About a month ago, I did you a favor. I read the entirety of Baude and Paulsen’s 126-page magnum opus on why Trump is barred from running for the presidency under Section 3 of the Fourteenth Amendment to the Constitution.

No good deed goes unpunished.

Damned if Professors Josh Blackmun and Seth Barrett Tillman didn’t write their own 126-page magnum opus on why Trump remains eligible to run for the presidency despite Section 3 of the Fourteenth Amendment. So I read that one, too, to allow me to give you a sense of the arguments.

If anyone writes another 126-page article on this subject, count me out. I don’t have time for this.

Baude and Paulsen and Blackmun and Tillman disagree about damned near everything. But I’m going to focus on a single issue: When Trump was president, was he an “officer of the United States”? That’s the threshold requirement for Trump to be barred from running again.

Let’s start at the beginning. Section 3 of the Fourteenth Amendment bars folks from running for president (or other offices), if those folks engaged in insurrection:

having previously taken an oath as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States

Trump was never a member of Congress, a member of a state legislature, or an executive or judicial officer of a state. The question is whether Trump falls into the second category — when he served as president, did he serve as “an officer of the United States”? If Trump has previously served as “an officer of the United States,” then he’s arguably prohibited from running again for the presidency.

Baude and Paulsen devote just six of their 126 pages to explaining why one who serves as president serves as “an officer of the United States.” Basically, they say: (1) this is the straightforward reading of the text of Section 3, (2) Articles II (the president) and VI (other officers) of the Constitution require certain government officials to take oaths to support the Constitution; the disqualification provision of Section 3 of the Fourteenth Amendment should be read at least to disqualify those required to take oaths; and (3) Section 3’s intent was to be reasonably comprehensive in disqualifying insurrectionists from running for office.

Blackmun and Tillman respond: (1) there is contemporaneous evidence from the days after the Civil War that the people who drafted Section 3 did not believe that one who served as president served as an “officer of the United States”; (2) Section 3’s disqualification clause should apply only to oaths required by Article VI, not Article II, of the Constitution (for reasons that you can read on your own if you’re interested); and (3) multiple other provisions of the Constitution expressly exclude the president and vice president from the category “officers of the United States.”

These arguments are not silly. The Impeachment Clause of the Constitution, for example, says: “The President, Vice President and all civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.” That sure sounds as though the president and vice president are not included among the “civil officers of the United States.”

I’m not going to judge these arguments; that would require Herculean effort. But I will note that Northwestern Professor Steven Calabresi has changed his mind on this issue, first concluding that Baude and Paulsen had the better of the argument and, more recently, deciding that Blackmun and Tillman rule the day. I know that politicians will scream “politics!” no matter how the courts rule, but the truth is that there are intelligent (and hard) arguments on both sides of this issue.

A coda: Harvard Professor Lawrence Lessig recently wrote a column in Slate arguing that Section 3 should not be read to disqualify Trump. He fears that this would lead us down a slippery slope of trying to decide precisely what constitutes engaging in insurrection under the Constitution.

Again, this is not silly. Suppose Trump’s January 6 plot had succeeded. Pence had disqualified some ballots for Biden, instead counted the Trump ballots, and declared that Trump had been re-elected. Suppose that tens of thousands of Democrats then protested on the grounds of the Capitol. Some of those Democrats, including elected officials, engaged in illegal acts of civil disobedience to show their outrage. Would those Democratic elected officials have engaged in insurrection, disqualifying them from holding future office?

It can’t all depend on whose ox is gored. The law must mean something.

Politicians will squeal to serve their political ends. But intelligent, thoughtful people who care about the law will realize that the disqualification question is a hard and close one. There will be much more to come before the 2024 election.

Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at inhouse@abovethelaw.com.

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Hedge Funds Cut Stock Leverage at Fastest Pace Since 2020 Crash [Bloomberg]
Fast money investors increased their bearish wagers to drive down their net leverage — a gauge of risk appetite that measures long versus short positions — by 4.2 percentage points to 50.1%.... At the same time, short selling rose at hedge funds tracked by JPMorgan Chase & Co., while Morgan Stanley’s clients cut their net leverage at a pace not seen since last October.

Oil Near $90 as Scarce Supplies Vie With Buying Exhaustion [Bloomberg via Yahoo!]
Macro headwinds are capping gains. The dollar has surged to an eight-month high, diminishing the appeal of commodities priced in the currency, and rate-hike expectations are fueling risk-off sentiment across markets…. Traders are looking to China now for signs of surging demand as the world’s top oil importer gears up for the Golden Week holiday from Friday.

Home prices set record in July [Yahoo!]
The S&P CoreLogic Case-Shiller National Home Price Index in July increased 0.6% month over month and 1% over the last 12 months, on a seasonally adjusted basis…. "This recovery in home prices is broadly based," [S&P Dow Jones Indices managing director Craig] Lazzara said. "As was the case last month,10 of the 20 cities in our sample have reached all-time high levels. In July, prices rose in all 20 cities after seasonal adjustment (and in 19 of them before adjustment)."

Fixing China’s property sector could take years — if not a decade, says economist [CNBC]
“The Chinese urbanization process, which has been progressing very fast in the past 10 years, is coming to a halt,” [Grow Investment chief economist Hao] Hong added…. “There is now an oversupply of real estate... 1.4 billion people may not be able to live in them,” said He Keng, a former deputy head of China’s statistics bureau.

Biden will join the UAW strike picket line. Historians can’t recall any president doing that [AP]
Biden will be arriving one day before former President Donald Trump, the front-runner for the 2024 Republican nomination, goes to Detroit to hold his own event in an attempt to woo auto workers even though union leaders say he’s no ally…. Presidents historically “avoided direct participation in strikes. They saw themselves more as mediators. They did not see it as their place to directly intervene in a strike or in labor action.”

Senior Nomura Banker Charles Wang Zhonghe Can Move Freely in China. He Just Can’t Leave. [WSJ]
Charles Wang Zhonghe, the Hong Kong-based chairman of China investment banking at the Japanese firm, recently informed his employer that he can’t return to the Asian financial hub or go overseas, the people said. He is cooperating with an investigation by Chinese authorities, they added…. “China says they’re open for business, but it doesn’t feel like it for the employees of Astellas, Bain & Company, Mintz, Capvision, and now Nomura,” read a message from [U.S. ambassador to Japan Rahm] Emanuel’s official X account.

Cell therapies are already here, with treatments now available for some cancers and rare diseases. But bringing such living medicines to more patients presents both scientific and financial challenges. As cell therapy research moves from rare diseases to more prevalent conditions, these treatments will cost multiple millions of dollars per dose—costs that are unsustainable for the healthcare system, said Ryan Clarke, co-founder and CEO of startup Syntax Bio.

Many research efforts are underway with the shared goal of improving the way cell therapies are manufactured. Some of them focus on automating the process with robotics and software. Others apply gene-editing technologies to cells from donors to reduce the risk of an adverse immune response. Syntax works with induced pluripotent stem cells (iPSCs), which have the ability to become almost any type of cell. The startup applies CRISPR to guide iPSCs through various steps that lead them to become a desired cell type.

“This is completely a biological problem rather than a bioreactor problem,” Clarke said.

Chicago-based Syntax launched in 2021. In the two years since, the startup has refined its technology and shown it can turn iPSCs into four different cell types. The startup was named the winner in the biopharma track at the MedCity News INVEST conference in May. It continues to make progress with its technology and is now looking to raise $20 million in Series A financing.

Syntax’s platform technology has its roots at the University of Illinois Chicago, where Clarke’s research focused on transcription factors of genes that control what a stem cell becomes. After receiving his Ph.D., he took a job doing drug discovery research at Sana Biotechnology, a company developing new cell and gene therapies. Clarke said the experience exposed him to the state of the cell therapy field and the challenges of manufacturing various cell types. But he said he found himself wanting to commercialize the technology he had invented in graduate school.

There are two ways to make cell therapies from stem cells. In directed differentiation, iPSCs are grown in media that contain growth factors that direct the stem cells to become a particular cell type. The culturing media is changed over the course of this process, which can take 50 to 100 days depending on the desired cell type. Directed differentiation can be used to make any cell, but this method is slow, expensive, and difficult to scale, Clarke said. It’s acceptable for making cells for a small Phase 1 clinical trial. Beyond that, the manufacturing need becomes enormous, he said.

The alternative cell therapy manufacturing method is a synthetic biology approach that skips over the multiple steps of directed differentiation. Instead, transcription factors are used to turn iPSCs into the desired cell type. This method is faster, scalable, and less expensive, but it also has limitations. It only works for certain cell types, such as neurons, endothelial cells, and some liver cells. Furthermore, the intermediate steps that are skipped in favor of speed are important, according to Clarke.

Syntax designed its cell therapy technology to overcome limitations of both directed differentiation and synthetic biology. The company’s approach takes cells through the multi-step process of differentiation, more closely mimicking what happens in the body to direct iPSCs to become various cell types, Clarke said. Syntax’s process is regulated by episomal plasmids that the company calls cellular algorithms. These “Cellgorithms” (a term coined by Syntax) do not do any gene editing. Instead, they use CRISPR to turn certain genes on or off in a particular sequence in order to direct the iPSC to the final cell state. The process takes about a week. Clarke likens Syntax’s approach to a computer programmer writing a line of code to execute a task.

“We’re trying to write multiple lines of code,” he said. “CRISPR is the absolute best medium for that. Target it to any gene in genome, turn if on or off. It’s a very flexible tool to execute the programming.”

Research describing the first generation of the Cellgorithm system was published in 2021 in the journal Molecular Cell. That initial research paved the way for $9 million in seed financing, co-led by DCVC. Clarke said Syntax is now on the third generation of the technology, which is more efficient and modular. With the new round of financing that the company is raising, Clarke said Syntax aims to show that cells produced by its Cellgorithms work in lab tests. Next, the company will validate those cells in animal testing. The potential of the Syntax technology impressed the Pitch Perfect judges. Kelly Kaihara, director, life science tools and diagnostics, General Inception, called the Cellgorithm system a “paradigm-shifting moonshot method” that could revolutionize cell therapy manufacturing.

“It is exactly the type of idea and company that we are looking for,” he said. “One that makes a major technical leap forward but also provides a platform to address multiple human diseases.”

Syntax aims to take some cell therapies to human testing, potentially leading to partnerships with larger companies that can continue their clinical development, said Leo Kelly, the startup’s vice president of corporate strategy & ops. But another part of Syntax’s strategy is to work with entities throughout the cell therapy ecosystem—drugmakers that are developing cell therapies as well as contract research organizations and contract development manufacturing organizations. Kelly said Syntax can integrate its technology with that of another company, helping it manufacture cells at scale.

One of the cell types that Syntax has generated is a beta cell from the pancreas, which could become a type 1 diabetes cell therapy. Several other companies are further along with type 1 diabetes cell therapy research. Over the summer, CellTrans won the first FDA approval for a type 1 diabetes cell therapy. That Chicago company’s therapy, made from pancreatic cells sourced from deceased donors, requires chronic immunosuppression to prevent the patient’s immune system from destroying the transplanted cells. Vertex Pharmaceuticals has three type 1 diabetes programs, one of which is derived from iPSCs that are edited with CRISPR technology. Eli Lilly’s cell therapy contender also comes from iPSCs. But Kelly says that rather than being competitors, these companies could end up being Syntax customers in various therapeutic indications.

“We don’t need to beat Vertex,” he said. “We need Vertex, Lilly, and others to compete for who uses our manufacturing solution. That’s what we’re thinking about—make cells others can’t make because of the biological complexity.”

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McCarthy confronts key decisions as Congress hurtles toward government shutdown [CNN]
The last-minute scramble could have been avoided if the House and Senate stuck to an agreement in the debt ceiling reached in May between Republicans and the White House that set top-line spending numbers across the federal government. But House Republicans marked their bills up at far lower levels after a rebellion from conservatives…. A handful of House Republicans from swing districts are also looking at a potential long-shot procedural option, known as a discharge petition, that would go over McCarthy’s head to bring a bipartisan funding bill to the floor. But it’s a time-consuming maneuver and at this point couldn’t avert a shutdown – it could merely help get lawmakers out of one.

On Day 146, Screenwriters Reach Deal With Studios to End Their Strike [NYT]
Conspicuously not doing a victory lap was the Alliance of Motion Picture and Television Producers, which bargains on behalf of studios. “The W.G.A. and A.M.P.T.P. have reached a tentative agreement” was its only comment…. This month, Warner Bros. Discovery said that the dual strikes would reduce its adjusted earnings for the year by $300 million to $500 million. The stock prices for Disney, Warner Bros. Discovery and Paramount Global have taken a hit. Analysts have estimated that studios will forgo as much as $1.6 billion in global ticket sales for movies that were initially scheduled for release this fall but pushed to next year because of the actors’ strike.

Hellman & Friedman, Starboard score big wins in Splunk's $28 bln sale [Reuters via Yahoo!]
Hellman & Friedman spent $1.38 billion to acquire a 7.5% stake in Splunk according to a statement in March 2022. That translates as $116 per share and yields 35% return based Thursday's deal price of $157 per share…. Starboard… paid somewhere in the mid-$80s per share for its stake, according to people familiar with the matter, representing a close to 85% return.

Some Schwab Customers Say They Want Their TD Ameritrade App Back [WSJ]
“It’s just amazing how bad it is, the new app,” said Scott Hendison, 62, a Portland, Ore., resident who owns an internet marketing firm and had a retirement account with TD Ameritrade.

Italy waters down bank windfall tax [FT]
The latest amendments state that lenders will be able to opt out of the tax if they allocate 2.5 times the amount that would have been owed under the tax to strengthening their core tier one capital reserves. The amendment also caps the tax at 0.26 per cent of banks’ risk weighted assets instead of 0.1 per cent of total assets.

Crispin Odey Faces Lawsuit Over Sexual Misconduct Allegations [Bloomberg via Yahoo!]
Two former employees have submitted a civil claim against Odey Asset Management and the 64-year-old former executive, according to Jill Greenfield, a lawyer at Fieldfisher who is overseeing the claim….. Odey Asset Management was plunged into turmoil in recent months after the Financial Times published multiple allegations of sexual harassment and assault by Odey. Numerous banks have cut ties with his firm and investors have raced for the exits, forcing the company to shut funds and suspend several others.

In financial industry legal news this week, it’s been (almost) all about artificial intelligence, the frenzy for which has reignited the initial public offering market.

All three of the big recent debutantes are, in their way, AI plays, none more so than chip designer Arm, which raised nearly $5 billion in the biggest stock-market debut since late 2021.

Machine-learning madness hasn’t just revived interest in tech IPOs, which have been on ice for two years, but new listings generally — perhaps, anyway.

Less welcome is the taxman’s investment in AI, with the Internal Revenue Service planning to sic its fancy new computers on partnerships, using them to pick 75 unlucky hedge funds, real-estate partnerships, and law firms, among others, for some unwanted extra scrutiny.

That comes as AI’s brain trust spent a few days in Washington promising to brush their teeth and eat their vegetables, while also trying to mold the coming regulatory crackdown to their liking, even as generative AI arrives on Wall Street and on lawyers’ desks.

Subscribe to Finance Docket to read this week’s full newsletter.

It includes our detailed look at the IPO frenzy, along with our deep dive on the war between AMC Entertainment’s APEs and apes, and of course our coverage of all things AI.

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Hard-right Republicans push closer to a disruptive federal shutdown [AP]
The White House will tell federal agencies on Friday to prepare for a shutdown…. The open revolt was further evidence that McCarthy’s strategy of repeatedly giving in to the conservatives is seemingly only emboldening them, allowing them to run roughshod over their own House majority.

Higher-for-Longer Interest Rates Threaten Fintech [WSJ]
High rates are a threat to fintechs for two main reasons. The rate increases are meant to slow down the economy, which is putting pressure on consumers—especially those at the margins who are often more likely to seek out a fintech lender instead of a bank. What’s more, the companies’ own borrowing costs are rising as broader rates increase, squeezing their margins and threatening to put smaller players out of business.

Potential Bids for U.S. Steel Keep Getting Weirder [Barron’s]
U.S. Steel is much larger than Stelco. The Canadian steel maker shipped about 2.6 million tons of steel in 2022, while U.S. Steel shipped about 15 million. Stelco’s enterprise value, including stock and debt, is about $1 billion. U.S. Steel’s is about $9 billion…. The possible bid is surprising in another way, too. Stelco was actually once owned by U.S. Steel. The American firm bought it 2007 after Stelco filed for bankruptcy protection. Stelco filed for bankruptcy again in 2014….

Top New York State Crypto Regulator to Depart [WSJ]
Peter Marton, who joined the New York financial regulator in late 2021 as the deputy superintendent of virtual currency, will depart at the end of the month. Marton will move to the private sector to work at an entity not regulated by the NYDFS…. Marton’s departure from the agency comes as the New York regulator continues to expand its influence in regulating crypto.

CFTC Rejects Bid to Launch Political Election-Betting Market [WSJ]
Critics of Kalshi’s plan have worried that giving citizens a financial incentive to cast their votes for certain candidates would fundamentally warp elections, and they feared the markets could be manipulated by political insiders.
CFTC Chair Rostin Behnam said Friday the contracts Kalshi sought to list would have turned the agency into an “election cop,” given its duty to police fraud in manipulation in markets subject to its oversight.

David McCormick Says He Lives in Pennsylvania. Flight Records Appear to Tell a Different Story [Vanity Fair]
On Monday morning, one of those planes flew from Bridgeport, Connecticut, to Harrisburg, Pennsylvania, where McCormick visited the state capitol…. After a few hours of glad-handing, the same plane took off from Harrisburg back to Bridgeport. Per Flightradar24 data provided to Vanity Fair, on August 9, another plane operated by PlaneSense flew from Bridgeport to Allegheny County, where McCormick attended a local Republican function the following day. Three days later, another PlaneSense plane flew from Allegheny County to Bridgeport….

On Monday, President Joe Biden’s son Hunter Biden filed a federal lawsuit against the IRS. This comes soon after being indicted on gun charges after a possible plea deal fell apart.

The complaint alleges that IRS agents Gary Shapley and Joseph Ziegler and their attorneys illegally disclosed the younger Biden’s private tax information to the public between April and August 2023.

Shapley’s legal team issued a statement saying that they never released any confidential taxpayer information except through whistleblower disclosures authorized by statute. They also stated that when Congress released Shapley’s previously confidential testimony to the public, he had a right to discuss that public information.

On May 26, 2023, the House Ways and Means Committee secretly interviewed Shapley. He told the committee that he was part of a special investigation of Hunter Biden who was code named “Sportsman.” He testified that Hunter Biden’s case was handled differently than any investigation he handled during his 14-year career with the IRS. Actions included slow-walking investigative steps, not allowing enforcement actions to be executed, limiting investigators’ line of questioning for witnesses, misleading investigators on charging authority, and delaying any and all actions months before elections.

At the beginning of the hearing, the committee counsel advised Shapley that the information discussed is confidential. He told Shapley that Section 7213 of the Internal Revenue Code makes it unlawful to make unauthorized disclosures of tax returns and return information. The committee counsel advised Shapley not to speak about what was discussed to individuals not designated to receive such information.

On June 22, 2023, the Ways and Means Committee released the transcript of the confidential hearing to the public on its website.

Hunter Biden’s complaint stated that Shapley violated confidentiality by talking to the press on multiple occasions. I was able to verify one interview Shapley did with CBS News on May 24, 2023, which was before the hearing transcript was released to the public.

Section 6103(a) of the Internal Revenue Code generally prohibits IRS employees from disclosing a taxpayers’s tax return or return information to the public unless an exception applies. “Return information” means a taxpayer’s identity, financial information such as income, deductions, tax liabilities and payments, and whether the taxpayer’s return will be audited or subject to other investigations.

So what is the whistleblower law they are referring to? According to the IRS website, Section 6103(h)(4) authorizes the disclosure of tax returns and return information in administrative or judicial proceedings pertaining to whistleblowers. Also, Section 6013(f)(5) (Disclosure By Whistleblower) states that any person who has access to a tax return or return information can disclose it to the House Ways and Means Committee if the information may relate to possible misconduct, maladministration, or taxpayer abuse.

Generally, the Ways and Means Committee can release tax information to the public. A few years ago, the committee released former President Donald Trump’s tax returns to the public.

The judge will have to decide whether Shapley’s, Ziegler’s, and their lawyers’ public statements on the Hunter Biden investigation, particularly the ones made before the hearing transcript was made public, violated tax return confidentiality laws.

Hunter Biden’s complaint demands damages, costs and attorney’s fees, a declaration that the IRS unlawfully disclosed his tax information, and ordering the IRS to implement a data security plan.

The IRS has issued no comment on the litigation. Probably because doing so could also violate confidentiality.

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at stevenchungatl@gmail.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

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Large mergers and acquisitions gain attention, both in the media and with the Federal Trade Commission (FTC). But the FTC doesn’t get pinged about every deal, particularly when it comes to smaller deals, said Lina Khan, chair of the FTC, on Monday. Specifically, the dollar threshold for a deal has to be above $100-110 million for the FTC to get notified.

This can lead to problems in some markets, such as the dialysis or medical device market.

“We have in certain instances just seen blind spots where we’ve seen a whole set of deals that are below our radar that are kind of slowly and incrementally consolidating a market and then five years in, 10 years in, you have two or three players that have come to dominate,” Khan said during a fireside chat at the Oliver Wyman Health Innovation Summit 2023 held Monday in Chicago.

These challenges are “top of mind” for the FTC, Khan added. In June, the agency proposed changes to the Hart-Scott-Rodino Form (HSR Form), which is a premerger notification form. The changes would include requiring companies to provide details about the rationale of their deal, their projected revenue streams and previous acquisitions.

“This is the form that companies fill out when they’re seeking to propose a deal that is above the threshold. That form would — in the proposed version we put out — actually seek information about prior deals, including ones that were below the radar, because I think we similarly are worried about some of the gaps,” Khan said.

She also noted a report the FTC did a couple of years ago that examined the acquisitions that were done below the agency’s radar in the tech space.

“There were somewhere between 800 deals by the top five tech companies that were just totally out of sight for us,” Khan stated. “That was an instructive experience for us as well in terms of eliminating some of the blind spots. So it’s definitely a challenge and we sometimes do retrospective studies or other types of research to try to understand where might some of those blind spots be. It’s also something that Congress is looking at in terms of potential legislation.”

In addition to discussing the problem of smaller deals, Khan touched on other areas the FTC is focusing on. This includes investigating the practices of pharmacy benefit managers (PBMs).

“We’ve been hearing a lot from patients as well as from pharmacies about how some of the practices between PBMs and drug manufacturers may be distorting what medicines Americans can get access to, maybe squeezing pharmacies,” Khan said.

The agency also recently proposed a rule that would eliminate non-compete clauses in employment contracts. The FTC received more than 20,000 comments on the proposed rule, many of which came from healthcare workers, Khan said.

Another priority for the FTC is consumer protection, such as issues around data privacy.

“One concern that the FTC has is that some of the data that’s being collected by these health apps is not fully protecting people’s privacy,” Khan said. “So some of the enforcement actions that we’ve brought have been designed to make sure that if companies are collecting people’s sensitive health data for the purpose of providing them health services, they’re not then quietly turning around and monetizing that data through providing ads.”

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Rudy Giuliani has been in quite a bit of legal hot water of late, and this week America’s Mayor got one more headache in the form of a collections suit filed by his former lawyer Robert Costello seeking almost $1.4 million in unpaid bills.

Giuliani more or less ruined himself through his association with Donald Trump, who famously stiffed him on the bill for his services. (In fairness to Trump, Giuliani steered him into not one, but two impeachments.) But in his own way, Costello, a partner at Davidoff Hutcher & Citron LLP, has also tied his fortunes to the former president.

Costello played a crucial role in publicizing Hunter Biden’s “laptop”; he reportedly dangled a pardon to Michael Cohen during the Mueller investigation; and, in a failed attempt to head off an indictment of Trump for making false business records, he testified in March to a grand jury in New York that his former client was an untrustworthy scoundrel. He also counseled Steve Bannon that it was very cool and very legal for him to ignore a subpoena from the January 6 Select Committee, netting his client a conviction for contempt of Congress and making himself the subject of a communications warrant after making some perhaps exaggerated claims to the FBI.

As for Giuliani, this collections suit is hardly his most pressing legal problem, as the complaint lays out in excruciating detail:

The legal services included, but were not limited to representing the Defendant while he was being criminally investigated by the U.S. Attorney for the Southern District of New York, representing the Defendant during a pending criminal investigation in Georgia by the Fulton County District Attorney’s Office, representing the Defendant during a pending criminal investigation by Special Counsel Jack Smith regarding the January 6th attack on the U.S. Capitol, and representing the Defendant during a pending investigation by the U.S. House Select Committee to Investigate the January 6th Attack on the United States Capitol. The Defendant also directed Plaintiffs to supervise more than ten civil lawsuits filed against the Defendant that were commenced in various state and federal courts as well as participating in representing the Defendant in disciplinary proceedings regarding his law license in the District of Columbia and the First Department of New York.

Giuliani recently defaulted in a defamation suit brought by Georgia poll workers Ruby Freeman and Shaye Moss, whom he accused of tabulating thousands of fraudulent ballots. Judge Beryl Howell issued the “death penalty sanctions” after Giuliani spent years refusing to comply with discovery, in part because he was so deeply in hock to his discovery vendor that it wouldn’t release his communications. But Giuliani was willing to admit to the allegations — sort of — rather than disclose his finances.

It’s not the first rodeo for Costello and Davidoff either, who recently sued Bannon for failing to pay almost $500,000 in legal fees. In fact, the lawsuits against Bannon and Giuliani are more or less identical, as well as being signed by the same Davidoff associate. The New York state court granted summary judgment in favor of Davidoff and Costello in August.

Giuliani, who recently put his New York apartment on the market, would appear to be more or less judgment-proof. He’s also barred from the practice of law, and currently earns his living as a podcaster and Cameo performer. So perhaps it’s wise that Davidoff is getting its claim in before any jury starts totting up the damages in the complaints brought by Freeman/Moss, Dominion Voting Systems, its competitor Smartmatic, and Giuliani’s former lover/employee Noelle Dunphy.

According to Insider, which first flagged the suit, Giuliani and Costello have been friends for decades, going back to their time as line prosecutors in the Southern District of New York. But it seems like that friendship has now run its course.

“I can’t express how personally hurt I am by what Bob Costello has done,” Giuliani told Insider. “It’s a real shame when lawyers do things like this, and all I will say is that their bill is way in excess to anything approaching legitimate fees.”

Ah, well. Trump stiffs Rudy, Rudy stiffs Bob, it’s the circle of life … at least in MAGAworld.

Rudy Giuliani’s ex-lawyers sue him for the $1.4 million they say he owes for defending him in election interference investigations [Insider]

Liz Dye lives in Baltimore where she writes about law and politics and appears on the Opening Arguments podcast.

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Instacart prices IPO at $30 a share, valuing grocery-delivery company at about $10 billion [CNBC]
[Instacart is] the first notable venture-backed tech company to hit the U.S. public market since December 2021…. The stock is set to debut on the Nasdaq Stock Market on Tuesday under ticker symbol “CART….”
In early 2021, at the height of the Covid pandemic, Instacart raised money at a $39 billion valuation, or $125 a share, from prominent venture firms like Sequoia Capital and Andreessen Horowitz, along with big asset managers Fidelity and T. Rowe Price.

FTX sues Sam Bankman-Fried’s parents over millions in ‘misappropriated’ funds [CNN]
Joe Bankman and Barbara Fried, both tenured Stanford law professors, either knew “or ignored bright red flags” that indicated their son and his business partners were “orchestrating a vast fraudulent scheme,” according to the lawsuit…. The lawsuit against Bankman and Fried, filed late Monday, claims that Bankman and Fried discussed with their son transferring a $10 million cash gift and a $16.4 million luxury property in the Bahamas even as the company was on the verge of insolvency.

Wall Street’s Fed Watchers Brace for ‘Higher-for-Longer’ [DealBook]
With Brent crude hitting a 10-month high of more than $95 a barrel on Tuesday morning, however, fears on inflation still loom large. Investors on both sides of the Atlantic dumped bonds on Monday, with yields on a 10-year inflation-adjusted Treasury note hitting a 14-year high on fears that the Fed would stay hawkish on interest rates…. Wall Street sees the Fed cutting rates next year as inflation gradually recedes. But economists believe the prime lending rate will remain close to 5 percent at the end of next year.

Square CEO Alyssa Henry is stepping down, and Jack Dorsey will take over for now [CNN]
Dorsey, whose current title is Block Head and Chairperson, will take on an additional role of “Square Head,” the filing added.

Elon Musk says users will soon have to pay for X in effort to stop bots [N.Y. Post]
The world’s richest man revealed the plan late Monday during a livestreamed chat with Israeli Prime Minister Benjamin Netanyahu in which he was asked how he plans to deal with the large armies of bots that amplify hate speech…. “Basically he’s saying, ‘If I had to pay too much for Twitter you do too,’” journalist Kara Swisher tweeted upon hearing the news.

Billionaire Ken Griffin, former DeSantis donor, on sidelines for GOP presidential primary [CNBC]
“I don’t know his strategy,” Griffin said, referring to DeSantis’ 2024 campaign. “It’s not clear to me what voter base he is intending to appeal to….”
“The ongoing battle with Disney, I think, is pointless,” said Griffin. “It doesn’t reflect well on the ethos of Florida.”

So, we’ve been talking a lot about age verification of late, as governments around the world have all (with the exception of Australia?!?) seemed to settle on that as a solution to “the problem” of the internet (exactly what that problem is they cannot quite identify, but they’re pretty sure there is one). Of course, as we’ve explained time and time again, age verification creates all sorts of problems, including undermining both privacy and speech rights.

That’s why it was little surprise to us (though we warned the politicians pushing these bills) that a series of age verification bills have recently been found to be easily and clearly unconstitutional under the 1st Amendment. And it seems likely that other such bills will soon meet a similar fate.

David French, who recently became a NY Times columnist and is a long term free speech defender/constitutional litigator, has apparently chosen as his weird hill to die on, that the 1st Amendment should not stop age verification laws. While there are many, many things that I disagree with French on, historically, he’s been pretty good on internet speech issues. So it’s a little weird that he’s so focused on undermining the 1st Amendment over his own views regarding adult content.

Before the recent set of rulings reaffirming that these laws violate the 1st Amendment, French had suggested that age verification laws around adult content should be found to be constitutional. But, now that multiple courts have ruled otherwise, French took to the pages of the NY Times to argue that courts are misreading longstanding 1st Amendment precedents and that we should be able to mandate age verification and legally block kids from seeing adult content online.

So why not bring our offline doctrines to the online world? If we can impose age limits and age verification offline, we can online as well. If we can zone adult establishments away from kids offline, we can online as well. And if we do these things, we can improve the virtual world for our children without violating the fundamental rights of adults.

The underlying argument is that the precedential rulings in Reno v. ACLU and Ashcroft v. ACLU (the cases that killed as unconstitutional two earlier attempts to lock up the internet for kids: the Communications Decency Act and the Child Online Protection Act) were narrower than everyone believes, and were based on the state of technology at the time, rather than where it is today:

Our nation tried this before. In 1996, Congress passed the Communications Decency Act, which — among other things — criminalized the “knowing” transmission of “obscene or indecent” material online to minors. In 1997, however, the Supreme Court struck down the act’s age limits in Reno v. A.C.L.U., relying in part on a lower court finding that there “is no effective way to determine the identity or the age of a user who is accessing material through email, mail exploders, newsgroups or chat rooms.”

The entire opinion is like opening an internet time capsule. The virtual world was so new that the court spent a considerable amount of time explaining what the World Wide Web — when was the last time you heard that phrase? — even was. The internet was so new and the technology so comparatively primitive that the high court, citing a U.S. District Court finding, observed in its opinion that “credit card verification was ‘effectively unavailable to a substantial number of internet content providers.’”

Indeed, critical to the Supreme Court’s opinion was the lower court’s finding “that at the time of trial existing technology did not include any effective method for a sender to prevent minors from obtaining access to its communications on the internet without also denying access to adults.”

In 1998, Congress tried again, passing the Child Online Protection Act, but in 2004 a closely divided Supreme Court blocked enforcement. Its decision was based in part on the naïve belief that blocking and filtering technologies were “less restrictive alternatives” to the law. But time has demonstrated that blocking and filtering aren’t “less restrictive”; they’re wholly inadequate.

As French concludes, with more modern age verification technology, those precedents suggest that if the tech is better, than the concerns in those cases no longer apply, and the laws can be constitutional:

Thus, our nation’s challenge is more technical than constitutional. The best way to understand the court’s old precedents regarding online age verification to get access to pornography is not that it said “no” but rather that it said “not yet.” But now is the time, the need is clear, and the technology is ready. Congress should try once again to clean up the internet the way cities cleaned up their red-light districts. The law must do what it can to restrict access to pornography for children online.

There’s just one of (actually) many problems with this. It’s not true. It’s not true that the earlier precedents were that limited, and it’s not true that today’s “technology is ready.”

Thankfully, 1st Amendment lawyer Ari Cohn has a pretty thorough response to French that is mandatory reading if you found French’s argument compelling.

The 1st Amendment, and the key precedents around it, are not nearly as malleable as French believes, Cohn notes.

French’s thesis can be distilled to two basic arguments: first, there is no constitutional right to “convenient pornography, and second, that established precedent declaring government-mandated age verification unconstitutional is “outdated.” And so, he concludes, the problem is “more technical than constitutional.” But those arguments, and his conclusion, couldn’t be farther from the truth.

Reducing the controversy to one about “convenient pornography” grossly minimizes the First Amendment issues at stake. Like it or not, pornography—and adults’ ability to access it—is constitutionally protected. So despite this attempt to otherize it, what we are talking about is speech. And speech does not become any less speech merely because some people find it “icky” or morally questionable.

The key bit, and perhaps the most important part, is that French’s claim of moving “offline doctrines” into the “online world,” seems to involve him misunderstanding “offline doctrines.”

French points to “ID requirements for strip clubs and other adult establishments,” arguing that we already require some loss of anonymity to access adult materials offline. Maybe so. But first, few if any laws explicitly require checking IDs—establishments do so voluntarily to avoid potential liability from providing entrance or materials to minors.

More importantly, there is a world of difference between a quick glance at an ID to check date of birth, and uploading identity documents to the internet that create a record of a user’s access.

Online data about us is collected, stored, shared, sold, and used at a galactic level. If anything, the chilling effect of age verification is significantly worse than it was 20 years ago. The effect of creating that kind of digital trail is several orders of magnitude greater than handing over an ID to a bouncer or store clerk—who likely could not remember your name seconds after handing it back.

Comparison of those two drastically different scenarios is reminiscent of the government’s argument in the door-to-door canvassing case: that canvassers necessarily reveal part of their identity by simply showing up at someone’s doorstep, perhaps someone who already knows them. The Supreme Court forcefully rejected that argument, finding that it did not mitigate the constitutional concerns.

Furthermore, in the few cases French can point to where “offline doctrine” has limited children’s access to adult content, as Cohn notes, those laws don’t chill 1st Amendment rights:

… having to travel a little farther to reach a business does not chill a patron’s First Amendment rights; compelling adults to sacrifice their anonymity before accessing disfavored content plainly does.

As for the ruling in Reno that French suggests is obsolete? Cohn points out that French is really annoyed about the facts, not the legal standards:

The principles laid out in Reno remain sound: the First Amendment protects online speech the same as offline speech, and any content-based restrictions must satisfy strict scrutiny—that is, the law must be narrowly tailored to serve a compelling government interest, and must be the least restrictive means of accomplishing the government’s goal. Far from being outdated, this remains the analytical approach the court uses to assess any content-based speech regulation.

French’s real issue is with the facts and evidence presented in Reno. But Reno has never precluded arguing that new facts and circumstances militate a different outcome; it simply held that on the record before the court, the law was unconstitutional. The question is not whether Reno should be revisited, but rather whether these new laws, under new facts, can satisfy the relatively routine constitutional analysis that the Reno court applied.

As for the idea that modern credit card technology changes the ballgame by making age verification effective, Cohn breaks that down as well:

French argues that because “secure credit card use and age verification are practically ubiquitous,” we have evolved past Reno’s assessment that credit card verification is “effectively unavailable.” In doing so, he misses the true meaning of “effectively unavailable.” Reno, and thecases that followed, found that credit card age verification failed to render the law “narrowly tailored” because it doesn’t actually verify age.

And nothing has changed in that respect. Neither entering a credit card nor uploading a picture of an ID actually verifies that it is that person who has provided the identity information. It’s just as easy to borrow an older sibling’s ID as it is to borrow a parent’s credit card. And while there are new forms of age verification that utilize selfies or video, a quick Google search turns up countless pages on fooling such systems using free, easy-to-use software. Whatever the advances in technology since 2008, they have not yet solved this fatal problem.

Reno and its progeny also held that parental controls and content filtering were less restrictive alternatives than age verification. French argues that we have now learned they are “wholly inadequate.”

But is that so? French doesn’t provide a basis for this claim.

And, in fact, Judge Ezra noted that Texas’ own studies tended to show that content filtering and parental controls would be more effective, and better tailored, than age verification.

Perhaps French believes such measures are inadequate because parents lack the knowledge and ability to implement them. But that does not allow the government to sidestep them as a less restrictive means: “A court should not assume a plausible, less restrictive alternative would be ineffective; and a court should not presume parents, given full information, will fail to act.”

There’s a lot more in Cohn’s analysis, but it saves me from having to do a similar breakdown myself.

The 1st Amendment still applies, and as courts in Texas and Arkansas (and hopefully soon in California) have rightly found, these laws do not get anywhere close to passing the standards required to get around the 1st Amendment.

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Why a Soft Landing Could Prove Elusive [WSJ]
The goal faces four threats: the Fed holds rates too high for too long, economic growth accelerates, energy prices rise or a financial crisis erupts…. Once the economy is operating with little or no slack, anything that boosts demand could stoke inflation. Meanwhile, anything that lowers demand could send the unemployment rate rising, a process that is hard to stop once it starts, said [BCA Research chief global strategist Peter] Berezin. He expects a recession in the second half of next year.

Klaviyo raises IPO price range, aiming for $9 billion valuation [CNBC]
The marketing automation company estimated in the filing that its IPO price will fall between $27 and $29, up from the $25 to $27 range it previously estimated.

Instacart IPO Is an Expensive Lesson for Venture Firms [WSJ]
The grocery-delivery firm is targeting a valuation of as much as $10 billion—sharply lower than the $39 billion valuation it reached at the peak of the startup funding frenzy two years ago. Many of the investors who poured almost $1 billion into Instacart’s last three funding rounds will be underwater on those shares…. Investors who bought in 2015, when Instacart raised its third funding round, or later would have made more by investing in the Nasdaq Composite Index over the same period.

Calpers Is Losing Its Investment Chief—Again [WSJ]
[Nicole] Musicco is the latest in a string of top officials to leave Calpers, which for years has dealt with significant turnover. The fund went through six investment chiefs in two decades before Musicco took the job in March 2022…. The team in charge of Calpers’ private-equity holdings, the retirement system’s highest-returning asset class and a linchpin in its plan to close its funding gap, has also dealt with turnover. The program got a new leader in October after the previous head left after three years. Before that, the office had gone more than two years without a permanent chief.

Morgan Stanley kicks off generative AI era on Wall Street with assistant for financial advisors [CNBC]
“Financial advisors will always be the center of Morgan Stanley wealth management’s universe,” Morgan Stanley co-President Andy Saperstein said in the memo. “We also believe that generative AI will revolutionize client interactions, bring new efficiencies to advisor practices, and ultimately help free up time to do what you do best: serve your clients.”
Morgan Stanley, a top investment bank and wealth management juggernaut, made waves in March when it announced that it had been working on an assistant based on OpenAI’s GPT-4.

You Might Be Paying Too Much for That Index Fund [WSJ]
The arrival of a 0.02% fund fee—about as close to zero as many in the market expect major funds to get—is the culmination of a decadeslong fee war among asset managers…. An individual investor can now build a fully balanced portfolio using ETFs without paying more than 0.05% in total fees, said Susan Thompson, head of SPDR Americas distribution at State Street, compared with around a 1% average fee 20 years ago….
“I think we’re getting pretty close to the end. If someone goes to zero, then they’re doing it as a loss leader,” Thompson said.

Venture capital funding for healthcare IT companies — those selling enterprise software to providers and payers — is slowly picking back up after its low point in the fourth quarter of 2022, according to a new report from Pitchbook.

Healthcare IT companies’ venture fundraising total was $1 billion in the second quarter of this year, down slightly from the $1.3 billion raised in the first quarter. But the second quarter’s funding total was still significantly higher than the mere $451.3 million raised during the fourth quarter of last year.

One explanation for the increasing investment in health IT is that health systems’ finances are slowly moving out of crisis mode, the report said. Last year was hospitals’ worst financial year in decades, but staff turnover and inflation have been decreasing slightly in recent months. Kaufman Hall’s hospital operating margin index was 1.3% as of July, remaining in positive territory for the fifth month in a row.

Now that hospitals have a little more room to breathe, healthcare leaders are seeking to boost efficiency by investing in new technology, the report pointed out. Unsurprisingly, a lot of these efforts are focused on generative AI — more than a quarter of the second quarter’s recorded deal value in the healthcare IT sector went to companies offering generative AI products.

The biggest round raised by a generative AI-focused healthcare IT company in the second quarter was Hippocratic AI’s $50 million seed round in May. The startup, which bills itself as the first large language model designed specifically for healthcare, went on to raise another $15 million in July. Another notable deal was Hyro’s $20 million Series B round. The startup sells a conversational AI platform used by providers including Intermountain Healthcare, Mercy Health, Novant Health, Hackensack Meridian Health, Weill Cornell Medicine and Hospital for Special Surgery.

Even though the excitement around generative AI remains high, the industry is still exceedingly cautious about deploying this technology for clinical decision support or other functions that necessitate medical discretion, such as prior authorization review, the report noted. The industry is focusing on how generative AI can boost providers’ efficiency, capacity and job satisfaction, as well as improve patient experiences, for the time being, the report said.

In addition to the hype surrounding generative AI, regulatory and reimbursement trends are also influencing healthcare IT investments. In the past couple years, CMS has introduced new codes for remote patient monitoring and expanded the range of practitioners allowed to provide this type of care. This has led to a larger influx of dollars flowing to startups specializing in remote patient monitoring, the report declared.

HealthSnap, a platform for chronic care virtual management and remote patient monitoring, completed a $9.1 million Series A round in May. Additionally, Optimize Health snagged $6 million in a Series B round in the second quarter. The company offers a remote patient monitoring and care coordination platform focused on the ambulatory market.

The report predicted that commercial payers — and later CMS — will scale back reimbursement for remote patient monitoring programs that fail to demonstrate their ability to improve patient outcomes. Because of this, startups in the remote patient monitoring space should prioritize the generation of actionable insights via seamless user experiences, Pitchbook’s analysts recommended.

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Instacart Set to Raise IPO Price Target After Successful Arm Debut [WSJ]
The grocery-delivery company now is expected to sell shares for $28 to $30 apiece…. At the high end of the new range, Instacart would be valued at nearly $10 billion on a fully diluted basis…. The latest valuation range is still a large step down from the $39 billion it commanded in a fundraising round in 2021, before investor interest in startups took a big hit.

Arm Already Looks Stretched [WSJ]
A doubling of market value over seven years might look reasonable at first glance…. But… the company reportedly told prospective investors during its IPO roadshow meetings that it expects revenue to grow 11% in the current fiscal year ending in March and in the mid-20% range the following year. That implies total revenue reaching about $3.7 billion in fiscal 2025. The stock’s closing price Thursday represents a multiple of nearly 18 times that projection based on Arm’s current diluted share count.
That is generous, to say the least.

Citigroup’s Europe Boss Departs Amid CEO Fraser’s Sweeping Overhaul [Bloomberg]
Citigroup employees are bracing for a wave of job cuts…. [Kristine] Braden, 49, joined Citigroup in the 1990s and held various roles in Asia and Europe before becoming chief of staff to Fraser’s predecessor, Michael Corbat in 2018. Then she became the head of the Europe cluster in early 2020….

‘One of the Most Hated People in the World’: Sam Bankman-Fried’s 250 Pages of Justifications [NYT]
“I’m broke and wearing an ankle monitor and one of the most hated people in the world,” he wrote. “There will probably never be anything I can do to make my lifetime impact net positive….”
After Mr. Bankman-Fried was arrested, charged with fraud over FTX’s collapse and placed in home detention in December, he wrote hundreds of pages of sometimes rambling self-justifications, ranging from childhood memories to mathematical calculations.

Ex-Celsius crypto lender exec Cohen-Pavon pleads guilty, will cooperate with US probe [Reuters]
Cohen-Pavon, Celsius' former chief revenue officer, admitted to four charges, including manipulating the price of the exchange's crypto token Cel…. The defendant and [founder Alex] Mashinsky had each been charged in July with market manipulation and wire fraud for artificially inflating Cel's value and cashing out their personal holdings prior to Celsius' July 2022 collapse.

Former Wells Fargo Executive Might Face Prison Time in Fake Accounts Scandal [WSJ]
[Carrie] Tolstedt’s lawyers have asked for three years probation, while Justice Department lawyers have asked that she serve one year…. She pleaded guilty in March to the charge that she stood in the way of the OCC’s investigation into sales practices when she contributed to a memo on the topic in May 2015. 

Thankfully, most of us have not had to think about Jared Kushner much over the past couple years. I’ll refresh your memory in case you’re lucky enough to have forgotten the essential details of his foray into federal leadership.

Jared Kushner is Donald Trump’s son-in-law (married to Ivanka). As a senior aide in the Trump administration without any previous government experience, Jared Kushner was tasked with a ridiculously ambitious portfolio that included, among other things, achieving peace in the Middle East. He’s now abusing the clout and connections he gained as a nepotism hire in the Trump administration to funnel billions into his new private equity fund.

While we all have the distinctly American misfortune of having to live in a country where “Jared Kushner” has become a household name, “Charles Kushner” is likely to draw a blank stare even from fairly well-informed voters. There is just too much political news to keep up on. That being said, Charles Kushner just did something fairly noteworthy for those of us concerned with keeping this whole democracy thing intact.

Charles Kushner is Jared Kushner’s father. Prosecuted by none other than GOP presidential hopeful Chris Christie, Charles Kushner went to prison some years back after pleading guilty to an array of crimes, from assisting in the filing of false tax returns to making false statements to the Federal Election Commission. One of the more salacious things Charles Kushner admitted to was retaliating against a cooperating witness — his own sister — by hiring a prostitute to seduce and have sex with her husband. Charles Kushner had this sexual encounter recorded, then sent the videotape to his sister. So, you know, not exactly sibling of the year.

In addition to serving his time, Charles Kushner certainly suffered some personal embarrassments as a result of his crimes. For instance, he had been licensed to practice law in multiple jurisdictions, then was disbarred when he became a convicted felon. Despite the blows to his pride, Kushner’s extremely successful real estate business, Kushner Companies, hardly missed a beat. Kushner Companies was making billion-dollar deals just months after its founder stopped wearing a compulsory jumpsuit.

As part of a bevy of controversial pardons issued days before he sent a mob of lunatics to storm the U.S. Capitol, Donald Trump gave Charles Kushner a full pardon. Though good taste and a rational electorate helped prevent previous presidents from doing something as crass as pardoning their son-in-law’s felon father, such things have never been a concern to Donald Trump.

As if this pardon wasn’t gross enough when it was issued, Charles Kushner just did something that propelled it from a run-of-the-mill Trump-style abuse of power to outright bribery in everything but name. At a time when Donald Trump’s campaign is bleeding cash to pay legal fees, Kushner made a $1 million donation to Trump’s leading super PAC.

There might not be any law directly prohibiting the recipient of a pardon from making a huge political contribution to benefit the politician who issued the pardon. It could be argued that since technically, and theoretically, a super PAC is not directly controlled by the candidate himself, a donation to that isn’t the same as scratching the back of the person who pardoned you. But come on. The message here is clear. This sort of horseshit is the reason only about one in five Americans trust the government in Washington to mostly do the right thing.

The Constitution itself provides scant guidance on what limitations, if any, should be imposed on the president’s pardon power. Seemingly, though, a less legally thorny issue would be limitations on the political contributions of pardon recipients. I get that, according to a recurringly befuddled and hopelessly partisan Supreme Court, money is speech and corporations are people. But wouldn’t banning pardon recipients from contributing to the campaigns of and super PACs supporting the candidate who pardoned them be an acceptable limitation on moneyspeech?

To anyone who is not a legal gymnast or a fervent partisan, giving a million bucks to the super PAC of the person who pardoned you looks an awful lot like paying for a pardon. Though the people involved here are smart enough not to have left a paper trail showing an overt quid pro quo, the subtext is inescapably clear to anyone else who would like to purchase a pardon in the future. It’s not good to allow this sort of thing to continue unabated.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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Arm prices IPO at $51 per share, valuing company at over $54 billion [CNBC]
The offering is at the top of Arm’s expected price range of $47 to $51…. Arm is riding the wave of excitement around artificial intelligence as it aims to crack open the tech IPO market after a nearly two-year pause. It’s set to be the biggest technology offering of the year.

The European Central Bank takes rates to a record high and signals the end of hikes [CNN]
The central bank has now raised its main interest rate at 10 consecutive meetings, taking it to the highest level since the launch of the euro currency in 1999…. High inflation and the interest rate hikes needed to curb it are also likely to weigh on growth in coming months, according to the European Commission. On Monday, the EU’s executive arm downgraded its economic forecasts for this year and next, citing those two factors. It now expects the EU economy to grow 0.8% in 2023.

Private funds prepare to spend billions on compliance after SEC rule [FT]
“This is something keeping general counsels up at night. Private funds’ legal teams are very thinly staffed,” said Allison Rosner of recruiters Major, Lindsey and Africa. She said she had heard from several general counsels: “I need a clone or a mini-me.”

Most Descendants of Tiger Management Are Far From Recovering Their High Water Marks [II]
Most of the major Tiger-related hedge funds in August continued to tack on another point or two to their long-short performance.

$20 Million Fund Gives Investors a Taste of Soaring Market for Rare Whiskies and Fine Wines [Penta]
Over the last several years, the value of both rare whiskies and fine wines has soared, but their skyward trajectory has softened in the last year. The Cult Wines Global Index—based on data from the website Wine-Searcher—is down nearly 3.9% for the year through Aug. 31, compared with a gain of 37.68% for the five-year period through the end of August.

CEO With $110 Million Pay Package Is Suddenly Out [WSJ]
His departure, disclosed in a securities filing on Monday, could mean [CS Disco co-founder and former CEO Kiwi] Camara loses the stock options that made up nearly all of the pay package…. CS Disco shares fell nearly 20% Tuesday following the disclosure.

Citigroup has something like a quarter of a million employees, operating across 160 countries to serv some 200 million customers. The country’s third-largest bank is the product of 211 years of mergers and acquisitions, and looks like it: an unruly, sprawling, mistake-prone mess—the proverbial banking camel created by a committee (actually, loads of committees, as it turns out) to build a financial services stallion—that neither its regulators or even its own leaders are able to get even the beginning of a handle on. There’s the financial-crisis-era division of the bank in twain, with one side broadly overseeing institutional business and the other broadly retail (to say nothing of the millstone Fraser used to run, Banamex). There’s the various regional management layers insulating the C-suite from global messiness. There’s the habit of entrusting everything to two people instead of one, and (as noted) a whole galaxy of committees that take up so much executive time that they practically require having too many executives in order to staff them.

No more.

The heads of the five businesses Fraser has made the bank’s focus will all report directly to her.… “We need the leaders of our five businesses at my table, fully engaged in how we operate the firm and in the critical decisions we make every day,” Fraser wrote in a memo to employees Wednesday. “We need a structure with fewer layers and clearer, more direct lines of decision making.”

The five businesses for Citigroup are: services (treasury and custody work for big clients); markets; banking (investment banking, corporate and commercial banking); consumer banking; and wealth management…. Fraser said the bank would also eliminate most of Citigroup’s co-head structures—which are numerous—and dozens of committees that sucked up management time.

What all that means is that Citi needs a great deal fewer upper middle-managers.

The bank declined to say how many jobs would be cut in the changes, but the new structure will eliminate roles throughout the bank. Fraser said in her memo that employees will know by the end of November any changes to their roles…. “We have taken hard, consequential, tough decisions here. They are not going to be universally popular within our bank,” she said. “It’s going to make some of our people very uncomfortable. I am absolutely fine with that.”

We guess when empathy doesn’t work—and it hasn’t; Citi’s share price is below where it was when Fraser took over more than two years ago—try the opposite.

Citigroup CEO Jane Fraser Is Shaking Up Executive Ranks [WSJ]

The big initial public offerings of the next couple of weeks look to breath some life into a lifeless Wall Street. But they have their problems. Chip designer Arm, set to debut tomorrow in the year’s biggest IPO to date, has certainly papered over most of them: six-times oversubscribed and with a $100 million commitment from the world’s largest and most important chipmaker, Goldman Sachs (which is running all of the big listings on the immediate calendar) was able to close its order book a day early, and is even mulling a price above the $47-to-$51 range. But some worry that this is a bit of irrational exuberance. Arm’s not nearly as big as its fellow chipmakers in that market cap range, valued at something like 18 times revenue, way ahead of everyone except the year’s hottest stock, Nvidia (which, like TSMC, is also getting in on the Arm IPO).

Those are slightly trifling concerns compared to Instacart, which is set to go public as soon as next week at a price less than one-quarter its valuation two years ago, as revenue from its core grocery-delivery business continues to slow. Marketing-automation platform Klaviyo is set to follow. It’s also likely to fetch a market cap less than its 2021 valuation, albeit not an order of magnitude less. (For what it’s worth, in spite of the investor frenzy and possible above-the-range pricing, Arm’s post-IPO valuation will still be far below the $64 billion implied by SoftBank’s acquisition of the quarter of the company it didn’t own from its own Vision Fund last month, to say nothing of the $70 billion dream of when SoftBank first moved to list the company.

Hippie footwear purveyor Birkenstock is also going public (also in the care of Goldman Sachs), right here in New York in spite of its German origins. And, well, it’s got its own problems, and they’re very different from its fellow market debutants.

Birkenstock has long struggled to protect its intellectual property, as copycats have taken advantage of the brand’s popularity and premium prices to try and undercut the company with cheaper alternatives. In its prospectus, Birkenstock says that some of the competition comes from “private label offerings” from retailers, but there are also “knock-off products” that are stealing its IP and trying to convince people on Facebook and elsewhere on the web that the items are authentic…. Should counterfeit products be successfully sold on e-commerce platforms managed by third parties, our brands and reputation could be damaged.”

Birkenstock warns in IPO filing that knock-offs on Facebook are a top risk [CNBC]
Birkenstock Files for IPO in Further Boost to US Market [Bloomberg]
Birkenstock heads for Wall Street in another blow to Europe [CNN]
Goldman Sachs is in the spotlight as tech firms Arm and Instacart test IPO market [CNBC]
Arm Considers Raising IPO Price Range [Bloomberg]
Taiwan chip giant TSMC to invest up to $100 million in Arm IPO [CNBC]
Strong demand pushes Arm to close IPO order book early [FT]
Arm Still Trying to Punch Above Its Weight [WSJ]
ARM IPO Lets Wall Street Return to What It Does Best [Barron’s]
Instacart to Target Much-Diminished Valuation Range of Under $10 Billion in IPO [WSJ]
Instacart is in free fall as its valuation plunges [CNN]
Klaviyo Joins Big IPO Week With Roadshow Launch [WSJ]

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Donald Trump is sincerely and deeply concerned about the public’s trust in the judicial process. All he wants to do is get a fair hearing, from a neutral arbiter, so that Americans can have faith in their justice system. That’s why he spends eleven hours a day shitposting about prosecutors and judges in his four criminal indictments. You bet!

Yesterday, the former president filed a motion demanding that Judge Tanya Chutkan recuse herself from the election interference case against him in federal court in DC.

“Although Judge Chutkan may genuinely intend to give President Trump a fair trial—and may believe that she can do so—her public statements unavoidably taint these proceedings, regardless of outcome,” his lawyers John Lauro and Todd Blanche wrote in a filing yesterday.

Well, it’s a bit much.

It’s not that it’s frivolous for Trump’s lawyers to suggest that Judge Chutkan’s prior statements as she sentenced other January 6 defendants might potentially suggest bias against their client — it’s probably not a winning argument, but it’s not ludicrous. Indeed, Judge Chutkan has sympathized with defendants who claimed to have been dispatched to the Capitol by Trump and his henchmen flogging false claims of election fraud.

It is, however, wildly hypocritical when their client has so singularly devoted himself to poisoning the jury pool and diminishing the credibility of every prosecution against him. Although it is certainly on brand for a lawyer who promised to move for a change of venue to West Virginia — for diversity! — as his client screeches that our nation’s capital is a “FILTHY AND CRIME RIDDEN EMBARRASSMENT TO OUR NATION.”

How the hell do you claim with a straight face to be concerned about “ensuring the appearance of fairness in this proceeding” when your client is posting on Truth Social that “Judge Tanya Chutkan—an Obama leftwing activist judge in DC, whose husband also got appointed by Obama as a DC judge—openly admitted she’s running election interference against Trump?”

Perhaps their tut-tutting about the “overwhelming public interest in ensuring the perceived fairness of these proceedings” would seem less ridiculous if their client wasn’t howling that the judge had some nefarious connection to Hunter Biden because they both worked at Boies Schiller Flexner ten years ago.

The handwringing that “Only if this trial is administered by a judge who appears entirely impartial could the public ever accept the outcome as justice” rings a little hollow when your client is screaming that “She obviously wants me behind bars. VERY BIASED & UNFAIR!”

Although it is very on brand for John Lauro, who made dozens of media appearances the first week of the trial, inveighing against prosecutors and announcing that his main legal strategy was to try this case in the press.

On Fox, he described a routine protective order as “a very broad attempt by the Biden administration to keep information away from the American people during the election season.”

“The American people have a right to know,” he huffed, claiming that any order which blocked his client from posting discovery materials on social media was a gross violation of the First Amendment. “Of course, Joe Biden doesn’t want that to happen.”

Judge Chutkan has invited the Justice Department to weigh in by Thursday, with any response from the defense due Sunday. What are the odds that Trump can stop himself from slagging the court on social media for five whole days?

US v. Trump [Docket via Court Listener]

Liz Dye lives in Baltimore where she writes about law and politics and appears on the Opening Arguments podcast.

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