Clancy Trial Twist & Kalshi Loses Again

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0:42This is Robert Smith from Business History. If you're listening to this, there's a good chance you're a small business owner. And like every small business owner, you started with a dream to do what you love and watch it grow. What you probably didn't dream about? Keeping up with cyber threats. That's where MasterCard can help with access to tools that help identify cyber threats to better protect your business. Building your dream business? Priceless. For cybersecurity in a changing world, there's MasterCard. Learn more at MasterCard.com slash small business. If you listen to financial news, you know a lot of time is spent thinking about what's next.

1:17The next opportunity. The next investment. The next move. But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables, and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you can't predict. Let Cincinnati insurance make your bad day better. Find an independent agent at CINFIN.com. This is Bloomberg Law with June Grosso from Bloomberg Radio. A jury can draw an inference or can determine that there is reasonable doubt based upon the lack of an adequate investigation.

2:08In this case, there was no investigation. They just immediately assumed that this woman was guilty. A new twist in the Lindsay Clancy case. For the first time, her defense attorney argued in court today that there wasn't enough evidence to prove she killed her three children. So I asked the court to hearken back to the evidence that was presented and ask yourself, where's the evidence that she did this? Where is the evidence that she did this? A striking turn because during the five weeks of trial, the defense didn't dispute that Clancy killed the children in the family's home in 2023. The prosecutor called the argument laughable, pointing to various evidence raised during the trial.

3:00The defense's focus during the trial was in trying to persuade a jury that the 36-year-old former nurse was not criminally responsible because of mental disease. a rare condition called postpartum psychosis. But the trial ended in a hung jury, 11 to 1, for acquittal. Joining me is Dave Ehrenberg, former Palm Beach County state attorney. Dave Clancy's lawyer took this leap from arguing through five weeks of trial that she wasn't criminally responsible because of mental disease to arguing now that there isn't enough evidence to prove she killed her three children. Quite a stunning reversal. Well, he's doing his job as a lawyer, which you can argue in the alternative, which during the trial, they admitted she did it.

3:50But they said that she was mentally incapacitated. So now, in an attempt to avoid a new trial, he's pulling out all the stops by even saying that, well, there's not any evidence to justify trying her again, because there's not enough evidence that says that she did it. But of course, she's already admitted to it, and the evidence does show that she did it. I mean, this was never even an issue, a question. This just feeds into the conspiracy theories out there. I mean, do you think that's why he's doing it? Because obviously the judge is not going to buy that. I mean, then who did it? Her husband?

4:21Some mysterious intruder? Well, he had always played coy with the conspiracy theories out there about Patrick Clancy. He never directly debunked them. He just said, well, I'm not the one saying it. And then after the mistrial, he did come out strongly saying that Patrick Clancy is a victim and all this. He did not do it and the conspiracy theory should stop. But now back in court, this will help reignite them, I guess. I know he's doing this to try to help his client in any way possible, but it's a no-win proposition. and it will only further the disgusting conspiracy theories out there, which are propagated by so-called Internet sleuths who, in reality, know nothing.

5:08Yeah, so now some of the arguments. He argued for a required finding of not guilty. She should be found not guilty because of the total and complete lack of evidence to indicate to a rational juror that she was guilty. The judge hasn't decided on this, but this is not going anywhere, is it? No, but defense attorneys are obligated to preserve every legal avenue. So what he's doing, he's attacking the sufficiency of the prosecution's baseline evidence. He's attempting to get the charge dismissed entirely or prevent a retrial on double jeopardy grounds. And so he's doing what a lawyer does. But in the court of public opinion, it's a loser.

5:51And in a court of law, it'll also be a loser. There is this legal wrangling over the holdout juror, and he filed a motion to investigate the juror. Among the things, he argued that the judge should have ousted the juror after the jury foreperson complained that he was refusing to listen to the law in reasonable doubt. So he wants all this information. He wants his cell phone records. I mean, what do you think? Well, they're trying everything, pulling out all stops. It's not going to work because unless you can show that the juror definitively and knowingly lied on his questionnaire, then this isn't going anywhere.

6:27And even if he did misrepresent things, I mean, the mistrial is over. He's already investigated it during the trial, whether the juror was following the instructions and the judge found that the juror was not violating any of the rules. So could you potentially get the juror in trouble maybe on perjury? Yeah, possibly if it gets that far. But there's no evidence to me that he knowingly lied. I think the problem was with the questionnaire itself. The questions were vague. And you've got to have more than just inconsistencies for a perjury count. But you notice how I said that the penalty would be perjury and not a retrial.

7:07Because the mistrial happened. It's over. And so going after this juror is a desperate attempt to try to force an end to all this, but it's not going to happen. And also it does discourage future jurors from holding out because if you're the one to hold out, this is the lesson. You're going to be scrutinized. I mean he's not the only one who has been accused of unauthorized cell phone use, but he's the only one whose phone records are being demanded. And so I think this whole thing is heading in the wrong direction and it's not going to go anywhere. Today they said they want to make the notes from the jury and the sidebars public.

7:48They want to use it in their motion to dismiss on double jeopardy grounds. Well, yeah. Well, you know, there's a strict line in the law between a juror who digs in their heels and votes their conscience and a juror who breaks the rules. And Kevin Reddington isn't allowed to challenge how the holdout juror voted. So he has to prove that the juror looked outside the courtroom or lied to get seated. But like I said, this looks like a fishing expedition. And I know they're trying to argue that double jeopardy attaches here. But the law is against them. The law says that there is manifest necessity here because when you have these extended deliberations where the judge has already given that Allen charge to keep deliberating where he questioned all the jurors, he gave renewed instructions.

8:39I mean the judge did what he had to do. So to say, well, the judge acted too quickly to declare mistrial and they shouldn't be allowed to try her again. No, none of this stuff is going to work. I think the best chance to avoid another trial is for the defense lawyer and the prosecution to come to an agreement and settle this thing. And it's in the prosecution's interest, I think, to do so because that 11 to 1 is a signal to him not to do it again. However, the defense attorney has said that he wouldn't accept any plea deal that would include her going to prison. What kind of room does that leave for the prosecutor?

9:18That's the big question. That's why they haven't been able to reach the settlement yet, because if the defense is not willing to compromise on a short period of incarceration, then it's up to the parties that come up with something more creative, like perhaps the defendant can not challenge the rulings on appeal and will go into a mental institution. But remember, you can't negotiate a defined term in a mental institution because that is not incarceration. You can only settle with a certain number of years in a prison, a penalty, incarceration, but not in a mental institution, which is about getting you well.

10:03And that's going to be up to a doctor and a judge to determine her number of years there. So that's the conundrum here. They're going to have to come up with something a little more creative to ensure that she accepts responsibility for what she did and she gets help. But she's not going to be released within a matter of months or even a couple of years because that would seem like an injustice if she was found not guilty by reason of insanity and then sent to a mental institution only to be released a short time later and then able to have kids again. The prosecutors said after the hearing that they hadn't decided whether to retry her or not.

10:43They were going to see how the motions played out. Do they have any choice? If they can't reach a plea deal, what choice do they have but to retry her? I don't think it's in their best interest to retry her. You can see by the way this first trial went that they were pretty fortunate not to get an acquittal. The prosecution lived to fight another day and they should take this as a message from the jury not to do it all again and put the community and the family through it again. In fact, Patrick Clancy didn't want it. He doesn't want to do it again either. So that's important. Plus, prosecutors have an ethical obligation only to pursue charges when they have a good faith belief they can get a conviction beyond a reasonable doubt.

11:26So whether they have that good faith belief, I don't know. I'd leave that up to the prosecutors. I know the DA. He's a good person, and he's a smart guy and an honorable person, Tim Cruz. So I think he'll do the right thing in the end. But this is going to take some real negotiation. And it did not help the cause for the defense lawyer, Kevin Reddington, to bash Tim Cruz personally during his gloating press conference after he got the mistrial. So I saw that he backed down from that and he started to compliment the DA. But it's never a good idea to start personally attacking the person who you depend on for a settlement.

12:11I mean, it is in the prosecution's hands as to whether this thing gets tried again and it's in their discretion. Do you see a case where the prosecutor just says there's no plea deal? We're just dropping the charges against this woman. Not a chance, because if that happens, then she goes free. She doesn't even go to a mental institution. So they're not dropping charges. But what could happen is they will posture that they're moving forward with another trial. and then that could increase the leverage that the state has over the defense and that could lead perhaps to some sort of settlement. Just that no one's interested to go through all this again with a full trial.

12:52But remember, even if she had won a trial, she wasn't going free. She was going to a mental institution. So why would he drop the charges now to give her something even better than she would have received if she had been found not guilty by reason of insanity in the first trial. Okay, stay with me, Dave. Coming up next, New York's governor is calling for an investigation into Cornell University's handling of gang rape allegations in 2024. I'm June Grosso, and you're listening to Bloomberg. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work.

13:37It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at chatgpt.com by selecting Work Mode, available on Plus and Pro Plans. This is Robert Smith from Business History. If you're listening to this, there's a good chance you're a small business owner. And like every small business owner, you started with a dream to do what you love and watch it grow.

14:12What you probably didn't dream about? Keeping up with cyber threats. That's where MasterCard can help with access to tools that help identify cyber threats to better protect your business. Building your dream business? Priceless. For cybersecurity in a changing world, there's MasterCard. Learn more at MasterCard.com slash smallbusiness.

14:56meals. Big League reliability for any business. That's genius. Today, New York Governor Kathy Hochul called for an investigation into Cornell University's response to a 2024 gang rape allegation in which a woman says she was sexually assaulted by seven students after being plied with alcohol and drugs. The woman filed a lawsuit this month. She had reported the incident to Cornell's campus police department, but the local district attorney's office opted not to prosecute anyone at the time. It reopened the criminal investigation Monday as public outrage built over the woman's allegations. I've been talking to former Palm Beach County State Attorney Dave Ehrenberg.

15:47Dave, explain why prosecutors have reopened the investigation after this civil lawsuit was filed by the student. Right. So what happened was originally this case went to the Cornell Police Department who did an interview with the victim and then it was sent over to the district attorney's office who decided that there was not enough evidence to file charges. The district attorney's office said that the victim claimed that the sexual conduct was consensual and the drugs were taken voluntarily. Now, there's something we don't know because then what is the complaint about? What was she reporting to police if the report is, well, she said everything was voluntary and consensual?

16:36So there must be some non-consensual conduct that was alleged. or else why would she go to police? And so that's where there's still some confusion out there. The district attorney is now saying that they have new evidence, like the Snapchat messages, and they now have a victim who is saying that pretty much all of it was non-consensual. And the drugging was, yes, she took the drugs on her own volition, but she was pressured into doing it. So it brings a whole new perspective to this case that it looks like there could be some serious charges here for sexual assault and for involuntary drugging.

17:25And so this is an open case, but I think political pressure had something to do with it because it's not just that there's new evidence. It's not just that there is a new 100-plus page civil complaint that makes very powerful allegations, but also the fact that you have prominent political leaders saying what's going on here. And district attorneys are elected officials too, and they don't want to be accused of a cover-up. They don't want to be accused of ignoring a rape survivor. So he's going to look at it and it's going to a grand jury, which perhaps should have been done at the beginning. The prosecutor has said that in her sworn statement, she didn't allege that she was drugged against her will or gang raped.

18:10She described her participation in drug uses and sexual conduct as voluntary, conscious and consensual. The allegations are so horrific, what happened to her, that it's gotten a lot of public attention and outrage. How does a prosecutor handle it if a victim's allegations are different two years later? There's still so much we don't know. Apparently, according to her lawyer, she did make allegations the first time around of non-consensual conduct. And maybe there's just – there's something here that we're not getting because the DA is saying she said it was consensual. Maybe then she said some of it was consensual but the gang rape was not.

18:58And if that's the case, well, that would be a huge crime. And that's something that they would take seriously and that's something that would justify an investigation using professionals who are trained in interviewing sex assault survivors. In this case, you had the Cornell Police Department, not the Ithaca Police, not the city police and not the state attorney's office there, but the local college police department who did one interview. And we don't know if that person is experienced with sexual assault survivors. And we don't know how thorough the investigation was. and we don't know if there are discrepancies between what her lawyer is saying and what the DA is saying but there's still so many open questions here that it looks like the DA is is digging in his heels because I saw some interviews saying that no we didn't have enough evidence to pursue it from the beginning and it's the police that give us the information and when the information doesn't check the right boxes we don't prosecute I get that I was a former state attorney.

19:59Then the question is, was it a thorough investigation? And why do we have this discrepancy between what her lawyer is saying she said and what the DA is saying she said? There were multi-day hearings in May of 2025, you know, at Cornell. So are they going to be looking at those as well, or have they looked at those? Well, the hearings would be different. See, different standards of proof as well. The hearings were based on a Title IX investigation. That's to see if the university's internal procedures when it comes to sexual activities and reporting and consent were all followed. And the standard there is preponderance of the evidence.

20:38When you're dealing with a criminal investigation, you're dealing with potential jail time and you have to prove cases beyond a reasonable doubt and the investigation is more serious. Here, the The investigation resulted in two students being expelled and others having to write an essay. So a Title IX investigation done by university police within the university is different than a criminal investigation done in conjunction with the district attorney's office. When it comes to a criminal investigation, it looks like something was done because the information got from the campus police to the district attorney's office, but then it died there.

21:16And so there are a lot of questions as to why, what kind of investigation was it, who was interviewed, how thorough was it, was it done by a transsexual assault investigator, and why the discrepancy between what the prosecutors are saying that the victim said and what the victim's lawyers said that she said. Her civil lawsuit accuses Cornell of not preventing the alleged assaults and of failing to properly address sexual violence on campus. Thanks so much for sharing your insights, Dave. That's Dave Ehrenberg, former Palm Beach County state attorney from the campus. Regulators in Ohio and Tennessee can go after Kalshi for allegedly skirting each state's sports gambling laws.

22:02Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

22:44This is Robert Smith from Business History. If you're listening to this, there's a good chance you're a small business owner. And like every small business owner, you started with a dream to do what you love and watch it grow. What you probably didn't dream about? Keeping up with cyber threats. That's where MasterCard can help. with access to tools that help identify cyber threats to better protect your business. Building your dream business? Priceless. For cybersecurity in a changing world, there's MasterCard. Learn more at MasterCard.com slash small business. Game night rush or any night of the week, really.

23:18Genius keeps every order moving. From online ordering to your kitchen to the front counter. Big league reliability for any business. That's genius. That's after the Sixth Circuit ruled unanimously against Calci, finding that states can enforce their gambling laws against the prediction market. Calci's argument is that it can only be regulated by the U.S. government. The Sixth Circuit is the third federal appeals court to rule on whether states can regulate gambling on Calci, and there's already a circuit split. Joining me is securities law expert James Park, a professor at UCLA Law School. James, start by telling us about the basic argument.

24:03You know, are these swaps? Yeah, I mean, I think the main question is whether they are sports gambling, because a number of states, they regulate gambling on sports, and they view some of the event contracts that are being traded on CalShe relating to sporting events as gambling, and they have gambling regulation that they want to enforce. Kalshi is saying that these are swaps regulated by a federal statute, the Commodities Exchange Act, and the Commodities Future Trading Commission, CFTC, has exclusive jurisdiction over the swaps, and that preempts all of the state gambling regulation. Are red and blue states trying to regulate Kalshi?

24:49It's not a political thing. I don't think it's a political thing. In the case that was most recently decided, you have Ohio and Tennessee trying to enforce state gambling laws. Ohio and Tennessee are both red, I think, or reddish. And so they have laws saying that you have to be 21 in order to gamble. And so this website allows, I don't know if it allows minors to, but people under 21 are allowed to use the site, and so they can evade state gambling laws. Also, Calci avoids paying state gambling taxes or having to get licensed from the state. Yeah, definitely licenses, and if there are specific gambling taxes, I think they might argue that they're not subject to those taxes.

25:37So tell us what the Sixth Circuit found. So they basically reversed a lower court which had essentially granted a request for an injunction. And that injunction basically prevented Ohio and Tennessee from enforcing its state gambling laws against CalShe. So they basically concluded that these are not swaps, that they are not really meant to be included in the definition of a swap. And therefore, the Federal Commodities Exchange Act doesn't apply. And so the state gambling laws are not preempted according to the Sixth Circuit. And this decision agrees with what the Ninth Circuit decided a few months ago.

26:18And there's a conflict, though, with the Third Circuit. The Third Circuit did conclude there's a likelihood of success that Kalshi would be able to establish that these sports contracts are swapped. So there's a circuit split, and that's a possibility that the Supreme Court will eventually hear this issue and resolve the split. So the court also held that even assuming that the Cal Sheet sports contracts are swaps, they held that the Commodity Exchange Act neither expressly nor impliedly preempts Ohio's or Tennessee's gambling laws. So they're saying that even if it is a swap. That's a very interesting point.

26:58And this is getting into constitutional law and preemption. States have regulated gambling for a really long time. They've regulated it for, you know, maybe 100 years or more. And so we don't lightly conclude that a statute that was passed primarily to regulate derivatives and then swaps after the financial crisis of 2008-2009, that that federal law was meant to completely rewrite state gambling law. And so there is a broader principle here of federalism and limits on federal power that we are not going to necessarily assume that Congress meant to preempt all of those laws unless it's very clear that Congress intended to do so.

27:48You know, that's an argument that's actually attractive to many conservative jurists, that they are generally against federal preemption of state law. They might be more for state rights. And so, you know, I think that is a principle that conservatives might agree with. Does federal law generally defer to the states on gambling? Yeah, that's my understanding, that it's meant to be regulated locally. And so you have a variety of different approaches. Some states permit it. Some states do not permit it. And, you know, Nevada, for example, has an interest in ensuring sports gambling happens in a physical place in various casinos.

28:30And so they have a rule that says you can gamble on sports, but it has to be in a physical place. There are age restrictions on gambling. So states have different sets of approaches. And, you know, that's why Cal-shee, in some ways, was unique in allowing for nationwide gambling on the Internet. Other sites were not able to do that. And that's something that Cal-shee actually advertised, according to the court, and said that that's an advantage to our site is that everyone can gamble on our site. And so that, you know, that's clearly something that the states are not happy about. Another argument that Kalshi makes a lot is that if you have different states, there'll be a patchwork of laws.