Summary: U.S. Supreme Court hears Cisco appeal on alien tort statute 9th Circuit revived lawsuit alleging Cisco aided Chinese crackdown Trump administration supports Cisco's position on aiding and abetting liability US Supreme Court hears claims Cisco aided Chinese human rights abuses The U.S. Supreme Court confronted a case on April 28 with broad implications for human rights litigation in American courts, a long-running lawsuit brought by members of the Falun Gong spiritual movement who have accused Cisco Systems of facilitating religious persecution in China. The justices heard arguments in Cisco's appeal of a lower court's 2023 ruling that breathed new life into the 2011 lawsuit, brought under the Alien Tort Statute, that accused the company of knowingly developing technology that allowed China's government to surveil and persecute Falun Gong members. San Jose, California-based Cisco is urging the Supreme Court to further limit the scope of that 1789 law, which lets non-U.S. citizens seek damages in American courts for violations of international law. The court in a series of decisions since 2013 has limited the law's reach, making it more difficult to hold U.S. corporations legally liable for human rights abuses. President Donald Trump's administration is siding with Cisco in the arguments, which are ongoing. The lawsuit accused Cisco of knowingly designing and implementing the "Golden Shield," an internet surveillance system used by the Chinese Communist Party to target dissidents. The plaintiffs allege that China used the system to track and then torture Falun Gong members. Cisco has called the allegations unfounded and offensive. The San Francisco-based 9th U.S. Circuit Court of Appeals revived the case and allowed it to move toward discovery, the evidence-gathering phase before a trial. The Alien Tort Statute had been dormant for nearly two centuries before lawyers began using it in the 1980s to bring international human rights cases in U.S. courts. The Cisco case poses the question of whether the law creates liability for corporations that "aid and abet" human rights abuses, a form of what is called accomplice liability. Cisco is arguing that the 9th Circuit overstepped its authority when it interpreted that law as allowing for liability for aiding and abetting. "It is for Congress, not this court, to provide for aiding and abetting liability," Cisco's lawyer Kannon Shanmugam told the court. "Such a cause of action would pose grave harms to foreign policy and the separation of powers," Shanmugam added, referring to the constitutional delineation of authority among the U.S. government's executive, legislative and judicial branches. The Human Rights Law Foundation, a nonprofit organization in Washington, sued Cisco on behalf of a group of Falun Gong members. A judge dismissed the case in 2014, saying the alleged conduct did not have a sufficient enough connection to the United States for the case to go forward. The case stalled for many years, in part because of a string of rulings in other Alien Tort Statute cases that made them harder to bring. In a 2023 ruling, the 9th Circuit said the plaintiffs plausibly alleged "that Cisco provided essential technical assistance to the douzheng (crackdown) of Falun Gong with awareness that the international law violations of torture, arbitrary detention, disappearance and extrajudicial killing were substantially likely to take place." The Supreme Court is expected to rule by the end of June. Falun Gong, founded in China in 1992, was banned by China's government in 1999 after thousands of members appeared at the central leadership compound in Beijing in silent protest. The group has called for people to renounce the ruling Chinese Communist Party. Falun Gong members founded a right-leaning U.S. media outlet called The Epoch Times that has been heavily critical of the Chinese Communist Party and supports Trump. (Reporting by Jan Wolfe; Editing by Will Dunham)

Summary: Elon Musk seeks $150 billion in damages from OpenAI and Microsoft Trial set for April 27 in Oakland federal court with key Silicon Valley witnesses OpenAI restructured as for-profit and public benefit corporation amid dispute The bitter legal fight between Elon Musk and the leading artificial intelligence firm, OpenAI, led by Sam Altman, may come down to a few pages in one executive's personal diary. "This is the only chance we have to get out from Elon," wrote Greg Brockman, OpenAI's president and a co-founder, in the fall of 2017. “Is he the ‘glorious leader’ that I would pick?” Brockman's diary entry is part of the thousands of pages of internal documents revealed in court since Musk, one of the original co-founders of OpenAI, sued the company, its chief executive Altman and Brockman in 2024. Musk is seeking $150 billion in damages from OpenAI and Microsoft, one of its largest investors, according to a person involved in the case, with proceeds going to OpenAI’s charitable arm. Jury selection for the trial is planned for April 27 in the Oakland, California, federal court, with opening statements expected on April 28. Altman is attending jury selection. The documents offer a rare window into egos and personalities that have shaped OpenAI as it evolved from a nonprofit research lab in Brockman’s apartment to a tech giant worth more than $850 billion. They also shed light on how the CEOs with the most power to shape generative AI think about the technology. The trial risks complicating OpenAI's plans for a potential initial public offering by casting doubt on its leadership. A drumbeat of unflattering disclosures could also intensify Americans' growing pessimism about AI technology more broadly. The case centers on Musk’s claim that OpenAI, Altman and Microsoft betrayed OpenAI's original mission as a nonprofit to benefit humanity by forming a for-profit entity in March 2019, 13 months after Musk left the OpenAI board. Musk said the defendants kept him in the dark about their plans, exploited his name and financial support to create a "wealth machine" for themselves, and owe damages for having conned him and the public. He also wants OpenAI to revert to a nonprofit, for Altman and Brockman to be removed as officers, and for Altman to be removed from its board, among other measures. OpenAI countered that Musk is motivated by a compulsion to control OpenAI and prop up his own AI lab xAI, which he founded in 2023 shortly after OpenAI launched ChatGPT and sparked the AI boom. The company says Musk was involved in discussions to create OpenAI's new structure and demanded to be CEO. Microsoft, also a defendant, denies that it colluded with OpenAI and says it teamed up with OpenAI only after Musk left. In a post on X on Monday, OpenAI said: "The truth and the law are on our side. This lawsuit has always been a baseless and jealous bid to derail a competitor." HEAVY HITTERS EXPECTED TO TESTIFY Heavy hitters in Silicon Valley including Musk, Altman and Microsoft CEO Satya Nadella are expected to testify in person. Shivon Zilis, a former OpenAI board member who is also mother to four of Musk's children, is likely to be a key witness, with OpenAI lawyers arguing that she funneled information about OpenAI to Musk. The trial comes at a sensitive time for both sides. OpenAI faces unprecedented competition from rivals including Anthropic, and is spending billions on computational resources. It is also preparing for a potential blockbuster IPO that could value the company at $1 trillion, Reuters has reported. Musk’s companies face similar pressures. His xAI, now folded into his rocket company SpaceX, trails far behind OpenAI in usage. SpaceX also plans to go public this year in what could be the biggest IPO ever. According to court papers, Musk gave about $38 million of seed money to OpenAI between 2016 and 2020, mostly before he left the board. In 2019, OpenAI restructured as a for-profit unit governed by the nonprofit. That let it accept money from outside investors while being accountable for the nonprofit’s original mission. Last fall, OpenAI overhauled its structure again to become a public benefit corporation, in which the nonprofit and other investors including Microsoft hold stakes. The nonprofit holds a 26% stake as well as additional warrants if OpenAI hits certain valuation targets. Musk's lawyers calculated damages by multiplying OpenAI's valuation and a portion of the nonprofit's stake that could be attributed to Musk's contributions. His team says between 50% and 75% of the nonprofit's stake can be attributed to Musk. A ‘MANHATTAN PROJECT FOR AI’ Musk and Altman co-founded OpenAI with a goal of developing AI to benefit humanity and fend off rivals such as Google. Altman approached Musk about the idea in May 2015, branding it the “Manhattan Project for AI,” court documents show. Musk’s involvement helped OpenAI land top researchers like now-former chief scientist Ilya Sutskever. By mid-2017, Musk began questioning OpenAI’s viability, at one point holding back promised funds after clashing with Altman, Brockman and Sutskever, according to court filings. One source of tension was that Musk wanted to be CEO, emails show, which made other co-founders uneasy. Around the same time, Brockman appeared frustrated by Musk's stance, and wondered if turning OpenAI into a profit-making venture could also make him rich. “Financially, what will take me to $1B?” he wrote in his diary. “Accepting Elon’s terms nukes two things: our ability to choose (though maybe we could overrule him) and the economics.” Musk's lawyers highlighted the entry to show that OpenAI's leaders were more motivated by profit than the mission. By January 2018, Musk appeared to have given up. “OpenAI is on a path of certain failure relative to Google,” Musk emailed. In late 2022, OpenAI launched ChatGPT. (Reporting by Deepa Seetharaman in San Francisco and Jonathan Stempel in New York; Editing by Ken Li, Noeleen Walder and Nick Zieminski)

Summary: Gannon Ken Van Dyke charged with commodities and wire fraud Van Dyke placed bets on Polymarket using classified raid info Van Dyke detained in Fayetteville, North Carolina, for trial Federal authorities on April 23 charged a Special Forces soldier involved in the capture of Venezuelan President Nicolás Maduro with using inside information about the raid to win roughly $400,000 through bets placed on online prediction markets. Prosecutors accused Gannon Ken Van Dyke, an active-duty U.S. Army soldier involved in the planning and execution of the U.S. operation, of using his access to classified information to place a series of wagers on Maduro’s future and whether U.S. forces would enter Venezuela through Polymarket, one of a number of sites offering users the opportunity to place bets on real world events. Hours after U.S. forces descended on a compound in Caracas on Jan. 3 to capture the Venezuelan leader and his wife, Van Dyke anonymously earned a hefty payday, authorities said. Van Dyke, 38, faces charges including commodities fraud, wire fraud, theft, and using confidential government information for personal gain. It was not immediately clear from public court dockets whether he had retained an attorney. The case against Van Dyke is believed to be the first time the Department of Justice has prosecuted an insider trading case based on prediction market betting, an industry that has drawn increasing scrutiny in recent months and calls for stiffer regulations that would bar users, especially those working in government roles, from trading on sensitive or confidential nonpublic information. “Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” said Jay Clayton, the U.S. attorney for the Manhattan-based Southern District of New York, where the charges against Van Dyke were filed. In a statement, he added: “Those entrusted to safeguard our nation’s secrets have a duty to protect them and our armed service members, and not to use that information for personal financial gain.” The series of well-timed bets prosecutors say Van Dyke anonymously placed late last year quickly drew attention in the days after the U.S. operation to bring Maduro and his wife, Cilia Flores, to face narco-terrorism charges in federal court in Manhattan. Polymarket data showed that in the week leading up the Jan. 3 raid an anonymous trader began placing small bets on a U.S. military intervention in Venezuela. According to the indictment, Van Dyke’s first wager came Dec. 27, when he made a $96 bet on contracts that would pay out if U.S. forces were in Venezuela by Jan. 31. Over the following week, the same user steadily increased the stakes, concentrating on a narrow set of contracts tied to Maduro’s fate, including bets that would pay off if he were no longer in power by the end of the month, a scenario most users still viewed as remote. The last wager was placed at 9:58 p.m. Eastern time on Jan. 2, just before a U.S. operation deposed the Venezuelan president. When news of the U.S. operation to capture him broke in the early morning hours of Jan. 3, the contracts surged in value. By the end, the trader had turned roughly $34,000 in wagers — more than half placed hours before the operation — into more than $400,000 in profit. Prosecutors said that before cashing out his winnings that same day and as U.S. forces were preparing to transfer Maduro to a U.S. base, Van Dyke posted a photo of himself on a military ship at sea wearing combat fatigues, carrying a rifle, and standing alongside three other service members. Later that day, Van Dyke allegedly transferred most of the proceeds to a foreign cryptocurrency vault and then a newly created online brokerage account before withdrawing the majority of the money. As word of the suspicious trade spread widely online, Van Dyke took steps to conceal his identity as the trader, prosecutors said. He asked Polymarket to delete his account three days after the Maduro raid, claiming he had lost access to the email address with which his account had been associated, according to the indictment. He also changed the email registered to his cryptocurrency exchange account to one not directly registered under his name, prosecutors said. Van Dyke, an 18-year veteran who enlisted in 2008, was detained on April 23 in Fayetteville, North Carolina, where he will face preliminary court proceedings before being transferred to Manhattan for trial. Most recently stationed at Fort Bragg, he was promoted in 2023 to the rank of master sergeant, the Army’s second-highest enlisted rank, authorities said. A Pentagon spokesperson declined to comment on Van Dyke’s arrest, referring all questions to DOJ officials. “Our men and women in uniform are trusted with classified information in order to accomplish their mission as safely and effectively as possible, and are prohibited from using this highly sensitive information for personal financial gain,” Acting Attorney General Todd Blanche said in a statement. “Widespread access to prediction markets is a relatively new phenomenon, but federal laws protecting national security information fully apply.” The case against Van Dyke comes as lawmakers in Washington have increasingly raised alarm about the possibility of government employees using access to inside information to profit through prediction market bets. Last month, the White House warned staff against insider trading amid a string of reports highlighting suspicious trades tied to the ongoing conflict in Iran. Trump’s social media company, Truth Social, announced in October that it planned to start its own prediction market. But asked about Van Dyke’s arrest and concerns about other government insiders illegally cashing in, the president expressed concerns over the boom in event-betting platforms. “The whole world, unfortunately, has become somewhat of a casino,” he told reporters, adding, “I was never much in favor of it. I don’t like it conceptually.” Polymarket, in a statement posted to social media, noted that it first publicly identified the suspicious trade, reported it to law enforcement, and cooperated with the DOJ investigation. Jeremy B. Merrill, Tara Copp and Aaron Schaffer contributed to this report.