No Kumbaya moment
President Trump has opened a new front in his attack on Big Law.
On Tuesday, he signed an executive order that targeted Jenner & Block, a major white-shoe firm, days after issuing a far-reaching memorandum threatening to punish any law firm that he contends has unfairly challenged his administration.
One of the biggest questions has been whether Big Law would band together amid Trump’s barrage. So far, the opposite has happened: Corporate law firms are using Trump’s assault as a competitive opportunity, The Times reports.
As Paul, Weiss was dealing with its own executive order this month, rival firms dove in to try to poach clients and partners.
The firm’s competitors moved in swiftly. Several of Paul, Weiss’s top rivals, including Sullivan & Cromwell and Kirkland & Ellis, tried to poach Paul, Weiss rainmakers within days of Trump issuing an executive order that could have seriously hobbled its business, according to The Times. They took a soft approach with the firm’s leaders, saying that they sympathized with their plight, but that if they wanted out of the turmoil, they could name their price.
Jon Ballis, the chairman of Kirkland & Ellis, said in a statement to The Times that his firm didn’t try to recruit Paul, Weiss lawyers. A Sullivan & Cromwell spokesman similarly denied trying to recruit the firm’s lawyers.
The outreach made a bad situation worse. Panic was already roiling through Paul, Weiss over the potentially catastrophic effect of the executive order.
The order restricted the firm’s lawyers from dealing with the government, including entering federal buildings, and said companies doing business with Paul, Weiss could lose their government contracts. Even if the firm successfully fought the order in court, it was feared it would be labeled an enemy of Trump.
The threat of losing the firm’s top lawyers compounded those worries. Some partners were particularly concerned that Scott Barshay, the head of the corporate practice, might leave and prompt others to follow him. (Top lawyers, including Barshay, assured Brad Karp, the firm’s chairman, and others that they had no plans to leave.)
Then things got more awkward. When Karp went to the Oval Office to negotiate a deal with Trump, he was surprised at one person the president wanted to dial into the meeting: Robert Giuffra, a co-chair of Sullivan & Cromwell, one of the firms that had been trying to woo his lawyers.
Giuffra, who has known Trump for many years, recently agreed to handle the appeal of Trump’s conviction on charges that he covered up a hush-money deal with the porn star Stormy Daniels in a New York State court.
Initially the conversation among the president and the two legal rivals focused on golf. Then it turned to Trump’s concerns about Paul, Weiss’s long association with Democratic politics. Eventually, the meeting resulted in a deal.
So far, Paul, Weiss appears not to have lost any partners or big clients.
HERE’S WHAT’S HAPPENING
President Trump throws support to his national security adviser as the Signal chat uproar grows. Michael Waltz took responsibility for the security breach in which members of Trump’s inner circle discussed details on the messaging platform of an attack on the Houthi militia in Yemen, and inadvertently added a journalist to the group. At a Senate hearing on Tuesday, the nation’s top two spy chiefs, both included in the chat, denied that the information was classified. Democrats called for the resignations of Pete Hegseth, the defense secretary, and Waltz. Politico explains why the chat participants are probably not in any serious legal hot water.
Russia and Ukraine agree to stop fighting in the Black Sea. That’s helped push up the share price of European shipping companies on Wednesday, and wheat prices have eased slightly, even if the agreement falls far short of a complete pause in combat and Moscow insists on more preconditions. A chief Kremlin demand: easing some sanctions on Russian companies and reconnecting Russian financial firms to the Swift international payments system, an arrangement that’s likely to draw fire from U.S. allies in Europe.
The White House is reportedly weighing the fast-tracking of copper tariffs. Duties on the metal, which is used in pipes, electrical circuits and components, could be introduced in a matter of weeks, Bloomberg reports, adding to President Trump’s protectionist barrage on key industrial materials. Watch the effect in global trading — copper prices on New York’s Comex commodities exchange have soared since Trump took office in January.
Crypto rising
After spending big on campaigns to elect President Trump and other crypto-friendly politicians, the crypto industry has been on a roll in Washington.
Executives have been warmly welcomed at the White House; regulators have dropped lawsuits and investigations into crypto companies from the Biden administration era; and the S.E.C. gave a boost to memecoins last month when it said that the highly volatile tokens are not securities, and don’t need to be regulated as such.
Now the industry is eyeing major legislative milestones.
A House committee is expected to advance long-awaited stablecoin legislation, according to Bloomberg. That comes as the banking sector and the Trump family itself looks to grab a bigger stake of the rapidly growing market. GameStop is soaring on Wednesday after the meme stock darling said it could use its corporate cash to buy Bitcoin and stablecoins.
The industry-backed bill, which would regulate stablecoins pegged to the U.S. dollar, has already cleared the Senate Banking Committee, and is up for consideration in the House on April 2.
The bill’s supporters say stablecoins could power faster and more transparent global transactions, and underpin demand for dollars. (Stablecoin providers like Tether are also big buyers of U.S. Treasury notes and bonds.) Trump said last week that such legislation would “unleash an explosion of economic growth.”
Detractors are worried about the fraud potential of stablecoins and the risk to the financial system from a run on a stablecoin that could ignite a broader crisis. The sides don’t fall neatly along party lines: Five Democrats voted to advance the Senate bill.
Another bill gaining momentum is aimed at addressing “debanking.” Introduced by Senator Tim Scott, Republican of South Carolina, it would remove an esoteric tool that financial regulators use to assess whether a bank’s reputation may be harmed by taking on a banking client, which crypto companies say has allowed banks to discriminate against them.
Trump’s ties to the crypto industry continue to deepen. On Tuesday, World Liberty Financial, the cryptocurrency company started by Trump and his sons, announced plans to sell a stablecoin called USD1. It’s the fourth digital currency that Trump and his businesses have marketed to the public this year:
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World Liberty Financial already offers a cryptocurrency;
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Trump and his wife, Melania Trump, each released memecoins just before his inauguration;
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Trump’s social media firm, Trump Media & Technology Group, said that it would partner with Crypto.com, a crypto trading platform, to create and market new investment products.
Ethics experts warn that Trump, who has vowed to turn the United States into “the crypto capital of the world,” has created an extraordinary conflict of interest issue. As Congress deliberates pro-business crypto legislation, expect that scrutiny to grow on Trump and the sector.
Separately, bank bosses see opportunities. Brian Moynihan, the C.E.O. of Bank of America, said last month that if the stablecoin legislation passed, Bank of America would “go into that business.”
The president hasn’t been shy about coercing business leaders to play by his rules. What would that dynamic look like for those who take him on as a direct business competitor?
“At the end of last year, the attitude was, ‘Full on, this is going to be an exceptionally pro-growth agenda and it will be executed in a clear way.’ All of that has gone in reverse.”
— Ed Al-Hussainy, a global interest-rate strategist at Columbia Threadneedle Investments, on how corporate America has begun to sour on the Trump administration as its on-again-off-again tariff moves and clashes with trading partners like Canada have prompted confusion and concern. The travel sector is also bracing for a hit on tourism.
Banker bonuses on the rise
Deals may not be flowing, but Wall Street bonuses are back to a new high.
The total bonus pool paid to those who work at New York City securities firms reached a record $47.5 billion last year, according to an annual tally compiled by the New York State comptroller, Thomas DiNapoli.
A surge in trading turbocharged Wall Street profits last year, and the likes of Goldman Sachs and JPMorgan Chase saw their share prices hit a series of new highs.
Last year, the average banker bonus was $244,700, up from $186,100 in 2023, according to the calculation, which is based on personal income tax withholding trends.
DiNapoli applauded the financial industry’s “very strong performance in 2024,” but noted that President Trump’s economic policies could hurt that upward trend.
“Increasing uncertainty in the economy amid significant federal policy changes may dampen the outlook for parts of the securities industry in 2025,” he said in a statement.
THE SPEED READ
Deals
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In activist investor news: Keith Meister, the managing partner of Corvex Management, is set to join Illumina’s board; Engine Capital has increased its stake in Lyft as it seeks a strategic review of the struggling ride-hailing service. (WSJ, Bloomberg)
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AT&T is reportedly in talks to buy Lumen’s consumer fiber business, valuing the unit at roughly $5.5 billion. (Bloomberg)
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Dollar Tree has reached an agreement to sell Family Dollar to Brigade Capital Management and Macellum Capital Management for roughly $1 billion. (Dollar Tree)
Politics, policy and regulation
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