SCOTUS on Election Deadlines & Musk Misled Investors

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0:46With Sonesta Travel Pass, every stay brings you closer to your next reward. Choose from more than 1 ,100 hotels across 13 distinctive brands and unlock the best available rates when you book direct with Sonesta Travel Pass. Here today, roam tomorrow. Join now at Sonesta.com. Terms and conditions apply.

1:29For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati insurance companies. Let them make your bad day better. Find an independent agent at CINFIN.com. This is Bloomberg Law with June Grosso from Bloomberg Radio.

2:14The Supreme Court signaled a divide over Republican calls to require mail-in ballots to arrive by Election Day. The justices are reviewing a Mississippi law that allows mail-in ballots to be counted as long as they arrive within five business days of Election Day. Federal law sets the Tuesday after the first Monday in November as the, quote, day for the election. And the issue is whether that phrase means that ballots need to be both cast by voters and received by state officials by that date, or whether voters must drop them in the mail by then. Several conservative justices like Samuel Alito voiced some of President Trump's familiar complaints.

2:59Confidence in election outcomes can be seriously undermined if the apparent outcome of the election on the day after the polls close is radically flipped by the acceptance later of a big stash of ballots that flip the election. or, yeah, I think you've got ballots that are delivered by somebody, by, you know, by a neighbor, and they're received a month after the election, and they don't have postmarks. In defending Mississippi's law, the state's solicitor general pointed out that the Trump administration and its allies in the case have not submitted a single case of fraud due to late arriving mail ballots.

3:49And the liberal justices like Sonia Sotomayor indicated they would uphold state laws with post-election day deadlines. History is informative of what's been permitted by Congress because what we're looking for is what understanding Congress had with respect to elections, correct? That's right, Your Honor. All right. And it doesn't talk about the receipt of absentee ballots after elections at all. So we look to the history of whether Congress has accepted it. Chief Justice John Roberts and Justice Amy Coney Barrett emerged as pivotal votes among the court's conservative supermajority. Roberts suggested he wasn't convinced by the Trump administration's contentions that late arriving ballots could be outlawed without also undermining early voting.

4:41If day includes a period after a particular day of the election, does it include a particular day before the day of the election? Or does your logic require a different consideration? A ruling likely to come by late June that bars counting ballots arriving after Election Day would send officials scrambling in 14 states and D.C. that have grace periods for ballots cast by mail, giving them just a few months before the 2026 midterm congressional elections to change their ballot rules. Joining me is elections law expert Richard Brafalt, a professor at Columbia Law School. So, Rich, this isn't about mail-in balloting in general, but about the grace periods that some states have.

5:35So this case is a challenge to a Mississippi law, and about another dozen or so states have similar laws concerning mail-in ballots, which say that we will count your ballot, so long as it's mailed by Election Day, we'll count your ballot up to a certain number of days after Election Day. I think in Mississippi it's five days. Some states are shorter, some states are longer. The idea for the state laws is that you were voted by Election Day if you vote on Election Day and mail it. But if you do vote on Election Day and mail your ballot, it is almost certainly not going to get to the Board of Elections on Election Day.

6:11Maybe more than almost certainly. It's certainly not. So these states give a grace period. They basically say you can vote as late as Election Day, provided that it's postmarked on Election Day or mailed on Election Day. We will count it, provided it gets to us by a certain number of days after Election Day. In Mississippi's case, it's five days. In their view, that's consistent with a federal law that says there shall be a single national election day for federal elections. So long as you voted on election day, that's all you need to do. We'll count it if it comes in within a certain number of days after election day.

6:43The challengers are saying, no, that's not good enough. When the federal law says there's a single national election day, that means the votes have to be cast and received by Election Day. So that the Mississippi law, which permits late received absentee ballots and any other state has a similar law, they have violated the federal law. Tell us about the Fifth Circuit's decision, which this is an appeal from. Oh, so when this case was filed, now, as I say, I think something like 14 states have this provision. There was challenges first for all the district court threw it out, basically saying election day means the day you vote, not necessarily the day that the ballots are received and counted.

7:25The Fifth Circuit disagreed and said, no, an election includes not just the casting of the ballot, but its receipt by the government elections agency. And so therefore, the challenges are right. And that's why the Supreme Court then agreed to take the case. Did it appear as if several of the conservative justices have a problem with the Mississippi law. Yeah, it looks to me that there's at the very least three and possibly four based on the oral argument who are willing to go along with the challengers and say election means casting your ballot and have it received. That's one process and that election day means election day, including receipt of the ballot.

8:07Based on their comments, and it's always a little bit treacherous to rely on the comments in oral argument, but Tom Masolito and Gorsuch seem very sympathetic or more than sympathetic to agree with the position. And some of Justice Kavanaugh's questions seemed to me to lean in that direction too, though he was less clear cut. The liberal justices were clearly hostile to this and felt that Congress did not address this, that this law, which is a 19th century law, was adopted at a time when nobody even thought about mail-in ballots in the way we have them now, and that they would leave it to the states and if Congress doesn't like it, Congress can write a new law.

8:41Justice Barrett asked a lot of questions. She was a little hard to read. She seemed a little more skeptical of the challengers than the other Republican, the other conservative justices. And I think the chief justice said hardly anything. So he was hard to read as well. So right now, I don't know, it's hard to sum them up. And clearly three votes to strike this down, three votes to sustain it and three votes that are not so sure. What is the real objection from the conservative justices to this? Well, there's the formal technical objection that choose means choose, or vote means voter, election means election, and that's what it means.

9:23And there is, I think, a latent objection that I think challengers have emphasized very heavily, which is that this does permit fraud, both fraud and the appearance of fraud. This has been, I think, a Republican criticism of mail-in ballots the last couple election cycles, is that the sense that Democrats use it more, the person who seems to be ahead on election night, suddenly the person who's behind comes ahead once the late received mail-in ballots are counted. Of course, it's kind of silly because most states count all the mail-in ballots afterwards and not just the ones that come in late.

9:55But there's a sense that it's fraud, that there's a problem of fraud. There's a problem of the appearance of fraud. The post office doesn't postmark everything. So maybe there will be some late cast ballots, that there's no inherent endpoint. You know, there was the usual sort of the parade of horribles. Mississippi chooses five days, but there's nothing to prevent them from choosing five weeks. No state does that, but that there's no endpoint once you cross election day. So I think it's the challenges is largely text, plus I think a concern that this is a rule that's better for preventing fraud and for public confidence.

10:34I mean, it sounds like they're buying into some of the concerns about ballot harvesting and all that? Are those concerns real? Every study that's ever been a ballot fraud shows that there's almost none. I won't say none, but almost none. Very, very, very little. And certainly a tiny amount relative to the millions of people who mail in their ballots, and maybe the millions or certainly the high hundreds of thousands who mail them on election day. I mean, there's some argument actually for using election day, because at that point, you have as much information as you're ever going to get. There are sometimes late developments for an election day.

11:11So, I mean, this is a grace period. If courts strikes down the Mississippi law, people who vote by mail would be very well advised to vote at least a week ahead, if not more. It could be very chaotic in the upcoming election because it only applies to federal elections. And there's no federal law that requires state elections to be held on any particular day, or that would affect how the states use ballots. So obviously there's a big federal election coming up in this coming November. Many states will have elections the same day. And you're either going to have some ballots that come in in 14 states that come in after election day, they'll be counted for one vote, but not the other, or the states are going to have to scramble to revise their laws.

11:58I'm guessing this won't come down before June, it's already late March. And no matter who wins, there's going to be dissents, a dissent, and that usually means it takes a little bit more time to write. So it's now, what is it, March 23rd? It's not going to be before June, I think. So I think if the law is struck down, I mean, it's conceivable, though I think unlikely, that they would say it's not good for this election. There is this idea that you don't change the laws too close to an election. But I don't know that anyone argued for that. So I knew, was it going to give the states time enough if it comes out in June?

12:35Let's say the end of June, there's technically time enough. The states can rewrite their, you know, you could to most states, the legislative session is long over. So they'd have to come back into session and rewrite it or do something. Now, again, I think it's 14 states that have this. A few more states had it and eliminated it because I think of the Republican pressure on mail-in voting. I think several states have already repealed it. But that was a state's choice. This would be a national Supreme Court mandate to the 14 states that have chosen to give voters this option to take it away. I always hear that Democrats use mail-in voting more than Republicans.

13:14Is that changing? I'm actually going to challenge you a little bit on that. Traditionally, it was Republicans. Tended to be, the stereotype is it was the Republican businessman who was away from home kind of thing. But traditionally, I mean, further back in time, let's say in the 20th century, it was primarily Republicans. Didn't become more common for Democrats until, I think, into the 21st century, when many states began to liberalize their voting rules and to allow it. And I think it's become more so lately, and especially now, you know, in Trump's attack on on mail-in ballots. And so I think it's become more of an article of faith for Republicans to oppose it.

13:52It's a little unclear, I think. I think the better term many people would use is that it may very well be less committed voters, because in some ways, it's kind of easier to get a ballot and mail it rather than show up and wait online on election day. I think the assumption is that the partisan cut would be that it would hurt Democrats. But I think the proof is actually pretty unclear. And it's certainly no evidence that it's the late voting mail-in voters, that they're any more democratic than the early voting mail-in voters. I mean, this would not end mail-in voting. It would just say, if you want to vote by mail, you've got to vote early.

14:29And tell us what else President Trump is pushing before the midterms. Well, President Trump would certainly try and stop all mail-in voting, except for, I think he says service, overseas, people who are ill, and people traveling. So he would go much further. And then, of course, the so-called SAVE Act, I think, would also require people to bring proof of citizenship when they vote, proof of citizenship when they register, I think to attach proof of citizenship when they send in a mail ballot, even for those who are allowed to do it, and, as I say, to bring proof of citizenship when they go to vote.

15:08So if the Supreme Court strikes down the Mississippi law, it will make it more inconvenient for people to vote by mail in 14 states. Now, I should point out, 36 states don't have this rule. So in those states, if you want to vote by mail, you do have to vote early. This would be, I think, a setback for people in the other states, but it would not be as remotely significant in terms of making it harder to vote as the kinds of things that are in the safe act. As you said, we'll find out the Supreme Court's decision by June. As you said, we'll find out the Supreme Court's decision by the end of June.

15:44Thanks so much, Rich, as always. That's Professor Richard Brafalt of Columbia Law School. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Sonesta Travel Pass makes traveling more rewarding.

16:22Designed to help you get more out of every stay. Sign up at Sonesta.com to enjoy instant savings, bonus points, and valuable perks like early check-in, late checkout, room upgrades, and free stays over time. With Sonesta Travel Pass, every stay brings you closer to your next reward. Choose from more than 1 ,100 hotels across 13 distinctive brands and unlock the best available rates when you book direct with Sonesta Travel Pass. Here today, roam tomorrow. Join now at Sonesta.com. Terms and conditions apply. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility.

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17:46The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n dot com. Remember the tumultuous months in 2022 leading up to Elon Musk's acquisition of Twitter for$44 billion, with the billionaire flip-flopping over whether he'd buy the platform, resulting in hard-fought litigation with Twitter's board of directors to force him to follow through. Well, a San Francisco jury has found that Musk intentionally misled Twitter shareholders when he tweeted that the social network had too many fake accounts and tried to back out of the deal. The amount of damages Musk must pay to individual investors will be determined at a later date when shareholders submit claims, although estimates are that it could reach as high as$2.6 billion.

18:43My guest is business law professor Eric Talley of Columbia Law School. Eric, take us back to that period in 2022 when it seems all we were hearing about was Elon Musk and Twitter. Well, yeah, this is something that is fused into many people's memories, including my own. Back in the spring of 2022, Elon Musk went hard at a purchase of Twitter. They weren't even asking for his entreaties. And he basically appeared on their doorstep saying, I want to buy this company. And after initially resisting, finally, it looked like he was offering a good enough price that it would just seem like the Twitter board would have been sort of crazy not to consider it seriously.

19:26Moreover, he said, not only am I offering this great price, that I want to sign up a deal that doesn't have any financing contingencies, doesn't have any of the booby traps that you often see in M &A transactions that can sometimes allow a buyer to walk away. And so at the end of the day, the Twitter board basically leapt at this offer of$42 a share, which was once again a sort of a takeoff on his recurrent 420 meme that we've seen many other times and has also gotten him into hot water, even though the Twitter stock price was far below that at the time. So he signed it up and it became pretty clear that shortly after he signed this deal that had to go through a shareholder approval process.

20:10So there were some months that had to follow on that he began to feel some regret that he might have overpaid. And that's when Mr. Musk started to drop several hints, all on Twitter, of course, that he thought this deal wasn't going to go through. And so on a couple of different occasions, Mr. Musk tweeted first, the deal is on hold. We're not exactly sure why the deal was on hold. And then relatedly tweeted that he had a concern about so many of the spam bots that were evident account holders on Twitter and that they had disclosed their existence to him or the magnitude of them to him. I don't think anyone at the time viewed either of these things as sort of credible claims.

20:56Most people, I think, thought that they were his claims to try to walk the price down a little bit so that he could try to negotiate either a better deal or walk away from the transaction completely. And it worked on some level. The fact that, you know, he had offered$42 per share should in principle mean that if people think the deal is going to close, the stock price should pretty quickly converge to something close to$42 a share. And by the summer of 2022, it was sitting in the mid 30s, evidently because a lot of people thought that, you know, Mr. Musk somehow had some secret that was going to allow him to walk away from the deal.

21:33I mean, tell us what the jury found because it was sort of a split decision. Yeah, there's a bit of a split verdict from the jury. The plaintiffs had brought forward a variety of claims, all various forms of securities fraud. Probably the most simple sort of claim that proved successful was the claim that these tweets that Mr. Musk put out during the pendency of the Twitter acquisition constituted misleading statements that were made recklessly or possibly deliberately in contravention of rules against securities fraud that would entitle them to damages. They also made another claim that these tweets were actually part of a much larger scheme to defraud the entire market.

22:14These were just points on the map, but the map was a grander map of putting together a significant scheme to defraud the market over a many month long period. When the jury came back, they basically accepted the idea that these individual tweets were episodic moments of carelessness and recklessness by Mr. Musk that would expose him to securities fraud liability. But it wasn't part of a month's long scheme. This was more of a kind of a shooting from the hip set of examples in which he made statements that clearly moved the market. He should not have made them. He knew better than to make them.

22:49And therefore, they constituted securities fraud. Now, you know, either way, the jury got to a verdict of securities fraud. But it does turn out that a scheme liability approach would probably be in some ways more potent because the way that you add up damages would allow plaintiffs as part of this large class action to come forward and pick out any period of time during this months long period to point to to say I was defrauded during this period of time. Now it's going to be those plaintiffs that basically bought before the correction or sold after the correction, right around the point where he was making these statements.

23:27That will limit the award a little bit, but people are still expecting that this would be somewhere in the low billions of dollars, say around$2 to$2.5 billion. So it's real exposure. The other reason why it's pretty important that the jury found that the type of securities fraud liability was these specific statements actually makes it a little bit more challenging to appeal because these are more sort of fact-specific conclusions of a jury as opposed to statements of law that a court could get wrong. And so, you know, for this type of securities fraud, the court pretty much puts it in the hands of the jury.

24:04It's up to the jury to figure out facts. And a court on appeal is very reluctant to overturn a factual finding that a jury has delivered. Coming up, I'll continue this conversation with Columbia Law School professor Eric Talley. Musk was on the stand for more than a day. But unlike other cases where he testified, the jury returned a verdict against him. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

24:46Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Travel smarter, not harder, at America's Best Value In by Sonesta. With convenient locations from coast to coast and value-packed comfort at every turn. It's a practical choice for road trips, quick getaways, and everyday travel that keeps things simple without sacrificing comfort. And when you're a Sonesta Travel Pass member, staying at America's Best Value In means earning points toward free nights, upgrades, and more every time you stay.

25:18Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass. Here today, roam tomorrow. Join now at Sonesta.com. Terms and conditions apply. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati insurance companies. Let them make your bad day better.

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26:07After about four hours of deliberations, a jury found Elon Musk liable for defrauding investors by deliberately driving down Twitter's stock price in the tumultuous months leading up to his 2022 acquisition of the social media company for$44 billion. I've been talking to Columbia Law School professor Eric Talley. Eric, he's often been called Teflon Elon for winning high stakes legal battles that many expected him to lose and in which he testified. Here he was on the stand for more than a day. So how can I put this? Do you think the thrill is sort of gone? Yeah, I think maybe the thrill's worn off a little bit.