🗞️ Taylor Swift Fans Don't Play Monopoly, BlockFi Catches Crypto Contagion, & Law School Rankings Drop
This Week: Swifties unleash a fury on Ticketmaster, the Crypto Crisis expands to BlockFi…and beyond, and is the T14 a thing of the past? Plus, some IRL sh*tposting, and a surprise twist in a quarter-billion dollar tax evasion scheme.
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How do you mobilize millions of people against corporate monopolies overnight? Scorn Taylor Swift fans, of course. That's the lesson Ticketmaster learned earlier this month after 14 million people flooded its website on November 15 hoping to get early access to the musician's first tour in 4 years. Instead, the website crashed, the tour sold out almost instantly, and tickets were being hawked for several thousand dollars by morning.
"There are a multitude of reasons why people had such a hard time trying to get tickets and I’m trying to figure out how this situation can be improved moving forward," Swift wrote in a statement a few days later, reports The Verge. "It’s truly amazing that 2.4 million people got tickets, but it really pisses me off that a lot of them feel like they went through several bear attacks to get them."
But Swift wasn't the only one really pissed off at Ticketmaster. Senators, Congresspeople, and Attorney Generals (like in Tennessee) were too—calling for antitrust investigations of Ticketmaster and its parent company, Live Nation. And the Department of Justice listened. Last week, the DOJ began such an investigation of Live Nation, reports the New York Times, while Senators Amy Klobuchar and Mike Lee announced they would hold hearings on the ticketing industry.
In response, Live Nation said in a statement that it "takes its responsibilities under the antitrust laws seriously and does not engage in behaviors that could justify antitrust litigation.”
When the DOJ approved the merger between Live Nation and Ticketmaster in 2010, concerns about a monopoly were already swirling. "The merger, as originally proposed, would have substantially lessened competition for primary ticketing in the United States, resulting in higher prices and less innovation for consumers," a DOJ statement noted at the time, writes Wired. The department ordered several stipulations be met by the newly-merged company, but in the years since, no real enforcement has been in place, nor any way to check up on those stipulations.
Sometimes it takes big events to change the law or spur an investigation. Usually that’s a merger, but sometimes that’s a large disaster. Of course, this disaster had no real human harm, but the size of Taylor Swift’s fan base is so large and so engaged that DOJ decided to step in.
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It seems FTX has gone viral—or, at least, has become a contagion. Just two weeks after the crypto titan imploded, BlockFi, the crypto lender once valued at $3 billion, has filed for Chapter 11 bankruptcy, reports NPR. And just like FTX's collapse revealed almost unfathomable incompetence and mismanagement, BlockFi's filing has raised alarm bells too.
"BlockFi's restructuring underscores 'significant' risks of contagion within the 'crypto ecosystem,' as well as potential deficiencies in how the companies manage risks," noted Monsur Husain, a senior director at Fitch Ratings, according to NPR.
BlockFi was also one of the companies FTX had bailed out earlier this year. Now, in a strange turn of events, BlockFi is suing its former savior for a $575 billion stake in the mobile trading app Robinhood, says the FT.
And more crypto firms are closing or at risk. BitFront, a crypto exchange, filed for bankruptcy on Monday, and Wired reports that Genesis Trading (one of the original crypto platforms) is on the verge of collapse. In fact, Genesis Trading has already brought on powerhouse law firms, Proskauer Rose and Kirkland Ellis to bankruptcy and to assist with restructuring , reports Reuters.
The Wider System
So far, despite investments by hedge funds and other large funds, the crisis in crypto has not spread to the economy at large. It appears that the crypto culture's us-against-the-establishment along with no real regulations has been both a blessing and a curse. A curse in that so many regular people are losing large sums of money as exchanges go belly-up overnight. A blessing in that Wall Street and the traditional banking system has, for the most part, kept itself out of crypto specifically for its lack of regulations and oversight. “Regulation can confer legitimacy,” Lee Reiners, policy director of the Financial Economics Center at Duke University law school, told Marketplace. “And not only that, but regulation then can make it possible for new connections to form between the crypto economy and the traditional financial system.”
We will keep repeating this for as long as we have to: regulate the crypto market. That being said, the paradox here is that wider economic contagion seems to be at bay (for now) because of the industry’s lack of regulations. Unfortunately, that won’t help the thousands/millions of people who lost precious savings.
What do the law schools of Harvard, Stanford, Yale, Columbia, Georgetown, and Berkeley all have in common? They've all dropped out of the US News & World Report's annual ranking of law schools. The decision began earlier this month with Harvard and Yale, and was quickly buttressed by the American Bar Association, which voted to stop requiring accredited law schools to require the LSAT or GRE for admission. Soon thereafter, several more law schools joined in. "Their concerns were about ethics, equity and mission," the New York Times says. "The rankings, with their focus on test scores, grades and employment, created a perverse incentive to downgrade public service law careers and to award merit aid rather than need-based aid, they said."
Nearly all the schools that dropped out of the ranking were part of the coveted T14—a term for the Top 14 law schools, which has stayed largely the same for decades.
Cornell is a notably holdout of major law schools withdrawing from the rankings. "The reality is that [the] U.S. News & World Report is a journalistic enterprise, and they don’t need anyone’s permission, including mine, to publish a ranking,” Dean Jens Ohlin of Cornell Law wrote in a statement, according to the Cornell Daily Sun. “And they have ready access to information from the ABA and other public sources to construct their rankings.”
US News is not the only publication ranking law schools. Above The Law has been doing so for 10 years. Its current ranking, released in early June, doesn't include the big 3 (Harvard, Stanford, or Yale) in the top 10. Moreover, ATL explains how its ranking differ from US News, mainly that even though "employment represents the bulk of a school’s overall score, we also account for law school cost and debt, since how much you pay — or borrow — for an education affects the return on your investment."
Will Stanford or Harvard law school suddenly become less prestigious? Of course not. However, if it takes pressure off the schools to push graduates into private firms rather than into the public sector, maybe it’s a win-win?
Poop Scoop: An Ohio attorney is facing an ethics complaint after pooping into a Pringles can and throwing it into the parking lot of the Haven of Hope victims advocacy center—his opposing counsel. Above The Law has an interesting detail from the complaint: the lawyer has allegedly done this about 10 times in the past.
Death & Taxes: A Texas tax attorney was set to stand trial this week for helping a private equity fund evade some quarter-billion dollars in capital gains taxes, says Law360. Instead, he died on the eve of the trial…and now the court wants to see a death certificate.
Here’s a short from last week.
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