Monday, February 7, 2022

[Monday Tangent Alert:] Ahem. Some Specific Examples Of Statements Martin Shkreli MAY Make...


This article, at Endpoints News, is a very good recapitulation of what we wrote last week, on his final injunction's terms. [In truth, several off-base comments in the comment section at the Shkreli review property, misunderstanding the nature of the orders. . . also led me to write this morning.] But as good as it is, Endpoints News paints with a slightly-too-broad brush about the terms, insofar as it goes to speaking or blogging by Martin.

The central, and key, notion to remember is that under the injunction, Martin cannot act to "influence" the management or business of any specific drug or bio-science company (whether its securities are '34 Act registered or not). So presumably, statements about the entire industry like: "The members of PhRMA all are overpriced (or under-valued). . ." so long as not made with a view to receiving compensation of any sort (so that it is not in any manner his business activity, for profit) from anyone, would not be deemed by a reasonable person to be an attempt to influence the companies who are members of that trade group to do. . . anything specific.

In a similar vein, he certainly may offer his opinions on crypto- (as many have suggested he's interested in working in that arena on release). He could discuss in broad terms, the aims and use cases for crypto- generally as a running chronology of the industry and its travails with frauds of all sorts (for example).

But again, this comes with a caveat here: to the extent he would discuss any specific advice to invest (or dis-invest) in any crypto-company that is also trading any Howey-type securities, his SEC ban would clearly prohibit that. He also may not derive any compensation from giving any form of "investment advice" -- as to specific crypto- companies or coins. I do think a reasonable person might both infer that many of these are themselves securities, and that while his injunction is not meant to prevent "influencing" the securities of a crypto- company, his SEC orders forbid his giving investment advice for any compensation. So, there's that.

So -- he cannot comment on the public company, '34 Act registered Bitcoin miners themselves (like RIOT and/or MARA), nor Coinbase (the exchange cum B/D, and related custody services), as all of those have NASDAQ securities that he must avoid opining (i.e., offering investment advice) specifically about, as direct "investment advice". But he can make all the goofy predictions he wants, about the future of Bitcoin (since that is not a company, per se), just as Michael Saylor (among others) is often wont to do.

And he is free to offer political commentary of all sorts, on public personas in and out of elected offices -- and on judges and dog or cat catchers, if he likes.

Moreover, he may (under all of his orders) critique movies, plays, sculptures, paintings, and audio and video streaming artists, so long as he isn't suggesting any investment decision -- in any of the affected public companies making or selling or buying such art. Art (excepting possibly fractional interests in it, or in NFTs) is not a Howey-type security.

These last things he may do for cash compensation, if someone is willing to pay him to do so.

He may discuss, in short, any subject he likes -- that doesn't specifically try to cause an investment (or dis-investment) in the securities of any SEC registered company, or influence the management of any public or private pharma or bio-science company.

Of course, he may (always, as many of us did) use his own hands - and back strength to earn a living in the construction trades, or in janitorial, hard rock or coal mining or in any retail service business, where he isn't offering opinions on stocks or on life science companies.

Yes, he may easily make a living, with the benefit of his white skin -- but it will not be the same sort of open privilege he enjoyed before he made all the choices to violate numerous federal and state laws on fraud and monopolization. [And -- of course -- he could be sent back to prison, if he were to violate these orders, and keep on running his "not-so" secret blog, on life science investing ideas. That's a cautionary note to his surrogates (from a lawyer who knows): you are all plainly warned, here.]

[So, in prior comments (at the other site), "me thinks the lady doth protest too greatly. . ." to quote Will Shakespeare. I will leave a case-by-case citation of authorities about why this set of measures does not offend our Constitution for another day -- though certainly the government's coming brief, in defending the orders -- when/if Martin appeals, will do that job quite nicely. . . and save me some original effort... so we may wait, and simply quote it (and link it, of course) here, in the future -- like by late Summer 2022.]

Now you know. Onward, grinning. . . ever grinning.

नमस्ते

No comments: