Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Tues 5/12 - Short Seller on Trial, Law Students Race to Beat Federal Loan Caps and Judge Scrutinizes Musk's SEC Settlement
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Legal News for Tues 5/12 - Short Seller on Trial, Law Students Race to Beat Federal Loan Caps and Judge Scrutinizes Musk's SEC Settlement

Andrew Left’s market manipulation trial, law students racing federal loan caps, and a judge scrutinizing Musk’s SEC settlement.

This Day in Legal History: Anti-Spitting Laws

On May 12, 1896, New York City adopted one of the country’s best-known early anti-spitting laws, aimed at stopping the spread of tuberculosis. At the time, tuberculosis was one of the deadliest diseases in American cities, and public health officials were increasingly focused on sputum as a source of infection. The new rule made it illegal to spit in public places, including streets, sidewalks, public buildings, and transit spaces. That may sound like a small matter today, but in the late nineteenth century it was part of a much larger legal campaign to use city power to fight disease.

The law reflected the growing belief that personal habits could become public harms when they created risks for others. It also showed how local governments were beginning to treat public health as a matter of regulation, enforcement, and criminal penalty. Violators could face fines, and in some cases arrest, which turned a common social habit into a legally punishable act. The ordinance was not just about cleanliness; it was about using law to change behavior before illness spread.

New York’s approach influenced other cities, which passed similar anti-spitting rules as tuberculosis campaigns expanded across the country. The measure also raised a familiar legal question: when does protecting public health justify limiting individual freedom in public spaces? That question would appear again in later fights over quarantine, vaccination, sanitation, smoking bans, and other health regulations.

Anti-spitting laws are a reminder that public health law often develops through ordinary, everyday conduct rather than dramatic courtroom battles. The legal element here is the police power, because the ordinance shows how local governments used their authority to protect health, safety, and welfare by regulating conduct in shared public spaces.


Andrew Left, the founder of Citron Research and a well-known short seller, is set to go on trial in Los Angeles over federal criminal charges that he manipulated the market and misled investors. Prosecutors say Left used his public profile, including social media posts and television appearances, to announce trading positions in companies such as Nvidia and Tesla while secretly closing those positions soon after price moves. The government alleges that this strategy allowed him to make at least $16 million.

Prosecutors also claim Left gave hedge funds advance notice of his public calls in exchange for compensation and hid those arrangements through fake invoices. Left has pleaded not guilty, and his lawyers argue that he made honest market commentary in good faith. They also say there is no law requiring an investor to hold a position for any particular amount of time after speaking publicly about it. Jury selection is expected to begin this week, and the trial could include testimony from retail investors and other witnesses. The case has drawn attention because short sellers often argue that their work is protected speech and that they help expose fraud or overvaluation in public companies.

Some legal experts see the prosecution as an aggressive theory, especially because investors are generally allowed to change their minds about trades. At the same time, the Justice Department appears to be trying to prove more than ordinary opinion or trading strategy by alleging deception, secret coordination, and knowingly false statements. If convicted of securities fraud, Left could face a lengthy prison sentence.

Short seller Andrew Left to stand trial in LA over manipulation charges | Reuters


Some incoming law students are starting school in May or June instead of waiting until the fall so they can qualify under the current federal student loan system before new limits take effect on July 1. A few law schools already had summer start programs, but demand has increased as students try to avoid the new loan caps for professional degrees. Stetson University College of Law and Rutgers Law School even created summer start options specifically to help students borrow under the existing rules. Under the expiring system, graduate and professional students can borrow up to the full cost of tuition and living expenses through federal loans.

The new system will cap federal borrowing for professional programs at $50,000 per year and $200,000 total, which could leave some law students needing private loans. That is a major concern because private loans may have higher interest rates, stricter credit requirements, and fewer protections than federal loans. Stetson’s dean said the early start option may be especially helpful for students with poor credit or existing debt. The Education Department has defended the new caps as a way to reduce excessive borrowing and pressure schools to lower costs. Several schools, including Seattle University, Rutgers, Ave Maria, and Drexel, report increased interest in summer programs. Administrators say the loan changes are driving much of that demand, though some worry that many applicants still do not understand how much the new rules could affect them.

Some US law students enroll early to beat the federal loan clock | Reuters


A federal judge in Washington, D.C., refused to immediately approve Elon Musk’s $1.5 million settlement with the SEC over his delayed disclosure of a large Twitter stake. The SEC had accused Musk of waiting too long to report that he had acquired more than 5% of Twitter’s shares before later revealing a 9.2% stake in April 2022. According to the agency, that delay allowed Musk to save about $150 million before he ultimately bought Twitter for $44 billion. Judge Sparkle Sooknanan said she needs more information before approving the deal, including whether it is fair, serves the public interest, and is free from improper collusion or corruption. She ordered Musk and the SEC to appear in court on May 13 and be ready to propose a schedule for briefs defending the settlement. The proposed deal would not require Musk to admit wrongdoing or return the money the SEC says he saved. Musk has said the delayed filing was accidental and has argued that the lawsuit was politically motivated. The case also comes as the SEC, now under Chairman Paul Atkins, is shifting its enforcement priorities under the Trump administration. The timing of the settlement talks has drawn attention because they were disclosed shortly after the SEC’s enforcement chief left her post. For now, the judge made clear that she will not simply sign off on the agreement without scrutiny.

US judge will not rubber-stamp Elon Musk settlement with SEC | Reuters

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