Tag Archives: NRLPA:OPUB

Taylor Swift concert fiasco leads to U.S. Senate grilling for Ticketmaster

WASHINGTON, Jan 24 (Reuters) – U.S. senators slammed Live Nation Entertainment’s lack of transparency and inability to block bot purchases of tickets on Tuesday, in a hearing called after a major fiasco involving ticket sales for Taylor Swift’s upcoming concert tour.

Live Nation Entertainment Inc (LYV.N) subsidiary Ticketmaster, which has been unpopular with fans for years, has drawn fresh heat from U.S. lawmakers over how it handled ticket sales last fall for Swift’s “Eras” tour, her first in five years. Experts say Ticketmaster commands more than 70% market share of primary ticket services for major U.S. concert venues.

“We apologize to the fans, we apologize to Ms. Swift, we need to do better and we will do better,” Joe Berchtold, who is president and chief financial officer of Live Nation, told the U.S. Senate Judiciary Committee hearing on Tuesday.

“In hindsight there are several things we could have done better – including staggering the sales over a longer period of time and doing a better job setting fan expectations for getting tickets,” Berchtold said.

Republican Senator Mike Lee said in an opening statement that the Ticketmaster debacle highlighted the importance of considering whether “new legislation or perhaps just better enforcement of existing laws might be needed to protect the American people.”

LACK OF COMPETITION

Senators slammed Berchtold for Live Nation’s fee structure and inability to deal with bots which bulk buy tickets and resell them at inflated prices.

“There isn’t transparency when no one knows who sets the fees,” Democratic Senator Amy Klobuchar said, responding to Berchtold’s claim that Live Nation fees fluctuate based on “ratings.”

Republican Senator Marsha Blackburn called Live Nation’s bot problem “unbelievable,” pointing out that much smaller companies are able to limit bad actors in their systems.

“You ought to be able to get some good advice from people and figure it out,” she said.

“I’m not against big per se, but I am against dumb,” Republican Senator John Kennedy said, referring to Live Nation’s dominance in the ticket sales market. “The way your company handled ticket sales for Ms. Swift was a debacle, and whoever in your company was in charge of that should be fired.

“If you care about the consumer, cut the price! Cut out the bots! Cut out the middle people and if you really care about the consumer, give the consumer a break!”

Jack Groetzinger, cofounder of ticket sales platform SeatGeek, testified that the process of buying tickets is “antiquated and ripe for innovation” and called for the breakup of Live Nation and Ticketmaster, which merged in 2010.

“As long as Live Nation remains both the dominant concert promoter and ticketer of major venues in the U.S., the industry will continue to lack competition and struggle,” he told lawmakers.

Ticketmaster has argued that the bots used by scalpers were behind the Taylor Swift debacle, and Berchtold asked for more help in fighting the bots that buy tickets for resale.

Other witnesses include Jerry Mickelson, president of JAM Productions, who has been among critics of Ticketmaster.

In November, Ticketmaster canceled a planned ticket sale to the general public for Swift’s tour after more than 3.5 billion requests from fans, bots and scalpers overwhelmed its website.

Senator Klobuchar, who heads the Judiciary Committee’s antitrust panel, has said the issues that cropped up in November were not new and potentially stemmed from consolidation in the ticketing industry.

In November, Ticketmaster denied any anticompetitive practices and noted it remained under a consent decree with the Justice Department following its 2010 merger with Live Nation, adding that there was no “evidence of systemic violations of the consent decree.”

A previous Ticketmaster dispute with the Justice Department culminated in a December 2019 settlement extending the consent agreement into 2025.

Reporting by Diane Bartz, Moira Warburton and David Shepardson; editing by Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Diane Bartz

Thomson Reuters

Focused on U.S. antitrust as well as corporate regulation and legislation, with experience involving covering war in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, El Salvador, Nigeria and Peru.

Read original article here

Feds seized nearly $700 million from FTX founder Bankman-Fried

Jan 20 (Reuters) – Federal prosecutors have seized nearly $700 million in assets from FTX founder Sam Bankman-Fried in January, largely in the form of Robinhood stock, according to a Friday court filing.

Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, has pleaded not guilty to fraud charges. He is scheduled to face trial in October.

The Department of Justice revealed the seizure of Robinhood shares earlier this month, but it provided a more complete list of seized assets Friday, including cash held at various banks and assets deposited at crypto exchange Binance.

The ownership of the seized Robinhood shares, valued at about $525 million, has been the subject of disputes between Bankman-Fried, FTX, and bankrupt crypto lender BlockFi.

The most recent asset seizure reported by the DOJ took place on Thursday, when prosecutors seized $94.5 million in cash from an account at Silvergate Bank which was associated with FTX Digital Markets, FTX’s subsidiary in the Bahamas. The DOJ seized more than $7 million from other Silvergate accounts associated with Bankman-Fried and FTX.

The DOJ previously seized nearly $50 million from an FTX Digital Markets account at Moonstone Bank, a small bank in Washington state.

DOJ also said that assets in three Binance accounts associated with Bankman-Fried were subject to criminal forfeiture, but did not provide an estimate of the value in those accounts.

Reporting by Dietrich Knauth; Editing by Noeleen Walder and Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Kevin McCarthy elected Republican U.S. House speaker, but at a cost

WASHINGTON, Jan 7 (Reuters) – Republican Kevin McCarthy was elected speaker of the U.S. House of Representatives early on Saturday, after making extensive concessions to right-wing hardliners that raised questions about the party’s ability to govern.

The 57-year-old Californian suffered one final humiliation when Representative Matt Gaetz withheld his vote on the 14th ballot as midnight approached, prompting a scuffle in which fellow Republican Mike Rogers had to be physically pulled away.

McCarthy’s victory in the 15th ballot ended the deepest congressional dysfunction in over 160 years. But it sharply illustrated the difficulties he will face in leading a narrow and deeply polarized majority.

He won at last on a margin of 216-212. He was able to be elected with the votes of fewer than half the House members only because six in his own party withheld their votes – not backing McCarthy as leader, but also not voting for another contender.

As he took the gavel for the first time, McCarthy represented the end of President Joe Biden’s Democrats’ hold on both chambers of Congress.

“Our system is built on checks and balances. It’s time for us to be a check and provide some balance to the president’s policies,” McCarthy said in his inaugural speech, which laid out a wide range of priorities from cutting spending to immigration, to fighting culture war battles.

McCarthy was elected only after agreeing to a demand by hardliners that any lawmaker be able call for his removal at any time. That will sharply cut the power he will hold when trying to pass legislation on critical issues including funding the government, addressing the nation’s looming debt ceiling and other crises that may arise.

Republicans’ weaker-than-expected performance in November’s midterm elections left them with a narrow 222-212 majority, which has given outsized power to the right-wingers who opposed McCarthy’s leadership.

Those concessions, including sharp spending cuts and other curbs on McCarthy’s powers, could point to further turbulence in the months ahead, especially when Congress will need to sign off on a further increase of the United States’ $31.4 trillion borrowing authority.

Over the past decade, Republicans have repeatedly shut down much of the government and pushed the world’s largest borrower to the brink of default in efforts to extract steep spending cuts, usually without success.

Several of the hardliners have questioned McCarthy’s willingness to engage in such brinkmanship when negotiating with Biden, whose Democrats control the Senate. They have raged in the past when Senate Republicans led by Mitch McConnell agreed to compromise deals.

The hardliners, also including Freedom Caucus Chairman Scott Perry of Pennsylvania and Chip Roy of Texas, said concessions they extracted from McCarthy will make it easier to pursue such tactics – or force another vote on McCarthy’s leadership if he does not live up to their expectations.

“You have changes in how we’re going to spend and allocate money that are going to be historic,” said Perry.

“We don’t want clean debt ceilings to just go through and just keep paying the bill without some counteracting effort to control spending when the Democrats control the White House and control the Senate.”

One of those Democrats, Senate Majority Leader Chuck Schumer, warned that the concessions McCarthy made to “the extremists” in his party may come back to haunt him, and made it more likely that the Republican-controlled House will cause a government shutdown or default with “devastating consequences.”

In a sharp contrast to the battles among House Republicans, Biden and McConnell appeared together in Kentucky on Wednesday to highlight investments in infrastructure.

McCarthy’s belated victory came the day after the two-year anniversary of a Jan. 6, 2021, attack on the U.S. Capitol, when a violent mob stormed Congress in an attempt to overturn then-President Donald Trump’s election loss.

This week’s 14 failed votes marked the highest number of ballots for the speakership since 1859, in the turbulent years before the Civil war.

McCarthy’s last bid for speaker, in 2015, crumbled in the face of right-wing opposition. The two previous Republican speakers, John Boehner and Paul Ryan, left the job after conflict with right-wing colleagues.

McCarthy now holds the authority to block Biden’s legislative agenda, force votes for Republican priorities on the economy, energy and immigration and move forward with investigations of Biden, his administration and his family.

CONCESSIONS

But the concessions he agreed to mean McCarthy will hold considerably less power than his predecessor, Democrat Nancy Pelosi. That will make it hard for him to agree to deals with Democrats in a divided Washington.

Allowing a single member to call for a vote to remove the speaker will give hardliners extraordinary leverage.

The agreement would cap spending for the next fiscal year at last year’s levels – amounting to a significant cut when inflation and population growth are taken into account.

That could meet resistance from more centrist Republicans or those who have pushed for greater military funding, particularly as the United States is spending billions of dollars to help Ukraine fend off a Russian assault.

Moderate Republican Brian Fitzpatrick said he was not worried that the House would effectively be run by hardliners.

“It’s aspirational,” he told reporters. “We still have our voting cards.”

Reporting by David Morgan, Moira Warburton and Andy Sullivan; Additional reporting by Gram Slattery, Jason Lange and Makini Brice, writing by Andy Sullivan; Editing by Scott Malone, Cynthia Osterman, William Mallard and Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Hardline Republicans dig in against McCarthy’s House speaker bid

WASHINGTON, Jan 5 (Reuters) – Hardline Republicans in the U.S. House of Representatives rejected Kevin McCarthy’s speakership bid for an 11th time on Thursday, while his supporters worked behind closed doors in hopes of cementing a deal that could bring success.

The voting propelled the House to a level of dysfunction not seen since the turbulent era just before the Civil War, even after McCarthy offered to curb his own clout, raising questions about the party’s ability to wield power.

After the 11th ballot, the House adjourned for the third time this week without electing a speaker. Lawmakers will reconvene at noon (1700 GMT) on Friday.

McCarthy’s opponents say they do not trust him to fight for the deep spending cuts and other restrictions they want to impose on President Joe Biden and the Democratic-controlled Senate.

But some Republicans held out hope of an agreement between the California Republican and at least some of the 20 hardline conservatives who have opposed his candidacy in ballot after ballot.

“Things are coming together in a very healthy way,” said Representative Patrick McHenry, a McCarthy supporter who is poised to lead a top congressional committee.

“We don’t know the timeframe. But the engagement is there and that’s why I’m optimistic,” he said.

Among other things, a possible agreement would allow for a vote on term limits for members of Congress, according to Republican Representative Brian Fitzpatrick.

But McCarthy’s supporters stopped short of predicting a resolution to the stalemate anytime soon.

Because of its inability to choose a leader, the 435-seat House has been rendered impotent – unable even to formally swear in newly elected members let alone hold hearings, consider legislation or scrutinize Biden and his administration.

Republicans won a slim 222-212 House majority in the November midterm elections, meaning McCarthy cannot afford to lose the support of more than four Republicans as Democrats united around their own candidate.

McCarthy, who was backed by former President Donald Trump for the post, offered the holdouts a range of concessions that would weaken the speaker’s role, which political allies warned would make the job even harder if he got it.

At least 200 Republicans have backed McCarthy in each of the votes this week. Fewer than 10% of Republican lawmakers have voted against him but they are enough to deny him the 218 votes needed to succeed Democrat Nancy Pelosi as speaker.

“What you’re seeing on this floor does not mean we are dysfunctional,” said Republican Representative Anna Paulina Luna as she nominated a McCarthy rival, Byron Donalds, for the 10th vote.

‘CONSTRUCT A STRAITJACKET’

“I can tell you there’s some good things happening,” said Representative Marjorie Taylor Greene, a McCarthy supporter who is among the most outspoken conservatives in the House. “I think we’re going to see some movement.”

But some of McCarthy’s opponents showed no sign of yielding.

“This ends in one of two ways: either Kevin McCarthy withdraws from the race or we construct a straitjacket that he is unwilling to evade,” said Republican Representative Matt Gaetz, who voted for Trump for speaker.

As speaker, McCarthy would hold a post that normally shapes the chamber’s agenda and is second in the line of succession to the presidency behind Vice President Kamala Harris. He would be empowered to frustrate Biden’s legislative agenda and launch investigations into the president’s family and administration in the run-up to the 2024 presidential election.

In a late-night bargaining session, McCarthy offered the holdouts greater influence over what legislation comes up for a vote, according to a source familiar with the talks.

He also offered the ability for any single member to call a vote that could potentially remove him from the post – a step that helped drive at least one prior Republican speaker, John Boehner, into retirement.

Those concessions could potentially help McCarthy win over some of the holdouts but would leave him more vulnerable to the hardliners through the rest of the next two years if he ultimately wins the speakership.

That has even alarmed some Democrats, who have largely served as bystanders in the drama of the past three days.

“With every concession, he has to wake up every day wondering if he’s still going to have his job,” Democratic Representative Richard Neal told reporters.

The inability to agree on a leader also raises questions about whether Republicans will force a government shutdown or risk default later this year in a bid to extract steep spending cuts. Some of the holdouts say they expect McCarthy or any other Republican leader to take that approach.

If McCarthy ultimately fails to unite Republicans, they would have to search for an alternative. Possibilities include No. 2 House Republican Steve Scalise and Representative Jim Jordan, who have both backed McCarthy. Jordan received 20 votes when nominated by the holdouts on Tuesday.

Reporting by Moira Warburton, Doina Chiacu, David Morgan, Kanishka Singh and Gram Slattery; Writing by Andy Sullivan; Editing by Will Dunham, Howard Goller and Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles.

Gram Slattery

Thomson Reuters

Washington-based correspondent covering campaigns and Congress. Previously posted in Rio de Janeiro, Sao Paulo and Santiago, Chile, and has reported extensively throughout Latin America. Co-winner of the 2021 Reuters Journalist of the Year Award in the business coverage category for a series on corruption and fraud in the oil industry. He was born in Massachusetts and graduated from Harvard College.

Read original article here

Kevin McCarthy vows to remain in race for U.S. House speaker amid hardline opposition

WASHINGTON, Jan 3 (Reuters) – Republican Kevin McCarthy vowed on Tuesday to remain in the race to be the powerful U.S. House of Representatives speaker, hours after hardline members of his party repeatedly blocked his bid to lead their brand-new majority.

In the first day of what could prove to be a brutal showdown between about 20 hardliners and the other 202 members of the Republican caucus, McCarthy failed in three ballots to achieve the 218 votes needed to become speaker, a role second in line to the Oval Office after the vice president.

It was a disconcerting start for the new Republican majority and highlights the challenges the party could face over the next two years, heading into the 2024 presidential election. Their slim 222-212 majority gives greater clout to a small group of hardliners, who want rule changes that would give them greater control over the speaker and more influence over the party’s approach to spending and the debt.

Late on Tuesday, McCarthy told reporters that former President Donald Trump had called him and reiterated his support. Trump has backed McCarthy in the race and remains a powerful figure in the Republican Party.

McCarthy, 57, from California, knew he faced an uphill climb heading into Tuesday’s vote and had vowed to continue to force votes. But the chamber voted on Tuesday evening to adjourn until noon ET (1700 GMT) on Wednesday, a move that would give Republicans time to discuss other candidates.

Conservative Representative Jim Jordan, 58, from Ohio, won 20 votes in the last ballot of the day, far from the threshold of 218 to become speaker but enough to stop McCarthy.

“I think that Kevin knows that this is his last shot,” said Representative Kenneth Buck, who had voted to support McCarthy. He noted that McCarthy previously tried in 2015 to become speaker and failed in the face of conservative opposition, adding, “He’s not gonna have this chance again.”

A protracted speaker election could undermine House Republicans’ hopes of moving forward quickly on investigations of Democratic President Joe Biden and his administration, and legislative priorities that include the economy, U.S. energy independence and border security.

The chamber’s top Democrat, House Minority Leader Hakeem Jeffries, bested McCarthy in all three votes. In the day’s final tally, Jeffries led McCarthy 212 to 202 votes. A majority of those voting, not a plurality, is needed to determine a speaker.

A standoff would leave the House largely paralyzed and could force lawmakers to consider another Republican candidate. In addition to Jordan, incoming Majority Leader Steve Scalise, 57, from Louisiana, was seen as a possibility.

The last time the House failed to elect a speaker on the first ballot was 1923.

‘RALLY AROUND HIM’

Jordan himself had spoken in support of McCarthy before he was nominated, and all three times voted for him.

“We need to rally around him,” Jordan had said in an impassioned speech on the House floor. “I think Kevin McCarthy’s the right guy to lead us.”

Jordan is a staunch ally of Trump and a co-founder of the conservative House Freedom Caucus.

A former college wrestler, Jordan is preparing to oversee the House Judiciary Committee’s investigation of the Justice Department and FBI under Biden.

McCarthy’s hardline opponents are concerned that he is not deeply invested enough in the culture wars and partisan rivalries that have dominated the House – and even more so since Trump’s White House years.

Before the vote, McCarthy tried to persuade the holdouts during a closed-door party meeting, vowing to stay in the race until he gets the necessary votes, but many participants emerged from the gathering undaunted.

McCarthy suggested to reporters later on Tuesday that the path to him becoming speaker lay in members voting “present” – neither for nor against him – which would lower the threshold needed to secure the job.

McCarthy has spent his adult life in politics – as a congressional staffer then state legislator before being elected to the House in 2006. As speaker, McCarthy would be well placed to frustrate Biden’s legislative ambitions.

But any Republican speaker will have the tough task of managing a House Republican caucus moving ever rightward, with uncompromising tendencies and – at least among some lawmakers – close allegiances to Trump.

Struggles with the party’s right flank cut short the careers of the last two Republican speakers, with John Boehner resigning the post in 2015 and Paul Ryan opting not to run for re-election in 2018.

The record number of voting rounds to elect a House speaker is 133 over a two-month period in the 1850s.

The Democrats picked Jeffries to serve as minority leader after Nancy Pelosi, the first woman to serve as speaker, announced that she would step down from her leadership role. She will remain in office as a representative.

Reporting by David Morgan, Moira Warburton and Gram Slattery; additional reporting by Richard Cowan and Makini Brice; Editing by Scott Malone, Alistair Bell, Will Dunham and Howard Goller

Our Standards: The Thomson Reuters Trust Principles.

Gram Slattery

Thomson Reuters

Washington-based correspondent covering campaigns and Congress. Previously posted in Rio de Janeiro, Sao Paulo and Santiago, Chile, and has reported extensively throughout Latin America. Co-winner of the 2021 Reuters Journalist of the Year Award in the business coverage category for a series on corruption and fraud in the oil industry. He was born in Massachusetts and graduated from Harvard College.

Read original article here

Slipping over Mexico border, migrants get the jump on U.S. court ruling

CIUDAD JUAREZ, Mexico Dec 28 (Reuters) – Even before the U.S. Supreme Court on Tuesday opted to keep in place a measure aimed at deterring border crossings, hundreds of migrants in northern Mexico were taking matters into their own hands to slip into the United States.

The contentious pandemic-era measure known as Title 42 had been due to expire on Dec. 21, but last-minute legal stays pitched border policy into limbo and made many migrants decide they had little to lose by crossing anyway.

After spending days in chilly border cities, groups of migrants from Venezuela and other countries targeted by Title 42 opted to make a run for it rather than sit out the uncertainty of the legal tug-of-war playing out in U.S. courts.

“We ran, and we hid, until we managed to make it,” said Jhonatan, a Venezuelan migrant who scrambled across the border from the Mexican city of Ciudad Juarez into El Paso, Texas with his wife and five children, aged 3 to 16, on Monday night.

Giving only his first name and speaking by phone, Jhonatan said he had already spent several months in Mexico and had not wanted to enter the United States illegally.

But the thought of failing after a journey that took his family through the perilous jungles of Darien in Panama, up Central America and into Mexico was more than he could bear.

“It would be the last straw to get here, and then they send us back to Venezuela,” he told Reuters.

On Tuesday, the U.S. Supreme Court granted a request by a group of Republican state attorneys general to put on hold a judge’s decision invalidating Title 42. They had argued its removal would increase border crossings.

The court said it would hear arguments on whether the states could intervene to defend Title 42 during its February session. A ruling is expected by the end of June.

Reuters images showed migrants racing across a busy highway alongside the border last week, one man barefoot and carrying a small child – the kind of risky crossing that alarms migrant advocates.

“We’re talking about people who come to request asylum … and they’re still crossing the border in very dangerous ways,” said Fernando Garcia, director of the Border Network for Human Rights.

John Martin, the deputy director at El Paso’s Opportunity Center for the Homeless, said the number of migrants his shelter has taken in are increasingly people who crossed illegally, including many Venezuelans.

“At one point, the majority were documented; now I’m seeing it reverse,” he said.

The agency’s El Paso sector was registering about 2,500 daily migrant encounters in mid-December, but the number dipped through Christmas to just over half that by the time of the court decision, CBP figures show.

On Tuesday before the Supreme Court ruling, a Venezuelan migrant in Ciudad Juarez who gave his name as Antonio said he was waiting to see whether U.S. border surveillance would let up, hoping to make money in the United States to send home.

“If they don’t end Title 42,” he said, “we’re going to keep entering illegally.”

Elsewhere along the border, other migrants said they felt they had run out of options.

“We don’t have a future in Mexico,” said Cesar, a Venezuelan migrant in Tijuana who did not give his last name, explaining why he has attempted once to cross the border fence to get into the United States, and plans to try again.

Reporting by Daina Beth Solomon in Mexico City and Jose Luis Gonzalez in Ciudad Juarez; Additional reporting by Lizbeth Diaz and Ted Hesson; Editing by Dave Graham and Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Insurers shun FTX-linked crypto firms as contagion risk mounts

Dec 19 (Reuters) – Insurers are denying or limiting coverage to clients with exposure to bankrupt crypto exchange FTX, leaving digital currency traders and exchanges uninsured for any losses from hacks, theft or lawsuits, several market participants said.

Insurers were already reluctant to underwrite asset and directors and officers (D&O) protection policies for crypto companies because of scant market regulation and the volatile prices of Bitcoin and other cryptocurrencies.

Now, the collapse of FTX last month has amplified concerns.

Specialists in the Lloyd’s of London (SOLYD.UL) and Bermuda insurance markets are requiring more transparency from crypto companies about their exposure to FTX. The insurers are also proposing broad policy exclusions for any claims arising from the company’s collapse.

Kyle Nichols, president of broker Hugh Wood Canada Ltd, said insurers were requiring clients to fill out a questionnaire asking whether they invested in FTX, or had assets on the exchange.

Lloyd’s of London broker Superscript is giving clients that dealt with FTX a mandatory questionnaire to outline the percentage of their exposure, said Ben Davis, lead for digital assets at Superscript.

“Let’s say the client has 40% of their total assets at FTX that they can’t access, that is either going to be a decline or we’re going to put on an exclusion that limits cover for any claims arising out of their funds held on FTX,” he said.

The exclusions denying payout for any claims arising out of the FTX bankruptcy are found in insurance policies that cover the protection of digital assets and for personal liabilities of directors and officers of companies that deal in crypto, five insurance sources told Reuters. A couple of insurers have been pushing for a broad exclusion to policies for anything related to FTX, a broker said.

Exclusions may act as a failsafe for insurers, and will make it even more difficult for companies that are seeking coverage, insurers and brokers said.

Bermuda-based crypto insurer Relm, which previously has provided coverage to entities linked to FTX, takes an even stricter approach.

“If we have to include a crypto exclusion or a regulatory exclusion, we’re just not going to offer the coverage,” said Relm co-founder Joe Ziolkowski.

D&O QUESTION

Now, one of the most pressing questions is whether insurers will cover D&O policies at other companies that had dealings with FTX, given the problems facing exchange’s leadership, Ziolkowski said.

U.S. prosecutors say former FTX Chief Executive Officer Sam Bankman-Fried engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.

A lawyer for Bankman-Fried said on Tuesday his client is considering all of his legal options.

D&O policies, which are used to pay legal costs, do not always pay out in cases of fraud.

Insurance sources would not name their clients or potential clients that could be affected by policy changes, citing confidentiality. Crypto firms with financial exposure to FTX include Binance, a crypto exchange, and Genesis, a crypto lender, neither of which responded to e-mails seeking comment.

While the least risky parts of the crypto market, such as companies that own cold wallets storing assets on platforms not connected to the internet, may get cover for up to $1 billion, a D&O insurance policyholder’s cover may now be limited to tens of millions of dollars for the rest of the market, Ziolkowski said.

The FTX collapse will also likely lead to a rise in insurance rates, especially in the U.S. D&O market, insurers said. The rates are already high because of the perceived risks and lack of historical data on cryptocurrency insurance losses.

A typical crime bond — used to protect against losses resulting from a criminal act — would cost $30,000 to $40,000 per $1 million of coverage for a digital assets trader. That compares with a cost of about $5,000 per $1 million for a traditional securities trader, Hugh Wood Canada’s Nichols said.

Reporting by Noor Zainab Hussain in Bengaluru and Carolyn Cohn in London; Editing by Lananh Nguyen and Anna Driver

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Biden signs marriage equality act to tune of Cyndi Lauper’s ‘True Colors’

WASHINGTON, Dec 13 (Reuters) – U.S. President Joe Biden signed the Respect for Marriage Act into law on Tuesday at a jubilant celebration that featured U.S. singer Cyndi Lauper performing “True Colors” in front of thousands of supporters on the White House lawn.

The new law provides federal recognition to same-sex marriages, a measure born out of concern that the Supreme Court could reverse its legal support of such relationships.

Cheers erupted from the crowd as Biden signed the bill.

“Marriage is a simple proposition. Who do you love? And will you be loyal to that person you love? It’s not more complicated than that. The law recognizes that everyone should have the right to answer those questions for themselves,” Biden said. “Today’s a good day.”

The event featured performances by pop icons Lauper and British singer Sam Smith.

“Well, this time, love wins,” Lauper said before starting to sing.

Made famous by her 1983 song “Girls Just Want to Have Fun,” Lauper, 69, said the act offered peace of mind to families like hers and Americans nationwide.

“We can rest easy tonight because our families are validated and because now we’re allowed to love who we love, which sounds odd to say, but Americans can now love who we love,” Lauper, an activist on LGBT issues who has been married to actor David Thornton since 1991, told reporters at a briefing prior to the performance.

Addressing the crowd before the signing, House Speaker Nancy Pelosi said the bill promoted equality.

“Everyone deserves to bask in the magical blessing of building a union with the person you love,” she said.

Senate Majority Leader Chuck Schumer, whose daughter and her wife are expecting a child, called it “a day of jubilation.”

Reporting by Steve Holland, Andrea Shalal, Katharine Jackson; Editing by Howard Goller and Josie Kao

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Meta battles U.S. antitrust agency over future of virtual reality

SAN JOSE, Calif./ WASHINGTON, Dec 8 (Reuters) – The Biden administration on Thursday accused Meta Platforms Inc (META.O) of trying to buy its way to dominance in the metaverse, kicking off a high-profile trial to try to prevent the Facebook parent from buying virtual reality app developer Within Inc.

The FTC sued in July to stop the deal, saying Meta’s acquisition of Within would “tend to create a monopoly” in the market for virtual reality (VR) fitness apps. It has asked the judge to order a preliminary injunction that would halt the proposed transaction.

In an opening statement, FTC lawyer Abby Dennis said the Within acquisition was part of Meta’s bid to acquire new and more diverse virtual reality users, including customers of Within’s popular subscription-based virtual reality workout app Supernatural.

That would complement Meta’s existing virtual reality users, who tend to skew young and male, and be more focused on gaming, Dennis added.

“Meta could have chosen to use all its vast resources and capabilities to build its own dedicated VR fitness app, and it was planning on doing that before it acquired Within,” Dennis said, pointing to a plan from early 2021.

The plan, Operation Twinkie, involved expanding a rhythm game app called Beat Saber that the company acquired in 2019 into the fitness space via a proposed partnership with digital fitness company Peloton (PTON.O), Dennis said.

She cited an email from Chief Executive Mark Zuckerberg saying he was “bullish” on fitness and calling the proposed partnership with Peloton “awesome.”

Lawyers for Meta and Within argued that the FTC did a poor job of defining the relevant market and said the companies compete with a range of fitness content, not just VR-dedicated fitness apps.

Meta’s lawyers also disputed that plans for a Meta-owned VR fitness app had proceeded beyond low-level “brainstorming” and argued that the FTC underestimated the competition in the market it had defined, citing the potential for fellow tech giants Apple Inc (AAPL.O), Alphabet Inc’s (GOOGL.O) Google and Bytedance to join the fray.

Rade Stojsavljevic, who manages Meta’s in-house VR app developer studios, testified that he had proposed the tie-up between Beat Saber and Peloton but did not develop a formal plan and never discussed the idea with either party.

Internal documents from early 2021 that were displayed in court showed Stojsavljevic proposing acquisitions of VR developers before they could be “cannibalized” by competitors and discussing pressure from Zuckerberg to “get aggressive” in response to reports of a prospective Apple headset.

The trial, scheduled through Dec. 20, will serve as a test of the FTC’s bid to head off what it sees as a repeat of the company acquiring small upcoming would-be rivals and effectively buying its way to dominance, this time in the nascent virtual and augmented reality markets.

The FTC is separately trying to force Meta to unwind two previous acquisitions, Instagram and WhatsApp, in a lawsuit filed in 2020. Both were in relatively new markets at the time the companies were purchased.

PRESSURE TO PRODUCE HIT APPS

A government victory could crimp Meta’s ability to maneuver in an area of emerging technology – virtual and augmented reality – that Zuckerberg has identified as the “next generation of computing.”

If blocked from making acquisitions in the space, Meta would face greater pressure to produce its own hit apps and would give up the gains – in terms of revenue, talent, data and control – associated with bringing innovative developers in-house.

Within developed Supernatural, which it advertises as a “complete fitness service” with “expert coaches,” “beautiful destinations” and “workouts choreographed to the best music available.”

It is available only on Meta’s Quest devices, which are headsets offering immersive digital visuals and audio that market research firm IDC estimates capture 90% of global shipments in the virtual reality hardware market.

The majority of the more than 400 apps available in the Quest app store are produced by external developers. Meta owns the most popular virtual reality app in the Quest app store, Beat Saber, the app it was considering expanding with the Peloton partnership.

The social media company agreed to buy Within in October 2021, a day after changing its name from Facebook to Meta, signalling its ambition to build an immersive virtual environment known as the metaverse.

Zuckerberg will be a witness in the trial. Other potential witnesses are Within CEO Chris Milk and Meta Chief Technology Officer Andrew Bosworth, who runs the company’s metaverse-oriented Reality Labs unit.

The trial is at the U.S. District Court for the Northern District of California.

Reporting by Diane Bartz in Washington and Katie Paul in San Jose, Calif.; Editing by Alexandra Alper, Matthew Lewis and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.

Diane Bartz

Thomson Reuters

Focused on U.S. antitrust as well as corporate regulation and legislation, with experience involving covering war in Bosnia, elections in Mexico and Nicaragua, as well as stories from Brazil, Chile, Cuba, El Salvador, Nigeria and Peru.

Read original article here

Supreme Court leans toward limiting judicial scrutiny of U.S. elections

  • Justice debate “independent state legislature” doctrine
  • Liberal justices decry threat to “checks and balances”
  • Conservative-dominated court to rule by end of June

WASHINGTON, Dec 7 (Reuters) – The U.S. Supreme Court’s conservative majority on Wednesday appeared to ready to limit judicial power to overrule voting policies crafted by state politicians but might not go as far as Republican North Carolina lawmakers want in a case the liberal justices painted as a threat to American democratic norms.

The court heard arguments in a case the state lawmakers have used to try to persuade the justices to endorse a contentious legal theory gaining traction in conservative legal circles that would prevent state courts from reviewing the legality of actions by state legislatures regulating federal elections.

The Republican lawmakers are appealing the top North Carolina court’s decision to throw out the map they devised for the state’s 14 U.S. House of Representatives districts as unlawfully biased against Democratic voters. Another state court then replaced that map with one drawn by a bipartisan group of experts.

The Supreme Court has a 6-3 conservative majority, and its most conservative justices including Samuel Alito, Clarence Thomas and Neil Gorsuch appeared willing to embrace the “independent state legislature” doctrine presented by the Republican legislators.

While the conservative justices in general asked questions that indicated skepticism toward the state court actions, some signaled that the Republican argument that state constitutions cannot constrain the power of legislatures in setting rules for congressional and presidential elections might go too far.

Under the once-marginal legal theory they are now promoting, the lawmakers argue that the U.S. Constitution gives state legislatures – and not other entities such as state courts – authority over election rules and electoral district maps.

The court’s liberal justices suggested the doctrine could free legislatures to adopt all manner of voting restrictions. Lawyers arguing against it also said it could sow confusion by allowing voting rules that vary between state and federal contests.

“This is a proposal that gets rid of the normal checks and balances on the way big governmental decisions are made in this country,” liberal Justice Elena Kagan said, referring to the interaction between the executive, legislative and judicial branches of government. “And you might think that it gets rid of all those checks and balances at exactly the time when they are needed most.”

America is sharped divided over voting rights. Republican-led state legislatures have pursued new voting restrictions in the aftermath of Republican former President Donald Trump’s false claims that the 2020 election was stolen from him through widespread voting fraud.

The court’s eventual decision, due by the end of June, could apply to 2024 elections including the U.S. presidential race.

During the three-hour argument, the justices touched on the issue of enabling federal courts to review state court actions to ensure that judges do not behave like legislators or unfairly apply vague state constitutional provisions such as those requiring free and fair elections to disempower lawmakers.

Conservative Chief Justice John Roberts wondered whether such broadly worded provisions provide proper “standards and guidelines” for state courts to apply.

ALITO WEIGHS IN

Alito dismissed arguments that legislatures would be unchecked if the Republican position carried the day.

“Under any circumstances, no matter what we say the ‘Elections Clause’ means, Congress can always come in and establish the manner of conducting congressional elections,” Alito said, referring to the Constitution’s elections language.

The doctrine is based in part on the Constitution’s statement that the “times, places and manner” of federal elections “shall be prescribed in each state by the legislature thereof.” The Republican lawmakers argued that the state court usurped the North Carolina General Assembly’s authority under that provision to regulate federal elections.

Kagan said the theory would free state legislators to engage in the “most extreme forms of gerrymandering” – drawing electoral districts to unfairly improve a party’s election chances – while enacting “all manner of restrictions on voting,” noting that lawmakers by virtue of coveting re-election may have incentives to suppress, dilute and negate votes.

Kagan said the theory also could let legislatures insert themselves into the process of determining winners in federal elections – a sensitive issue following the Jan. 6, 2021, U.S. Capitol attack by Trump supporters who sought to block congressional certification of Biden’s 2020 election victory.

‘HISTORICAL PRACTICE’

Some conservative justices appeared to balk at aspects of the Republican arguments.

Justice Brett Kavanaugh emphasized the “historical practice” that “nearly all state constitutions regulate federal elections in some way.” Roberts said another check on a legislature’s power – a state governor’s veto – “significantly undermines the argument that it can do whatever it wants.”

David Thompson, arguing for the North Carolina lawmakers, said the Constitution “requires state legislatures specifically to perform the federal function of prescribing regulations for federal elections. States lack the authority to restrict the legislature’s substantive discretion when performing this federal function.”

Kavanaugh told Thompson that his position on the theory’s breadth “seems to go further” than that conceived by then-Chief Justice William Rehnquist in a concurrence to a 2000 ruling deciding a presidential election’s outcome – an opinion seeing state courts as exceeding their authority on federal elections.

North Carolina’s Department of Justice is defending the state high court’s February ruling alongside the voters and voting rights groups that challenged the map approved by the legislature in November 2021. They are backed by Democratic President Joe Biden’s administration.

Elizabeth Prelogar, arguing for Biden’s administration, said empowering state legislatures the way the Republicans want would “wreak havoc in the administration of elections across the nation” and cause federal courts to become flooded with lawsuits concerning state-administered elections.

Reporting by Andrew Chung in Washington and Nate Raymond in Boston; Editing by Will Dunham

Our Standards: The Thomson Reuters Trust Principles.

Nate Raymond

Thomson Reuters

Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.

Read original article here