Opinion

Stories I’d like to see

The Kennedys and Caro, Facebook IPO suits, the Edwards trial judge

By Steven Brill
May 29, 2012

1. The Kennedys’ take on the Caro book:

Robert Caro’s stunning new volume on Lyndon Johnson has received enormous coverage, but one angle I haven’t seen is what the reaction to it is of John F. Kennedy family members and loyalists. Caro’s depiction of how LBJ was treated by JFK and his team (especially Robert Kennedy) during his vice-presidency and how he basically resuscitated the Kennedy administration’s domestic agenda – which seemed doomed in Congress had Kennedy lived, because of how JFK and his aides fumbled the ball on Capitol Hill – presents a pretty damning picture of the Age of Camelot. Are there any Kennedy people out there willing to argue otherwise?

2. Facebook: Race to the courthouse

The three suits claiming class action status that have been filed against Facebook, its underwriters and  Nasdaq charging various misdeeds in the run-up to its IPO would be great material for a fresh look at class action securities suits. More often than not such suits are an exercise in plaintiffs’ lawyers racing to the courthouse to file dubious claims to force defendants into making settlements that typically pay the lawyers handsomely while leaving little for their supposed clients.

The suits – one in Maryland, one in New York and a third in California – were filed within hours of news reports pinpointing Nasdaq’s screwups and the fact that analysts apparently warned some big clients, but not the rest of the buyers, that Facebook’s supplemental filing with the SEC just before the launch of the IPO might be a significant negative development. The filing noted the increasing use of mobile devices to access Facebook and explained that Facebook has so far not done well generating ad revenue from mobile traffic.

Forget the fact that anyone reading the filing would have known about Facebook’s vulnerability as its traffic moved to mobile; that’s the purpose of a public filing. Forget that brokerages and their analysts (as opposed to the company issuing the IPO) are not required to communicate their views with all clients equally. And forget that it’s probably going to be impossible to claim a legitimate “class” out of all Facebook buyers whose trades were delayed by Nasdaq’s snafus, because the facts surrounding each case (such as when they tried to buy and at what price) are, by definition, so different as to make litigating their claims as a group untenable. None of that matters. What usually matters to the lawyers is that they got to the courthouse first, which gives them a great argument for becoming the class’s lead lawyer, or at least part of the lead lawyer team – which can make them the prime recipients when the defendants pay the plaintiffs’ lawyers to go away.

So, how did these lawyers gather their clients? Why did they pick the venues they picked? Who’s likely to be competing with them with new suits in the coming days? What are the likely economics, based on past cases?

Another wrinkle to the story has to be the paparazzi-like profile of everything surrounding Facebook and its IPO. That could make the defendants want to settle to put the publicity behind them, which is what I’d bet Nasdaq will do, as might the bankers. But Facebook and CEO Mark Zuckerberg have proved in the past to be tough defendants who don’t cave. (Ask the brothers Winklevoss.) And it’s nearly impossible to figure out what they did wrong, since it was their public filing of the supplement to the IPO that has generated the suit against them.

All in all, a great legal fight story.

3. Figuring out the judge in the Edwards case:

Catherine Eagles, the judge in the John Edwards campaign funds case, has made many seemingly ridiculous rulings that are likely to make any Edwards conviction a slam dunk to be overturned on appeal. So, I’d love to know more about her than can be found in this simple Wikipedia entry. (Here’s a summary of the shakiness of the case that I sketched on the eve of the trial.)

As this Washington Post article tactfully summarizing her miscues last week explained, Judge Eagles refused to allow a former chairman of the Federal Election Commission to testify for the defense about why the commission did not think the money channeled by key Edwards patrons to Edwards’ mistress was a campaign contribution. The judge also refused to allow Edwards’ former campaign treasurer to testify that an FEC audit had concluded that these were not campaign contributions. Nor did she allow testimony that the campaign finance law is confusing, ruling that “it just doesn’t seem complicated to me” – an assessment that the jury, which has now been deadlocked for a week, would probably not agree with.

Beyond that, I’m still hoping for some terrific reporter who covers the Justice Department (Charlie Savage of the New York Times would be my pick) to get the story of how and why Eric Holder’s Justice Department decided to prosecute this case in the first place. Criminalizing political conduct is always dicey, but this case is such an acrobatic stretch that everything about how it came to be begs to be put under the microscope. Someone might as well do it now – before there’s a race to do it if the Edwards jury follows the judge’s lead and convicts him but then the case is overturned with a stinging rebuke of Eagles from the appellate court.

4. Apple and volume discounts:

I recently noticed this article in a trade publication called Government Security News that says the Transportation Security Administration is seeking authority to buy 1,000 Apple laptops and 1,000 iPhones, iPods, or iPads for as much as $3 million. That computes to $1,500 per product, which not only seems high but clearly suggests that the TSA does not expect a volume discount.

The memo seeking that authorization suggests that the government doesn’t have much leverage with Apple no matter how much it spends. Because Apple products only use the iOS operating system, the memo explains, “there is no competition for Apple products.”

Which reminded me of stories like this one I’ve seen lately about school systems buying iPads in bulk, where, again, the math seems to suggest that Apple is bargaining hard. In this case, Education Week reports that San Diego is buying 27,500 iPads for $15 million – which would be $545 each. Assuming the devices don’t come with cellular connections, the middle range (32GB) new iPad lists for $599. Not much of a discount, and that assumes the school isn’t buying the lower capacity (16GB) version, which lists for $499.

So what’s the story with Apple’s volume pricing, especially for non-profits and government agencies?

PHOTO Monitors show the value of the Facebook, Inc. stock during morning trading at the NASDAQ Marketsite in New York, May 21, 2012. REUTERS/Brendan McDermid

Comments
3 comments so far | RSS Comments RSS

LBJ was treated poorly by the Kennedy’s, and later ostracized, because of LBJ’s personal involvement in the Billy Sol Estes fraud which was just about to become public before JFK was assassinated. RFK was leading that investigation of LBJ. I can’t believe American’s can’t connect these dots…we’ve had almost 50 years to do it…

Posted by sarkozyrocks | Report as abusive
 

oh, the rich

Posted by running | Report as abusive
 

Good crisp insights on Judge Eagles. As for Caro and the Kennedys, Johnson’s side of the story is well known. His sense of aggrievement particularly regarding his treatment in the first hours after JFK was killed are not likely to get him any more sympathy now than they did when he aired them out privately at the time. Johnson harbored a savage hatred of RFK – this is old news. As for the Kennedy response, Sorenson and Schlesinger are no longer with us. They would have been the most likely candidates to rebut LBJ’s claims as offered by Caro.

Should you wish to see RFK, Schesinger’s opinions of Johnsons grievances, you can find them in Robert F. Kennedy And His Times by Arthur Schlesinger Jr.

Posted by Dem12 | Report as abusive
 

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