Legal AF by MeidasTouch - Biden SEC CHAIR has FINAL MESSAGE for Trump Admin

Episode Date: December 14, 2024

It’s the holidays, and Lame Duck Securities fraud enforcement season, as President Biden’s Securities and Exchange Commission Chair goes after Trump’s incoming administration for securities fraud! Michael Popok reports and explains that Trump can’t do a thing about it! Join in the fight: https://au.org/legalaf Remember to subscribe to ALL the MeidasTouch Network Podcasts: MeidasTouch: https://www.meidastouch.com/tag/meidastouch-podcast Legal AF: https://www.meidastouch.com/tag/legal-af MissTrial: https://meidasnews.com/tag/miss-trial The PoliticsGirl Podcast: https://www.meidastouch.com/tag/the-politicsgirl-podcast The Influence Continuum: https://www.meidastouch.com/tag/the-influence-continuum-with-dr-steven-hassan Mea Culpa with Michael Cohen: https://www.meidastouch.com/tag/mea-culpa-with-michael-cohen The Weekend Show: https://www.meidastouch.com/tag/the-weekend-show Burn the Boats: https://www.meidastouch.com/tag/burn-the-boats Majority 54: https://www.meidastouch.com/tag/majority-54 Political Beatdown: https://www.meidastouch.com/tag/political-beatdown On Democracy with FP Wellman: https://www.meidastouch.com/tag/on-democracy-with-fpwellman Uncovered: https://www.meidastouch.com/tag/maga-uncovered Coalition of the Sane: https://meidasnews.com/tag/coalition-of-the-sane  Learn more about your ad choices. Visit megaphone.fm/adchoices

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I talking about? The Securities and Exchange Commission and its chairperson Gary Gensler is continuing to go after major pieces of the Trump administration, including the incoming Commerce Secretary nominee Howard Lutnick and Elon Musk, until his last dying breath when Gary Gensler leaves the position on January 20th. Until then, he is the chairman of the Securities and Exchange Commission. And I'm Michael Popak, you're on the Midas Touch Network and on Legal AF. Let's get to it. We're not sitting around letting grass grow under our feet.

The party that's in power is making sure that things are done to protect America right up until the 20th of January. Gary Gensler, long been a thorn in the side of almost everybody that Donald Trump has picked to be in his cabinet. Every business person and every billionaire in his cabinet has gotten sideways at one point with the Securities and Exchange Commission. Some of them more than once, including Donald Trump. And now we've got something I am sure is sticking in the craw of Donald Trump because Gary Gensler,

who has announced that he's done on January 20th, but he's not done until then. Two major Wall Street enforcement actions are in the works. One, a major fine against Canter Fitzgerald, Howard Lutnick's company, the Commerce Secretary, for $6.75 million that was just announced yesterday. I am sure that they wanted to kick that off, and kick that down the road until well after January and let the new more compliant securities and exchange commission commissioner

come in and wave his magic wand and make that disappear. But Gary Gensler's group said, no way, we're not waiting. We've done this investigation for a couple of years now. Has to do with special purpose acquisition companies. It's called SPACs or blank check companies. I'm gonna break it down for you here about what I know about the settlement based on a new, we just got it here,

the new cease and desist order by the Securities and Exchange Commission against Howard Lutnick's, Cantor Fitzgerald. And then I'm gonna talk about Elon Musk, who just announced through his own lawyer that the Securities and Exchange Commission is either gonna settle with him immediately within 48 hours on a term, or they're going to start their enforcement action related to both his acquisition of Twitter and stock

purchases before he did it, and a company he has called NeuroLink, which people have said and claimed has made unreasonable, fraudulent statements about its technology at the heart of that company. I'm sure Musk and Lutnick, who know each other well and have been hanging out at Mar-a-Lago during the transition team issues, I'm sure they're sitting around with scowls on their faces about why couldn't we just advance the clock and get to after January? Yeah, that's not happening because the Democrats are still in charge. We're still in charge of the Senate. We're still in charge of the White House.

Let's get down to what the Securities and Exchange Commission just did. And here we go. So on the Canter Fitzgerald side, that's the company that is owned and controlled by Howard Lutnick, the incoming Commerce Secretary. He's also one of the heads of the transition team. One question CNBC and some other news reporting agencies

have asked, and it's a good one, is, he was head of the transition team. Did he mention to the transition team that Cantor Fitzgerald had in the works an enforcement action with the Securities and Exchange Commission, which could lead to a multimillion dollar fine, yes or no, and a finding of fraud, because that's what just happened.

Let's stay with that one. What happened? Canter Fitzgerald's made a lot of money running, being kind of the book runner, if you will, for what's called Special Purpose Acquisition corporations or companies. We call them SPACs, S-P-A-C. It's also known as blank check company.

It's a way to get around securities laws and to bring companies public without having to go through a lot of the regulatory red tape. And they were all the rage for the last five or eight years. Cantor Fitzgerald first among them in running these things. And so they had two in particular that the SEC was troubled by and found fraud and statements related to them.

When you're a blank check company, you get to collect money and raise money from investors at $10 a unit, not shares yet, and look for a public company to acquire, therefore taking basically, it's access to the public market directly without having to go through all that red tape. But there's one major limitation.

You are not allowed to let either know who you're going to acquire or let your investors know who you're going to acquire for that particular SPAC vehicle. You can't have any contact with the possible target or acquisition when you look the public in the eye, in the investing market in the eye, and you tell them, just give me your money, here's the broad strokes of what we're gonna invest in,

and leave it to us. Now some people might say, well what if you don't like the investment? Or they don't make the investment on time. Well, they don't make the investment within a year, or maybe by extension two years, they gotta return all the money. And if you don't like the investment,

you can redeem and get your money back. But you're not supposed to know who the target is. Now some people might be thinking, isn't this what Donald Trump's SPAC company got fined for, because they knew they were gonna acquire Trump, truth social, and they let it be known to their investors, which that's not the way this is supposed to work. And they got fined over, let me get the number right, I think they got fined over $18 million.

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Here, two different SPACs. Canter Fitzgerald made, one was a $500 million deal in which Canter Fitzgerald made a $10 million fee and took a $143 million equity stake in the company. And the other one was a $250 million deal where Canter got a $62 million equity stake in the company. And the other one was a 250 million dollar deal, where Cantor got a 62 million dollar equity position in the company at a five million dollar fee. So you're talking about 200 million dollars of money plus 15 million dollars of fees going to Cantor Fitzgerald. And what the SEC found is that they lied about the fact that they knew who they were going to acquire in both of these SPACs and done the due diligence and even let investors know. So when they told their investors in

disclosures, we don't know who we're going to acquire, that was false. So they file the SEC as they often do. When they reach a settlement, they file the order instituting cease and desist proceedings. So they start the proceedings and then they conclude them all in the same document. But really this reflects months and months, if not a year or so, of enforcement action, investigation, negotiations, all getting filed and wrapped up on the same day. So I just wanna clear that up for people who are like,

wait, they just started the action and they settled it on the same day? Yeah, that's how this works usually. We don't know about it in the public unless it leaks to the papers about the investigation Until they announced the resolution and under the resolution They have to make a payment within a very short amount of time of six point seven million dollars Within 14 days of the entry of this order and they have all and then of course There's a press release from the SEC about it. So I am sure within 14 days of the entry of this order. And they have all, and then of course, there's a press release from the SEC about it.

So I am sure that the incoming commerce secretary and head of the transition team and buddy of Donald Trump wanted to push this off and hope this could end with a new replacement for Gary Gensler at the SEC in January, not happening. Elon Musk, similarly, is not getting out from under the SEC in the remaining time left on the clock. They're doing an investigation,

and we know this because he's social media posted about it, and MAGA Congress's social media posted about it, and Elon Musk's own lawyer, Alex Spiro, has posted about it. And what it has to do with is two things that Elon Musk has done wrong, Alex Spiro, has posted about it. And what it has to do with is two things that Elon Musk has done wrong, as alleged by the SEC. One, he has a company called Neuralink Corporation,

which has made some pretty lofty claims about their technology related to the brain and other things that don't seem to pass muster. And so whether those statements were fraudulent enough or fraudulent in order to induce investors to invest in the company. That's one thing. And then before Elon Musk acquired Twitter in 2022 for 44 billion dollars, he was buying and selling stock related to it. And the question is whether he violated securities laws in

the way he bought and sold and statements that he made around that and disclosures he made or did not make around that. Now, of course, Elon Musk doesn't like the fact, like Howard Lutnick, that the Securities and Exchange Commission under Gary Gensler is still up and running and starts tweeting out, oh, this is an example of the weaponization of the Securities and Exchange Commission to do political dirty work. And Alex Spiro, the lawyer said in a letter back to the SEC, please tell us if this is your decision or the White House as if Joe Biden is like manipulating the SEC. I mean, they have all these conspiracy theories that don't make any sense. I assure you, Gary Gensler is wearing his big boy pants. He's done a great job as a Securities and Exchange

Commission, but he's been the bane of the existence of billionaires who don't want regulation. He's been regulating cryptocurrency, which they hate They're all heavily heavily invested in cryptocurrency I mean most of the administration including Donald Trump Howard Lutnick Elon Musk heavily invested in cryptocurrency They hate this guy and they want to get rid of him and this guy's like yeah And I got a job to do until you get rid of me on the 20th of January. I mean I'm going I'm backing out but you know, I got a job to do until you get rid of me on the 20th of January. I mean, I'm going. I'm backing out, but I got a job to do. And I'm going to continue to follow all the ways the Biden administration and separate departments and agencies and cabinet positions within the

Biden administration continue to do their job until the very end, including, and I'll do this and follow up hot takes, including Joe Biden taking important steps through executive orders and other actions to strengthen his policies and make it harder for Donald Trump to dismantle the Biden domestic policy wins when he gets into office. There's ways to do it and Joe Biden is working on it right now. Nobody knows the Senate better than Joe Biden, having served all that time there. Nobody knows how to secure legislation better than Joe Biden, and he's putting those talents to work right now. I'm Michael Popock. Thank you for being on the Midas Touch Network and with Legal AF. In collaboration with the Midas Touch Network, we just launched the Legal AF YouTube channel.

Help us build this pro-democracy channel where I'll be curating the top stories the intersection of law and politics. Go to YouTube now and free subscribe at LegalAFMTN. That's at LegalAFMTN.