Weekend Law: Jimmy Kimmel, Short Seller Trial & Trump vs Monuments

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3:14disclosures at public.com slash disclosures. This is Bloomberg Law with June Grosso from Bloomberg Radio. Here's the joke that made President Trump call for Jimmy Kimmel to be fired for the second time in less than a year. Look at more so beautiful. Mrs. Trump, you have a glow like an expectant widow. Last September, Kimmel was suspended for six days after Trump demanded he be fired for comments he made about the killing of conservative activist Charlie Kirk. That backfired when Kimmel's ratings actually went up after his forced hiatus and ABC had to contend with Disney Plus subscriber cancellations from the program Blackout.

4:02Still, Federal Communications Commission Chairman Brendan Carr seems to be taking Trump's grudge against Kimmel seriously. He's taken the rare, almost unprecedented step of calling Disney's eight ABC TV station licenses in for early review, ostensibly over Disney's diversity, equity, and inclusion practices. And Carr is also investigating ABC's daytime talk show The View after declaring it subject to equal time rules for political candidates. But there are signs that Disney is taking a different approach this time around, standing its ground and fighting back. The company fired back at the FCC in a lengthy filing, accusing the agency of seeking to chill critical protected speech and shape media content to its liking.

4:56Joining me is Professor Daniel Lyons of Boston College Law School, a telecommunications law expert. Is FCC Chair Brendan Carr taking a different approach from his predecessors at the agency? It's a good question, a good place to start the conversation, because FCC Chairman Brendan Carr has been so different than his predecessors on the issues of old media speech. So over the past 20 years or so, the FCC has been focused significantly upon things like broadband, right, expanding broadband, whether we've got net neutrality rules, things like that. But prior to the internet era, the FCC was America's communications regulator and developed a whole lot of doctrines balancing the government's interest in regulating communications with the limits on the government and the First Amendment.

5:44We thought for a long time that most of these doctrines were relatively settled. They haven't really changed much since the late 90s. But Chairman Carr has shown an interest in aggressively exploring the gray areas that were left unexplored by bipartisan commissions in years past. So we see this with the comments that he had with regard to Jimmy Kimmel's statements after Charlie Kirk's murder. We saw it even earlier than that. The FCC began questioning PBS's sponsorship statements before shows, which sponsorships are illegal, but commercials are not. And the line between the two is not always been clear.

6:22So the agency has shown an interest in revisiting all of these doctrines and getting a sense of whether it should more aggressively pursue the old media rules that had originally been its forte in the pre-internet era. This coincides with the fact that we have a president who is much more interested in old media than occupants of the White House in years past. The president seems particularly interested in questions about what broadcast news is doing, what cable news is doing, which feel much more like 1990s and 2000s questions than they do the most relevant communications law issues of 2026. And are Carr and Trump moving in lockstep?

6:59Brendan Carr's been pretty open about the fact that he's responding to what his boss wants, that the FCC is, although it's structured as an independent agency, it lacks the job protection that many other independent agencies have, which means that the commissioners work at the whim of the president. And Carr has shown not just a realization about that, but a zeal in kind of doing his part within a Republican commission to toe the party line. This is another, I think, situation where the president has at least set the direction and Carr is following. I think the language that Carr is using in this context is about clarifying the scope of the equal time rule and the broadcast news essential.

7:41It doesn't seem coincidental that the same network is being picked on in all of these situations. And they happen to be the same network that the president has in his crosshairs. The FCC is investigating the ABC talk show The View. And in January, the FCC told broadcasters that talk shows and late night programs hosting political candidates have to give equal time to opponents. The view has had this exemption. So tell us about equal time and the exemption. Well, so I think it's important to put this in the broader context of how the First Amendment interacts with FCC broadcast regulation, right?

8:18So the Supreme Court has made clear that in most contexts, the government can't tell a particular platform or speaker what they can and can't say, right? This is Miami Herald versus Tornillo, where the state of Florida tried to adopt a right of reply statute for newspapers. If a newspaper editorial criticized one candidate, then it had to give equal space to that candidate to respond. And the court said this is a violation of the right of editorial control, the right to decide what I say, what I don't say, and what I choose to put on page one versus what I choose to put on page 13. The Supreme Court revisited this just recently with regard to Facebook and Twitter and other Internet platforms in the case just a couple of years ago.

8:58So broadcast is an exception to that strong limit on government power. Because broadcasters have to apply for a license to use the electromagnetic spectrum in order to send their signals out over the airwaves, broadcast television and radio the Supreme Court held did not have the same rights of editorial control. The reason for this ostensibly was scarcity. There's only so much electromagnetic spectrum. And so when the government is handing out these limited licenses, it should have the ability to decide that the users of these licenses present both sides of a debate. This was a case called Red Lion in the late 1960s.

9:33But there was always the concern that Red Lion was on a very thin read. At the time, most of America got its television through broadcasts before the cable industry. And so broadcasters had a very significant control over the pipe into people's homes. And more importantly, the court said, we recognize that there could be First Amendment problems with even this exception. If broadcasters are unwilling to address political controversies because of fear that they have to provide equal talking time to the other side, and it causes them to chill political speech generally, then it might be that even redlining is unconstitutional.

10:11We'll revisit this question. The FCC phased out the Fairness Doctrine in the 1980s. 80s. But one vestige of it still remains, which is the equal time rule. The equal time rule says that if you have a qualified candidate during an electoral period and make an appearance, then the other candidates in the election have the right to demand equal opportunity to be heard on the broadcast network. And that was an issue in The View. So ostensibly, The View had James Tallarico on as a guest. And Carr's position was this could have implications for the equal time rules such that Tallarico's opponent should be allowed time on the view as well.

10:48Back in the 1950s, this became an issue in the Chicago mayoral election. Mayor Daley was welcoming a delegation from a foreign city and it made the broadcast news. And this guy, Lars Daley, who was no relation to Mayor Daley, he was a perennial fringe candidate. He was on the ballot every year and got like three votes. He would walk around wearing like an Uncle Sam outfit. He wrote to the FCC and demanded equal time. He said, if you're going to put Mayor Daley on, then I deserve equal time. And lo and behold, to everyone's surprise, the FCC granted it. So Congress freaked out about this and passed what they call the bona fide news exemption.

11:21If a candidate appears on your broadcast as part of a bona fide news broadcast, then it wouldn't trigger the equal time rules, partly in order to preserve the spirit of the First Amendment, right? This idea that you should be able to cover newsworthy events. If you decide you don't want to cover newsworthy events because of fear of triggering the equal time rules, that's a problem for society in general. So the scope of the bona fide news exemption is what's at issue here. As news evolved in format and as broadcast became less and less of a dominant information provider, the FCC traditionally has added more and more programs to the exemption category.

12:01So in 1984, Phil Donahue's talk show was recognized as a bona fide news broadcast because it was covering topical issues. Later on, Politically Incorrect with Bill Maher. Weirdly, the Howard Stern Show and the Tonight Show is granted an exception. And The View was granted an exception in 2002 or 2003. So it was that exemption that Carr has announced the desire to kind of tighten up, make it not as expansive as it has been in FCC's past. So in January, the FCC issued guidance saying going forward, we're going to apply this much more stringently. And those of you who have existing exemptions should not assume there can be blanket exemptions.

12:40And that's what now is being built on with regard to the specific inquiry into Tauro Rico's appearance on The View. Carr is also reviewing whether to revoke the broadcast licenses for Disney-owned local ABC stations. And it's actually over Disney's DEI practices. Carr said the timing is purely coincidental, but it came right after Trump demanded that Kimmel be fired for the second time. Is there any precedent for revoking licenses like this? These licenses to broadcast, they're issued for an eight-year period, and then they come up for renewal. But there is a strong norm and, in fact, a legal precedent for a presumption that they would be renewed.

13:22The FCC only doesn't renew a broadcast license in the event that the broadcaster is found to engage in a repeated pattern and practice of violating FCC rules. The only instance I'm aware of was a religious broadcaster in the 1990s that lost its rights because it had represented itself as a minority-owned broadcaster to take advantage of the minority preference rules. And it turns out it was more of a straw man than a real minority-owned business. And so when it came time for the license to be renewed, the FCC chose not to renew it. But because broadcasters invest a lot of money in the expectation that this would be renewed, the D.C.

13:58Circuit has recognized the renewal is almost like a property interest. And so there's a high barrier to a license not being renewed. What's unusual in this case is that most of ABC's licenses aren't due for renewal for several years. The commission has stepped up and moved the timeline forward for starting the process and asking for all the compliance measures long before ABC expected to, given the commission's history. So even if it goes through the process and somehow they revoke the licenses, there would be a huge court battle after that, right, that might go up to the Supreme Court. Yeah. And ultimately, it may be that ABC wins that challenge, right?

14:38It may be that at the end of the day, the FCC chooses not to revoke the licenses, or if they revoke the licenses, ABC sues and successfully gets them reinstated. But that in itself is a tremendous cost. And this is what communications call sometimes call regulation by Ray's eyebrow, right? The situation where the FCC may or may not have legal authority to do what it wants to do, but it can ask questions to try to nudge broadcasters to voluntarily comply with requirements that the agency may not be able to outright demand. And there's a long history of that in the FCC, as you might imagine. Disney in 2024 settled a$15 million defamation lawsuit brought by Trump against George Stephanopoulos, an ABC News anchor.

15:20And it did pull Kimmel off the air for several days last fall after Carr's threats. But Disney's taking an aggressive stance this time. In its filing with the FCC, it accused the agency of seeking to chill critical protected speech and to shape media content to its liking. Are they under less pressure for some reason? Why do you think that they're deciding to, you know, really aggressively fight back? Well, one, I think they're on pretty strong legal ground. The constitutional ground for the equal time exception to the first amendment, I think, is relatively weak. The red line, I think, was dubious when it was decided.

15:58I don't know that it has very many supporters on the Supreme Court today. Justice Thomas has come out explicitly to call for overturning it in the right facts. I think if it gets to the Supreme Court, you don't get there. But also the fact that The View has been granted an exemption as a bona fide news broadcast in 2003 makes it very hard for the FCC to punish it for conduct it took under that exemption. The FCC can make a decision going forward, but to the extent that it's trying to sanction ABC for having Tallarico on during a time when The View has a bona fide news exemption license from the FCC, I think ABC is on very good ground in defending where it's at.

16:37So I think this is where it's decided to draw the line in the sand, and I think it's a very good line to draw. And you're right, it's really brought in some heavy hitters. Paul Clement was the signatory on the brief, who is no stranger to taking on and winning very difficult Supreme Court cases. Certainly not. He is one of the premier Supreme Court litigators, a former solicitor general. I believe he's argued more cases before the Supreme Court than any other lawyer. He's appeared before the justices several times this term, including representing Federal Reserve Governor Lisa Cook in her fight to prevent President Trump from firing her.

17:14Thanks so much for taking us through this latest saga involving ABC and the FCC. That's Daniel Lyons, a professor at Boston College Law School. Short sellers are making money when others are losing it, so they're generally not well liked. In fact, a short seller was even cast as the supervillain in the James Bond film Casino Royale. Terrorist financier Le Chiffre uses a warlord's money to short sell stock. Do you believe in God, Mr. Le Chiffre? No. I believe in a reasonable rate of return. I want no risk in the portfolio. Agreed. I have the money, so short another million shares of Skyfleet stock.

18:01Sir, you must know you're betting against the market. No one expects this stock to go anywhere but up. Just do it. And now one of the most prominent short sellers is on trial for securities fraud. Andrew Left rose to fame with sensational tweets that went viral, published reports claiming firms were overvalued or had engaged in fraud, betting against companies like GameStop and Valiant Pharmaceuticals, and hyping his positions on financial TV shows. In a bit of irony, Left, who accused so many others of fraud, is now on trial for defrauding investors. Prosecutors say he used explosive social media posts about dozens of companies to illegally move their stock and make a quick profit.

18:53Market manipulation that totaled as much as$20 million. The 55-year-old denies misleading investors and says he genuinely believed in his stock calls. My guest is securities law expert James Park, a professor at UCLA Law School. Jim, give us a picture of who Andrew Left is. He started out by publishing research reports on companies through his platform Citrin Research, often making negative recommendations. I think he's mainly known for correctly identifying problems at a company called Valiant Pharmaceuticals, a company that engaged in questionable practices with respect to recognizing sales.

19:35And so, you know, he published a report identifying some of the questionable practices. He also came up, interestingly, in the GameStop saga from a few years ago where he had taken a short position in the company and retail investors basically rallied on Reddit to squeeze the short. Ben, you know, with those successes, he's gained a high profile. You know, he makes recommendations with respect to companies, emails them out. He has an online platform, is using social media a lot, is frequently invited on various shows and has a lot of media appearances. And so he's somebody with a higher profile than most folks who are doing research and, you know, taking short positions potentially in companies.

20:19The government is accusing him of manipulating the stock market. Tell us about the charges here. He was indicted for various accounts of securities fraud, manipulation, and fraud more generally. The manipulation argument is that he would basically establish positions in a stock, whether it was long or short, issue a recommendation with respect to that position, which he would disseminate to the public, presumably, according to the prosecutors, with the intent to either inflate or deflate the stock, given his high profile. And then he would quickly reverse his position. And I think the argument there is that that shows he did not believe his recommendation, that he was issuing these recommendations to artificially manipulate the price of these stocks and that his actions, which often came very soon after the recommendation, indicated that he did not sincerely believe his recommendation that you should buy the stock or sell the stock because he was doing the reverse.

21:26And there might have been a dozen or so of these transactions, maybe more that the prosecutors allege he profited by around$20 million dollars through this market manipulation. Is this an aggressive legal theory for the prosecution? Is it an uphill battle for prosecutors to prove this? It's not a commonly prosecuted back pattern. I think that's fair to say. You know, do the prosecutors have a very well-developed case? I think they have a lot of evidence, right? They have a lot of evidence about not only his recommendations, of course, which are public, but what he did. And there is, some email evidence that could be interpreted in a way that the jury might be able to conclude that he knew that the information was false.

22:13Now, that's up to the jury, and emails have a lot of ways that they can be interpreted. Market manipulation cases are tough, right? It's tough to prove the intent because a lot of the actions that could potentially be manipulative may be motivated by legitimate reason. He may legitimately believe part of his recommendations, some of his recommendations. Maybe he changed his mind very soon after. And so market manipulation is challenging. We talked a few years ago about the Bill Huang case. That's one where I noted that it's hard to establish manipulation, and the prosecution did in that case. And so I think that the case is novel and interesting because, you know, manipulation is not prosecuted as much as, say, insider trading, for example.

23:05It's a little bit more straightforward when I've taken non-public information, I'm an insider, I trade on it. That is usually more straightforward than a situation where somebody is engaging in various trading activity and around recommendations that they've issued. And so I think it's just less common to bring cases like this. So far, prosecutors have focused on the stocks of two companies they say left, tweeted about, and then traded on, Twitter and Kronos Group, which is a cannabis company. And they call stock analysts to the stand who disagreed with left's negative reports about the companies.

23:43On cross-examination, the defense attorney seemed to be trying to highlight its position that analysts can disagree about stocks. and left was just telling the public what he believed. I think the analyst's recommendation or the analyst's testimony is probably serving as a baseline. You know, these are the facts that were out there. And, you know, without specific facts contradicting that, if you're just kind of saying this stuff without any basis and you're only doing it to manipulate the stock price, that that's going to be problematic. Disagreement is not broad. How did people have the ability to disagree?

24:22But I think it shows the context of how the stock was understood. And if you are deliberately issuing false information, that that is essentially what the case is about. But the testimony by the stock analyst by itself is not going to be able to establish that these statements were false, that he knew that they were false. The defense hasn't said whether or not left is going to take the stand. Obviously, a defendant doesn't have to take the stand and it can't be held against him. But there are some instances, for example, prosecutors have introduced testimony that the stock of Kronos plunged 28 percent after Leff's report that Kronos was misleading investors about its distribution commitments.

25:07And prosecutors say shortly after the tweet, about 24 minutes later, Leff started closing out his short position. How will the defense explain what happened in those 24 minutes if Leff doesn't take the stand? I don't know how his operation works, whether he does all the research himself or whether there's somebody else who does that. I think that, you know, ideally he would explain, you know, what was my basis for making this statement about this company? What did I look at and why did I quickly close out the position? I think that's also a question that could be asked. And it might be difficult to establish that without the person who's making the recommendation taking the stand.

25:52Jim, I've been reading some headlines that say, is short selling facing a reckoning, referring to this trial? Do you think it is? I don't think so. You know, some of the transactions were long positions. Now, you know, he is maybe known as a short seller, but he does make long recommendations as well. There's a Facebook transaction where he says it's going to$160 a share, and he sells out at much less than that after the price goes up. And so, you know, you might think of it as more perhaps a case involving the use of social media, the use of kind of online recommendations. Is that the place where you could have a bit of a chilling effect?

26:34And so I think you might even think of the case a bit broader than it being about, you know, somebody who is specifically selling companies short and making allegations that the price should go down. I think it's a bit broader than that. It is the combination of, you know, do short sellers sometimes use social media? Sure. I don't know that they do that to the extent that Mr. Left did. And that might be kind of what the case ultimately is about, is that technology has, you know, made it difficult to regulate conduct that might manipulate markets. Because before social media, you couldn't move a stock price like this.

27:09But now, you know, there's some individuals who can't. Short sellers were already spooked by Leff's indictment, especially because criminal investigators in D.C. and L.A. had been investigating short selling for years. Some of Leff's biggest competitors have already left the market. Some came out with more extensive disclaimers. So this case is really being watched closely. No, I think it's tough being a short seller. It's always been tough. Nobody likes you. And, you know, there's long been scrutiny of short sellers and their statements. You know, one that comes in mind, you know, Bill Ackman years ago, like in the early 2000s, was investigated by the New York Attorney General's office and maybe the SEC about a report he published about a company called MBIA.