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Welcome to The Fineprint, the home of people who actually read the terms and conditions.

True or false… In Alabama, wearing a fake moustache that causes laughter in a church is illegal.
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Now let’s take a look at the most interesting legal developments that took place over the past 7 days, including:

• The 3 most damning legal arguments that added up to former crypto king Sam Bankman-Fried’s 25-year fraud sentence.

• Elon Musk loses a lawsuit after a judge accuses him of being butthurt.

• Kim Kardashian teaches us why promoting the wrong thing on social media can land you with a high legal bill.

But first…

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WHITE COLLAR CRIME

The 3 Damning Reasons That Landed SBF A 25 Year Sentence

Why we’re paying attention - Understanding the internal decision-making and operations that goes on behind the scenes of a business is often out of reach for most customers, underlining the fundamental reliance on trust in the business-customer relationship. Sam Bankman-Fried's downfall serves as a dramatic reminder of what happens when that trust is breached.

A quick refresher on Sam Bankman-Fried and his crimes

Sam was the head of FTX, a place where people could store their cryptocurrency safely online.

However, instead of safeguarding their money, he transferred it to another company he owned called Alameda Research.

From there, he used the money to invest in other businesses, essentially gambling with the customers' funds.

This amounted to one of the largest cases of financial fraud in history.

Last week, it was down to judge Lewis Kaplan to decide how long Sam should be sent to jail for his crimes.

Here are 3 of the biggest factors Kaplan considered before handing down his sentence…

1. RISK OF REPEAT 

Sam Bankman-Fried's defense portrayed him as “a beautiful, complicated puzzle,” arguing that his decisions were driven by "math in his head, not malice in his heart." 

But Nicolas Roos, the lead prosecutor against Sam, pulled some legal jujitsu by flipping this claim on its head. Roos highlighted Sam’s calculated thinking as a liability, suggesting, "If Mr. Bankman-Fried thought the mathematics would justify it, he'd do it again." 

Judge Kaplan agreed, emphasizing concerns over Sam's potential future actions and the risk of him committing further wrongdoing.

2. REFUSAL OF WRONGDOING

In the courtroom, Sam offered a partial apology for FTX's downfall, notably avoiding full responsibility for his actions. This half-hearted apology set the stage for a stark rebuttal from Roos, who didn't hesitate to detail Sam's actions post-arrest, demonstrating a glaring lack of remorse and accountability:

• Attempted witness tampering while on bail, indicating a deliberate effort to influence those who could speak against him.

• Crafting narratives with reporters after FTX collapsed, aimed at swaying public opinion in his favor.

• Committing perjury during the trial by lying about his knowledge of Alameda's misuse of FTX customer funds and the timing of when he discovered the missing $8 billion.

Despite this, Sam insisted that his decisions weren't made with selfish intent. However, his actions speak otherwise, highlighting a pattern of self-serving behavior:

• Living a lavish lifestyle, including purchasing a $16.4 million vacation home for his parents in the Bahamas.

• Making significant political donations to both Democrats and Republicans, ostensibly to court political influence and shape crypto regulation to his advantage.

Judge Kaplan aligned with this view, recognizing these actions as indicative of Sam's character. "I've been doing this job for close to 30 years. I've never seen a performance like that," Kaplan remarked, before referencing one of Bankman-Fried’s interviews where he said, "F*** regulators." 

Yep - sounds pretty selfish to us.

3. STOLEN WINNINGS ARE STILL STOLEN

Sam’s final defense was that FTX customers weren’t harmed by what he did. That’s because Sam’s bets with their money actually paid off big time, meaning that there’s more than enough money for customers to be paid back in full. 

Sadly for Sam, Kaplan dismissed this line of reasoning as irrelevant. If someone steals money and takes it to Vegas, Kaplan reasoned, they shouldn't get a lesser sentence when they're caught just because they won money. 

Turns out that skillful deployment of fraudulently obtained money is… still fraud.

WHAT’S NEXT

Ultimately these arguments added up to a 25-year prison sentence, an $11 billion fine, and as Sam put it in his own words, his “useful life is probably over.” 

In the meantime:

• Sam plans to appeal (🤦🏻‍♂️)

• FTX customers are still waiting to get their money back 

• The Federal Bureau of Prisons will decide where Sam carries out his sentence. Judge Kaplan recommended a low or medium security prison, close to his parents in the San Francisco Bay Area 

THE TAKEAWAY 

Steer clear of defrauding your customers and investors. 

But if you do, and get caught, at least have the decency to fess up.

SNIPPETS

TikTok had 2% of its entire video library go silent recently (120,000,000+ vids!) after Universal Music Group revoked the app’s access to its music over contract disputes. This week, Spotify saw their chance to get into bed with Universal and twist the knife into TikTok even deeper. The new Spotify-Universal collab will give Spotify’s users early access to new songs from major artists like Taylor Swift. #badblood #vigilanteshit #lookwhatyoumademedo

Kim Kardashian is being sued for trademark infringement, copyright infringement, unfair competition, false advertising and false endorsement… over a table! In one of her vlogs from 2022, she showed off a large table from high-end furniture company  “Judd.” The problem? It wasn’t a Judd. It was actually made by a Los-Angeles based design company that Kim hired to outfit her office. In the world of digital marketing and branding, it is crucial to choose your words (and tables) wisely.

The European Union launches investigations into Apple, Google, and Meta to check whether they are complying with their new DMA regulations. On the EU’s checklist: 

1. Closely monitor whether Apple tries to stop its developers from doing business outside of the Apple App Store; 

2. Scrutinize Google's search results to see if they're playing favorites with shopping, flights, or other services; and 

3. Evaluate whether Meta’s new subscription offer (that lets users opt out of having their data collected) passes the ethics test.

Apple allegedly facilitates stalking. Since their release in 2021, Apple’s AirTags have become a hit sensation among the stalking community. Now stalking victims have banded together to file a class-action lawsuit against Apple, claiming they are not getting enough protection from the company. For example, while Apple does notify users if an AirTag is traveling with them, this notif can take anywhere from 4 - 72 hours, users have no way to scan for the tags manually, and Android users are left completely high and dry. Apple fought back by saying they should not be liable for the action of stalkers in the same way that car manufacturers are not liable for road incidents caused by drivers.

Bloomberg is getting sued for allegedly using 183,000+ books to train its AI chatbot—BloombergGPT. Bloomberg filed a motion to dismiss because they’re not making any money from the product and, as OpenAI have recently argued, AI output falls under fair use copyright laws.

Elon Musk lost his lawsuit against the Center for Countering Digital Hate on Monday. Musk originally sued the small non-profit after it published reports about the spread of hate speech on X. In Judge Breyer’s stinging 52-page ruling, he held that Musk’s reason for filing the suit was simply due to his bruised ego and that his main motivation was to simply intimidate CCDH and other potential detractors.

MEME

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The answer to today’s “did you know” is…

True. If you wear a fake moustache to church and cause laughter - you can go to jail.

Remember: always read the Fineprint!