What's Good: Jan. 10, 2020
This week's compilation of interesting things from around the internet.
Hello and welcome to this week’s What’s Good! Did you know you can get these in your inbox? It’s like a magic trick, except you get to consent to it. Here’s a button!
First, some personal news: I beat Halo: Reach on Legendary this week. Solo. I’m very proud of myself.
My power went out last weekend, and we are in the middle of winter here in Chicago, so that was not really an ideal situation. It sort of threw my entire week off! But, good news, I channeled that weird energy into building a collection of links for you. In fact, not only did I curate the links, I also wrote about them. Truly, it is a staggering amount of content. I hope you love it. Shall we?
Also, Substack says this post is too long for an email, and I don’t really know what happens in that case, but the last post I wrote that was “too long for email” got sent in its entirety anyway, so this will be a fun experiment. In any case, you can read it online!
Don’t poison the Ivy
My friend Alex - Clarkisha Kent on Twitter - is a phenomenal writer. I have known her for years now, and I am regularly blown away by her ability to take complicated ideas and weave them into nuanced, engaging prose.
If you’re white, this article may be the first time you’ve heard of the concept of colorism. From the piece:
Colorism is anti-Blackness and Black self-hatred at its most insidious: discrimination against darker-skinned people of color by those with lighter skin-tones and — often — more Eurocentric features. And it is something Black people use to police ourselves.
White people, of course, also frequently favor lighter-skinned and whiter-presenting folks over darker-skinned folks. Remember that lawsuit alleging that Jones Day altered the photo of one of its associates to make her appear lighter-skinned and have a skinnier nose?
I don’t want to steal Alex’s thunder here, and, as a white guy, there isn’t much for me to add on the issue. But you should read her piece, and her other writing, because it’s all very good. You’ll learn a lot - I know I have.
Oh, Rivoire
I have two snippets to highlight here. First:
The best business story of last decade snuck in under the wire, when Carlos Ghosn, the former head of Nissan Motor Co. and Renault SA who was out on bail in Japan awaiting trial on charges of financial misconduct, popped up in Lebanon just before New Year’s after being smuggled out of Japan in, apparently, a large black case used for audio equipment.
And then there’s this:
Rivoire further stated that “We need to wait for the screen to be adjusted.” Rivoire also asserted that “Obviously we are not controlling the screen.” The Issuer agreed to wait.
Money Stuff is one of my favorite things on the internet; reading Matt Levine’s commentary every day at lunch is a highlight of my day. And while everyone deserves a vacation, Matt’s recent pause on the newsletter left a gap in my daily schedule that no amount of scouring the web for delicious securities-related content could totally fill. All that said, Monday’s newsletter is absolutely worth the wait.
I think one of the main themes of Money Stuff is that if you have enough money, you can sort of do whatever you want with impunity. Or at least in the short term, anyway. Sure, maybe it will catch up to you eventually, and you will have to pay off some of your large quantities of money to the government, but a fine is a price and you can - in a great many cases - pay the fine in the exchange for the ability to do whatever you want. And at the very least you can do the thing in the first place without anyone stopping you! Poor people - even normal people - cannot do that. Someone will stop you and ask you what you are doing, and you can’t pay them off or pretend like you belong there. But if you’re rich, well, who are they to say that you don’t belong there? You’re rich! This is sort of a corollary to the “this person cannot be wrong, they are rich” mentality that a lot of people subscribe to.
Anyway if you’re rich enough you can apparently escape a country in an audio equipment case and then live in a mansion that you don’t own for a while. Or you can just do extreme market fraud and shout obscenities at your underlings and force everyone in your immediate circles and in those peoples’ immediate circles to do the fraud with you. Both of those things happened in Monday’s Money Stuff, both of the stories are amazing, you should go read them. And the story about the swaps? That should be a movie. I want to watch that movie. Maybe, if nothing else, we will get to enjoy it as a subplot of Billions at some point.
The chicken companies are chicken
Drew is correct about dark meat being the superior form of chicken and about Popeyes needing to sell a fried chicken sandwich made with dark meat. He is incorrect about the CFA sandwich being superior to the Popeyes sandwich; the Popeyes sandwich is clearly better and it’s not close. And while the ideal spicy fried chicken sandwich would have spice in both the breading and the sauce, if you have to pick one, it’s better to have flavorful sauce. Weak-ass mayo is an abomination.
If you use mayo at home, you should make it yourself. Homemade mayo has a much stronger and better flavor than the jarred shit you get at the store. I won’t eat jarred shit, but I’ll make, for example, a homemade smoky chipotle mayo to serve with slow-roasted pork shoulder. People lose their minds over it because they’ve never had mayo that tastes like anything other than slimy death. I have spoken.
Punching Nazis is the American way
The Informant is a newly-launched newsletter by Nick Martin. Its first piece is about how a case of mistaken identity in Michigan led some Nazis to intimidate the wrong targets.
“This letter is merely to display that we know where you live,” it said, “and while it’s easy to excuse us all as these terrible people and terrorists, we’re pretty cool once you’d get to know us.”
The letter made references to the Bowl Patrol and neo-Nazi YouTube shows. It praised Hitler and several notorious neo-Nazis, and it contained a crudely drawn swastika. It was signed, “Yours truly, the [redacted] Bomber.”
I mean, holy shit, right?
Nick is going to put out reportage about white supremacists on a weekly basis, and it’s worth subscribing so you know just exactly how fucked up things are getting in this country. There are far more Nazis doing far more heinous shit than a lot of people are willing to admit or imagine. If nothing else, I think sharing these stories is extremely important. And if you know about any shady bullshit like this, you should Nick a tip.
Heavenly bodies
Now, we know that Dennis Prager believes that self-pleasuring is a sin, but how does he feel about self-owns?
Hey, did you know he did a Reddit AMA a few years ago? It was a shitshow, of course.
I tried to find more content for this segment but basically everything about this dude sucks. Sorry. Wait, no, here’s one more link.
This movie tastes funny
I haven’t seen Cats yet. Weed is legal in Illinois now! But it’s still federally illegal, and my employer sent out an email just before the new year reminding us that they can fire us if they find out we’ve consumed it, so, you know, better not.
Maybe I’ll go this weekend and have some beers first. Or maybe not:
Water minus sports
I feel like if this item were to become popular that it would reveal much more information about the wearer than any of us would be comfortable with. First, wearing a vest in public that your own urine is all over seems a little bit like nonconsensual kink, and even if it’s not weird by default I can say with absolute certainty that someone would make it weird extremely quickly. But, also, think about the decisions that go into populating and maintaining this thing. 22 crops! The crops that a person chooses obviously say a lot about them, right? There would absolutely be “crop cliques” and “crop feng shui” and all sorts of ridiculous judgment passed by the wearers of some crops on the wearers of some other crops for no particular or useful reason.
Plus, what about those of us who are just chronically awful about remembering to water their plants? I suppose the whole urine thing is supposed to help solve that problem, but it feels like a really inelegant solution! Also if I live in Chicago am I only supposed to be able to wear it a few months out of the year? What about when I sit down, am I going to hurt my plants? Am I going to wet my plants? Sorry, sorry.
Anyway before you get too mad at me making jokes about this, I know that it was an art thing, because of course it was:
The work wasn't really produced to offer a solution.
The point was to get us to think about issues around the environmental crises at a palpable scale so that ... if we can feel these issues on our body, that might provoke us to do something about these issues instead of taking the passive role we've done so far in our history.
I will say that I have definitely thought about the issues raised by this vest at a palpable scale. Can we start with more rooftop gardens? I love rooftop gardens.
Is this securities fraud?
A preface, here - I am a lawyer, but I am not your lawyer. The following is not legal advice that anyone should rely on, and you should consult competent counsel in your jurisdiction before making any decisions that could affect your rights and liabilities. These are just my personal opinions about a single pending case based on incomplete information, and they’re liable (and likely!) to change as more information comes to light. In fact, I look forward to getting more information about the case, and I’ll try to post updates and corrections as appropriate. I have attempted to qualify most factual claims with “allegedly” where the basis for them is the allegations in the complaint, but to be on the safe side you can just assume that all of this is alleged and none of it is proven unless separately sourced, like via the SEC order. It is my general assumption that the attorneys who worked on this situation are competent and made informed, researched decisions and gave their clients nuanced advice. Okay:
Suppose that you are a lawyer and a potential client - a firm - comes to you sometime between 2015 and 2017. The firm tells you that it wants to be “the first regulated cryptocurrency asset fund in the United States,” and you say, great, I will tell you how to do that in exchange for a lot of money. The firm agrees, and you are off to the races.
You, the lawyer, now have to figure out what “the first regulated cryptocurrency asset fund in the United States” means, but there are some clues, right? It will be in the United States. Easy. It will be a “fund.” Okay. It will have “cryptocurrency assets.” So it’ll buy/trade/hold Bitcoin and other cryptocurrencies as its “assets,” fine. Also, it will be “regulated,” which means you need to figure out how to make it comply with various laws. That’s doable. Finally, it will be “the first” to do this. Oh. Well, alright, that is a little riskier, but not impossible.
Being the first to do anything in the legal world is something that many lawyers tend to avoid - yes, your client gets to have some kind of first mover advantage on the market, and they get to make various claims about being the first to do something, but the actual value of that advantage and those claims is difficult to determine. Maybe it’s negligible! If you’re going to be the first to do something, you are generally making a bet that the first mover advantage is large enough that the risk you undertake in moving first is worthwhile. But if a potential client comes to you and tells you that they want to take that risk, and they’re willing to pay for your advice? Done deal! You cross the t’s and dot the i’s and make sure you’ve covered all the bases, of course, but you’ve got a new client - and a reliable source of income for all the legal advice they’ll be needing.
In this case, the client wants you to help them be a regulated fund, which means that they want to voluntarily comply with regulations related to funds. Those regulations tend to be within the jurisdiction of the SEC, and the statute that governs funds is the Investment Company Act of 1940. The Act and the accompanying rules generally require that if you operate a fund with more than 40% of your investments in securities, you most likely have to register with the SEC. Your new client’s investments - namely, crypto - might be securities; they arguably involve 1) the investment of money, 2) in a common enterprise, 3) with a reasonable expectation of profits predominantly from the efforts of others. (This is the short version, of course.) And while I’m pretty sure the SEC had not yet taken positions on whether cryptocurrency assets were securities in 2015-2017, you, a cautious attorney, will probably advise your client that as a “cryptocurrency asset fund,” the SEC may ultimately deem their assets to be securities and their fund to be an investment company. After all, the client wants to be regulated, right? That is their entire pitch!
In 2017, the SEC investigated a crypto firm, “Crypto Asset Management.” The firm sought to be - you guessed it - “the first regulated cryptocurrency asset fund in the United States,” and it hired the law firm of Faegre Baker Daniels to provide legal advice in advance of its launch. The launch did not go well, as far as the SEC’s 2018 settlement order with the fund is concerned:
Although CAF met the definition of “investment company” during the Relevant Period, it did not register with the Commission as an investment company, meet any statutory exemptions or exclusions from the definition of an investment company, or seek an order from the Commission declaring that it was primarily engaged in a business other than that of investing, reinvesting, owning, holding, or trading in securities, or exempting it from complying with any provisions of the Investment Company Act or the rules thereunder. Thus, during the Relevant Period, CAF should have registered with the Commission as an investment company.
During the Relevant Period, Respondents also negligently misrepresented to actual and prospective investors in certain marketing materials that CAF was the “first regulated crypto asset fund in the United States” and had filed a registration statement with the Commission. Respondents failed to take reasonable steps to ensure the accuracy of these statements before disseminating them to actual and potential investors.
Unhappy about getting fined for $200,000, the fund is now suing Faegre. By the way, the lawsuit is happening in my little ol’ neck of the woods - it was filed in Chicago, in the Circuit Court of Cook County! The complaint alleges that:
Defendant further advised Plaintiffs that Crypto Assets are not securities and to structure CAF's and the Fund's business accordingly.
I am not surprised that the SEC was upset about the fund not registering. I mean, this was 2017 - maybe 2016 or 2015 - and back then everyone was a little less sure that crypto assets were securities. But the SEC loves to get upset about people claiming that things are not securities! And I love them for it - that is an extremely important public service. And, given both the SEC’s penchant for determining that everything is a security and the crypto firm’s description of itself as “a fund,” well, that seems like fraught advice to give a crypto client in 2015-2017 when they ask you whether the SEC was likely to determine that their assets and issuances would be deemed securities. Whether or not you think crypto assets ought to be classified as securities as a matter of principle, my approach would be to plan for regulators taking the least-generous view of the client’s activities - especially when your client is operating in a new and evolving field, and especially when they are the self-identified first mover!
Again, the firm’s assets being deemed securities means the firm is an “investment company” governed by the ‘40 Act. Essentially, if you are wrong about whether or not the fund’s assets are securities, your client has run afoul of a large number of regulations and is likely to attract the ire of the SEC. So, you know, they could actually just register, just to be on the safe side? Why not curb as much of the risk as possible? Based on the allegations in complaint, it seems like the fund specifically wanted to 1) be regulated and 2) avoid risk! The complaint alleges that it relied on the advice of Faegre, and that Faegre told it not to register. But if the client wants to be regulated, why not register?
That all sounds right, doesn’t it? It is entirely possible that I could be missing some important details, of course. And this is just the complaint, which means we don’t have Faegre’s side of the story. They have a while to file their answer. (Faegre also declined to comment in response to every piece of reportage about the case that I was able to find.)
Look, I am sympathetic to Faegre here! They were put in the difficult position of having to make a prediction about what a federal agency would do in a field that is notoriously complicated and difficult to predict. On some level, the lawyer who allegedly gave the fund this advice just made the wrong prediction or gave an insufficiently nuanced answer about how the SEC would regulate crypto, and everyone gets things wrong sometimes. I am also pretty confident that anyone who says Faegre was malicious or reckless here is wrong; my guess is that the attorneys working on this project did their research and that they made a calculated prediction based on the information they had available to them. I just would have made a different prediction.
As far as legal malpractice lawsuits go, “I relied on the advice of my lawyer, my lawyer that advice was wrong, and a federal agency fined me $200,000 because I did what my lawyer told me” is a decent complaint. I have no idea what will happen in the case, but I’m eager to find out! Maybe the case will go all the way to a jury, or maybe the judge will rule on a motion for summary judgment and say that nobody could have predicted what the SEC would do. The possibilities are endless! Well, maybe not endless, but still - it’s fascinating, isn’t it?
By the way, the SEC has published some guidance about whether crypto assets are securities or not. That guidance was probably not available back when Faegre was advising the fund. And here is a letter from the SEC in 2018 about cryptocurrency and investment companies. You can also read some responses to that letter. Oh, and the SEC is still very interested in regulating crypto.
That was a lot of information, but this is extremely my shit. Securities litigation is the type of law that I would most like to practice, and I have been in awe of the various cryptocurrency-related catastrophes for years.
It costs $0 to not be like this!
There has been a big kerfuffle on the internet lately because a few years ago an employee of a game studio said that adding women to a game would not happen because “women can’t handle th[e] amount of stress” related to the subject of the game; “there’s only place for hardened men in this place [sic].”
It is a shooting game, because of course it is. We all know “there’s no room for women in this game” is a bullshit argument. Their real argument is, wait for it: “we didn’t want to spend the resources adding women to the game.”
So here’s a thread from a developer about why adding women to a game isn’t that hard:
You should add women to your games! Include them! Make women in the world feel appreciated the way you make men feel appreciated! And nonbinary people, too, while we’re at it! You should do this for moral reasons, of course. But also, even if you’re a cold asshole, it will benefit you economically! You will make more profit if you have a wider audience, you will get more people playing and streaming your game, you will have greater success. And if you refuse to do this out of spite or whatever, people will notice and give you shit about it.
It’s funny - I heard about this game from its popularity explosion on Twitch, but now I’m absolutely not going to play it, and you shouldn’t either.
Hey, you know what game supports multiple body types and lets you present yourself to others in basically any way you want? Minecraft! And Notch has zero ownership interest in it anymore, so it’s not problematic. Woohoo!
EEEEEEEEEEEEEESPOOOOOOOOOOOORRRRRTS!!!
I love League of Legends, and I especially love watching pro play. The LCS is the North American professional league, and the 2020 spring split begins soon - on January 25th! That’s two weeks from tomorrow!
The format for this year includes an expanded schedule, more emphasis on academy matches (think minor leagues), and a new format for playoffs with more on the line. All of this is amazing, in my opinion. Monday Night League is a welcome addition to the schedule and will hopefully attract some new viewers, the playoffs system demystifies who goes to Worlds at the end of the year, and academy getting some much-needed attention will improve our region’s ability to recruit and foster new talent. 2020 is going to be a great year for the LCS!
Also, if you missed the opening ceremony for Worlds 2019, it was just a tad bit impressive:
D’Abrosca a-Bannon-doned
Click through on this one and read Jared’s underlying thread, this saga is hilarious. It’s one of those things that if I told you about it at a cocktail party, you wouldn’t believe me and I’d have to pull up the article on my phone.
I’m not sorry about the pun. It’s a good pun.
Fantastic fanfiction
I read this entire script at lunch on Wednesday. It blew my mind.
Truth doesn’t always hurt
First, read this column, specifically the letter that begins “I’m 15, and three years ago…” - go and do that now. Okay, you read it, right? You can scroll down now. I included the John Mulaney tweet as a buffer. (It was also retweeted by Nicole.)
Greg is sobbing, Nicole is sobbing, I’m sobbing, we’re all sobbing. I’ve written my fair share of apology letters, and there are a few more I should probably write, too. It’s a terribly freeing thing, apologizing - it lets you unburden yourself of all the guilt and shame you’ve been carrying. And while it may not always go as we might hope, this story is a nice reminder that in most cases, people are decent and kind and they want to help us be better versions of ourselves when we find the occasion to do so. We all struggle and stumble and do things that we’re later not quite proud of. Owning that is the first step in trying to do better and be better.
The above paragraph is me trying to channel Nicole Cliffe. I am so delighted that she is back on Twitter, if only temporarily. Nicole, if this post somehow makes its way to you, we are all so much better for your internet presence, and we have missed you dearly on Twitter - I regularly describe you as one of the Patron Saints of Twitter. I love your newsletter; it inspired me to start mine. Also, yes, many of the links this week are from your feed, you are an incredible curator.
By the way, Nicole is back on Twitter for this week to raise money for a very good charity, so please consider contributing:
Shake your bushy tail
Wouldn’t you like to read about squirrels? Of course you would. Also, there are videos.
Wow, what a week! I hope you appreciated me ending with the squirrels. I thought that would be nice. If you enjoyed this post, please sign up for the newsletter if you haven’t already - it is free. And you can also share this post, of course!
I’ve really enjoyed writing this newsletter so far - it makes me pay more attention to what I’m reading and think a little harder about why things capture my attention. I spent hours and hours curating links and editing the commentary this week. I hope you all liked it. Hopefully my power stays on this weekend. I’ll see you next Friday.