The Georgetown Law Journal Online

This Note posits that the Second Circuit's new definition of friendship for insider trading cases, as set forth in United States v. Martoma, is incorrect. Rather, United States v. Newman’s close standard is the correct definition of friendship. The paper is divided into two parts. Part I addresses the antecedent issue of whether Salman v. United States rejected the close standard, concluding that Salman neither expressly nor impliedly rejected the close standard. Part II establishes that prior cases and the underlying policy rationale of the prohibition against insider trading compel the conclusion that the close standard is the proper definition of friendship under the gift theory.

Part I of this Note provides a brief background of cryptocurrencies and ICOs. Part II examines historical speculative bubbles and argues that the ICO market is a speculative bubble. Part III explores characteristics of those who invest in bubbles as well as the psychological biases that those investors may encounter. It presents psychological arguments for market behavior in an effort to counter the neoclassical economic claims for why a bubble cannot occur and identifies two distinct types of investors in ICOs—the smart money investors and noise traders. Part IV discusses the limited regulations currently governing the ICO market. Finally, Part V argues that an asymmetrically paternalistic regulatory scheme is the most fitting way to regulate the ICO market. Part V does not provide a comprehensive regulatory framework; rather, it argues for light-touch regulation of ICOs and offers examples for how to implement such regulation.

This Note is divided into five parts. Part I explores the history of psychological operations broadly, examining how information has been used to manipulate adversaries and foreign populations. Part II examines the development of technology and how social media has changed the way psychological operations are employed during peacetime to shape attitudes and intervene in sovereign affairs. Part III examines the current legal framework surrounding psychological operations and demonstrates how the gaps in that framework create legal grey zones for states to exploit through the use of disinformation on social media. Part IV discusses the role of international agreements in qualifying state use of “weaponized social media” as a prohibited intervention. It then considers the design of a multilateral treaty that addresses the limits of acceptable deliberate state behavior on social media when the use is intended to manipulate foreign populations during peacetime. This Note concludes by addressing the threat of emerging technologies and the need to reach an international consensus regarding permissible online behavior.

In Jesner v. Arab Bank, PLC, the Supreme Court held that foreign corporations are not subject to lawsuits under the Alien Tort Statute (“ATS”). Written by Justice Kennedy, the highly fractured opinion offered several reasons for its holding. Although commentators have already criticized various aspects of Justice Kennedy’s opinion, one point has not received meaningful consideration and merits correction. In his plurality opinion, Justice Kennedy attached significance to the placement of the Torture Victim Protection Act (“TVPA”) as a statutory note to the ATS in the U.S. Code. In so doing, he disregarded longstanding practice and black letter law that the placement of a statutory note in the U.S. Code by the Office of Law Revision Counsel (“OLRC”) does not have any substantive impact on the law’s meaning, interpretation, or application. This error merits correction by the Court for several reasons. Although it undoubtedly influenced Justice Kennedy’s interpretation of the ATS, its implications extend beyond this case. It will affect future ATS and TVPA cases. It also creates uncertainty over the status of the countless statutory notes that populate the federal code. And, it raises constitutional concerns by attaching legal significance to OLRC’s placement decisions.

In their symposium articles, Professors Sale and Fisch offer mirror-image visions of the role of mandated disclosure. Professor Sale addresses information that is typically relevant to an investing audience and recognizes its importance to the wider public. Professor Fisch, by contrast, addresses information that is most relevant to a noninvestor audience but only contemplates its importance to corporate financial performance. The gulf between their approaches highlights one of the significant tensions in our system of securities regulation: the distance between its intended purpose and its current function.