Author: Phil Mattera

What’s Behind Rising Beef Prices?

Those who enjoy a breakfast of steak and eggs are feeling better about half of their plate. Egg prices have come down sharply in the past year. But now beef prices are the problem, soaring well beyond the level of other foods.

Most analyses of the situation point to two primary culprits. The first is drought, which parched grazing land and caused hay prices to spike. When these conditions emerged a few years ago, ranchers responded by slaughtering cattle sooner. Initially, this increased supply and pushed prices down. But now the herds are smaller and output is down, putting upward pressure on prices.

The other culprit are tariffs, especially those Trump capriciously imposed on Brazil, a major source of U.S. red meat imports, to punish the country for prosecuting former president Jair Bolsonaro in connection with a January 6-type attempted coup.

A federal court in Minnesota is focusing on another cause: collusion among the major beef producers to keep prop up prices. Starting in 2020, groups of beef buyers filed several lawsuits that came to be consolidated in a multidistrict action against the giants of the industry.

The litigation alleged that from at least 2015 Cargill, JBS, Tyson Foods, and National Beef Packing Company agreed among themselves to reduce live cattle purchasing and slaughter volumes for the purpose and effect of increasing their margins. The plaintiffs alleged that the companies accomplished and perpetuated this agreement through collusion at trade association conferences and industry events between executives and key employees, and through ensuing collusive relationships. This anti-competitive activity, the plaintiffs argued, caused them to pay artificially and illegally inflated prices for boxed beef, which in turn elevated prices for consumers.

Plaintiffs have achieved a series of substantial settlements. In 2022 JBS agreed to pay $52.5 million to direct purchaser plaintiffs. Earlier this year, JBS said it would pay $83.5 million to settle allegations it had conspired with other processors to suppress the prices paid to ranchers. Earlier this month, Cargill and consumer indirect purchaser plaintiffs announced that they had reached a settlement, but details have not yet been announced.

Along with conspiring to keep prices high, the big beef producers have been accused of colluding to depress wages of their employees. A 2022 lawsuit filed in Colorado has resulted in another series of multi-million-dollar settlements, including a $72 million payout by Tyson Foods and $55 million by JBS. Cargill and National Beef Packing coughed up another $43 million.

JBS, Tyson Foods, and Cargill have also been connected to illegal child labor via the hiring of underaged workers by Packers Sanitation Services to do dangerous cleaning work at their plants.

Despite their lawsuit payouts, it is likely that the beef giants have not completely mended their ways and are still finding ways to push up prices and push down wages. Drought and Trump’s tariffs are not the whole story behind rising beef prices. Plain-old corporate greed is also playing a role.

Private Litigation to the Rescue

It used to be the case that federal prosecutors and regulators were the first to bring action against a corporate abuse, and plaintiff’s lawyers followed that with a class action lawsuit designed to obtain additional relief for harmed parties.

In the new Trump era, the federal government is increasingly abdicating that role. As Public Citizen points out, the Justice Department and other agencies have dropped scores of investigations of corporate lawbreaking.

Or else the DOJ is employing leniency practices that let companies off easy. For example, federal prosecutors just notified Liberty Mutual that the company will not be charged under the Foreign Corrupt Practices Act despite evidence that its subsidiary in India paid bribes to officials at six government-owned banks. Under the declination deal, no charges will be filed if Liberty Mutual disgorges $4.7 million in profits.

Future enforcement actions against companies are growing less and less likely as a result of deep staffing cuts at many regulatory agencies and because some of those agencies are now led by Trump allies pursuing a MAGA agenda.

The courts, especially at the appellate level, are doing little to impede this retreat from enforcement. The U.S. Supreme Court is, in effect, cheering it on.

Yet there is also good news from the courts: those plaintiff’s lawyers are not backing down. Here are some examples of their efforts:

A federal judge in New York just gave final approval to a settlement in which Mastercard agreed to pay $26 million to resolve allegations of racial and gender discrimination in its hiring practices.

A federal judge in Illinois gave final approval to a deal in which Cargill is paying $32 million to settle litigation in which it was accused of improperly sharing internal information with other turkey processors to limit price competition. In another case in the same court, a group of poultry processors agreed to pay $41 million for their anti-competitive practices.

Last month, a state jury in California awarded $314 million in damages to Android mobile device users who sued Google for transferring data from their devices without their consent for information harvesting and surveillance purposes.

DuPont became the latest chemical company to settle litigation relating to PFAS contamination when it agreed to pay $27 million to upstate New York residents whose drinking water was tainted.

General Motors agreed to pay $150 million to end a case involving the sale of vehicles with hidden engine defects that caused excessive oil consumption.

Capital One paid $425 million in a lawsuit alleging it deceptively advertised its 360 Savings accounts as high-interest products.

Phillips 66 is paying $12.5 million to resolve a lawsuit in which workers at its refineries in California claimed they were not given proper meal and rest breaks and were not compensated for time spent donning and doffing personal protective equipment.

These are but a small sample of the steady stream of class actions brought in federal and state courts on behalf of consumers, workers, and communities. Corporations and their allies have long disparaged such cases as frivolous lawsuits and have sought to limit them through so-called tort reform.

Today, nonetheless, they are increasingly the primary way in which corporate misconduct is being addressed.

Note: Violation Tracker documents more than 5,000 class action lawsuits in a dozen categories.

Debunking Debanking

There are plenty of reasons to be critical of the big banks. They hit customers with illegitimate fees. They misuse personal information. They pay meager interest on savings accounts. They do too little to help struggling mortgage holders. Some such as Wells Fargo have a history of creating bogus accounts to generate revenue. Many have been accused of manipulating foreign exchange markets, enabling tax evasion by the wealthy, and helping bring the U.S. economy to the brink of collapse in the late 2000s.

In Violation Tracker, Bank of America has by far the largest cumulative penalty total: $87 billion. JPMorgan Chase is second with $40 billion; Wells Fargo and Citigroup are also among the ten most penalized corporations.

Apparently oblivious to all this, Donald Trump recently launched a tirade against the banks that focused on a bizarre accusation: that they refuse to do business with people with right-wing political views, especially Trump himself.

In an interview with CNBC, Trump claimed that JPMorgan Chase and Bank of America had refused to accept deposits from his company after his first term as president. “The Banks discriminated against me very badly,” he moaned.

Trump’s account may very well have been fictional. If not, it conveniently ignores the idea that the banks may have shunned him because he was a bad credit risk, and for a period of time after January 6 there was a chance he would end up in prison.

Aside from his personal grievances, Trump’s comments appear to be connected to a move by his administration to address what right-wingers claim is a practice of “debanking” – denying banking services to people based on their political views. There is, of course, no evidence that banks apply an ideological litmus test to potential customers.

Instead, the debanking assault seems to be an effort to undermine rules governing transactions with individuals who might be connected to illegal activities such as money laundering and the financing of terrorist activities. As part of their due diligence, banks are supposed to consult lists of people who may be tied to such activities.

During the Obama and Biden Administrations there were also efforts to discourage banks from doing business with crooked operators in areas such as payday lending and cryptocurrencies. These efforts, known as Operation Choke Point, have come under frequent criticism from MAGA world.

The banks themselves would like to weaken their due diligence obligations. That probably explains why they chose not to scoff at Trump’s criticism. A JPMorgan spokesperson said: “We agree with President Trump that regulatory change is desperately needed.”

If anything, the regulations governing bank practices need to be more stringent. All too often, financial institutions are found to be deficient in their anti-money-laundering efforts. U.S. and foreign banks have paid out billions of dollars in fines and settlements to resolve cases brought by federal and state regulators.

Big banks have also been accused of doing business with disreputable individuals such as one very much in the news these days: the late Jeffrey Epstein. In 2023 JPMorgan Chase paid $290 million to settle a lawsuit brought by victims of Epstein who alleged that the bank turned a blind eye to indications of his sex trafficking because he was such a lucrative client.

If debanking means that financial services are denied to the likes of Jeffrey Epstein, I’m all for it.

21st Century Robber Barons

It’s a case of life imitating art imitating life. The announcement that Union Pacific is seeking to acquire Norfolk Southern to create the first coast-to-coast rail network sounds very much like the deal that the character George Russell is depicted as seeking to accomplish in the HBO television series The Gilded Age. Russell is said to be based on the real-life 19th Century robber baron Jay Gould, who controlled UP in the 1880s before moving on to manipulate numerous other rail lines.

The $71 billion deal being pursued by UP is a throwback to the bad old days of unrestrained corporate concentration. It would reduce the number of Class 1 carriers from six to five and give a single operator control of some 50,000 miles of track across 43 states. It will certainly create upward pressure on freight prices.

It would also bring together two companies with checkered records. Norfolk Southern is notorious for the 2023 derailment in Ohio that spilled a large quantity of toxic chemicals in the town of East Palestine. Many of the 150 railcars—which included tankers filled with hazardous materials such as vinyl chloride—caught fire and were allowed to burn for days.

Jennifer Homendy, chair of the National Transportation Safety Board, would later allege that NS “delayed or failed to provide critical investigative information to our team,” forcing her to have to threaten to issue subpoenas to compel disclosure. She described the company’s actions as “unconscionable” and “reprehensible.”

NS ended up paying $310 million to resolve a case brought against it by the U.S. Justice Department and the Environmental Protection Agency, while also settling a class action lawsuit brought by community residents for $600 million.

Over the years, the company has also paid millions of dollars in fines to the Federal Railroad Administration (FRA) for safety violations and  $2.5 million to the Equal Employment Opportunity Commission to settle allegations it engaged in systemic disability discrimination. In 2020 NS was ordered to pay $85,000 and reinstate an employee who was fired for reporting an on-the-job injury.

UP has also paid out millions for safety infractions and has been fined five times for retaliating against whistleblowers. Its environmental record includes a $31 million penalty imposed by the EPA for water pollution and a $2.3 million settlement with four California counties concerning the mishandling of hazardous wastes.

There is no reason to believe that the company emerging out of this merger would be any more compliant with workplace, environmental, and other types of regulations. On the contrary, its size would enable it exercise even greater sway over an agency such as the FRA.

Regulatory weakness is also likely to be exhibited by the Surface Transportation Board, the federal agency with oversight over the proposed merger. It is being run by Patrick Fuchs, a former Senate staffer who worked for Republican Senator John Thune. Fuchs is reported to be open to further consolidation of the industry. We are thus likely to see a repeat of 2023, when the Board green-lighted Canadian Pacific’s  purchase of Kansas City Southern.

This could pave the way for the other rail behemoth, Warren Buffett’s BNSF, to make a move on CSX. Soon, nearly all of U.S. freight traffic could be under the control of two or three mega-carriers. Jay Gould would be impressed.

The Attack on Independent Business Regulation

Donald Trump has a great fondness for the policies of the late 19th Century, praising that period’s focus on tariffs and its lack of a federal income tax. Yet there is another practice from that time that Trump abhors: independent regulatory agencies.

In 1887 Congress created the Interstate Commerce Commission to oversee the railroad industry, which then played a commanding role in the economy and was not known for having high ethical standards. The ICC was not completely autonomous—the president appointed its members—and it had some significant flaws, but the agency was the beginning of a system in which federal oversight of business would take place outside the direct control of the White House.

Part of the Trump Administration’s campaign to remake the federal government is the elimination of independent regulation. In February, Trump signed an executive order taking a significant step in that direction by giving the Office of Management and Budget extensive powers to oversee the agencies. He has gone on to fire their Democratic commissioners, brazenly violating the legal requirement of bipartisanship in the running of those entities and a 90-year-old Supreme Court ruling that presidents cannot fire board members without just cause.

Unfortunately, the current Supreme Court has shown no inclination to block Trump’s power grab. It has just allowed him to proceed with the dismissal of three commissioners at the Consumer Product Safety Commission. This ruling, issued as part of the Court’s ever-expanding shadow docket, followed a similar decision allowing Trump to remove a Democrat from the National Labor Relations Board. Trump has also fired commissioners at agencies such as the Federal Trade Commission and the Nuclear Regulatory Commission. And, of course, he is openly weighing whether to illegally fire Federal Reserve chair Jerome Powell; the Fed is a banking regulator as well as being in charge of monetary policy.  

Aside from the general issue of undue consolidation of presidential power, Trump’s moves at the independent agencies are likely to be detrimental to the oversight process itself.

It is true that the agencies have a mixed record when it comes to enforcement. Entities such as the Nuclear Regulatory Commission have traditionally been too close to the industries they were supposed to oversee. On the other hand, independent agencies have brought major actions against major companies for various kinds of violations. The FTC, for example, has imposed multi-billion-dollar penalties on Meta Platforms and Volkswagen.

Trump, of course, is exerting more power over the agencies not to make them more aggressive but rather to weaken their oversight, especially when it comes to companies favored by the Administration. Or else he is seeking to turn the agencies into weapons against those he disfavors. This is seen most clearly at the FCC, whose Trump-appointed head Brendan Carr, is an eager MAGA partisan.

Overall, Trump’s campaign against independent regulation is an enormous gift to Big Business and a serious setback for consumers, workers, and communities depending on those agencies for some measure of protection against corporate misconduct.

The Real Healthcare Fraud

If you had to choose a single phrase to describe the Trump Administration’s policy positions, you might very well go with “false claims.” That includes false claims about the degree of criminality among immigrants, false claims about the way tariffs work, false claims about voter fraud, and much more. Congressional Republicans play the game too, defending their assault on Medicaid with false claims about fraud and abuse among recipients.

None of this is new, but what is surprising is the Administration stance toward another type of false claims—fraud committed by government contractors, especially those working in the healthcare sector.

The False Claims Act (FCA), which dates back to 1860s, is the primary tool used to prosecute companies that cheat Uncle Sam. Technically, they aren’t prosecuted, since the law does not provide for criminal charges. Instead, they typically face civil monetary penalties that can go as high as eight or nine figures.

Many observers assumed that the second Trump Administration would downplay FCA enforcement as part of its overall deregulatory campaign. Instead, it has been using the law in unusual ways. Earlier this year, the Justice Department began targeting grant recipients that were not adhering to Trump’s edicts on social issues such as DEI and transgender rights. DOJ also pressured universities that were supposedly failing to protect Jewish students from antisemitism. This turned the FCA into a weapon in the culture wars.

Now it appears that the Administration is focusing more on conventional FCA cases. Recently, the DOJ and the Department of Health and Human Services announced the creation of a working group to pursue more enforcement actions against healthcare providers. Among the priority areas are: Medicare Advantage, kickbacks related to pharmaceuticals and medical devices, and defective medical equipment.

This initiative is consistent with the activity of federal prosecutors in the past few months. In collecting data for Violation Tracker, my colleagues and I have found that FCA actions account for more than three-quarters of the 147 resolved actions against corporations and non-profits announced by the DOJ since Inauguration Day.

Some of these, especially those against large corporations, are cases that were initiated under the Biden Administration. That’s true, for example, of a $59 million kickback penalty against Pfizer announced in late January.

Yet, during a period in which enforcement actions across the federal government have fallen off significantly, there has been a steady stream of FCA case announcements. Many of them involve smaller entities, but the penalties have not been insignificant. For instance, in June, the DOJ announced that NUWAY Alliance, a provider of substance abuse services, would pay over $18 million to resolve allegations it submitted fraudulent Medicaid claims.

It remains to be seen whether the Trump Administration will pursue legitimate FCA actions in a serious way. For now, it would be helpful if those politicians making baseless claims about Medicaid recipient abuse paid more attention to these cases of real healthcare fraud committed by providers. That is how taxpayer dollars are really being wasted.

The FCC Betrays Its Diversity Legacy

The Federal Communications Commission has scored another victory in the campaign to use its regulatory powers to promote the MAGA goal of stamping out all vestiges of diversity, equity, and inclusion in the private sector. T-Mobile, which is seeking FCC approval of two fiber and wireless deals, has announced it will shut down all its DEI programs.

The company announced the move in an obsequious letter to FCC Chairman Brendan Carr, a contributor to Project 2025 and an unabashed Trump loyalist. It wrote: “We remain fully committed to ensuring that T-Mobile does not have any policies or practices that enable invidious discrimination, whether in fulfillment of DEI or any other purpose,” adding that the company is ending its DEI-related policies “not just in name, but in substance.”

T-Mobile’s move comes about two months after Verizon, also seeking regulatory approvals, issued a similar renunciation of DEI. That, in turn, came after the FCC announced it would investigate DEI at major media companies.

While anti-DEI pressures can be found throughout the Trump Administration, it is particularly troubling to see them at the FCC. That is because the agency has a long history of policies to combat discrimination and promote diversity in the communications industry.

Those policies came about primarily through the efforts of non-profit groups with close ties to the civil rights movement. Chief among these was the Office of Communications of the United Church of Christ, now known as the UCC Media Justice Ministry. In the 1960s, the UCC effort, led by Dr. Everett C. Parker, began to research the way in which television and radio stations in the South covered the campaigns for racial justice.

The UCC found that stations such as WLBT-TV in Jackson, Mississippi mostly ignored the protests while frequently airing pejorative comments about African-Americans. The UCC petitioned the FCC to deny the station a license renewal because it was not serving the public interest, as broadcasters were required to do under federal law. After a lengthy legal battle, the UCC won a landmark court ruling.

Around the same time, the UCC successfully pressured the FCC to adopt equal employment regulations for license holders. Those rules were modified by a 1998 court ruling, but the agency continued not only to prohibit discrimination but also require broadcasters to take positive steps to promote the hiring and promotion of minorities and women. Operations with larger staffs were expected to engage in more initiatives than smaller ones.

The current FCC’s policies turn this tradition on its head. By embracing the wrong-headed idea that efforts to address discrimination are themselves discriminatory, the agency is starting to turn back the clock to a time when people of color were largely absent from the staffs of media companies.

It is also concerning to see a regulatory agency distort its mission by using its power for ideological purposes. We can only wonder how much the FCC’s anti-DEI efforts are taking resources away from its legitimate enforcement practices.

T-Mobile, for instance, certainly deserves plenty of scrutiny. Last year, it paid over $4 million to state attorneys general to resolve allegations of misleading advertising practices. The year before, it paid $350 million to settle a class action lawsuit over its failure to prevent a massive customer data breach. The Biden FCC fined the company another $80 million in the data case.

Pursuing matters such as these as well as conducting honest evaluations of proposed mergers should be the focus on the FCC–not engaging in culture war attacks.

Delivering Corporate Misconduct

When we go online to order dinner, we are getting a lot more delivered than a bowl of Pad Thai. As they bring in billions of dollars in revenue, leading app-based services such as DoorDash and Grubhub are being compelled to pay out millions in fines and settlements to resolve wide-ranging allegations of misconduct.

As shown in Violation Tracker, U.S. market leader DoorDash has accumulated more than $43 million in penalties. Most of that has come in the past year. In February, the company paid over $16 million to settle allegations by the New York State Attorney General that it misled both consumers and delivery workers by using tips intended for workers to subsidize their guaranteed pay. A few months earlier, DoorDash agreed to pay over $11 million to resolve a similar case brought by the Illinois AG.

Around the same time, the Illinois AG and the Federal Trade Commission got Grubhub to pay over $25 million over its alleged deceptive business practices that harmed customers, delivery drivers, and restaurants. Grubhub, now owned by Wonder Group, allegedly misled consumers about the cost of delivery and the benefits of a Grubhub Plus subscription; misled drivers about the amount of money they could make; and listed restaurants on Grubhub’s app without their knowledge or consent, and in some instances, over their explicit objections.

The other giant of the U.S. market, Uber Eats, accounts for a portion of the $917 million in penalties paid by its parent Uber Technologies. For example, in 2022 the City of Chicago got the company to pay over $6 million to restaurants for overcharging commissions and for listing some establishments without their permission.

Delivery service misconduct is not limited to the United States. Recently, the European Commission fined the German company Delivery Hero, which operates in about 60 countries, the equivalent of $253 million for engaging in anti-competitive practices. As shown in Violation Tracker Global, that brought the penalty total for Delivery Hero and its subsidiaries to nearly $600 million. That includes fines for labor standards violations in Spain, privacy violations in Italy, consumer protection violations in Hungary, and antitrust violations in Chile.

DoorDash has faced legal challenges in its foreign operations as well. Recently, the company was fined the equivalent of about $1.3 million by the Australian government for sending over one million texts and emails which breached spam rules. It is being sued by the Canadian government for allegedly advertising misleading prices and discounts. DoorDash is in the process of acquiring its rival Deliveroo, which was fined by the French government in 2022 for abusing the freelance status of delivery workers.

Similar allegations have dogged other services such as Colombia-based Rappi, which has been fined in its home country as well as in places such as Argentina, Brazil, and Peru. Singapore-based Grab Holdings has paid several consumer protection fines in the Philippines. Last year, the government of India ordered Zomato to pay the equivalent of $90 million in taxes and fines for non-payment of certain taxes.

Food delivery is one of the world’s youngest industries, yet it already has one of the worst records for regulatory compliance. It remains to be seen whether governments can rein it in.

The Other Face of EU Business Regulation

There is a common assumption in some circles that Europe is a regulatory nightmare for business. Resentment toward Brussels bureaucrats was a prime motivating factor for Brexit, and today U.S. high tech firms complain about being pressured over antitrust and data protection issues. Claims about regulatory overreach are part of the MAGA distaste for all things European.

A report I just published with my colleagues at Good Jobs First challenges this depiction of EU practices. Entitled Europe’s Biggest Corporate Lawbreakers at Home and Abroad, the report draws on data collected for Violation Tracker Global to show that in many ways EU regulatory enforcement lags behind other countries, especially the United States.

We found that large multinational corporations based in the European Union have been paying far more in regulatory penalties outside the EU than inside. Since the beginning of 2010, EU companies have paid the equivalent of US$43 billion (about EUR 37 billion) in fines and settlements in cases brought by the European Commission and member-state regulators. This is less than half of the US$104 billion (EUR 91 billion) those companies paid in the rest of the world.

Among the 445 EU corporations included in the analysis, the average company paid $95 million in total penalties for cases brought in the EU, far less than the average of $234 million per company for cases brought elsewhere. Volkswagen, the European company with the most worldwide penalties, paid only $5.7 billion of its $30.3 billion total in the EU.

When the penalties of the EU-based parent companies are looked at by industry, the largest total by far comes from the financial services sector. Of the $58 billion in penalties paid by EU-based financial services corporations worldwide, only 12% involved cases brought by regulators in the EU. Deutsche Bank, the most penalized European bank paid only $1.1 billion of its $16.7 billion total in the EU.

When the penalties of the EU parents are analyzed according to the category of the offense, financial offenses are at the top, with a total of $50 billion. Only 11% of this amount came from cases in the EU.

By contrast, 63% of the $47 billion the companies paid in penalties for competition-related offenses came from cases brought either by the European Commission’s Directorate-General for Competition or authorities in member states. European regulators also account for most of the penalties paid by EU companies for data protection offenses.

The United States accounts for two-thirds of the total penalties paid by companies headquartered in the EU. Six of the 10 most penalized EU companies in the U.S.—including Allianz, BNP Paribas, and Deutsche Bank–have paid over 90% of their total fines and settlements to U.S. regulators and prosecutors.

In short, there are two faces of EU regulation: In the areas of competition and privacy there is aggressive enforcement with numerous high-profile cases against large corporations with substantial penalties. In other categories, there are far fewer major cases. As a result, large EU-based corporations are facing much lighter overall penalties closer to home than they face abroad, especially in the United States.

This reality is largely being ignored by EU policymakers, increasing numbers of whom are being swayed by the anti-regulatory zealots. Last year, the EU adopted the Corporate Sustainability Due Diligence Directive, which established more rigorous disclosure requirements about human rights and environmental practices in corporate operations and supply chains.

This year, the EU is backtracking. It adopted an Omnibus package that weakens the reporting rules and limits the number of companies that need to comply. Our report argues that this reversal is a mistake and argues in favor of more robust disclosure and enforcement.

A Company’s MAGA-Style Attack on a Regulatory Agency

Normally, when a company reaches a settlement with a regulatory agency, that is the end of the matter. Gemini Trust, a cryptocurrency exchange, has another idea.

In January, Gemini agreed to pay a $5 million fine to resolve a case brought by the Commodity Futures Trading Commission alleging the company made false statements during an investigation relating to its exchange and futures contracts. Gemini neither admitted nor denied the misconduct.

Now Gemini is attacking the CFTC by filing a pugnacious complaint with the agency’s inspector general. The 13-page document alleges that the CFTC’s Enforcement Division is “out of control and that its culture is toxic.” It claims that agency staffers were “not motivated by a principled application of the law or desire to protect the commodities markets. Rather, these lawyers were driven by a selfish desire to advance their careers by misusing their offices to obtain a high-profile ‘win.’”

Gemini’s complaint criticizes by name the lead CFTC lawyer on the case, who is accused of making false statements about the matter in the bio posted on the website of the law firm he joined after leaving the agency.

The facts of the Gemini case are complicated. I will not attempt to summarize them or assess the validity of the CFTC’s case.

What concerns me is whether Gemini’s move is a sign of things to come as companies feel emboldened by the anti-regulatory rhetoric of the Trump Administration to assail regulators in unprecedented ways. The Gemini complaint incorporates MAGA-style rhetoric by accusing the CFTC of seeking to “weaponize and tilt the scales of justice in its favor” and engaging in “trophy-hunting lawfare.”

It is worth noting that the CFTC case is not the only time Gemini, which was founded by the Winklevoss brothers, known for their legal disputes with Mark Zuckerberg, has run afoul of regulators.

Last year, in a settlement with the New York Department of Financial Services, Gemini agreed to return at least $1.1 billion to customers and pay a $37 million fine to resolve allegations it failed to conduct due diligence on Genesis Global Capital, an unregulated third party that allowed Gemini customers to loan their virtual currency and receive interest payments. Genesis defaulted on its loans and declared bankruptcy in 2023.

Also last year, Gemini agreed to pay $50 million to resolve allegations it misled thousands of investors on the risks associated with one of its investment programs.

Given the way the Trump Administration and Congressional Republicans are boosting cryptocurrency, it is not surprising that a company such as Gemini would feel confident in going after one of the main agencies involved in oversight of the business.

It is unclear what Gemini expects to accomplish with its complaint. The CFTC has already been weakened by the departure of many staff members since the new administration took office. The man Trump has nominated to head the agency is Brian Quintenz, who served as a commissioner during the first Trump administration and who has close ties to the cryptocurrency industry. On his X social media page he describes himself as a “financial freedom advocate.” An analysis published in the National Law Review said that his nomination “portends a potential shift towards a more business-friendly regulatory approach.”

Perhaps Gemini is paving the way for Quintenz, who would initially run the commission single-handledly, to rescind the settlement and return the $5 million. This would be another unfortunate step in the Trump Administration’s effort to rewrite the history of enforcement at the same time that it undermines its future.