🏛 The lawsuit-investing boom

…and TikTok’s “god credential”   Like Thiel in 2016, Big Money’s on the case (Marco Bello/Getty Images)   [Sponsored by]( Yesterday’s Market Moves   Dow Jones 33,665 (+0.27%) S&P 500 4,268 (-0.38%) Nasdaq 13,105 (-1.29%) Bitcoin $26,152 (-3.89%) Dow Jones 33,665 (+0.27%) S&P 500 4,268 (-0.38%) Nasdaq 13,105 (-1.29%) Bitcoin $26,152 (-3.89%) Hey Snackers, A new NBA conspiracy theory just dropped: all the cities Taylor Swift visits on her Eras Tour will be eliminated. That’s bad news for Denver, who’s playing Miami in the Finals. Swift visits Denver this summer but has no stops in Miami. Can Denver… shake it off? The S&P 500 pulled back from the brink of a bull market yesterday after Canada’s central bank hiked rates and stoked worries that the US would copy its neighbor. The Fed meets next week, and investors are less hopeful for a pause in June. Backed Litigation funding is quietly changing the legal world, and regulators are beginning to object GoFundMy court case… Litigation funding, a multibillion-dollar industry where investors fund lawsuits (and potentially receive a sizable % of the winnings), has been gaining steam in the US. Litigation funding has been used in suits ranging from antitrust to [climate change]( and most investors can stay anonymous. That's raised concerns that powerful people and institutions could covertly influence cases worldwide. - Sustained-able: Litigation funding’s promise is to help when a plaintiff is up against a deep-pocketed defendant (often seen in climate-related suits). - Case in point: One case between 15K Indonesian farmers and an Australian oil company was settled for nearly $200M last year, with the funding firm taking home 40% of the winnings. (Un)controlled explosion… Litigation financing’s first big step into the public eye was 2016’s Hulk Hogan v. Gawker Media, in which Hogan’s case was bankrolled by billionaire Peter Thiel. Since then the practice has boomed into a nearly $14B US industry. Firms are selective with cases they fund, and annual returns can top 50%. Last year US funders poured $3B+ into new cases, a 16% jump from the previous year. The number of dedicated US litigation-finance firms has grown to over 40, up from 6 in 2008. THE TAKEAWAY Ulterior motives can lead to exterior problems… Just one example: the US’s largest litigation-funding firm, [Burford Capital]( is now in litigation with its own client, [Sysco]( because it thinks Sysco is accepting too low a settlement. Now states are [cracking down]( on litigation funding, demanding greater transparency. Louisiana is advancing a bill that would require the disclosure of litigation funders, while Wisconsin and New Jersey already have these rules. A recent bill in California got watered down after lobbying. Super China reportedly used a “god credential” to spy on TikTok users, adding fuel to the ban fire Superuser surveillance… A former exec at TikTok’s parent company [raised]( (more) alarm bells this week: Yintao “Roger” Yu, who was ByteDance's US head of engineering, said that Chinese Communist Party members were able to use a “superuser credential” (aka a “god credential”) to monitor users’ personal data — including that of US users — through a special Chinese gov’t committee installed at ByteDance’s Beijing office. - Stalker mode: In a court filing Yu said that CCP officials used the superuser power to identify and track civil-rights activists and protesters in Hong Kong. - Superuser access was “commonly discussed” among employees, Yu said. He also accused TikTok of storing users’ DMs, search histories, and viewing habits. The Tok chopping block… gets another strike. Last week, Forbes [reported]( that TikTok creators’ personal info (like: SSNs) was being stored in China, where employees could access it. TikTok denied that, but these reports could give US lawmakers more fuel for a ban. Though Congress was recently preoccupied with the debt ceiling, Tik-ban momentum has accelerated this year: - Last month: Montana became the first US state to completely ban TikTok with legislation that’ll make it illegal for app stores to offer it in the state. - In March: Congress proposed legislation that would allow for a Tik ban, and President Biden encouraged lawmakers to pass it. THE TAKEAWAY The Tok lobby is powerful… The US gov’t has been talking about a nationwide ban for years, and Americans favor a ban 2-to-1, a recent Pew survey found. But TikTok’s still going strong with 150M+ US users. ByteDance has spent millions lobbying Congress and recruited armies of influencers to promote TikTok. Democratic Sen. Mark Warner [said]( “I don’t think there is a lobbyist that I know that is not on TikTok’s payroll at this point.” What else we're Snackin' - [Gooaall]( Lionel Messi said he’s joining Inter Miami at the end of this season. It’s a huge win for US soccer, and revenue-sharing offers from [Apple]( and [Adidas]( helped land it in the net. - [GTA]( NYC's suing Hyundai and Kia, saying the automakers didn't install standard anti-theft controls, which led to a spike in stolen cars. TikTok videos showing how to steal the vehicles have gone viral. - [Meta]( Researchers said that Instagram's algos promoted accounts that shared child sexual abuse material. Insta owner [Meta]( which has struggled with moderation, said it failed to enforce its own rules. - [Sunny]( Zara parent Inditex reported a 53% jump in quarterly profit and said demand for summer fits is hot. Other millennial retail staples, like [Abercrombie]( and [Urban Outfitters]( also had strong Q1s. - [CryptOh]( The SEC asked a federal court to freeze the assets of Binance US after upping its crypto crackdown by suing both Binance and [Coinbase](. Crypto's increasingly looking abroad for calmer regulatory waters. 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up [here](. Snack Fact Of the Day This week, NYC has been the world’s most polluted major city [Read more]( Thursday - Jobless claims - Earnings expected from DocuSign, Planet Labs, Signet Jewelers, Toro, and Vail Resorts Authors of this Snacks own shares of: Apple and Planet Labs Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... 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