Last week Chapter 7 bankruptcy trustee Christopher Murray announced that Global Tetrahedron, parent company of The Onion, was the winning bidder in the auction of Free Speech Systems, Alex Jones’s corporate firehose of hate. The runner-up bidder was a company called First United American Companies, LLC, which would appear to be associated with one of FSS’s suppliers. FUAC’s attorney Walter Cicack previously represented Charlie Cicack in this case, and Charlie is described by the New York Times as “an entrepreneur who had sold products through Free Speech Systems in the past” and then “claimed ignorance of the relationship and then deleted references to Infowars from his social media accounts” when the paper contacted him.

At an emergency status conference on Thursday, Walter Cicack protested that Murray, the trustee, had illegally changed the terms of the auction and colluded with the Sandy Hook families to rig the auction in favor of a party who put less cash on the table. And US Bankruptcy Judge Christopher Lopez appeared sympathetic, despite Murray’s protests that he’d done what was in the best interests of all the creditors.

This morning, Cicack filed an emergency motion to disqualify The Onion’s bid on the theory that Murray violated the court’s winddown order authorizing the sale. It was chock full of highly inflammatory claims that Murray acted “in complete bad faith and with improper collusion with the Connecticut Families.”

Within an hour, Murray docketed a two-page preliminary response denying the “barrage of baseless allegations, selective quoting and half-truths in FUAC’s recent filings” and “reserv[ing] all rights, including those under Federal Rule of Civil Procedure 11 and Federal Rule of Bankruptcy Procedure 9011 regarding the duties of attorneys who sign their names to pleadings in this Court.”

Then this afternoon, Murray filed an expedited motion to ratify the sale making clear why he chose The Onion’s bid, even though it was for less cash upfront.

Thanks to the numerous exhibits, the sealed auction negotiations have now been functionally unsealed (with the exception of the identity of FUAC and its funders). FUAC’s initial bid was $1.2 million, and The Onion’s was $1 million. But The Onion’s bid included a Distributable Proceeds Waiver by the Connecticut plaintiffs in favor of the Texas plaintiffs addressing a rift between the two sets of Sandy Hook parents that opened up when FSS exited Chapter 11 proceedings.

In brief, the Connecticut plaintiffs have a $1.4 billion judgment; and the Texas plaintiffs have a $50 million judgment. And so, under a pro rata distribution of assets, the Texas plaintiffs are going to get just three percent of the payout. And so, to address this disparity, while simultaneously ensuring that Jones doesn’t get to keep the company, the Connecticut plaintiffs agreed to disclaim as much of the sale proceeds as necessary to make the Texas plaintiffs $100,000 better off than they would be under the second-place bid.

To the extent an alternative Qualified Bid is submitted by a third party that consists of cash consideration in a higher amount than the Purchase Price set forth herein, the Connecticut Families commit to forego receipt of the Distributable Proceeds Waiver Amount (as defined herein), and shall assign the Distributable Proceeds Waiver Amount to the Chapter 7 Trustee for the benefit of all other unsecured creditors of FSS. The waiver described in this section (the “Distributable Proceeds Waiver”) is intended to enhance the terms of this Bid, such that creditors other than the Connecticut Families will receive greater cash recovery pursuant to this Bid than they would under an alternative Qualified Bid, notwithstanding a higher cash purchase price.

Murray went back to both FUAC and The Onion and asked them to submit their best and final offers, as was within his discretion according to the plain language of Judge Lopez’s order authorizing the sale. Notably, FUAC did not object at the time to the change in procedures.

The submissions were to include bids on multiple different lots, in varying combinations, since the assets include Infowars’ IP, the Infowars store, various domain names, and the FSS’s tangible personal property.

Goblinlove dot com???

View the original article to see embedded media.

This appears to have been an effort to extract maximum value for creditors by selling the IP to The Onion, and the store, which The Onion didn’t care much about, to FUAC.

FUAC came back with a bid for $3.5 million. The Onion’s bid was $1.75 million. But it was accompanied by a promise from the Connecticut families to disclaim as much of the purchase price as necessary to put the Texas families in a better position than they would have been with the FUAC deal, even if FUAC raised its offer to $7 million.

To be clear, the Connecticut plaintiffs calculated this by grossing the share of all other creditors up to 25 percent. In reality, everyone else’s claims against the Jones estate are just a rounding error compared to the $1.4 billion plus post-judgment interest the Connecticut plaintiffs entitled to. And, despite Cicack’s suggestion that The Onion was bidding with “monopoly money,” the Sandy Hook parents will get a continuing share of the ad revenue post-sale.

So Murray, exercising his broad discretion under the winddown order and the business judgment rule, chose the offer that maximized value to the creditors, even though it was not the deal that put the most cash on the table up front.

Presumably he will respond to Cicack’s attack in short order. Wonder if we’ll find out exactly which goblinlover is behind that FUAC bid …

Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.

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In recent statements, Andreessen has threatened criminal charges against advertisers choosing not to associate with certain platforms and accused an imaginary “government-university-company censorship apparatus” of violating free speech rights. These authoritarian demands completely contradict the free market and free speech principles Andreessen claims to champion in his “techno-optimist manifesto.”

As a board member of Meta with inside knowledge of content moderation practices, Andreessen should know better. His descent into promoting baseless conspiracy theories and attacking the very rights he purports to defend is deeply troubling.

Over the last few years, Andreessen’s views on innovation have taken him down a path that often seems detached from reality. It started with him claiming that Elon Musk is “pro free speech,” when it was blatantly obvious that he was not even remotely supportive of free speech.

Things got worse last year when Andreessen published his bizarre “Techno-Optimist Manifesto,” which had plenty of good, but non-controversial, ideas in it, and then a few that made no sense, including claiming that “trust & safety” was an “enemy of progress.” I wrote a long response to it as my final post of last year, noting that avoiding breaking shit that doesn’t need to be broken (the role of “trust & safety”) isn’t holding back progress, it’s making sure that innovation and progress proceeds in a way that more people are willing to adopt rather than freak out about.

Earlier this year, Andreessen made a big bet on Donald Trump for President, and now he’s won that bet. He claimed he only supported Trump because he believed Trump was better for what he calls his “Little Tech Agenda.” Historically, I would have expected him not to leap to the gloating stage so quickly, but I was wrong. He’s spent a few days basically showing that his supposed “Little Tech Agenda” gets tossed out the window when he gets near the hands of power, to the point that he is looking to weaponize the criminal justice system to punish his perceived critics.

Andreessen seems to ignore that his plan to punish people completely obliterates what he claimed he believed in his “tech optimist manifesto.” So let’s go through a bit of it. In the manifesto, he writes:

We believe free markets are the most effective way to organize a technological economy. Willing buyer meets willing seller, a price is struck, both sides benefit from the exchange or it doesn’t happen. Profits are the incentive for producing supply that fulfills demand. Prices encode information about supply and demand. Markets cause entrepreneurs to seek out high prices as a signal of opportunity to create new wealth by driving those prices down.

I agree with that sentiment. But Andreessen’s recent actions contradict it. On ExTwitter, Andreessen wrote:

That’s him tweeting:

The orchestrated advertiser boycott against X and popular podcasts must end immediately. Conspiracy in restraint of trade is a prosecutable crime.

He’s wrong. To an extraordinary degree. Conspiracy in restraint of trade applies to collusive behavior to harm competitors. In 1982, the Supreme Court made clear that boycotts are a form of expression, protected by the First Amendment. The only exceptions are if those boycotts were done for “illegal aims.” And “sorry, we don’t want to advertise on your site” is not an “illegal aim.”

It’s especially galling since choosing not to advertise is clearly part of both the free market and the free speech right not to associate. The only cases where boycotts may be illegal is if they are in pursuit of something illegal, such as for antitrust purposes, like when Toys R Us used its (then!) dominant position to block toy makers from selling to Costco. But advertisers deciding “we don’t want our ads showing up on Elon Musk’s Hellsite” are making a business decision.

You know, like what free markets enable? Willing buyer. Willing seller. Except here, some of the buyers aren’t willing. And Marc is claiming that’s criminal.

His misunderstanding of free speech continued.

That’s him saying:

Everyone involved in the longstanding illegal joint government-university-company censorship apparatus should take care to preserve their files and communications. Sunlight is coming.

First of all, you don’t issue litigation holds by tweet. That’s not how any of that works. Second, there is no “joint government-university-company censorship apparatus.” That’s literally not a thing that exists. We’ve talked about this quite a bit here at Techdirt, and even the Supreme Court just recently pointed out (in a ruling written by Amy Coney Barrett) that there appears to be no evidence of such a thing existing (other than a bunch of made up nonsense by a bunch of grifters).

There were a bunch of university researchers studying the flow of disinformation, mostly around voter intimidation and the like. One government agency, CISA, did team up with some of those researchers to act as a clearing house for connecting election officials who might see potentially problematic voter information, such as false information about where, how, or when to vote. Through this effort sometimes that information would be flagged to companies to review against their own policies.

This was nothing controversial or problematic. Every company has their own policies on what they allow. Most companies don’t want to enable election interference, so they say “hey, maybe we shouldn’t allow information that tells people to vote on the wrong day, because maybe that violates our rules.”

As we’ve explained multiple times, even as these researchers flagged some content for the companies to review, the companies quite frequently did nothing in response and there were no threats or legal consequences as a result. Flagging is something anyone can do (still, to this day, if you find something that you think violates the rules on any social media platform, you can flag it, just like these researchers did).

Again, Stanford’s report on what happened stated that the social media companies kept up nearly every reported URL, and in the small number of cases when they took action, they mostly focused on adding more speech (which is a very “marketplace of ideas” concept) such as pointing out that mail-in ballots are, in fact, pretty damn safe and secure.

We find, overall, that platforms took action on 35% of URLs that we reported to them. 21% of URLs were labeled, 13% were removed, and 1% were soft blocked. No action was taken on 65%. TikTok had the highest action rate: actioning (in their case, their only action was removing) 64% of URLs that the EIP reported to their team.)

I need to repeat this because it seems to keep getting lost every time I write about this. Anyone can report things to social media companies. It’s the “report” button you see all over the place. These academic researchers did report stuff to the companies, and only 13% of that content was removed. And even that’s distorted, because TikTok removed 64% of URLs reported because TikTok doesn’t care. So, the reality is that the other companies (mainly Facebook, Instagram, and Twitter) removed less than 10% of what was flagged by folks. Some of them they “labeled” which is just “more speech” in the marketplace of ideas. And the rest they left alone.

And even if you claim that the 13% of removed links is too much, the details suggest you’re wrong about that as well. The report showed that the largest % of content that was removed after researchers reported it was related to phishing scams. In other words, people posted election-related content that was made to trick people into giving up their personal info, and it was reported to the companies and they removed it to protect users.

This is not a censorship scandal. This isn’t a “joint government-university-company censorship apparatus.” This is “local election officials were scared about scams and election interference, and wanted to be able to report it to companies to review, and some academics who were studying disinformation helped.”

Sounds a lot less problematic that way, right?

And here’s the thing: Marc Andreessen knows all this.

Because Marc Andreessen, who claims he does everything in support of his “Little Tech Agenda,” is on the board of Meta, one of the biggest “Big Tech” companies there is. And, over the last few days, I’ve spoken to way too many current and former executives at Meta (many of whom are frustrated), who all made it clear to me that in Marc’s role on the board he has been directly briefed on what is happening regarding disinfo/trust & safety efforts and why it’s not nefarious.

I don’t know if Marc ignored those briefings.

I don’t know if he forgot those briefings.

I don’t know if he doesn’t care that he’s misrepresenting reality.

But I do know that Meta execs are not particularly thrilled that he’s now spreading a nonsense conspiracy theory suggesting that the very company he is on the board of is somehow engaged in First Amendment violating state action, a thing that every court that has looked at this issue fully has rejected completely.

Because this is not a thing:

That’s Andreessen claiming that “every participant in the orchestrated government-university-nonprofit-company censorship machine of the last decade can be charged criminally under one or both of these federal laws.” The “federal laws” he’s talking about are 18 USC 241 and 18 USC 242: “Conspiracy against rights” and “Deprivation of rights.”

These are both laughable claims.

Your “rights” do not grant you the freedom to use someone else’s private property for your own purpose. Again, you would think that Mr. “we believe in free markets” and “willing buyer meets willing seller” and “I’m on the board of Meta” would at some point realize that part of the free market where willing buyer meets willing seller is that private property rights matter. If the private property owner doesn’t want you on their property, they can get you to leave.

Even if we’re just looking at this through the free speech lens, the right of free speech has to include the right of association, and that includes the right not to associate.

Marc must believe that too, because I’m pretty sure that if I showed up at one of Marc’s many mansions and started screaming on his lawn, he would have me forcibly removed. That would be his right as a private property owner. Is that “depriving me of my free speech rights”? Of course not, because Marc has no obligation to allow me to speak on his property.

The same is true of Meta, on whose board Marc sits. It has no obligation to enable anyone’s speech. Their property. Their rules. And yes, it’s true that the government can’t forcibly remove speech, but there’s no evidence that happened. Instead, you had some academics and non-profits who used their own free speech rights (which Marc seems to think don’t exist) to share their thoughts with the companies, sometimes highlighting content they thought broke the company’s rules, or sometimes advocating for different rules. Which is their free speech.

The only way speech “rights” can be deprived is via state action, which has to involve the government. And yes, Marc wants to keep arguing that the government is involved in this “government-university-nonprofit-company censorship machine” but as the Supreme Court noted just a few months ago, what is happening does not, in any way, appear to be state action to deprive people of their rights.

At worst, government actors were trying to persuade private actors to act differently, which is allowed. The problem only comes in when the government tries to force action through threats and coercion. Yet no one has turned up any evidence of that.

Unlike Marc, the Supreme Court appears to be adept at differentiating between cases involving potential government coercion. In the Murthy case, the majority opinion authored by Justice Barrett found no evidence of coercion against social media companies. And the plaintiffs in that case tried every angle they could and threw a ton of ideas against the wall. Conversely, in the Vullo case, heard on the same day, the Court unanimously agreed that a New York official’s demand for insurance companies to deny coverage to the NRA constituted coercion and violated the First Amendment.

In short, the Supreme Court knows when the government is depriving people of their free speech rights and didn’t see that (at all) in how social media companies do content moderation.

Again, I know that plenty of internet randos and highly motivated partisans have been misrepresenting this reality for a few years now. And it’s pointless to respond to them.

But, of all the people in the world, Marc Andreessen should know what’s actually going on. Multiple Meta execs told me that he’s been told about it. Yet he’s making a mockery of his own “manifesto” by supporting the literal criminalization of being a “non-willing buyer” in a marketplace where he has a stake. He undermines his own claims of supporting free speech by suggesting it’s criminal for private property owners to decide whose speech to associate with. He’s further contradicting his free speech stance by threatening criminal action against academics and non-profits who use their free speech to criticize companies where Marc Andreessen is either an equity holder (ExTwitter) or a board member (Meta).

And that’s not “techno optimism.” It’s certainly not a “little tech agenda.” If you can force companies to do the bidding of the biggest tech companies out there, while simultaneously creating criminal charges for merely saying “hey, does this violate your rules?” you’re creating a world in which startups will be loathe to do business, out of fear of what arbitrary nonsense the Marc Andreessen/Elon Musk/Donald Trumps of the world will impose on them.

At Techdirt, we frequently call out hypocrisy and inconsistencies from public figures. In many cases, these stem from ignorance or misunderstanding of the complex issues around technology and policy. What’s so troubling here is that Marc is not ignorant of what has happened. He has had these things explained to him. Yet he is misrepresenting them to a very large audience, riling them up to believe things that are simply not true. This goes beyond mere inconsistency — it’s a direct distortion of reality from someone who should, and likely does, know better.

The end result may be that he gets to punish his perceived enemies if the Trump administration is willing to take such marching orders, but it doesn’t change the fact that he is misrepresenting reality. In doing so, he’s not just violating his own stated principles, but undermining public understanding of critical issues around free speech and platform responsibility. For someone who claims to be a “techno-optimist,” that’s a deeply pessimistic and damaging approach.

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The company’s satirical CEO Bryce P. Tetraeder explained that the decision was “an easy one for the Global Tetrahedron executive board.”

Founded in 1999 on the heels of the Satanic “panic” and growing steadily ever since, InfoWars has distinguished itself as an invaluable tool for brainwashing and controlling the masses. With a shrewd mix of delusional paranoia and dubious anti-aging nutrition hacks, they strive to make life both scarier and longer for everyone, a commendable goal. They are a true unicorn, capable of simultaneously inspiring public support for billionaires and stoking outrage at an inept federal state that can assassinate JFK but can’t even put a man on the Moon.

Through it all, InfoWars has shown an unswerving commitment to manufacturing anger and radicalizing the most vulnerable members of society—values that resonate deeply with all of us at Global Tetrahedron.

The guys who brought you the recurring headline “‘No Way To Prevent This,’ Says Only Nation Where This Regularly Happens,” will now own the media outlet used by smear merchant Alex Jones to defame the families of victims of the Sandy Hook shooting. And the purchase was financed, at least in part, with a multi-year advertising commitment from Everytown for Gun Safety, the gun violence prevention non-profit which is itself financed by Michael Bloomberg.

In addition to The Onion, through its parent company Global Tetrahedron, the deal includes the Sandy Hook plaintiffs who filed in Connecticut (but not the Texas plaintiffs).

From bankruptcy trustee Christopher Murray’s notice of the successful bid:

In his reasonable business judgment, the Trustee has designated the joint bid by Global Tetrahedron, LLC (“Global Tetrahedron”) and the Connecticut Families as the Successful Bid at the IP Assets Auction and Global Tetrahedron and the Connecticut Families, jointly, as the Successful Bidder.

“By divesting Jones of Infowars’ assets, the families and the team at The Onion have done a public service and will meaningfully hinder Jones’s ability to do more harm,” their attorney Chris Mattei told the New York Times.

Jones appears to be taking it well.

View the original article to see embedded media.

Earlier this week, he seemed optimistic that a fellow troll would pony up the cash to buy the business in the bankruptcy sale of his assets and allow him to continue to run it. CNN reported that one of his allies had made a “seven figure offer” for the bankruptcy assets. But it would appear that Jones, who notably tried to buy off the Sandy Hook plaintiffs with a measly $10 million, undershot again.

It’s not clear whether this ally was the backup bidder First United American Companies, LLC, nor is it clear who is the AC that this LLC is FU-ing. FUAC is represented by a Texas attorney named Walter Cicack, who previously represented Charlie Cicack, whom the New York Times described as “an entrepreneur who had sold products through Free Speech Systems in the past.” Charlie Cicack was deposed last year in the now-dismissed FSS bankruptcy.

FUAC is furious, and moved for an emergency hearing today “to address the apparent defects in the sale process, including changing the procedures, lack of transparency, and inaccurate disclosures to interested bidders.”

“Because the value of the assets is in the process of being destroyed at this very minute, FUAC requests a status conference today if the court’s calendar can accommodate it,” Walter Cicack added on behalf of whoever is throwing middle fingers behind that LLC. The hearing is at 2:30CT, and available to listen to through US Bankruptcy Judge Christopher Lopez’s public access line.

As CEO Bryce P. Tetraeder would say, “All will be revealed in due time. For now, let’s enjoy this win and toast to the continued consolidation of power and capital.”

Alexander E. Jones and Official Committee Of Unsecured Creditors [Docket via Court Listener]

Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker. 

Lambert’s client is Patrick Byrne, the founder of Overstock.com and former paramour of Russian spy Maria Buttina. Since 2020, Byrne has bankrolled efforts to overturn President Biden’s electoral victory, spouting ever-wackier conspiracy theories about how the fraud was engineered. Last Thursday he held forth on a Twitter livestream where he claimed to have hacked the Venezuelan government:

What I’ve really been doing for the last two years abroad is I’ve been hacking the government of Venezuela and I have it all at this point. I have everything. And it’s kind of funny, somewhere along the way, somebody told me — I got kicked out. I was operating in a foreign countries and I hired a bunch of professional hackers and we hacked the government of Venezuela, and I have everything.

Dominion Voting Systems is suing Byrne for defamation, along with Mike Lindell, Sidney Powell, and Rudy Giuliani. A freethinker like Byrne was never going to be content with a normie lawyer, and so in March he swapped out Dickinson Wright’s Robert Driscoll for Lambert, a fellow traveller in conspiracy land.

Lambert is facing multiple indictments in her native Michigan for election-related crimes, and her first action after (or perhaps before) entering her appearance in Byrne’s case in DC was to hand over protected discovery to her election-denying allies, specifically a “constitutional sheriff” from rural Michigan named Dar Leaf.

What followed has been a bizarre dance between Lambert, Magistrate Judge Moxila Upadhyaya, and Susman Godfrey’s Davida Brooks, who represents Dominion and is now having to deal with opposing counsel who is nuttier than squirrel shit.

Lambert insists that she has the right to alert law enforcement about “crimes” revealed in protected discovery — by which she means emails in a language other than English. Judge Upadhyaya told Lambert to knock it off, and Brooks moved to disqualify Lambert, arguing that the lawyer and her client could never be trusted to appropriately handle confidential discovery, and would just come up with more creative ways to leak it.

Lambert responded by seemingly engineering a subpoena in a Colorado criminal case for discovery materials in the Dominion civil matter. The Colorado case involves Tina Peters, a former election clerk who is charged in a plot to sneak one of Byrne’s operatives in to image a Dominion machine using a stolen government ID. During his recent Twitter rant, Byrne said “If you have any brains at all, which I’m not sure they do, they should be throwing in the towel and just surrendering and dropping this case against Tina because those who don’t are going to end up facing a piano wire and blowtorch before this is over. So I know that’s probably another felony, but f— it — threatening them like that — but there we are.”

Probably!

The clear terms of the protective order required Lambert to contest the Peters subpoena. But she refused to say whether she had done so, or if she’d taken advantage of the brief period between when the subpoena was served and when it was quashed to give Peters’ counsel access to the Dominion discovery. Citing attorney-client privilege, Lambert refused to say if she disclosed the company’s internal emails, but assured the court that Peters’s attorney John Case signed a confidentiality agreement, so it’s totes cool.

Last week, Lambert moved to file a surreply to Dominion’s response to the motion to enforce the protective order. She cited no reason other than her own busy schedule, but did attest that she’d “discussed the anticipated motion with opposing counsel in a good-faith effort to determine whether there is an opposition to the relief sought,” and Dominion opposed. Judge Upadhyaya reluctantly granted Lambert permission to file a surreply by Friday, but on Friday, Lambert simply docketed a request for an extension, noting that “her appearance is required at multiple depositions this week.”

But Davida Brook did get her homework in on time, and it was WILD.

The supplemental motion in support of Dominion’s bid to enforce its protective order and get Lambert off the case quoted Byrne’s Twitter rant at length, including a passage where he called one Dominion employee “a Cuban intelligence officer.” Dominion claims that Byrne and Lambert regularly work to intimidate witnesses, with Lambert’s behavior veering into the bizarre.

In a section captioned “Improper Activity at Recent Deposition,” they write:

In depositions of Dominion employees, Ms. Lambert is consistently disruptive. Instead of appearing at the beginning, Ms. Lambert joins each deposition by zoom, at some random point, without prior notice, and without announcing herself. She keeps her camera turned off even while questioning the witness. During last Friday’s deposition, Ms. Lambert went further.

Defendants were deposing a Dominion employee, a United States citizen who happens to have been born and raised in a foreign country. As usual, Ms. Lambert was not present when the deposition began. Twenty minutes in, she appeared on the zoom, camera off, with the screen name “Prosecutor.” Dominion’s counsel refused to re-start the deposition until Ms. Lambert, who is not a prosecutor, changed her screen name. Although Ms. Lambert initially claimed she did not know how to, not surprisingly, Ms. Lambert was able to change her screen name quickly once she realized the deposition would not move forward until she did.

And while her client was copping to felonies and threatening bodily harm to his enemies, Lambert was making what appears to be a blatant misrepresentation to the court. Because she had not met and conferred with Dominion, as she’d attested in her motion to file a surreply.

“I have canvassed our team and it appears that you did not confer with anyone for Dominion, much less get a response,” Susman lawyer Jonathan Ross wrote on Friday night. “Please correct the record with the Court over the weekend so we do not have to on Monday.”

Lambert replied shortly after: “I apologize. I was traveling with bad Internet and my email to your office did not go through.” But when asked for a screenshot of the purported email, which would not have represented conferral even if sent, Lambert never responded. And when informed that Dominion intended to tell Judge Upadhyaya about the discrepacy, the “Prosecutor” fired off a completely manic surreply in which she repeated the claim about the unsent email and accused opposing counsel of “seek[ing] to invade attorney-client privilege in an effort to reign [sic] in these privileged and confidential matters under this Court’s protective order.”

Yesterday Judge Upadhyaya reiterated once again that discovery materials are not to be distributed to non-parties.

Even though it appears that the Colorado court has granted motions to quash the subpoenas at issue, this Court will make abundantly clear that Defendant and his Counsel are expressly prohibited from sharing Dominion’s discovery anywhere outside this case absent express Court order. This order applies to ALL of the discovery that Plaintiffs have produced in this litigation. It likewise applies to ALL of Defendant Byrne’s counsel who have gained access to Plaintiffs’ discovery, including Ms. Lambert and Mr. John Case.

Well! Surely that will be the end of the matter and there will be no further spillage in this case.

LOL.

Liz Dye lives in Baltimore where she produces the Law and Chaos substack and podcast.

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker. 

As things l’affaire GameStop really ramped up, someone at Citadel (the names have been redacted) noted to Robinhood’s deputy general counsel, “we obviously have a strong relationship between the two firms.” The day before the restrictions were imposed, Robinhood’s top brass had a 5 p.m. chat with Citadel, with founder Vlad Tenev wondering if “Maybe this would be a good time for me to chat with Ken griffin.” Why ever would that be, Vlad? An hour and a half after the call began, Robinhood President Jim Swartout said in an internal chat, “you wouldnt believe the convo we had with Citadel. total mess.”

It is indeed, Jim, for in spite of your later and potentially exculpatory bitterness toward Citadel (“I am beyond disappointed in how this went down. It’s difficult to have a partnership when these kind of things go down this way.”), Ken Griffin & co. feel compelled to deign to address it.

Citadel Securities in a statement Tuesday rejected “Internet conspiracies and Twitter mobs” that have again accused the firm of pushing Robinhood Markets Inc. and other brokerages to limit trading in GameStop and other meme stocks on Jan. 28, a move that resulted in losses for many small investors.

"Citadel Securities never requested, intimated, agreed or otherwise sought to limit or to restrict the trading of such securities," Citadel Securities said in a statement to Reuters on Tuesday.

Citadel Securities Faces New Pressure Over GameStop Frenzy [WSJ]
Citadel Securities denies involvement in 'meme stock' trading restrictions [Reuters]

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But no, because in addition to turning their fury on their formerly preferred trading platform, they’re also alleging that losing more than half your money on a single highly-levered short was all part of Plotkin’s master plan to screw over the little guys who thought they were screwing him.

Gabriel Plotkin’s Melvin Capital, the hedge fund at the center of the GameStop trading frenzy in January, is a defendant in nine lawsuits by retail investors alleging a conspiracy to limit trading that caused them to lose money…. The lawsuits have been filed on behalf of investors in New York, California, Virginia, Illinois, and Texas.

One purported class action lawsuit, filed Feb. 8 in the Eastern District of New York, said its claims “arise from a conspiracy to deprive individual investors… of their ability to invest in the open market in the midst of an unprecedent[ed] stock rise so that defendants could shield themselves from incurring substantial losses as a result of their own high-risk short selling strategies.”

According to the suit, buying restrictions were only placed on retail investors, not institutional investors like the hedge funds named in the complaint that were “leveraged short” and had a vested interest in seeing the prices decline so they could cover their shorts at lower prices…. The lawsuit filed in the Eastern District of New York claims that hedge fund defendants “made misstatements about their role in the conspiracy to the public.”

Anyway, not that it matters to the above cases, which Melvin, of course, says are “without merit,” nor, frankly, to GameStop’s untethered-from-reality stock price, but the company at the center of the legal battle is continuing its transformation into an asset that may one day be worthy of a slightly larger fraction of that stock price.

GameStop Corp said on Tuesday its chief customer officer Frank Hamlin will resign from the company on March 31, the latest sign of a broader overhaul at the video game retailer driven by its top shareholder, Chewy.com co-founder Ryan Cohen…. GameStop last month also said Chief Financial Officer Jim Bell would step down…. Cohen hopes to transform the brick-and-mortar retailer into an e-commerce firm that can take on big-box retailers such as Target Corp and Walmart Inc and technology firms such as Microsoft Corp and Sony Corp.

Melvin Capital Is Facing Nine Lawsuits Related to the GameStop Frenzy [II]
GameStop loses second senior exec as shakeup deepens [Reuters]

Silver futures were up more than 9% by midday Monday, and many news outlets linked the sharp uptick to the Reddit page r/wallstreetbets that has been shaking up Wall Street over the past week…. The hashtag #silversqueeze was trending on Twitter Monday morning…. Shares for AMC Theaters, another favorite of r/wallstreetbets, climbed nearly 6%.

Digital-currency exchange website Coinbase Global Inc. said it was investigating an outage Friday that prevented customers from trading on its web and mobile apps. Another exchange, Bittrex Global GmbH, said an increase in traffic created technical problems on its platform…. Robinhood Markets Inc., which is under fire for suspending trading of popular stocks, also curbed activity in its cryptocurrency platform…. Some digital-currency proponents think investors unable to trade their favorite stocks moved to crypto instead.

Day traders are even putting money into SPACs before they have revealed what company they are buying…. “I would just have a bad case of FOMO if I wasn’t in SPACs,” said Marco Prieto, a 23-year-old real-estate agent living in Tucson, Ariz., referring to the fear of missing out that is driving many individuals to put money into markets…. In another sign blank-check firms are now frequently traded by individuals, several SPACs and companies that have merged with them recently joined GameStop and AMC on a list of stocks that had position limits on Robinhood Markets Inc., a popular brokerage for day traders.

None of this is sitting well with those currently aboard the sputtering rocket called GameStop.

Some of the top posts on the Reddit forum, however, said that this was false and urged members of the community not to buy silver but to focus on stocks such as GameStock and AMC.

And what of the Redditor most credited with the events of the last week? He’s not getting judgmental. At least not on the record with a Wall Street Journal reporter.

“This story is so much bigger than me,” [Keith] Gill told The Wall Street Journal in his first interview since the unboxing this week of a volatile new stock-market game. “I support these retail investors, their ability to make a statement….”

“I’m not out for anybody,” Mr. Gill said. “Roaring Kitty was an educational channel where I was showcasing my investment philosophy.”

This is perhaps news to Steve Cohen and Andrew Left. And also maybe to Robinhood, which is definitely being gone after by at least some of Gill’s acolytes (although not Gill himself; as any peruser of r/WSB can tell you, Gill himself is an E*Trade man). And also maybe by the SEC, too.

Securities regulators said Friday they plan to closely review the actions of some brokerage firms that restricted investors’ ability to trade volatile stocks such as GameStop Corp. this week.

So it looks like one day soon, Vlad Tenev is going to have some questions to answer from Gary Gensler (and Elizabeth Warren and AOC and Ted Cruz and Ken Paxton and an as-yet-undetermined number of plaintiffs’ attorneys). But first, he’s got to prostrate himself before he who really matters on Wall Street. That is, just as soon as said power finishes sparking another trading frenzy on Twitter.

Billionaire Elon Musk said on Monday bitcoin was “on the verge” of being more widely accepted among investors as he expressed his support for the cryptocurrency in a chat on social media app Clubhouse that drew thousands of listeners.

The comments followed his use of the “#bitcoin” tag on his Twitter profile on Friday, which pushed the crytocurrency up 14%.... “I am a supporter of bitcoin,” he said.

Anyway, on to the matter at hand.

Wild moves in the value of those stocks and options prompted clearinghouses that process and settle trades to demand increased cash collateral to insulate themselves from possible losses.

“The request was around $3 billion, which is, you know, about an order of magnitude more than what it typically is,” Robinhood Chief Executive Vlad Tenev said. He spoke Sunday night in an interview alongside Tesla boss Elon Musk on a live stream of Clubhouse, an invitation-only social networking app popular in Silicon Valley….

In the online interview, Mr. Musk, questioned the motive behind Robinhood retail trading limits, asking whether hedge funds had pressured the company or wielded influence at the DTCC.

“I don’t have any reason to believe that, then you’re getting into conspiracy theories,” Mr. Tenev responded.

Silver surges, AMC ticks up and GameStop falls as retail investors shake up markets [ABC News]
Cryptocurrency Platforms Struggle With Demand From WallStreetBets Fervor [WSJ]
GameStop Day Traders Are Moving Into SPACs [WSJ]
SEC to Review Brokers’ Restrictions on GameStop, AMC Trading [WSJ]
Gensler Faces Big Challenge in Tackling GameStop’s Wild Ride [NYT]
Tesla’s Elon Musk Speaks With Robinhood Boss About GameStop Stock Trading [WSJ]
Elon Musk says bitcoin “on the verge” of being more widely accepted [Reuters]
Keith Gill Drove the GameStop Reddit Mania. He Talked to the Journal. [WSJ]

So, it seems, it is with even Paul Singer. It’s been just three-and-a-half months since the Elliott Management chief came to terms with the new president and the guaranteed “widespread global depression” he rode in on, and just a month since he had some facetime with The Donald. Now, he’s throwing around accusations of voter fraud.

What has unleased the tin-foil-hatted-one inside the normally cool, collected and ruthless Singer? Why, the massively, abysmally underperforming folks at Arconic, whose latest we’ll admit is a doozy.

Last week, Arconic disclosed that in August 2016 the company had reached a two-year deal with its sixth biggest shareholder, Oak Hill, which had agreed to vote in favor of directors nominated by Arconic's board.

The deal was part of a resolution of a "working capital adjustment" in connection with Arconic's acquisition of aircraft parts maker Firth Rixson from Oak Hill….

Elliott said on Monday that Arconic's board must take immediate action to dismiss anyone who devised, authorized and participated in negotiating the "secret vote-buying agreement", thereby "converting company assets for personal benefit".

Elliott demands review of Arconic’s voting deal with Oak Hill [Reuters]