An anonymous reader shared this report from the New York Times: Snippets of computer code. More than six million pages of emails, Slack messages and other digital records. And a small black notebook, filled with handwritten observations. For months, federal prosecutors building the criminal case against the fallen cryptocurrency executive Sam Bankman-Fried have assembled a vast and unusually varied array of evidence. The documents include crypto transaction logs and encrypted group chats from Mr. Bankman-Fried's collapsed exchange, FTX, as well as strikingly personal reflections recorded by a key witness in the case. The mountain of evidence ranks among the largest ever collected in a white-collar securities fraud case prosecuted by the federal authorities in Manhattan, according to data provided by a person with knowledge of the matter...

The diversity and growing volume of materials in the FTX case underscore the legal challenges facing Mr. Bankman-Fried, 31, who is charged with 13 criminal counts, including accusations that he misappropriated billions of dollars in customer money, defrauded investors and violated campaign finance laws. He has pleaded not guilty. With the trial set for October, prosecutors have gathered evidence ranging from phones and laptops to the contents of Mr. Bankman-Fried's Google accounts, which amounted to 2.5 million pages alone. At a hearing in March, Nicolas Roos, a federal prosecutor investigating FTX, said the government had obtained a laptop crammed with so much information that the F.B.I.'s technicians were struggling to decipher all of it. "It is a massive amount to sift through, and sometimes you can find incredibly useful information," said Moira Penza, a former federal prosecutor who's now in private practice. "It is a real challenge...."

Many of FTX's corporate records, including emails, Slack messages and transaction logs, were held by Sullivan & Cromwell, the law firm that took control of the exchange after it declared bankruptcy... In a January court filing, Sullivan & Cromwell displayed an excerpt from FTX's underlying code base, showing a feature that allowed Alameda to borrow virtually unlimited amounts of money from the exchange.

An anonymous reader quotes a report from KrebsOnSecurity: The number of phishing websites tied to domain name registrar Freenom dropped precipitously in the months surrounding a recent lawsuit from social networking giant Meta, which alleged the free domain name provider has a long history of ignoring abuse complaints about phishing websites while monetizing traffic to those abusive domains. Freenom is the domain name registry service provider for five so-called "country code top level domains" (ccTLDs), including .cf for the Central African Republic; .ga for Gabon; .gq for Equatorial Guinea; .ml for Mali; and .tk for Tokelau. Freenom has always waived the registration fees for domains in these country-code domains, but the registrar also reserves the right to take back free domains at any time, and to divert traffic to other sites -- including adult websites. And there are countless reports from Freenom users who've seen free domains removed from their control and forwarded to other websites.

By the time Meta initially filed its lawsuit in December 2022, Freenom was the source of well more than half of all new phishing domains coming from country-code top-level domains. Meta initially asked a court to seal its case against Freenom, but that request was denied. Meta withdrew its December 2022 lawsuit and re-filed it in March 2023. "The five ccTLDs to which Freenom provides its services are the TLDs of choice for cybercriminals because Freenom provides free domain name registration services and shields its customers' identity, even after being presented with evidence that the domain names are being used for illegal purposes," Meta's complaint charged. "Even after receiving notices of infringement or phishing by its customers, Freenom continues to license new infringing domain names to those same customers." Meta pointed to research from Interisle Consulting Group, which discovered in 2021 and again last year that the five ccTLDs operated by Freenom made up half of the Top Ten TLDs most abused by phishers.

Interisle partner Dave Piscitello said something remarkable has happened in the months since the Meta lawsuit. "We've observed a significant decline in phishing domains reported in the Freenom commercialized ccTLDs in months surrounding the lawsuit," Piscitello wrote on Mastodon. "Responsible for over 60% of phishing domains reported in November 2022, Freenom's percentage has dropped to under 15%." Piscitello said it's too soon to tell the full impact of the Freenom lawsuit, noting that Interisle's sources of spam and phishing data all have different policies about when domains are removed from their block lists.

A U.S. judge has approved Apple's $50 million class-action settlement resolving consumer claims over certain defective MacBook keyboards, in a ruling that spurned challenges to the deal. From a report: U.S. District Judge Edward Davila in San Jose, California, federal court in his ruling called the settlement "fair, adequate and reasonable." Eleven consumers from New York, Florida, California, Michigan and several other states were the lead plaintiffs in the national class action alleging consumer protection and warranty claims. The lawsuit accused Apple of failing to provide sufficient repairs or troubleshooting help for certain MacBook "butterfly" keyboards made between 2015 and 2019.

An anonymous reader quotes a report from NPR: The U.S. Supreme Court Court on Thursday significantly curtailed the power of the Environmental Protection Agency to regulate the nation's wetlands and waterways. It was the court's second decision in a year limiting the ability of the agency to enact anti-pollution regulations and combat climate change. The challenge to the regulations was brought by Michael and Chantell Sackett, who bought property to build their dream house about 500 feet away from Idaho's Scenic Priest Lake, a 19-mile stretch of clear water that is fed by mountain streams and bordered by state and national parkland. Three days after the Sacketts started excavating their property, the EPA stopped work on the project because the couple had failed to get a permit for disturbing the wetlands on their land. Now a conservative Supreme Court majority has used the Sackett's case to roll back longstanding rules adopted to carry out the 51-year-old Clean Water Act. While the nine justices agreed that the Sacketts should prevail, they divided 5-to-4 as to how far to go in limiting the EPA's authority.

Writing for the court majority (PDF), Justice Samuel Alito said that the navigable waters of the United States regulated by the EPA under the statute do not include many previously regulated wetlands. Rather, he said, the CWA extends to only streams, oceans, rivers and lakes, and those wetlands with a "continuous surface connection to those bodies." Justice Brett Kavanaugh, joined by the court's three liberal members, disputed Alito's reading of the statute, noting that since 1977 when the CWA was amended to include adjacent wetlands, eight consecutive presidential administrations, Republican and Democratic, have interpreted the law to cover wetlands that the court has now excluded. Kavanaugh said that by narrowing the act to cover only adjoining wetlands, the court's new test will have quote "significant repercussions for water quality and flood control throughout the United States." In addition to joining Kavanaugh's opinion, the court's liberals, signed on to a separate opinion by Justice Elena Kagan. Pointing to the air and water pollution cases, she accused the majority of appointing itself instead of Congress as the national policymaker on the environment. President Biden, in a statement, called the decision "disappointing." It "upends the legal framework that has protected America's waters for decades," he said. "It also defies the science that confirms the critical role of wetlands in safeguarding our nation's streams, rivers, and lakes from chemicals and pollutants that harm the health and wellbeing of children, families, and communities."

"I don't think its an overstatement to say its catastrophic for the Clean Water act," said Jim Murphy of the National Wildlife Federation. Wetlands play an "enormous role in protecting the nation's water," he said. "They're really the kidneys of water systems and they're also the sponges. They absorb a lot of water on the landscape. So they're very important water features and they're very important to the quality of the water that we drink, swim, fish, boat and recreate in."

An anonymous reader shares a report: After song lyrics website Genius sued Google in 2019 for allegedly breaching its terms of service by copying its lyrics transcriptions in search results, the United States Supreme Court invited the US solicitor general, Elizabeth Prelogar, to weigh in on how the US viewed the case. The question before Prelogar was whether federal copyright law preempted Genius' terms of service, which prohibits any of its website visitors from copying lyrics for commercial uses. Yesterday, Prelogar responded, filing a brief that sided with Google. She denied that Genius' case was a good vehicle to test whether copyright law preempted state-law contract claims and recommended that the court deny Genius' petition to review the case.

The key issue was that Genius' terms of service may not be a valid contract because website visitors don't have to directly agree to the website's terms and may not even be aware they exist. Because of this, Prelogar said it was unclear whether any court would find that Google -- or any visitor to Genius' site -- ever agreed to not copy the lyrics. Reviewing Genius' arguments, Prelogar said that the Supreme Court should not review the case because "there is little indication that any other court of appeals would reach a different outcome in this case." A Google spokesperson told Ars that Google continues to dispute Genius' claims it copied song lyrics. "The Solicitor General and multiple courts continue to find that Genius' claims have no merit," Google's spokesperson told Ars. "We include lyrics in search results to help you quickly find what you are looking for. We license the lyrics text from third parties, and we do not crawl or scrape websites to source lyrics."

Nintendo is facing a potential class-action lawsuit filed by a young gamer and backed by his father, alleging that the microtransactions in the mobile game Mario Kart Tour are "immoral." Axios reports: The suit calls for refunds for all minors in the U.S. who paid to use Mario Kart Tour's "Spotlight Pipes," which delivered players in-game rewards using undisclosed odds. Until last year, Mario Kart Tour players could spend real money to repeatedly activate the pipes, in the hope they'd randomly produce useful upgrades. The suit alleges that Nintendo intentionally made the game difficult to proceed in without paying, using "dark patterns," an industry term for tricking consumers, to steer players toward spending more.

The suit was filed in March but emerged on the federal docket last week after it was moved out of state court. Its plaintiff, identified as N.A., spent more than $170 on Mario Kart Tour microtransactions, via his father's credit card, which was linked to their Nintendo user account. "Defendant's lootbox mechanism capitalized on and encouraged addictive behaviors akin to gambling," according to N.A.'s suit. It states that minors are particularly susceptible to systems that involve surprise rewards. Axios notes that Nintendo "discontinued use of spotlight pipes in Mario Kart Tour last September, switching to a system that lets players directly purchase items offered in its in-game shop."

An anonymous reader shares a press release from the American Civil Liberties Union (ACLU): The U.S. Supreme Court [Monday] declined to hear Moore v. United States, leaving in place a patchwork of lower court decisions on an important and recurring question about privacy rights in the face of advancing surveillance technology. In this case, police secretly attached a small camera to a utility pole, using it to surveil a Massachusetts home 24/7 for eight months -- all without a warrant. Law enforcement could watch the camera's feed in real time, and remotely pan, tilt, and zoom close enough to read license plates and see faces. They could also review a searchable, digitized record of this footage at their convenience. The camera captured every coming and going of the home's residents and their guests over eight months. As a result, the government targeted the home of a community pillar -- a lawyer, respected judicial clerk, devoted church member, and a grandmother raising her grandkids -- to cherry-pick images from months of unceasing surveillance in an effort to support unwarranted criminal charges against an innocent person.

Federal courts of appeals and state supreme courts have divided on the question of whether such sweeping surveillance is a Fourth Amendment search requiring a warrant. The highest courts of Massachusetts, Colorado, and South Dakota have held that long-term pole camera surveillance of someone's home requires a warrant. In Moore v. United States, the members of the full en banc U.S. Court of Appeals for the First Circuit split evenly on the question, with three judges explaining that a warrant is required, and three judges expressing the belief that the Fourth Amendment imposes no limit on this invasive surveillance. This issue will continue to arise in the lower courts; the ACLU filed an amicus brief on the question in the U.S. Court of Appeals for the Tenth Circuit earlier this month. "The Supreme Court's decision not to hear this case means that people across the country remain vulnerable to law enforcement's claim of unfettered authority to surveil any of us at our homes, for as long as they wish, with no judicial oversight," said Nathan Freed Wessler, deputy director of the ACLU's Speech, Privacy, and Technology Project. "As the cost of surveillance technology falls and its use by law enforcement expands, the need to resolve whether the Fourth Amendment poses any constraint has become all the more urgent. We will continue fighting for essential privacy protections."

Nearly every US state yesterday sued a telecom company accused of routing billions of illegal robocalls to millions of US residents on the Do Not Call Registry. From a report: Avid Telecom, an Arizona-based company formed in 2000, "chose profit over running a business that conforms to state and federal law," according to a lawsuit led by Arizona AG Kris Mayes and joined by the attorneys general of 47 other states and the District of Columbia. The case involves every US state except Alaska and South Dakota. The lawsuit was filed in US District Court for the District of Arizona against Avid Telecom, CEO Michael Lansky, and VP of Operations and Sales Stacey Reeves. The lawsuit arises from work done by the Anti-Robocall Multistate Litigation Task Force of 51 attorneys general.

"In the more than 7.5 billion calls to telephone numbers on the National Do Not Call Registry, Avid Telecom used spoofed or invalid caller ID numbers, including more than 8.4 million calls that appeared to be coming from government and law enforcement agencies, as well as private companies," a press release from the Arizona AG's office said. The lawsuit seeks a jury trial, a permanent injunction to prevent additional illegal robocalls, and financial penalties including "restitution or other compensation on behalf of residents" for illegal calls. The lawsuit cites the federal Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Telephone Consumer Protection Act, and certain state laws regarding unfair and deceptive trade practices.

The iPhone maker, VC veteran are fighting for heart-health tracking market. From a report: There's an unwritten rule for technology startups: Never challenge Apple in court if you want to survive. The world's most valuable company has a track record of success in a long string of David versus Goliath battles over cutting-edge, life-changing technologies. But billionaire Vinod Khosla is no lightweight. He's one of Silicon Valley's most celebrated venture capitalists, and he's used to playing long odds on the startups he backs. Khosla Ventures LLC put itself on a collision course with Apple when it moved into the personal health and fitness space a decade ago and invested in AliveCor, a maker of cardiac monitoring devices and software. What might have been a big partnership opportunity for AliveCor in the years following the release of the Apple Watch in 2015, to offer watch bands that monitor heart health, has turned into a messy court fight.

Now, instead of riding Apple's coattails as a prominent player in the wearable medical device market, forecast to grow to $132.5 billion by 2031, AliveCor's Food and Drug Administration-approved technology is inaccessible to the tens of millions of people who buy Apple Watches every year. The startup is in its third year of trying to prove to judges that the iPhone maker brazenly copied its heart-monitoring technology and sabotaged AliveCor's ability to offer its own product on the Apple Watch. Apple has parried with claims that its smaller rival's patent-infringement and antitrust claims are meritless -- and with counterattacks alleging that AliveCor is the imitator.

The FBI misused surveillance powers granted by Section 702 of the Foreign Intelligence Surveillance Act (FISA) over 278,000 times between 2020 and early 2021 to conduct warrantless searches on George Floyd protesters, January 6 Capitol rioters, and donors to a congressional campaign, according to a newly unclassified court opinion. The Register reports: On Friday, the US Foreign Intelligence Surveillance Court made public a heavily redacted April 2022 opinion [PDF] that details hundreds of thousands of violations of Section 702 of the Foreign Intelligence Surveillance Act (FISA) -- the legislative instrument that allows warrantless snooping. The Feds were found to have abused the spy law in a "persistent and widespread" manner, according to the court, repeatedly failing to adequately justify the need to go through US citizens' communications using a law aimed at foreigners.

The court opinion details FBI queries run on thousands of individuals between 2020 and early 2021. This includes 133 people arrested during the George Floyd protests and more than 19,000 donors to a congressional campaign. In the latter, "the analyst who ran the query advised that the campaign was a target of foreign influence, but NSD determined that only eight identifiers used in the query had sufficient ties to foreign influence activities to comply with the querying standard," the opinion says, referring to the Justice Department's National Security Division (NSD). In other words, there wasn't a strong enough foreign link to fully justify the communications search.

For the Black Lives Matter protests, the division determined that the FBI queries "were not reasonably likely to retrieve foreign intelligence information or evidence of a crime." Again, an overreach of foreign surveillance powers. Additional "significant violations of the querying standard" occurred in searched related to the January 6, 2021 breach of the US Capitol, domestic drug and gang investigations, and domestic terrorism probes, according to the court. It's said that more than 23,000 queries were run on people suspected of storming the Capitol.

Climate litigation poses a financial risk to fossil fuel companies because it lowers the share price of big polluters, research has found. From a report: A study to be published on Tuesday by LSE's Grantham Research Institute examines how the stock market reacts to news that a fresh climate lawsuit has been filed or a corporation has lost its case. The researchers hope their work will encourage lenders, financial regulators and governments to consider the effect of climate litigation when making investment decisions in a warmer future, and ultimately drive greener corporate behaviour.

The study, which is currently being peer reviewed, analysed 108 climate crisis lawsuits around the world between 2005 and 2021 against 98 companies listed in the US and Europe. It found that the filing of a new case or a court decision against a company reduced its expected value by an average of 0.41%. The stock market responded most strongly in the days after cases against carbon majors, which include the world's largest energy, utility and materials firms, cutting the relative value of those companies by an average of 0.57% after a case was filed and by 1.5% after an unfavourable judgment. Although modest, the researchers conclude that the drop in the value of big polluters is statistically significant and therefore down to the legal challenges.

An anonymous reader quotes a report from Wired: Spain has advocated banning encryption for hundreds of millions of people within the European Union, according to a leaked document obtained by WIRED that reveals strong support among EU member states for proposals to scan private messages for illegal content. The document, a European Council survey of member countries' views on encryption regulation, offered officials' behind-the-scenes opinions on how to craft a highly controversial law to stop the spread of child sexual abuse material (CSAM) in Europe. The proposed law would require tech companies to scan their platforms, including users' private messages, to find illegal material. However, the proposal from Ylva Johansson, the EU commissioner in charge of home affairs, has drawn ire from cryptographers, technologists, and privacy advocates for its potential impact on end-to-end encryption.

For years, EU states have debated whether end-to-end encrypted communication platforms, such as WhatsApp and Signal, should be protected as a way for Europeans to exercise a fundamental right to privacy -- or weakened to keep criminals from being able to communicate outside the reach of law enforcement. Experts who reviewed the document at WIRED's request say it provides important insight into which EU countries plan to support a proposal that threatens to reshape encryption and the future of online privacy. Of the 20 EU countries represented in the document leaked to WIRED, the majority said they are in favor of some form of scanning of encrypted messages, with Spain's position emerging as the most extreme. "Ideally, in our view, it would be desirable to legislatively prevent EU-based service providers from implementing end-to-end encryption," Spanish representatives said in the document. The source of the document declined to comment and requested anonymity because they were not authorized to share it.

In its response, Spain said it is "imperative that we have access to the data" and suggests that it should be possible for encrypted communications to be decrypted. Spain's interior minister, Fernando Grande-Marlaska, has been outspoken about what he considers the threat posted by encryption. When reached for comment about the leaked document, Daniel Campos de Diego, a spokesperson for Spain's Ministry of Interior, says the country's position on this matter is widely known and has been publicly disseminated on several occasions. Edging close to Spain, Poland advocated in the leaked document for mechanisms through which encryption could be lifted by court order and for parents to have the power to decrypt children's communications. Several other countries say they would give law enforcement access to people's encrypted messages and communications. "Cyprus, Hungary, and Spain very clearly see this law as their opportunity to get inside encryption to undermine encrypted communications, and that to me is huge," says Ella Jakubowska, a senior policy advisor at European Digital Rights (EDRI) who reviewed the document. "They are seeing this law is going far beyond what DG home is claiming that it's there for."

An anonymous reader quotes a report from Reuters: Google will pay Washington state $39.9 million to resolve a lawsuit accusing the Alphabet unit of misleading consumers about its location tracking practices, state Attorney General Bob Ferguson said on Thursday. The settlement resolves claims that Google deceived people into believing they controlled how the search and advertising company collected and used their personal data. In reality, the state said Google was able to collect and profit from that data even if consumers disabled its tracking technology on their smartphones and computers, invading consumers' privacy.

A consent decree filed on Wednesday in King County Superior Court requires Google to be more transparent about its tracking practices, and provide a more detailed "Location Technologies" webpage describing them. "Today's resolution holds one of the most powerful corporations accountable for its unethical and unlawful tactics," Ferguson said in a statement. Google, based in Mountain View, California, denied wrongdoing in agreeing to settle. "In November, Google agreed to pay $391.5 million to resolve similar allegations by 40 U.S. states," notes Reuters. "Some states including Washington chose to sue Google on their own about its tracking practices."

An anonymous reader quotes a report from TorrentFreak: When the French government formed a new anti-piracy agency called Hadopi, the mission was to significantly disrupt BitTorrent and similar peer-to-peer file-sharing networks. Hadopi was a pioneer of the so-called "graduated response" scheme which consists of monitoring a file-sharer's internet activities and following up with a warning notice to deter their behavior. Any future incidents attract escalating responses including fines and internet disconnections. Between 2010 and 2020, Hadopi issued 12.7 million warning notices at a cost to French taxpayers of 82 million euros. The program's effect on overall piracy rates remains up for debate but according to French internet rights groups, Hadopi doesn't just take citizens' money. When it monitors citizens' internet activities, retains huge amounts of data, and then links identities to IP addresses to prevent behavior that isn't a "serious crime," Hadopi violates fundamental rights.

Despite its authorization under the new law, the official launch of the Hadopi agency in 2009 met with significant opposition. File-sharers had issues with the program for obvious reasons but for digital rights group La Quadrature du Net, massive internet surveillance to protect copying rights had arrived at the expense of citizens' fundamental right to privacy. La Quadrature's opposition to the Hadopi anti-piracy program focuses on the law crafted to support it. One of the implementing decrees authorizes the creation of files containing internet users' IP addresses plus personal identification data obtained from their internet service providers. According to the digital rights group's interpretation of EU law, that is unlawful.

With support from the Federation of Associative Internet Service Providers, French Data Network, and Franciliens.net, in 2019 La Quadrature filed an appeal before the Council of State (Conseil d'Etat), requesting a repeal of the decree that authorizes the processing of personal information. The Council of State referred the matter to the Constitutional Council and its subsequent decision gave La Quadrature the impression that Hadopi's position was untenable. For their part, Hadopi and the government reached the opposite conclusion. The Council of State heard La Quadrature's appeal and then referred questions to the Court of Justice of the European Union (CJEU) for interpretation under EU law. In CJEU Advocate General Szpunar's non-binding opinion issued last October, friction between privacy rights and the ability to enforce copyrights were on full display. [...] Faced with an opinion that recognizes difficulties faced by rightsholders but runs up against case-law, AG Szpunar proposed "readjustment of the case-law of the Court." This would ensure that rightsholders retain the ability to enforce their rights, when an IP address is the only means by which an infringer can be identified (CJEU, pdf). The first court hearing occurred on Tuesday, and a further legal opinion is expected in late September 2023. The ruling from the CJEU is expected before the end of the year.

The United States Supreme Court has released its opinion on The Andy Warhol Foundation v. Goldsmith case, finding in favor of Lynn Goldsmith and stating that Warhol's use of her photo was not fair use. From a report: For those unfamiliar, the Warhol v. Goldsmith case has been ongoing for several years and involves photographer Lynn Goldsmith's photo of Prince and Andy Warhol's use of that photo which his Foundation argues was fair use. The details of the case to this point can be read in prior coverage, but in summary, Goldsmith had been victorious in the most recent court's decision leading up to this point. The Andy Warhol Foundation had appealed the decision to the Supreme Court, who has affirmed the lower court's decision and sealed Goldsmith's win.

In an 87-page [PDF], seven-to-two opinion written by Justice Sotomayor, the Supreme Court has ruled that Warhol's use of Goldsmith's Prince photo was not transformative enough to warrant fair use and was instead a violation of her copyright. Justices Roberts and Kagan dissented. "Although new expression, meaning, or message may be relevant to whether a copying use has a sufficiently distinct purpose or character, it is not, without more, dispositive of the first factor," the court holds. "The 'purpose and character' of Andy Warhol Foundation's (AWF) use of Goldsmith's photograph in commercially licensing Orange Prince to Conde Nast does not favor AWF's fair use defense to copyright infringement."

An anonymous reader quotes a report from the Associated Press: Five TikTok content creators have filed a lawsuit seeking to overturn Montana's first-in-the-nation ban on the video sharing app, arguing the law is an unconstitutional violation of free speech rights. The Montana residents also argued in the complaint, filed in federal court late Wednesday without public notice, that the state doesn't have any authority over matters of national security. Republican Gov. Greg Gianforte signed the bill into law Wednesday and said it would protect Montana residents' private data and personal information from being harvested by the Chinese government. The ban is scheduled to take effect on Jan. 1, 2024.

"The law takes the broadest possible approach to its objectives, restricting and banning the protected speech of all TikTok users in Montana to prevent the speculative and unsubstantiated possibility that the Chinese government might direct TikTok Inc., or its parent, to spy on some Montana users," the complaint states. "We expected a legal challenge and are fully prepared to defend the law," said Emily Flower, spokeswoman for the Montana Department of Justice. TikTok has argued the law infringes on people's First Amendment rights. However, spokesperson Brooke Oberwetter declined to comment on the lawsuit Thursday. She also declined to say whether the company helped coordinate the complaint.

The plaintiffs are Montana residents who use the video-sharing app for things like promoting a business, connecting with military veterans, sharing outdoor adventures or expressing their sense of humor. Two of them have more than 200,000 followers. One content creator, Carly Ann Goddard, shares videos about living on a ranch, parenting, recipes and home decor. Her account has 97,000 followers and has allowed her to roughly triple her family's household income, the complaint states. TikTok creators can make money in several ways, including by being paid to advertise products to their followers. The lawsuit -- filed just hours after Gianforte signed the measure into law -- states the ban would "immediately and permanently deprive Plaintiffs of their ability to express themselves and communicate with others." "Montana can no more ban its residents from viewing or posting to TikTok than it could ban the Wall Street Journal because of who owns it or the ideas it publishes," the plaintiffs' attorneys wrote.

A former CFO of a Seattle startup is accused of diverting $35 million and losing it when the crypto market crashed last year (Warning: source paywalled; alternative source), according to a report. The CFO allegedly used the funds for personal expenses and investments without authorization. The Seattle Times reports: Nevin Shetty, 39, was hired in March 2021 as CFO of a company called fabric, which makes software platforms for retail commerce. About a year later, after the company informed him it was letting him go over job performance concerns, he secretly took the money and transferred it to HighTower Treasury, a crypto platform he controlled as a side business, the indictment said. His idea was to pay the company 6% interest while retaining profits above that, but soon the $35 million investment was practically worthless, the U.S. Attorney's Office in Seattle said in a news release.

The indictment in U.S. District Court charged Shetty with four counts of wire fraud. He is scheduled to be arraigned May 25. Shetty's attorney, Cooper Offenbecher, said in an emailed statement that he and his client had been in regular contact with prosecutors and disagreed with the decision to bring an indictment. "As the CFO of his former employer, tasked with making investment decisions for its benefit, Mr. Shetty was personally devastated by these losses, which occurred as a result of a catastrophic crash in the cryptocurrency market in May 2022," Offenbecher wrote. "We look forward to responding to these allegations in Court."

Prosecutors, however, said that as the company raised hundreds of millions of dollars in startup funding, it adopted a conservative approach to managing that money -- a policy that Shetty had helped draft. According to the Seattle tech news website GeekWire, fabric had raised more than $293 million by February 2022 and was valued at $1.5 billion. In an emailed statement, the company said it had been cooperating with law enforcement and appreciated the work of the FBI and federal prosecutors. "While the amount taken is substantial, fabric remains very well-funded with years of runway," the statement said.

Adi Robertson writes via The Verge: The Supreme Court has declined to consider reinterpreting foundational internet law Section 230, saying it wasn't necessary for deciding the terrorism-related case Gonzalez v. Google. The ruling came alongside a separate but related ruling in Twitter v. Taamneh, where the court concluded that Twitter had not aided and abetted terrorism. In an unsigned opinion (PDF) issued today, the court said the underlying complaints in Gonzalez were weak, regardless of Section 230's applicability. The case involved the family of a woman killed in a terrorist attack suing Google, which the family claimed had violated the law by recommending terrorist content on YouTube. They sought to hold Google liable under anti-terrorism laws.

The court dismissed the complaint largely because of its unanimous ruling (PDF) in Twitter v. Taamneh. Much like in Gonzalez, a family alleged that Twitter knowingly supported terrorists by failing to remove them from the platform before a deadly attack. In a ruling authored by Justice Clarence Thomas, however, the court declared that the claims were "insufficient to establish that these defendants aided and abetted ISIS" for the attack in question. Thomas declared that Twitter's failure to police terrorist content failed the requirement for some "affirmative act" that involved meaningful participation in an illegal act. "If aiding-and-abetting liability were taken too far, then ordinary merchants could become liable for any misuse of their goods and services, no matter how attenuated their relationship with the wrongdoer," writes Thomas. That includes "those who merely deliver mail or transmit emails" becoming liable for the contents of those messages or even people witnessing a robbery becoming liable for the theft. "There are no allegations that defendants treated ISIS any differently from anyone else. Rather, defendants' relationship with ISIS and its supporters appears to have been the same as their relationship with their billion-plus other users: arm's length, passive, and largely indifferent."

For Gonzalez v. Google, "the allegations underlying their secondary-liability claims are materially identical to those at issue in Twitter," says the court. "Since we hold that the complaint in that case fails to state a claim for aiding and abetting ... it appears to follow that the complaint here likewise fails to state such a claim." Because of that, "we therefore decline to address the application of 230 to a complaint that appears to state little, if any, plausible claim for relief." [...] The Gonzalez ruling is short and declines to deal with many of the specifics of the case. But the Twitter ruling does take on a key question from Gonzalez: whether recommendation algorithms constitute actively encouraging certain types of content. Thomas appears skeptical: "To be sure, plaintiffs assert that defendants' 'recommendation' algorithms go beyond passive aid and constitute active, substantial assistance. We disagree. By plaintiffs' own telling, their claim is based on defendants' 'provision of the infrastructure which provides material support to ISIS.' Viewed properly, defendants' 'recommendation' algorithms are merely part of that infrastructure. All the content on their platforms is filtered through these algorithms, which allegedly sort the content by information and inputs provided by users and found in the content itself. As presented here, the algorithms appear agnostic as to the nature of the content, matching any content (including ISIS' content) with any user who is more likely to view that content. The fact that these algorithms matched some ISIS content with some users thus does not convert defendants' passive assistance into active abetting. Once the platform and sorting-tool algorithms were up and running, defendants at most allegedly stood back and watched; they are not alleged to have taken any further action with respect to ISIS." "The interpretation may deal a blow to one common argument for adding special liability to social media: the claim that recommendation systems go above and beyond simply hosting content and explicitly encourage that content," adds Robertson. "This ruling's reasoning suggests that simply recommending something on an 'agnostic' basis -- as opposed to, in one hypothetical from Thomas, creating a system that 'consciously and selectively chose to promote content provided by a particular terrorist group' -- isn't an active form of encouragement."

The Supreme Court on Thursday sidestepped a case against Google that might have allowed more lawsuits against social media companies. From a report: The justices' decision returns to a lower court the case of a family of an American college student who was killed in an Islamic State terrorist attack in Paris. The family wants to sue Google for YouTube videos they said helped attract IS recruits and radicalize them. Google claims immunity from the lawsuit under a 1996 law that generally shields social media company for content posted by others. Lower courts agreed with Google. The justices had agreed to consider whether the legal shield is too broad. But in arguments in February, several sounded reluctant to weigh in now. In an unsigned opinion Thursday, the court wrote that it was declining to address the law at issue.

Disgraced Theranos founder Elizabeth Holmes has been ordered to report to prison while she appeals her fraud conviction and jail sentence of over 11 years for defrauding investors. She has also been ordered to pay $452 million to victims, which will be split with her former partner, Ramesh "Sunny" Balwani, who was also convicted and sentenced to 13 years in prison. CNBC reports: Elizabeth Holmes, the disgraced CEO of Theranos, must report to prison on May 30, according to a ruling issued Wednesday by U.S. District Judge Edward Davila. Holmes must report to prison no later than 2:00 p.m. local time on that day, and is expected to begin her sentence at a minimum-security facility in Bryan, Texas. On Tuesday, an appeals court rejected Holmes' bid to stay out of prison while she appeals her conviction. In another Tuesday ruling, Judge Davila ordered that Holmes and former Theranos executive Ramesh "Sunny" Balwani pay $452 million in restitution to victims. You can read more about the 'U.S. v. Elizabeth Holmes, et al.' case here.