient. So I really doubt here. I don't even think the suit would be narrowed in emotion dismissed. It's possible that it would.
I believe Apple would probably argue that it is under no duty under the anti trust laws to deal with its competitors or to make its products in a way that makes it easier for competitors to work with those products. But again, I think because it's such a fact based determination, the judge is going to say, look, we're going to have to collect some evidence and dig in, and that's basically how you get past that motion to dismiss as a plaintiff.
You know, Apple seems to have unlimited resources to fight these legal challenges, But at what point does a challenge like this take its toll on Apple.
I think Apple will fight, and they do have resources, and I think this is going to go for a long time. But the interesting thing about the toll that it takes, especially because Apple's facing so many other anti trust challenges around the world right now and also from private parties in the US, is that it does take resources. You know, as you fight the litigation the two three
four years that it takes, it takes resources. It can take your eye off the ball in a sense in your own business that you do from day to day, and sometimes it can actually cause companies to become a little more cautious. Generally, in the decisions they're making in their business as they go forward to pull their competitive punches a little bit, you know, not sort of toe the line which can make them fall back in the
market a bit. I mean, this is kind of what happened to Microsoft as it was fighting the Department of Justice in the nineteen nineties.
But Apple has been effective in fighting off other antitrust challenges.
They have been real effective over the years. And you know, the reason, I think is because, as I said, it's very hard for a plaintiff to win a monopolization suit when the defendants have legitimate and when I say legitimate, I mean something that's not just made up for the litigation, that's not a pretext, but a legitimate, pro competitive business justification for the conduct. We did this conduct because it made our business more efficient, because it made our product
better for consumers. When you have reasons like that and they're backed up by the evidence, by your ordinary course, normal business documents, even if that conduct has excluded your rivals and caused some harm, usually it's considered legitimate and legal under the antitrust laws, and a plaintiff's going to lose.
And I think it's been really for those reasons that Apple generally over the years has most of its cases, certainly in the Epic Games litigation against Apple, where Apple largely won most of it, they won all the federal law claims. Part of the reason for that win is because the judge did determine that some of its business most of it's actually business justifications, were legitimate and we're good for consumers.
Jed.
What does the Justice Department want? Let's say it wins this lawsuit, what does it want? You know?
I think when it comes to remedies, when the complaints are filed, the government tends to be really vague. You know, they're going to get into that later after the liability and be much more precise about what they want. The one thing I'll say here that's different from all the other government cases against the big tech platforms is that they have not specifically specified that they want some structural remedy.
So in all the other cases against Meta, against Google, against Amazon, there has been a suggestion that they are looking for some sort of a breakup or separation of business. They have not done that here, but they've asted for an injunction. I think what they're simply trying to do is break open Apple's closed ecosystem. I don't really think that they're going to get that, even if they win here.
I would think it's much more likely that a remedy would be very narrowly tailored and probably wouldn't as a whole in that way impact Apple's business model. I think it would be more piecemeal, like allow super apps on the phone, you know, something like that, June, rather than really kind of drastically changing their business model.
And Apple in the years it takes to go to trial, could make some adjustments on its own, you.
Know what, absolutely, And you know from people who know the business far better than I do that study Apple know Apple really well. I've already seen quite a few news reports and articles and analyzes that say that actually some of what's in the complaint is stale, that they have made changes already that make some of the complaint stale, or that they're actually about to implement changes that make some of these things that thej is complaining about go away. So yes, absolutely, so.
We've talked many times about how the Biden administration has tried to rein in the big tech companies with Andy Druss lawsuits. If the administration changes could this just go away?
You know, maybe I would say ten years ago, I would have said likely. I think I would it have said ten years ago, there's a good chance that the case could settle, and in fact, the Microsoft suit settled after administration changed from Democrat to Republican. But I think in this day and age, no, it's less likely. It's
only a maybe. It's kind of a wild card because right now you do have a wing of the Republican Party that really actually are happy about very aggressive anti trust enforcement, that agree that anti trust enforcements to lax, and wants to go after these big tech platforms. So what this will depend on, let's just say Donald Trump wins the next election, is who is appointed leadership at the Department of Justice, because that would ultimately be the decision maker.
So how long do you think before this gets to trial? Just ballpark?
Oh, I think a couple of years.
A lot can happen in that time. Thanks so much, Jen. That's Bloomberg Intelligence Senior litigation analyst Jennifer Reed. For more of Jens analysis, you can go to Bigo on the Bloomberg Terminal. Coming up next on the Bloomberg Law Show, Sam Bankman Freed will be sentenced to and he's facing decades in prison. Four of the charges he was convicted of involved wire fraud. Even though overall white collar crime cases have dropped, prosecutions built around wire fraud have reached
an all time high. Last year, prosecutors used wire fraud in more than thirteen hundred instances, up from about nine hundred and twenty sixteen. I'll give you a hint why it corresponds with a flurry of crypto cases. Remember, you can always get the latest legal news by listening to our Bloomberg Lawn podcasts. You can find them wherever get your favorite podcasts. I'm June Grosso and you're listening to Bloomberg.
Sam Bankman Freed faces decades in prison when he sentence tomorrow for his role in the collapse of the FTX cryptocurrency exchange. Prosecutors have recommended the thirty two year old get forty to fifty years in prison, while his attorneys have asked for six and a half years or less. Federal Judge Lewis Kaplan, who oversaw on SBF's trial, will decide his sentence. Four of the eight charges against SBF
involved wire fraud. It's become prosecutor's weapon of choice to hone in on crypto crime as the debate plays out over whether cryptocurrencies are securities. Joining me is Bloomberg Legal reporter Crystal Mesh. We hear that people are charged with wire fraud all the time, and I'm not sure that most people know what that really means. What is wirefraud? What is an encompass?
So it's a pretty basic charge. It just means that, you know, it stems from the old mail fraud statute, but obviously people don't use the mail as often nowadays, so wirefraud has kind of overtaken that in importance. But basically, all it requires is that somebody uses a wire, you know, an electronic form of money transfer to further a scheme, you know, whether it be a you know, any kind of fraudgilant scheme. You know. That could be for commodities,
it could be for pretty much anything. It encompasses all kinds of different transactions, and in the modern world where nearly everything goes through an electronic payment, it can really encompass the whole universe of transactions and commerce. And across the globe, white.
Collar crime cases have dropped but prosecutions around wire fraud have reached an all time high.
Yeah, so this is based Those statistics come from Syracuse University's Transactional Records Access clearing House, which gathers data on all kinds of things statistics by the federal government, but more specifically tracks the DOJ's how they charge cases. You know, what charge they use is the lead charge, which is usually the mosterious charge or the charge that led to
the referrals to the Justice Department for prosecution. They started tracking this data in the nineteen eighties, so you know, just to be to be clear, this is when we talk about all time high. We talked about going back to say nineteen eighty six or so. But white collar crime prosecutions and that encompasses all kinds of different kind of violations in securities, fraud, anti trust violations. It's not everything that you might it's not all Wall Street related.
It could be you know, as simple as kind of defrauding a program or something like that. Some of the COVID related fraud cases fall under that canon, but they've been dropping consistently over the past say twenty years or so.
They peaked in twenty eleven, which makes sense given you know, the financial crisis was just a few years before that, but it's kind of every pretty much every year since then, say for a couple of small upticks in twenty eighteen and in twenty twenty one, which is probably also attributable to some of the COVID stuff. They've been dropping consistently,
and there's lots and lots of reasons for that. Just Number one, in terms of you know, securities fraud, as we've talked about, has become used less and less just because it can be hard with cryptocurrencies to prove that a cryptocurrency is security, and what that means is that it's a complicated test, but basically would mean that the person who is purchasing the instrument believes that they are sharing in the common profits of the enterprise by no
activity of their own. Just basically means that they are expecting to get some potential return on their investment from the activities of the people who are promoting, say the cryptocurrency. And in a lot of these cryptocurrencies, the main question is whether or not they're security or not, so using wire fraud basically allows them to get around that question and just kind of charge it as a straight fraud case, and I.
Charged wire fraud in Sam Beckmann Freed's case and Elizabeth Holmes case.
You know, I can't tell you exactly, you know what the reasoning is. Is there a nose case, But certainly in Sam's case, it didn't really matter to them whether and to his case, whether he was selling securities or not. It was more of a straight up fraud. And that's kind of the overarching reason why they're going to it. It's an old, old statute. Prosecutors know it very well. It simplifies the arguments they can make to the jury.
They don't have to go into this kind of complicated past as to whether something is a security or not, and just kind of it's just kind of a straight up fraud claim.
Federal Judge Jed Rakoff, who is one of the most well known and respected judges on the federal bench, wrote a paperback in nineteen eighty calling it the true love of prosecutors. Quote to federal prosecutors of white collar crime, the male fraud statue is our strativarius, our cold forty five, our Louisville slugger, our couason art, and our true love that remains I suspect.
Yeah, that's I mean that nearly everyone I talked to brought up that quote. And it's kind of funny because as I sit here in the courthouse, we have Judge Raycoff is presiding over a civil trial in the SEC's case against terror Form, which is No Kwan's company, at which he's not even present because he's fighting he's fighting an extradition fight. And Judge Racoff is actually already ruled in this case that they were selling securities, so it
isn't even in that case. So it's very unusual that, you know, at the same time we see this uptick in wire fraud prosecutions, that we see Judge Racoff kind of making similar decisions, especially given his famous quote.
Yeah, and other judges have ruled in different ways, but it hasn't reached an appellet court yet.
No, it has. There have been mixed rulings, you know. There's Ripple Labs famously kind of one a big porsche
of its fight against the SEC. When a judge in the same courthouse, well I shouldn't say, it's been a different courthouse across the street, but she found that they weren't selling securities when they were selling their XRP token on exchanges, but that they were when they were selling them to institutional investors because those people had kind of a greater expectation that they were going to share in
profits and were more sophisticated investors. But we've had others that have found, you know, the opposite thing, but some of the other things they've you know, federal prosecutors here in New York who prosecuted Sam Bankman Free to have used it in is a couple of things that are not really what we would consider traditional white collar fraud kind of things, which are you know, fraud associated with trading NFTs, which is really kind of your best example for the
use of this wire fraud statute. Because NFTs are a new product, they're not really well known, or they at least they weren't when they were surging their use and their sale was surging a few years ago. They weren't really well known to the courts. And in the end it didn't matter because they just charged They charged a former open See employee, which is the exchange that they
trade NFPs on. They charged him with wire fraud for insider trading based on knowledge that he got about which tokens would be featured on the website before they were. So it allows the prosecutors, like I said earlier, to kind of just use, you know, a more broad statue, to kind of address fraud as a whole at a most basic form, regardless of the trappings of that scheme, whether it's NFPs or cryptocurrency or anything else.
So let's talk about Sam Bankman free sentencing tomorrow. Tell us what the various recommendations are from prosecutors, the Probation Department, and the defense.
So prosecutors so US criminal sentencing guidelines, which are a complicated set of factors that are determined by the parties, the prosecutors and the defense, and then eventually the judge. They determined that he was recommended one hundred years, which is outside of Bernie Madoff and some others, would be one of the highest white collar crime sentences ever. His
lawyers are seeking six and a half years. They're arguing that, you know, obviously one hundred years is way too much, and that the prosecutors who are seeking forty to fifty years, they argue that's tra codian as well. So there will likely be a rather vigorous debate at the beginning of the sentencing hearing over the individual factors that go into
those guideline calculations. They probably in the end that the guidelines may that the judge decides on maybe a little more or a little less, but that probably won't really inform his sentence as much. He's gonna he's gonna weigh all kinds of different factors here, including his age, you know, his lack of any criminal history before this, and of course the eyes of the multi billion dollar size of his fraud. So there's a lot of things that go
into it. It's going to be probably take a few hours to take place and for the judge pronounced sentence, but it will be a very vigorous debate between the two sides, and we would expect to hear from Sam himself, and it's going to be very interesting.
Chris, So, I've been reading that the victims of the collapse of FTX, a lot of most are going to get their money back. Does that play into the judge's sentence?
That is an argument that his lawyers are making. It may go into more that may not matter in the grand scheme of things. The judge may find that whether or not people are made whole by It doesn't mean
that he didn't, you know, try to defraud them. That is more likely to inform whatever kind of you know, restitution or forfeiture he might have to pay after the fact because his lawyers of our gu there was no loss in this case because of what you just said, because that it's likely that there will be enough money to repay the victims. But of course the government disagrees with that convention, and it's likely going to argue that he should pay back billions of dollars.
And Judge Caplan, you know, we've talked before about he was very tough with sbfs. But how is he at sentencing?
He's not from the cases we look he is, he doesn't. He doesn't. Really. He's definitely going to impose a serious sentence and a sentence that sends a message to deter others. But he does not appear to be as heavy handed in at white collar sentencings as his demeanor during the trial would suggest. He seems to understand the individual arguments for defendants. And let's be clear, this is not a
violent crime. That usually is a big factor in whether or not a judge decides that somebody should you know, get out while they still have a life ahead of them or not. And people have varying views obviously of Sam Bankmin Freed and the conduct that he employed. But nobody can argue that there was a violence crime employee here that anyone was physically injured, So that may play greatly into his decision. And the big question is whether he's going to kind of give him a penalty for
determining if he lied on the stand. That's really that could be one of the main factors that could drive his sentence higher. And we really don't know what his thinking is on that. That's entirely up to Judge Kaplan.
I know you'll be watching the sentencing. Chris, thanks so much for joining us on the show. That's Bloomberg Legal Reporter Chris dol Mesh. Of course, we'll have full coverage of the sentencing of Sam Bankman Freed on tomorrow's show. And that's it for this edition of The Bloomberg Law Show.
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