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In today’s email:

• Cheat on your dream firm

• The CMA could bite Apple

• One of the Big Four is cutting lawyers

• Should you know if AI wrote a legal document?

• Daily finance news written by investment bankers

• Spotify cut 17% of its workforce and its share price went crazy

… and more!

EDITOR’S RAMBLE 🗣

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- Idin

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FEATURED REPORT 📰

⚽ The $1bn Ronaldo crypto lawsuit

What's going on here?

Cristiano Ronaldo faces a $1bn lawsuit over promoting non-fungible tokens (NFTs) of himself.

What does this mean?

Investors are suing the Portuguese football star over his partnership with the crypto exchange Binance to promote the NFTs (he was promoting them even as recently as 28 November).

The NFTs were introduced ahead of the 2022 World Cup, with prices ranging from $70 — $10,000. They were also linked to entry into competitions with prizes — like the opportunity to meet Ronaldo. Now, they’re pretty much worthless.

Binance recently settled money laundering charges by paying a $4.3 billion (£3.4 billion) fine.

What has he done wrong?

The class-action lawsuit (which is being brought in Florida) claims that Ronaldo promoted the sale of unregistered securities — we’ll come on to what those are. They claim that his promotion caused them to invest in other Binance products, believing that they were safe, and that he’s responsible for the losses they suffered when the investment they made dropped in value.

It also claimed that he made deceptive statements and failed to disclose how much he was getting paid by Binance.

What are ‘unregistered securities’?

Securities are essentially financial assets that you can trade.

In the US, things like cryptocurrencies are considered securities. The law says they can be officially registered, which gives any investor additional protections. But Binance's crypto products weren't.

The lawsuit claims that people got interested in these products because of Ronaldo's Instagram posts. The Securities and Exchange Commission (SEC) - the US stock market regulator - says these crypto tokens are definitely securities and should be registered.

What happens next?

It’s difficult to predict what will happen next.

Ronaldo might choose to settle the matter before it goes to trial, or he may decide to let it go to court.

If the matter reaches a trial and the claimants win, Ronaldo could be held personally liable for the their losses and ordered to pay damages.

Has something like this happened before?

Yes — it’s certainly not the first time:

• 👩‍⚖️ Kim Kardashian faced action for promoting cryptocurrency Ethereum Max on social media and not disclosing that she had been paid for it

• 👨‍⚖️ Shaquille O’Neal faced two separate lawsuits for promoting unregistered securities as part of a sponsorship deal with the crypto exchange FTX

• 👩‍⚖️ Floyd Mayweather and DJ Khaled both faced legal action for failing to disclose payments from sponsored promotions of cryptocurrency launches

Why should law firms care?

Crypto: Cryptocurrency, as an industry, is facing increased scrutiny from regulators around the world. This lawsuit is just one of many legal actions against cryptocurrency exchanges — the most recent being the issues surrounding Binance.

Earlier this year, Binance was charged by the SEC for operating a “web of deception.” The SEC accused Binance of operating as an unregistered securities exchange and violating a number of US securities laws.

US law firm Latham & Watkins defended Binance’s chief executive Changpeng Zhao, while Gibson Dunn represented Binance.

Wherever there’s changing regulation, there’s work to be won for law firms.

Celebrity promos: The Ronaldo lawsuit highlights the possible legal risks for celebs promoting cryptocurrency products.

They’ll need to ensure they are within the law and acted in accordance with the regulation (for example, making the necessary disclosures). Lawyers would need to be consulted, reviewing the agreements and promotions, to ensure they’re compliant.

Celebs wanting to dabble in crypto will keep an eye on the outcome of the Ronaldo trial.

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A BIT OF FUN 😄

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IN OTHER NEWS 🗞

• 🔍 EY's UK branch is shedding 150 jobs across EY Law and deal advisory. They're even closing EY Riverview Law, the legal services disruptor they snapped up in 2018. It's part of a broader cost-cutting trend, with EY launching 10 redundancy rounds recently due to market slowdowns.

• 🍏 The CMA (Competition and Markets Authority) gets a win to probe Apple's mobile browser and cloud gaming services. After initially losing in March, the CMA appealed and the Court of Appeal has now sided with them, overturning the earlier decision. Apple had argued the CMA was too late to investigate, but the court sees this as vital for promoting competition and protecting consumers. The investigation is on pause right now, pending any appeal to the Supreme Court.

• 🇧🇷 A city in Brazil, unknowingly passed legislation that was written by ChatGPT. AI was used to draft a proposal about water meter charges and it sailed through the vote. But when revealed, it stirred debate about AI's role in lawmaking. Should we need to be transparent about how and when AI is used in complex legal documents?

• 👩‍⚖️ In Canada, the Ontario Law Society were deemed to be too strict when they punished 125 aspiring lawyers suspected of cheating on their bar exams. They made them redo the whole licensing process and slapped a year-long ban on reapplying. This started with a scandal about leaked exam questions during the pandemic. The court thought canceling the exam results was fair. But the rest was too much without a proper hearing or solid proof. Now, the Law Society's got to rethink its approach.

• 🎶 Spotify is slashing 17% of its workforce (about 1,500 jobs) amid economic challenges. CEO Daniel Ek admitted it’s tough, especially since Spotify just turned a profit and has big growth plans — the company’s eyeing a billion users by 2030. The move mirrors a wider trend in tech, with giants like Meta and Amazon also announcing significant layoffs. Also, it seems markets reacted positively to this news 👇️ 

  

AROUND THE WEB 🌐

• 😭 Crypto: This Twitter page shares anonymous crypto confessions — maybe Ronaldo will be posting on there soon!

• 🕊️ Insightful: Charlie Munger, Warren Buffett’s longtime friend and business partner, died last week aged 99. Read his most powerful quotes.

• 🎞️ Fun: Think Netflix, but for films that are in the public domain. If you love old movies, you need to check it out,

Credit: r/internetisbeautiful

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