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Matt Davis — Need2Know Chedditor

News You Need2Know

What’s the stock market up to, eh?*

$SPX ( ▼ 0.38% )   $DJI ( ▼ 0.63% )   $NDX ( ▲ 1.59% )  

Companies mentioned in today’s newsletter

$CI ( ▲ 0.73% )   $ESRX ( ▼ 3.62% ) $KALSHI ( 0.0% )   $SHEL ( ▼ 3.39% )   $BP ( ▼ 1.84% )   $TTE ( ▼ 1.37% )   $MCD ( ▼ 0.14% )   $WHR ( ▼ 11.91% )   $NVDA ( ▲ 1.77% )   $GOOGL ( ▼ 0.01% )   $AMZN ( ▼ 1.39% )  

Elite Wall Street lawyers ran insider trading ring

You thought the million-dollar partner draw was enough to satisfy the fine legal minds of Wall Street? Think again. Federal prosecutors in Boston just unsealed indictments revealing that some of the brightest bulbs from top firms, including powerhouses like Latham & Watkins, Goodwin Procter, and Wachtell Lipton, allegedly spent a decade side-hustling in a massive insider trading ring.

According to the feds, this extracurricular club netted tens of millions of dollars in illicit profits by stealing and using confidential details on nearly 30 major corporate transactions, including Cigna’s $CI ( ▲ 0.73% ) $54 billion acquisition of Express Scripts $ESRX ( ▼ 3.62% ) . At the center of the drama is corporate attorney Nicolo Nourafchan, a Yale Law grad who apparently decided legal prestige wasn’t enough. He even allegedly roped in a college classmate to help recruit more lawyer tipsters.

As FBI Special Agent Ted Docks told the Financial Times: “Everyone charged today is accused of scoring significant profits from expected market moves and making out like bandits.”

Naturally, the big law firms are clutching their pearls. Goodwin claimed to be “deeply disappointed” by the violations of trust, while Wachtell and Latham rushed to point out that the accused "responsible party" and "former associate" haven't actually worked at their firms in four or five years. Not since, like, 2021, or so.

Time heals all wounds.

Quote of the Day

Injuries are costing the NBA playoffs $313m

You’d think paying someone tens of millions of dollars would guarantee they actually, you know, play basketball when it matters most. Instead, the NBA playoffs have turned into the world's most expensive doctor’s waiting room.

A staggering eight recent All-Stars — raking in a combined $313.7 million this season —have already missed postseason duty. Take the Lakers, who are getting steamrolled by the Thunder. Partly it’s because superstar Luka Doncic has been keeping the bench warm in street clothes with a hamstring strain. As LeBron James helpfully explained: “We have a guy that averaged 37 a game... That’s the issue right there.”

Meanwhile, the Celtics’ Jayson Tatum lamented that he was “upset... sad... disappointed all day” after missing a decisive Game 7 with a bum knee, which his team lost. The 76ers' Joel Embiid survived an emergency appendectomy to win that game, only to immediately get sidelined again with hip and ankle pain in game two against the Knicks last night. My sense is he wants to be fresh for game three but whatever.

The culprit? The NBA's exhausting obsession with running non-stop for "pace and space." As orthopedic surgeon Dr. Neal ElAttrache explains the modern game, “you’re exceeding their ability to stay healthy.” I think there might also be a bit of Gen Z snowflakiness going on because the 1990s Bulls enjoyed pristine playoff attendance from Michael Jordan and Scottie Pippen. Still, today's teams are just crossing their fingers and praying that whoever is left standing can hobble across the finish line.

I bet you Kalshi is now worth $22 billion

Betting used to just be a fun way to lose money and your marriage and ultimately, perhaps, your life. Now, one prediction market is a $22 billion business. And that’s a totally different thing entirely, of course.

Kalshi $KALSHI ( 0.0% ) just bagged a massive $1 billion funding round, making its founders billionaires on paper. Millions of users are apparently flocking to the platform to gamble on everything from presidential election outcomes to the winner of Survivor and the exact high temperature in New York City on a given afternoon. All this casual wagering has pushed Kalshi's annualized trading volume to a staggering $178 billion. As the lead investor’s Lucas “Double Entend-not” Swisher told the New York Times: “Literally, outside of A.I., you don’t see anything growing like that.”

But squeezing money out of everyday internet bettors isn't enough anymore. Kalshi is now targeting financial heavyweights by wooing institutional investors like hedge funds and brokerages. CEO Tarek Mansour told the Times, “From a business perspective, the current business is working great,” but added that “the next step is going to institutionals, because that’s how you get a deeper layer of liquidity.”

I bet it is, Tarek. I bet it is.

Song of the Day: Lady Gaga, ‘Glamorous Life’