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Trump DOJ Sues All Maryland Federal Judges · Bloomberg Law

0:02
Speaker 1: This is Bloomberg Law with June Brossel from Bloomberg Radio.
0:08
Speaker 1: It's unprecedented. The Trump administration has sued all fifteen federal
0:14
Speaker 1: District court judges in Maryland over a standing order that
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Speaker 1: prevents the government from deporting a person for two business
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Speaker 1: days after a habeast challenge is filed. It's the latest
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Speaker 1: escalation in the Trump Administration's battle with the federal judiciary.
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Speaker 1: Joining me is Immigration attorney Lena Baudi. Lena tell us
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Speaker 1: why the Justice Department is suing every federal District court
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Speaker 1: judge in Maryland.
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Speaker 2: Judge George L. Russell the Third issued a statewide standing
0:46
Speaker 2: order on May twenty one, says that any immigrant detainee
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Speaker 2: who files a habeas corpus petition would receive a forty
0:53
Speaker 2: eight hour automatic stay on the deportation. And the purpose
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Speaker 2: of that was to ensure that detained individuals who filed
1:02
Speaker 2: for habeasts were able to have a fair hearing and
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Speaker 2: access to council, especially since there were so many habeas
1:09
Speaker 2: petitions being filed after hours or on weekends, creating an
1:13
Speaker 2: urgency where they were facing deportation without judicial review. The
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Speaker 2: Department of Justice under Attorney General Bondy labeled the order
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Speaker 2: unlawful and democratic judicial overreach, and they basically filed a
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Speaker 2: lawsuit arguing that the standing order violates the Supreme Court
1:34
Speaker 2: precedent requiring case by case injunctive authority, meaning that the
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Speaker 2: chief judge of the district court could not just issue
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Speaker 2: a blanket standing order for every case without considering it
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Speaker 2: case by case. So the legal filing filed by the
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Speaker 2: Department of Justice demands of the court and all fifteen
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Speaker 2: Maryland federal judges recused themselves from the case, and that
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Speaker 2: an out of district judge oversee the liiticuate.
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Speaker 1: Have you ever heard of a suit against all the
2:05
Speaker 1: federal court judges on a bench.
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Speaker 2: No, it's unprecedented for the executive branch to sue an
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Speaker 2: entire federal bench. Traditionally, the Department's Justice responds to unfavorable
2:17
Speaker 2: ruling through appeals, not lawsuits targeting individual judges or individual courts.
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Speaker 2: This is really a direct assault on judicial independence and
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Speaker 2: threatens the separation of powers.
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Speaker 1: But is the rule itself, the rule that the chief
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Speaker 1: judge put in place, is that also unusual?
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Speaker 2: It's not very unusual for a court to have standing orders.
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Speaker 2: In fact, many of the district courts and the Court
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Speaker 2: of Appeals have standing orders for all types of various things,
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Speaker 2: including stays, in which an immigrant gets an automatic stay
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Speaker 2: while the motion for a stay is played out. This
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Speaker 2: often happens because in cases where deportation is eminent, when
3:02
Speaker 2: a case is filed in the evening or it's filed
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Speaker 2: over the weekend, if ICE or DHS is allowed to
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Speaker 2: remove a non citizen without them having an opportunity to
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Speaker 2: have a federal judge look at their motion for a
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Speaker 2: stay or for a habeast, they're deprived of due process
3:22
Speaker 2: and that ends up happening just because of the timing
3:25
Speaker 2: of their filing. So it's not unusual for judges to
3:29
Speaker 2: issue orders under the All Rits Act. So the All
3:32
Speaker 2: Rits Act basically says federal courts may issue all riats
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Speaker 2: necessary or appropriate in aid of their respective jurisdictions and
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Speaker 2: agreeable to the usages and principles of law. And in fact,
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Speaker 2: in this specific case, when the standing order was issued,
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Speaker 2: the chief judge cited the All Rits Act and said
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Speaker 2: this squarely applies to protect their ability to decide cases.
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Speaker 1: Is that argument stronger than what the Justice Department is arguing,
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Speaker 1: which is that Supreme Court recedents mean that the judges
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Speaker 1: have to rule on each case individually, not in a
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Speaker 1: blanket fashion.
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Speaker 2: Well, I think the All Risk Act gives the court's
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Speaker 2: wide latitude to run the courts how they see fit,
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Speaker 2: and the Court has inherent power to issue preemptive orders
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Speaker 2: to prevent jurisdictional defeat. For example, they can issue standing
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Speaker 2: orders to prevent a deportation before a judge can look
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Speaker 2: at it. The Department of Justice's rebuttal is that the
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Speaker 2: All Rits Act doesn't authorize blanket automatic injunctions, and federal
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Speaker 2: judges can't preemptively enjoin executive action in every case. But
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Speaker 2: this could happen in a very different way, which leads
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Speaker 2: to the same result, which is a judge, a district
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Speaker 2: judge can be on call twenty four hours a day
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Speaker 2: and issue the same exact standing order for any habeasts.
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Speaker 2: And so what the Chief Judge is doing, as for
4:55
Speaker 2: lack of a better term, a housekeeping matter, they're saying,
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Speaker 2: we're going to do this for every case anyway, So
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Speaker 2: we're going to make it a standing order for this court.
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Speaker 1: And the Chief Judge explained in the order that there
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Speaker 1: has been an increase in habeas petitions filed after court
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Speaker 1: hours and on weekends. Is it pretty obvious why there
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Speaker 1: has been this increase now.
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Speaker 2: There's a lot obviously going on in immigration right now.
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Speaker 2: There's a lot of things that the administration is doing
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Speaker 2: that are circumventing the legal process that has been set
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Speaker 2: out for individuals to apply for relief from removal. As
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Speaker 2: we've seen, they are kidnapping people in the street, they
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Speaker 2: are dismissing cases of individuals who have sought relief in
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Speaker 2: immigration court, and they are moving non citizens around the
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Speaker 2: US in order to pick and choose which district courts
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Speaker 2: we as council file habeas in. So there is absolutely
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Speaker 2: an uptick in hey petitions and that's a direct response
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Speaker 2: to what the administration has been unlawfully doing in the
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Speaker 2: immigration system.
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Speaker 1: A lot of high profile cases, immigration cases in particular,
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Speaker 1: have been handled in this Maryland Federal District Court, including
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Speaker 1: the case of Abrego Garcia, and Maryland judges have put
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Speaker 1: some key Trump initiatives on hold in different areas. Maryland's
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Speaker 1: Governor Wes Moore has called this a transparent effort to
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Speaker 1: intimidate judges. Do you agree?
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Speaker 2: I do? I mean the Abrego Garcia case is such
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Speaker 2: an alarming situation in immigration law. This is not a
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Speaker 2: non citizen who was just in the US without status.
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Speaker 2: This is someone who had had a hearing before an
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Speaker 2: immigration judge, he had been granted protection from removal, and supposedly,
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Speaker 2: due to administrative error, he was deported back to the
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Speaker 2: very same country that an immigration judge found that he'd
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Speaker 2: be persecuted and tortured. I don't believe it was an
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Speaker 2: administrative error, and the fact that the Trump administration was
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Speaker 2: so hesitant to bring him back tells us a lot.
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Speaker 2: It was a test to see how far they could
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Speaker 2: push to remove non citizens.
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Speaker 1: So, as you mentioned, there's a question of who's going
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Speaker 1: to hear this lawsuit, and the Justice Department is asking
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Speaker 1: that the Fourth Circuit Court of Appeals randomly selected judge
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Speaker 1: from another district.
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Speaker 2: Well, the inter Circuit Assignment Statute empowers the chief judge
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Speaker 2: of the circuit here, the fourth Circuit, to request the
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Speaker 2: judge from another district within the same circuit by designation.
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Speaker 2: So if there's no suitable in circuit judge available because
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Speaker 2: all fifteen are recused, the matter goes higher up. So
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Speaker 2: here it looks like what's going to happen is that
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Speaker 2: the entire district or even the circuit is going to
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Speaker 2: be confident it out. So what happened is the Chief
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Speaker 2: Justice of the United States, John Roberts, will designate and
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Speaker 2: assign a judge from another federal district to preside over
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Speaker 2: the case. And this is going to be done in
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Speaker 2: coordination with the Administrative Office of the US Courts and
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Speaker 2: the Judicial Conference. And when they select the judge, Justice
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Speaker 2: Roberts will be looking for someone who doesn't have a
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Speaker 2: conflict of interest, who has judicial experience, especially with constitutional,
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Speaker 2: administrative or immigration law, someone who's able to handle public
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Speaker 2: scrutiny or politically sensitive issues, and someone who's obviously logistically available.
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Speaker 2: And that's often going to be a senior judge or
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Speaker 2: a retired Article three judge or a sitting judge from
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Speaker 2: a district who has no involvement with similar issues.
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Speaker 1: So it sounds like this is sort of getting a
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Speaker 1: little complicated. Then do you think that this case will
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Speaker 1: take a long time to play out?
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Speaker 2: The complaint was just filed yesterday, and normally in these
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Speaker 2: types of cases they will file a motion for preliminary injunction.
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Speaker 2: They haven't done so as of this morning, So that
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Speaker 2: is what I expect will be next. And what's happening
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Speaker 2: with all these cases with the administration and the federal
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Speaker 2: courts is that it's almost like a game of ping pong.
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Speaker 2: We are not seeing a lot of aligation go to
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Speaker 2: actual merits of the case because a lot of these
9:17
Speaker 2: cases are being decided in the form of motions for
9:21
Speaker 2: preliminary injunctions and injunctive relief. So if this were to
9:25
Speaker 2: play out, what will probably happen is a motion for
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Speaker 2: preliminary injunction will be filed, and then the actual merits
9:33
Speaker 2: of the case will be ongoing for years. I expect
9:35
Speaker 2: this is going to be a long lawsuit because this
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Speaker 2: is really a pivotal case in the tension between the
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Speaker 2: judicial and executive French.
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Speaker 1: The Trump administration has brought so many immigration cases on
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Speaker 1: an emergency basis to the Supreme Court, and the court often,
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Speaker 1: as it did on Monday, issues orders without explanation. Is
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Speaker 1: it confusing to litigants and perhaps even to judges.
10:03
Speaker 2: Confusing to everyone. It's confusing to lawyers. I mean, we
10:07
Speaker 2: are constantly back and forth and asking each other what
10:11
Speaker 2: happened with this case? And what about this? And it's
10:14
Speaker 2: impossible to keep track of this and imagine people who
10:18
Speaker 2: are being held in custody. One day they're going to
10:21
Speaker 2: get a credible fear interview. The next day they're being
10:23
Speaker 2: deported to South Sudan, the third day they're being removed
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Speaker 2: somewhere else. The fourth day they might have a credible
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Speaker 2: fear interview. It's ridiculous. I mean, not only is it
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Speaker 2: a violation of due process and a violation of the
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Speaker 2: United States obligation under international law, but it also makes
10:42
Speaker 2: it impossible for them to be represented by counsel which
10:46
Speaker 2: is not acquisident. So it makes it very very impossible
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Speaker 2: one for us to communicate with our clients, and two
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Speaker 2: for us to properly advise them because so much is
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Speaker 2: happening all the time.
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Speaker 1: Well, it doesn't look like any confusion is going to
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Speaker 1: be cleared up anytime soon, unfortunately. Thanks so much, Lena.
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Speaker 1: That's immigration attorney Lena Baruti. I'm June Grosso, and you're
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Speaker 1: listening to Bloomberg. As court orders hem in the Trump agenda,
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Speaker 1: there's been a steady drumbeat of rhetoric by the President
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Speaker 1: challenging the authority and independence of federal judges.
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Speaker 3: You can't stop that with a judge sitting behind the
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Speaker 3: bench that has no idea what goes on, who happens
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Speaker 3: to be a radical left lunatic. These are judges that
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Speaker 3: just want to, you know, show how how big and
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Speaker 3: important they are. They hit their local federal judges, and
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Speaker 3: they shouldn't be allowed to do it. Judges are trying
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Speaker 3: to take away the power given to the president to
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Speaker 3: keep our country safe and it's.
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Speaker 4: Not a good thing.
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Speaker 1: And Trump administration officials have followed suit from borders are
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Speaker 1: Tom Holman challenging a judge's authority.
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Speaker 5: I don't care what that judges, thanks virus this case.
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Speaker 2: We're going to continue to arrest public safety threats and
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Speaker 2: national security threats.
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Speaker 5: We're going to continue to the Port for the United States.
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Speaker 1: To the Attorney General of the United States, Pam BONDI
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Speaker 1: not only criticizing a judge, but name calling they're deranged.
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Speaker 5: It's all I can think of.
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Speaker 4: I cannot believe. I think some of these judges think
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Speaker 4: they are beyond and above the law, and they are not.
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Speaker 1: And we're sending a very strong message today. This rhetoric
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Speaker 1: hasn't gone unnoticed by judges, and their reaction has been
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Speaker 1: to stay on the bench refusing to retire, and this
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Speaker 1: is true of judges appointed by both Democratic and Republican presidents.
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Speaker 1: Joining me is Bloomberg Law reporter Tianna Headley Tianna how
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Speaker 1: many judges appointed by Republicans are eligible for retirement now?
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Speaker 4: So there's roughly seventy Republican appointed judges who are eligible
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Speaker 4: to take a fore a partial retirement called senior status,
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Speaker 4: or to just completely step down from the bench, and
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Speaker 4: that was as of June first of this year.
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Speaker 1: And how many are taking retirement very few.
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Speaker 4: As the numbers tell us, there's been sixteen new opportunities
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Speaker 4: that have opened up for the President Trump to fail
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Speaker 4: judge ships. Those include folks who are have announced their
13:26
Speaker 4: intent to retire, who've already taken retirement or senior status
13:31
Speaker 4: or some unfortunate depths this year. But comparatively to those
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Speaker 4: first couple of months of other presidencies, this is not
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Speaker 4: a big group.
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Speaker 1: No, it's not. Nine Republican appointed judges assume partial or
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Speaker 1: full retirement since January one, and only one Democratic appointed judge.
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Speaker 1: And usually you'll see judges holding out and then retiring
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Speaker 1: when there's a president of the same party that appointed them.
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Speaker 1: So why are Republican appointed judges holding back from retirement.
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Speaker 4: You know, there's so many reasons why judges decide, you know,
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Speaker 4: even though I am eligible to, you know, take this
14:13
Speaker 4: this privilege of taking senior status or just retiring and
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Speaker 4: enjoying that. You know, judges love doing their jobs. Judges
14:21
Speaker 4: find the work invigorating intellectually. But you know, what we've
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Speaker 4: seen under this administration, as former judges than even president
14:31
Speaker 4: judges would say, is this sort of unprecedented attack open
14:36
Speaker 4: hostility towards the federal judiciary, even specifically from this administration,
14:43
Speaker 4: the Trump administration, And I would say this has been
14:47
Speaker 4: sort of a concern on both sides of the isle,
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Speaker 4: if you will, from judges appointed by Republicans presidents and
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Speaker 4: Democratic presidents.
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Speaker 1: Is there a difference in the people that the Trump
14:59
Speaker 1: adminis is appointing the second term as opposed to the
15:04
Speaker 1: people you know he was appointing the first term.
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Speaker 4: There is a difference in how this administration is thinking
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Speaker 4: about the kind of judge they want to appoint to
15:16
Speaker 4: the court. You know, the President on several occasions and
15:20
Speaker 4: even just very recently, has expressed his disappointment and his
15:24
Speaker 4: path appointees that they are not ruling in the ways
15:29
Speaker 4: in which he felt that they would be ruling, particularly
15:32
Speaker 4: in cases related to himself and his administration's agenda. And
15:37
Speaker 4: so this time around, he has been looking to appoint
15:42
Speaker 4: more conservative jurists, lawyers who have a track record of
15:46
Speaker 4: sort of advancing these conservative legal movement issues, but in
15:52
Speaker 4: some respects lawyers who have shown even a personal loyalty
15:58
Speaker 4: and commitment to the present and that's what we have
16:02
Speaker 4: seen in recent nominee Emil Bozi for the Third Circuit.
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Speaker 1: That appointment has been very controversial for a lot of
16:12
Speaker 1: different reasons, including ethical concerns. He was Trump's criminal defense attorney,
16:18
Speaker 1: and at his hearings he even denied that he was
16:22
Speaker 1: Trump's henchman, saying, I'm not an enforcer, but he's seen
16:27
Speaker 1: as a loyalist to the president who's been rewarded with
16:30
Speaker 1: this lifetime nomination on the Third Circuit. Explain why that
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Speaker 1: concerns some sitting judges.
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Speaker 4: So many of the judges, the publican appointed judges who
16:43
Speaker 4: are on the bench right now and are eligible, were
16:47
Speaker 4: appointed by more traditional conservative presidents. We're talking about Ronald Reagan,
16:52
Speaker 4: George W. Bush, George H. W. Bush, and so as
16:57
Speaker 4: I spoke with more traditionalservative lawyers for the story, for
17:01
Speaker 4: example Greg Nunciata at the Society for the Rule of Law.
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Speaker 4: You know, these are institutionalists as far as the judges go.
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Speaker 4: They want to preserve institutions, and preserve president, and preserve
17:16
Speaker 4: the ways in which our system currently functions. And you
17:20
Speaker 4: know in the sort of allegations that Trump is trying
17:23
Speaker 4: to seek out loyalists who will sort of do his bidding. Again,
17:27
Speaker 4: those are allegations the idea that an institutionalist conservative judge
17:34
Speaker 4: can reflect on his ability to take senior status and
17:37
Speaker 4: create a vacancy and potentially be replaced by a judge
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Speaker 4: who has sort of expressed more of a loyalty to
17:47
Speaker 4: the president than to the rule of law or maintaining
17:51
Speaker 4: and conserving our institutions. There is a tension there and
17:55
Speaker 4: that is what mister Nunziata was speaking to in conversations
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Speaker 4: with him.
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Speaker 1: How have people reacted to the Beauvet hearings, because despite
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Speaker 1: the fact that there is a lot to question him on,
18:13
Speaker 1: it didn't seem like the Republican senators were phased by that.
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Speaker 4: That's a bigger question. That's how the Republican Senate Caucus
18:23
Speaker 4: sort of follows and answers to the President's agenda and
18:27
Speaker 4: what he wants. So that's its own conversation. But what
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Speaker 4: I will say about how even the conservatives that we're
18:34
Speaker 4: speaking about have responded and reacted to the Bovie nomination.
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Speaker 4: It's been extremely mixed, you know. I would say that
18:44
Speaker 4: in speaking to conservative lawyers, what they felt was what
18:48
Speaker 4: was a unifying force during the first Trump term is
18:52
Speaker 4: his track record appointing traditional conservative judges with traditional bonafides,
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Speaker 4: and now they're seeing, in their words, straying away from,
19:08
Speaker 4: you know, just picking textualless judges, originalist judges, conservative judges
19:13
Speaker 4: from the bench were seen, in their eyes that the
19:17
Speaker 4: highest credential is do you swear your loyalty to this president.
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Speaker 1: The Federalist Society was particularly active, to put it mildly,
19:28
Speaker 1: in the selection of nominees for the first Trump term.
19:32
Speaker 1: Is the Federalist Society involved anymore?
19:35
Speaker 4: As far as you know, the Federalist Society is a
19:40
Speaker 4: network of right leaning lawyers, right and between that network
19:47
Speaker 4: and the organization's former chairman, Leonard Leo, they had a
19:55
Speaker 4: pretty influential Mark Odd, who the president previously can bittered
20:00
Speaker 4: under his previous administration. This time around for the reasons
20:05
Speaker 4: I mentioned, this president has found those appointees that he
20:09
Speaker 4: picked through that process as a disappointment. And so the
20:15
Speaker 4: sort of short answer for you is no, their membership
20:18
Speaker 4: in the society, in the federalist society, but will not
20:22
Speaker 4: have as big of an impact on how the president
20:26
Speaker 4: affects nominees are potential nominees. What he seems to be
20:31
Speaker 4: looking for is this deep commitment to having litigated issues
20:38
Speaker 4: important to Trump and the Trump administration, as well as
20:42
Speaker 4: aligning with Trump's.
20:45
Speaker 5: Goals and agenda for his presidency.
20:48
Speaker 1: And tell us about this group of former federal judges
20:54
Speaker 1: appoint you by both Democratic and Republican presidents who formed
20:57
Speaker 1: this coalition.
21:00
Speaker 4: Yes, so they are the Article three coalition. They're a group,
21:07
Speaker 4: I would say, growing group of retired judges that were
21:11
Speaker 4: appointed by pretty much every single president going back to
21:16
Speaker 4: Jimmy Carter, I believe, and they have come out in
21:20
Speaker 4: recent weeks to say, you know what, in the face
21:24
Speaker 4: of the attacks and threats that we have seen against
21:28
Speaker 4: the independence of the judiciary, against judges themselves, and really
21:34
Speaker 4: what they're seeing as a huge misunderstanding about our system
21:39
Speaker 4: of checks and balances and what the courts really do
21:42
Speaker 4: and what their role is in our society. They've decided,
21:46
Speaker 4: you know what, we're going to advance together and publicly
21:49
Speaker 4: speak out in support of judicial independence and to inform
21:54
Speaker 4: the public about what the role of the judiciary actually
21:57
Speaker 4: is in our democracy.
21:59
Speaker 1: It really has been an unprecedented attack on the federal judiciary.
22:04
Speaker 1: Thanks so much, Tianna. That's Bloomberg Law reporter Tianna Headley.
22:11
Speaker 1: The SEC's Consolidated Audit Trail system, which requires broker dealers
22:16
Speaker 1: and others to report trade data in real time, is
22:20
Speaker 1: at a critical juncture. The Commission is reviewing the market
22:24
Speaker 1: surveillance tool as some lawsuits push to abolish it entirely.
22:29
Speaker 1: SEC Chairman Paul Atkins said last month that the financial
22:33
Speaker 1: services industry and Congress have rightly pushed back on the
22:37
Speaker 1: seemingly endless cost increases and the risks of storing so
22:41
Speaker 1: much sensitive data. Together. Joining me is securities law expert
22:46
Speaker 1: James park, A professor at UCLA Law School. Jim tell
22:50
Speaker 1: us about this Consolidated Audit Trail system, What it is
22:55
Speaker 1: and what it does.
22:56
Speaker 5: It's basically a record of trading in stocks on national markets,
23:04
Speaker 5: and it basically allows the SEC to track pretty much
23:08
Speaker 5: every trade that's happening. And this is a capability that
23:11
Speaker 5: the SEC did not have until relatively recently. After the
23:16
Speaker 5: flash crash of twenty ten, there was a concern that
23:20
Speaker 5: the SEC just didn't have enough information about increasingly complex
23:25
Speaker 5: securities markets, and so they passed this rule, which requires
23:29
Speaker 5: various self regulatory organizations to report this information basically the
23:34
Speaker 5: next day to the SEC.
23:37
Speaker 1: I take it that traders don't like this. Does it
23:39
Speaker 1: cost them a lot to do this?
23:41
Speaker 5: You know, it does cost them something. I mean, certainly
23:45
Speaker 5: record keeping is not free, and you know, I think
23:49
Speaker 5: you know, we're in a time of deregulation. And so
23:52
Speaker 5: to the extent that various broken dealers and other parties
23:56
Speaker 5: responsible for providing this information to the extent that they can,
24:00
Speaker 5: you know, argue to the SEC that this is costly.
24:03
Speaker 5: We don't want to pay these costs. This is the
24:06
Speaker 5: time to make that argument. On the other hand, you
24:08
Speaker 5: could say, well, you know, the two hundred and fifty
24:11
Speaker 5: million dollars are spending on this is the nice investment
24:15
Speaker 5: in the integrity of markets, and that you actually benefit
24:18
Speaker 5: when the SEC knows what's going on, because investors will
24:22
Speaker 5: be more confident in the stock markets and more likely
24:27
Speaker 5: to invest, and so there's an argument there about cost
24:31
Speaker 5: that is going on, whether it's in the benefit of
24:33
Speaker 5: the various self regulatory organizations to report this information. Another
24:38
Speaker 5: concern may be that they may be worried about, you know,
24:42
Speaker 5: this data being stolen, and they may not want there
24:47
Speaker 5: to be a risk that somebody will be able to
24:50
Speaker 5: look at this data and somehow profit in trading against
24:54
Speaker 5: various firms. And that's not as far se possibility as
24:58
Speaker 5: beyond those cyber attacks are pretty constant and a threat.
25:02
Speaker 5: But I think there are a couple of reasons why
25:04
Speaker 5: the industry would like to see the consolidated audit trail
25:09
Speaker 5: reduced or even repealed.
25:11
Speaker 1: Conservative think tank and investor plaintiffs are suing in Texas
25:16
Speaker 1: federal court arguing that quote the dystopian surveillance scheme was
25:22
Speaker 1: never endorsed by Congress and that it amounts to spying
25:26
Speaker 1: on US traders. Do they have a strong case?
25:30
Speaker 5: You think they're raising privacy concerns, and you know, I
25:35
Speaker 5: think you know, it's the similar arguments that we're seeing
25:38
Speaker 5: in a lot of different contexts. You know, we are
25:40
Speaker 5: being tracked and our data is being collected, you know,
25:44
Speaker 5: something that some of us may be uncomfortable with. And
25:48
Speaker 5: you know, there was until recently, personal identification for a
25:52
Speaker 5: lot of the investors was included in this information and
25:55
Speaker 5: that could potentially be sensitive if it's stolen, knowing what
26:00
Speaker 5: every individual investor is doing, you know, is there some
26:04
Speaker 5: privacy concerns there, you know, possibly, and just sort of
26:08
Speaker 5: the question of do we want you know, cameras recording
26:11
Speaker 5: things that are happening on the street traffic because they're
26:15
Speaker 5: more likely to catch people who violate the laws, right,
26:18
Speaker 5: And there may be an argument that I should have
26:21
Speaker 5: the privacy too, you know, to trade in the way
26:24
Speaker 5: that I want to without being investigated for insider trading,
26:28
Speaker 5: and that is I think one of the uses the
26:30
Speaker 5: SEC has made of the consolidated audit trail is tracking
26:33
Speaker 5: unusual training and so there may be a privacy interest there.
26:38
Speaker 5: You know, whether the rule is authorized. Congress did pass
26:43
Speaker 5: a statute about the SEC regulating national markets generally, and
26:48
Speaker 5: I think there's a complex legal issue there as to
26:50
Speaker 5: whether that rule is within that authority.
26:53
Speaker 1: So Jim the SEC chairman, Paul Atkins, what's his take
26:59
Speaker 1: so far on and as you mentioned, they're all into
27:02
Speaker 1: you know, deregulation.
27:03
Speaker 5: Now, I imagine this is one of many issues on
27:07
Speaker 5: his plate, and I think that you know, certainly to
27:11
Speaker 5: the extent that he could find a way to reduce
27:13
Speaker 5: the costs, I think that is something that he might
27:16
Speaker 5: be sympathetic too. On the other hand, it's a pretty
27:19
Speaker 5: powerful tool that can be used to diagnose what are
27:23
Speaker 5: increasingly complex markets. You know, we have high frequency training,
27:28
Speaker 5: algorithmic training, you know, and AI I'm sure is going
27:31
Speaker 5: to get involved as well. And stock markets are not
27:35
Speaker 5: always as robust and stable as we'd like to think
27:38
Speaker 5: they are, and markets can break down and you know,
27:42
Speaker 5: fall for various reasons and be manipulated. And this allows
27:46
Speaker 5: the SEC the tools to diagnose exactly what happened. And
27:49
Speaker 5: so I think it would be something that the SEC
27:53
Speaker 5: would be reluctant to totally do away with. You know,
27:56
Speaker 5: we used to live in a much simpler world where
27:59
Speaker 5: the New York stocking it's just a physical person taking
28:02
Speaker 5: the orders, and you know, it's it's just you know,
28:04
Speaker 5: more centralized. But now we just have all sorts of
28:07
Speaker 5: different factors and considerations that you know, people are using
28:11
Speaker 5: to gain the market and manipulate it in various ways. So,
28:16
Speaker 5: you know, if you think of a cost benefit analysis,
28:18
Speaker 5: which I imagined that would be an approach that would be
28:22
Speaker 5: used by the SPC, I would hope that, you know,
28:24
Speaker 5: it would it would survive in some form. Are there
28:26
Speaker 5: ways we can reduce some of the burdens? I'm sure
28:29
Speaker 5: that's something they will take a very close look at.
28:31
Speaker 1: Yeah, And because the SEC is generally understaffed, isn't it
28:35
Speaker 1: so if it doesn't have tools like this, it's very understaffed.
28:40
Speaker 5: And you know, everyone's using technology, everyone's using technology, why
28:45
Speaker 5: shouldn't the government also utilize technology in certain ways in
28:50
Speaker 5: order to perform its basic regulatory function. I think that's
28:54
Speaker 5: the argument. Now, on the other end, you could say, well,
28:56
Speaker 5: you know, it's the government. We are maybe more concerned
29:00
Speaker 5: because of the power of the government as opposed to
29:04
Speaker 5: private parties. But you know, I think you know, some
29:07
Speaker 5: would say that, well, I'm just as concerned of big
29:10
Speaker 5: tech companies having all this data about me as well,
29:13
Speaker 5: And maybe in order to regulate significant corporate interests on
29:19
Speaker 5: Wall Street, we do have to give the government the
29:21
Speaker 5: tools so that they can keep up this.
29:25
Speaker 1: Month, the SEC withdrew a proposal from Trump's first term
29:29
Speaker 1: that would have boosted the security of this What does
29:33
Speaker 1: that tell you.
29:35
Speaker 5: It probably means that they want to take another look
29:39
Speaker 5: at what they want to do. They want to start
29:41
Speaker 5: kind of fresh. Maybe it means that they'll go further.
29:46
Speaker 5: It doesn't necessarily mean, though, that they will go further.
29:49
Speaker 5: But I think they want to at least leave open
29:51
Speaker 5: the possibility that they do more than increase the security
29:55
Speaker 5: of the trail and implement other reforms. And you know,
29:59
Speaker 5: they've they've already done some things with you know, creating
30:02
Speaker 5: an exemption for personally identifiable information with an order. You know,
30:08
Speaker 5: maybe that would be put into a rule. Maybe there's
30:10
Speaker 5: some other things that they're working on as well. It's
30:14
Speaker 5: hard to tell what that means. It may may not
30:16
Speaker 5: necessarily be a sign that there's something drastically different about
30:21
Speaker 5: what they'll do.
30:22
Speaker 1: You know, there's been a lot of news about different
30:25
Speaker 1: departments and agencies, not so much about the SEC. So
30:29
Speaker 1: have there been any major changes since Trump took office.
30:34
Speaker 5: It's a very good question. I think they've moved slowly
30:38
Speaker 5: from what I understand. One of the things, you know,
30:39
Speaker 5: I'm always interested in is an enforcement my understanding, they
30:43
Speaker 5: have not yet appointed a director of the Enforcement Division,
30:47
Speaker 5: although I think they have done a bit of reorganization
30:51
Speaker 5: of the various regions, and you know, I don't think
30:55
Speaker 5: it's necessarily a major set of reorganizations on the enforcement front.
30:59
Speaker 5: They've all so basically made it a little bit more
31:03
Speaker 5: difficult to open investigations of corporations. They passed a rule
31:09
Speaker 5: basically saying that if the enforcement staff wants to open investigation,
31:13
Speaker 5: they have to get a majority vote of the commission.
31:16
Speaker 5: The five commissioners who sit in in Washington, they have
31:21
Speaker 5: to review their requests and that would allow them to
31:24
Speaker 5: open an investigation. That's a change back. You know, starting
31:29
Speaker 5: in two thousand and nine, after the Madoff scandal, enforcement
31:34
Speaker 5: was streamlined a bit so that you can open investigations
31:37
Speaker 5: without going to this five person commission. So that that is,
31:41
Speaker 5: you know, significant change I swot at singles on enforcement
31:44
Speaker 5: at the FEAT. You know, the SEC wants to centralize
31:47
Speaker 5: enforcement decision making to a greater degree than the prior administration.
31:53
Speaker 3: You know.
31:53
Speaker 5: The risk of that, though, is that the investigations will
31:56
Speaker 5: be slow. Those are the things that I've noticed.
31:58
Speaker 1: It's great to have you on Jim As. That's Professor
32:01
Speaker 1: James Park of UCLA Law School. And that's it for
32:05
Speaker 1: this edition of The Bloomberg Law Show. Remember you can
32:07
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32:11
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