GUEST BLOG [In]Securities: Instant Karma By Aegis Frumento Esq

February 19, 2021


Instant Karma

Here's a question I haven't heard in decades:  Did OJ Simpson kill his wife?  

The truest answer is, only OJ knows. None of the rest of us was there. But Nicole Brown Simpson and her waiter-friend Ron Goldman were surely killed by someone, and someone had to answer for it. So, like it or not, and imperfectly for sure, the question whether OJ did it had to be answered.

Those of us of a certain age remember the OJ Simpson trial as one of the several "trials of the century" that amused us in the days before internet cat memes. This was reality TV in the mid-90s, before it became fake. For example, OJ really did lead a flock of police cars on a low-speed "chase" in a white Ford Bronco up the LA Freeway, all the while being televised live from news helicopters. 

That's just a short snippet of it. The whole chase lasted an hour. And then came the trial, with a cast worthy of an extended Columbo episode. Who can forget such characters as Kato Kaelin, of whom no one yet knows what he did or why? Or, better yet, OJ's defense team of Robert Shapiro, Johnny Cochrane and F. Lee Bailey, who pulled off the murder defense of their day. In the end, OJ, who had become an actor, put in one of his finest performances when with great effort he couldn't quite squeeze into a pair of bloody gloves found at the scene. That gave Cochrane the perfect rhyming couplet for the jury: "If the glove don't fit, you must acquit!"  

And the jury did. OJ was acquitted of his double-murder charge. So OJ didn't kill his wife.  

Well, not so fast.  A while later, Nicole's and Ron's families sued OJ in civil court seeking damages for their wrongful deaths. This time, the ill-fitting glove didn't help. OJ was found liable for the two deaths and ordered to pay $33.5 million.

So, he did kill his wife?

Yes and no. These sorts of confusing results happen because, in the real world where decisions must be made, what really happened matters less than how persuasive is the evidence of what happened. In most cases, the Truth (with a capital "T") is beyond us. The best we can hope is to form an educated guess as to what happened. Our guesses are educated by the evidence we have, and what consequences follow depend on how much reliability we demand of that evidence. That is what it means to prove something. What we can prove for one purpose we might not be able to for another, and vice-versa.

Not all cases need the same level of reliable proof. Criminal cases, like OJ's murder trial, must be won by evidence "beyond a reasonable doubt." How much doubt is "reasonable" to me might not be to you, so we can't fix a probability percentage to it. But it has to have a high probability of being reliable. Most civil cases are won by a simple "preponderance of the evidence," which could mean only that the evidence in favor needs no more than a 50.0001% chance of being accurate. And then there's a measure in between the two-"clear and convincing evidence," that needs maybe a 60+% probability of being accurate. OJ Simpson was acquitted of "murder," because the evidence of his guilt was not reliable beyond a reasonable doubt. The glove, after all, did not fit. But it fit well enough to make it 50+% probable that he did kill Nicole and Ron. That was all that was needed to make OJ liable for wrongful death. In other words, he probably did it.

So, here's the next question: Did Donald Trump incite a mob to storm the Capitol? 

Let me not hold anyone in suspense. Yes, he probably did. Most of the House, most of the Senate, and most of the American public, think he did. And we all should know, because the whole thing played out on our screens. All we saw of OJ's travails was his pseudo-getaway in the white Bronco; here we saw the storming of the Capitol in all its gory. And the House Managers in the impeachment trial laid it all out in devastating persuasiveness. There's just no reasonably debating it.

And yet, let's not make too much of the Senate's acquittal. The Constitution sets a very high bar to convict a president and remove him from office. Presidents have been impeached 4 times in our history, and none has ever been removed from office. Someone's got to be pretty awful to piss off 2/3 of the Senate.

I actually think Trump has pissed off 2/3 of the Senate. I think if the vote were held in secret, Trump would have been convicted, probably with ease. But I understand both the political realities that prevented many Republican Senators from voting against him, and the legal argument against them doing so. The House Managers argued that to say the impeachment of a lame duck president is moot gives rise to a "January exception" to the impeachment clause, such that a President could run amuck in his last days in office with no accountability. Well, of course he could. A tyrannical President could do nasty things even during an impeachment proceeding. Trump incited a mob to try to prevent so ministerial a task as counting electoral votes. Do we think he couldn't do the same to disrupt an impeachment trial?

So I understand the Republican position here, and I don't think it's necessarily hypocritical. Minority Leader Mitch McConnell's after-trial speech made some sense. Senator McConnell did the House Managers one better in excoriating Trump, but in the end concluded that since he was already gone, there'd be no point in throwing him out. Mitch's argument was something like, "Once he's on the beach, you can't impeach!" But in the next breath, McConnell invited all the criminal and civil cases to follow. "He hasn't gotten away with anything, yet," Mitch reminded us.

Trump's reaction was to declare vindication from the Senate's acquittal and to call Senator McConnell names. All typical. But the Donald will soon learn the same lesson that OJ Simpson learned: an acquittal in one forum won't protect you in another where different claims have different proof requirements. Already a civil lawsuit has been filed against Trump by the NAACP, representing Congressman Bennie Thompson and others. See That lawsuit is based on the Ku Klux Klan Act of 1871. Meanwhile, investigations of wrongdoing are percolating in DC and in Georgia arising out of Trump's efforts to undo the election and incite violence in the capital. Meanwhile, prosecutors in New York are deep into his pre-Presidential financial shenanigans. There will be more trials to come, and none of them will need the concurrence of 2/3 of the Senate.

A few days after Trump's acquittal, the Trump Hotel and Casino was demolished in Atlantic City. Trump hadn't owned it since 2009, when he bankrupted it to stiff his lenders. Still, it bore his name, and I understand someone bid $40,000 for the privilege of pressing the button that started the explosive charges that brought it down.

Once the charges were set and fired, it took less than a minute for the whole structure to implode of its own weight. As it settled, you can hear one of those present ask, "That's it?"

Yes, that's it. That's how it happens, first slowly, and then all at once. The demolition of Trump's casino foreshadows the collapse of the house of Trump cards to come. There is karma in the world, but it is seldom instant. You have to wait for it. 


Aegis J. Frumento

380 Lexington Avenue
New York, NY 10168

Aegis Frumento co-heads the Financial Markets Practice of Stern Tannenbaum & Bell, New York City.  He represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations).  He has decades of experience representing SEC, CFTC and FINRA regulated firms and persons in regulatory enforcement investigations, hearings and lawsuits.  Drawing on his five years managing the Executive Financial Services Department of Morgan Stanley Smith Barney, Aegis has rare depth of experience in the securities and corporate governance laws affecting senior executives of public corporations.  When not litigating, Aegis enjoys working with new and existing broker-dealers, registered investment advisers, and private equity funds, covering all legal aspects from formation to capital raising. Those clients now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises, including the use of cryptosecurities to represent equity and debt interests. 

Aegis's long and distinguished career includes having been a Managing Director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.  He graduated from Harvard College in 1976 and New York University School of Law in 1979.  Aegis is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.  He is the current Chairman of the New York City Bar Association's standing Committee on Professional Responsibility.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of Blog.