Very off-the-cuff here, so forgive any sloppiness. 2 and 3 seem like empirical questions about which I don’t have enough information to even hazard a guess. I’d at best be stoking a similar kind of confusion my original post attempts to warn about.
Re 1, if we’re talking in the abstract about criminal or civil liability, then I think the answer is probably yes (with potential exceptions for situations where after-the-fact actions might give rise to liability for things like perjury and witness tampering, etc.).
But if we’re talking about cost in time, treasure and mental well-being associated with being a witness, or the knock-on effects for others and the system more generally, I think the answer is a strong no. Loose talk after a dispute has arisen can easily take a near-0% chance of someone being significantly involved (looking exclusively at pre-dispute facts) and make it a near certainty. And this would not necessarily be just for the individual or organization doing the talking. A simple but hopefully clear example would be where a central figure in the pre-dispute facts speaks post-dispute and identifies someone else as being significantly involved. The identified person would suddenly be on everyone’s radar even if they were on nobody’s radar before the statement, and that would be true even they weren’t actually involved (i.e., the post-dispute statement was false), and even if the false statement was an innocent mistake (a few examples of which I try to outline in the post—e.g., confusing post-dispute involvement with pre-dispute involvement, etc.).
If I understand you correctly, you’d agree that carefully saying true things, with extra attention to clarity (to avoid easy misreadings), would go a long way to reducing risk of (1).
I’m not sure I understand this comment completely, but I think I disagree with it. Speaking in the abstract because I don’t want to suggest I know anything about any specifics here, I think the best way to avoid legal risk (including but not limited to liability) based on pre-blow-up actions or statements in any situation like this is to stay silent after the fact and only say what is absolutely necessary through the formal legal process.
I am not Tyler but am a lawyer. Based on limited information, I think it likely that over 90% of legal exposure would be based on actions that happened on or before November 11 (let’s use the date of the bankruptcy filing). However, that is not equivalent to saying that what potential targets do from November 11 onward will affect the ultimate financial pain they end up bearing (damages, clawbacks, legal fees, intangible negatives) by no more than 10%. I think the latter statement is likely false, and is the question one has to consider when deciding on speech vs. silence.
The answer to #2 depends in part of your definitions of “prominent EA figures” or “involved in the litigation process.”
I would think less of Sullivan & Cromwell’s litigation team if EV and CEA are not involved in litigation in some capacity. I have zero inside knowledge, but way too much money went from FTX-affiliated entities and persons to EV and CEA not to make an attempt to clawback and to see what else might be there.
[Edited: “on or before November 11,” “November 11 onward.” Thanks to the person who messaged me to note those typos!]
Tyler: thanks for the post.
A couple questions I’d love to hear your thoughts on:
Would it be right to say that >90% of the legal risk to public figures and institutions was incurred prior to the FTX blow-up on November 8?
Do you expect that >30% of prominent EA figures will end up involved in the litigation process, regardless of what they post after November 8?
Do you expect that Effective Ventures (formerly: CEA) will end up involved in the litigation process, regardless of what they post after November 8?
Very off-the-cuff here, so forgive any sloppiness. 2 and 3 seem like empirical questions about which I don’t have enough information to even hazard a guess. I’d at best be stoking a similar kind of confusion my original post attempts to warn about.
Re 1, if we’re talking in the abstract about criminal or civil liability, then I think the answer is probably yes (with potential exceptions for situations where after-the-fact actions might give rise to liability for things like perjury and witness tampering, etc.).
But if we’re talking about cost in time, treasure and mental well-being associated with being a witness, or the knock-on effects for others and the system more generally, I think the answer is a strong no. Loose talk after a dispute has arisen can easily take a near-0% chance of someone being significantly involved (looking exclusively at pre-dispute facts) and make it a near certainty. And this would not necessarily be just for the individual or organization doing the talking. A simple but hopefully clear example would be where a central figure in the pre-dispute facts speaks post-dispute and identifies someone else as being significantly involved. The identified person would suddenly be on everyone’s radar even if they were on nobody’s radar before the statement, and that would be true even they weren’t actually involved (i.e., the post-dispute statement was false), and even if the false statement was an innocent mistake (a few examples of which I try to outline in the post—e.g., confusing post-dispute involvement with pre-dispute involvement, etc.).
Hope this is useful.
Very helpful, thanks Tyler!
If I understand you correctly, you’d agree that carefully saying true things, with extra attention to clarity (to avoid easy misreadings), would go a long way to reducing risk of (1).
I’m not sure I understand this comment completely, but I think I disagree with it. Speaking in the abstract because I don’t want to suggest I know anything about any specifics here, I think the best way to avoid legal risk (including but not limited to liability) based on pre-blow-up actions or statements in any situation like this is to stay silent after the fact and only say what is absolutely necessary through the formal legal process.
I am not Tyler but am a lawyer. Based on limited information, I think it likely that over 90% of legal exposure would be based on actions that happened on or before November 11 (let’s use the date of the bankruptcy filing). However, that is not equivalent to saying that what potential targets do from November 11 onward will affect the ultimate financial pain they end up bearing (damages, clawbacks, legal fees, intangible negatives) by no more than 10%. I think the latter statement is likely false, and is the question one has to consider when deciding on speech vs. silence.
The answer to #2 depends in part of your definitions of “prominent EA figures” or “involved in the litigation process.”
I would think less of Sullivan & Cromwell’s litigation team if EV and CEA are not involved in litigation in some capacity. I have zero inside knowledge, but way too much money went from FTX-affiliated entities and persons to EV and CEA not to make an attempt to clawback and to see what else might be there.
[Edited: “on or before November 11,” “November 11 onward.” Thanks to the person who messaged me to note those typos!]
Great questions! More succinct than what I said.