novelslam Chapter 232 The Perfect Bait
Chapter 232 The Perfect Bait
Mid-March 1990.
Nikkei Average: 30,120 points
Lower Manhattan, New York. United States District Court for the Southern District of New York (USDC SDNY).
The heavy oak double doors were pushed open by the bailiffs, and the noisy voices from the corridor instantly flooded into the solemn hearing room.
Arthur Vance sat on the wooden bench in the plaintiff's seat. His usually straight back was now slightly hunched, and his dark gray suit jacket was covered with wrinkles from sitting for a long time.
He stretched out his hands and rubbed his bloodshot eyes vigorously.
In front of me, the area of the defendant's dock was completely submerged by a mountain of documents.
A full twelve Wall Street partner-level lawyers, dressed in expensive custom-made suits and with their hair meticulously combed, were standing next to those waist-high file carts.
The case files they opened and the leather briefcases they carried bore logos that would give any multinational corporation's legal department a headache.
Skadden, Sullivan & Cromwell, and Davis Polk—top-ranked "white-shoe" law firms across the United States—have surprisingly formed a united front in the same defendant's seat.
These legal mercenaries, who usually charge thousands of dollars per minute for consultations, were now working with clear division of labor and extremely efficient movements.
The lead defense attorney picked up a legal document that was five hundred pages thick.
"Your Honor," the lawyer's voice boomed and commanding, echoing beneath the empty courtroom dome, "regarding the emergency freeze order issued by CFIUS (Committee on National Security Review) citing Section 721 of the Defense Production Act of 1950, the Exon-Florio Amendment, we formally submit our thirty-fourth Request for Cross-Border Jurisdiction Objection and Review."
The lawyer extended his index finger and tapped it heavily on the thick cover of the document.
"Absolute control of these funds rests with an independent trust in the Cayman Islands, which is under the highest protection of local offshore trust law. The holding institution for the flow of funds is located in Luxembourg. Legally speaking, CFIUS's domestic administrative jurisdiction has no right to extend to offshore SPVs (special purpose vehicles) outside the United States."
The lawyer spoke at an extremely fast pace, rattling off a series of legal provisions like a machine gun.
"More importantly... the executive branch, without obtaining a lawful search warrant from a federal court, directly used its power to intercept legitimate commercial remittances at physical gateways. This action seriously violates the Fifth Amendment to the U.S. Constitution, which states that 'no one may be deprived of their property without due process of law!'"
"We request that the court immediately initiate an independent hearing to review the constitutionality of this freezing order, pursuant to Rule 65 of the Federal Rules of Civil Procedure. Until the hearing concludes, neither the SEC (Securities and Exchange Commission) nor any federal agency has the authority to access any underlying data on these offshore accounts."
The judge sat on the high bench, looking at the mountain of documents that even blocked his view, and rubbed his temples wearily.
Arthur Vance's jaw suddenly tightened, and his masseter muscles bulged.
He knew exactly what the other person was doing.
These lawyers, paid exorbitant hourly rates, had no intention of proving the funds' innocence in court. They were simply exploiting the extremely cumbersome procedural justice within the American judicial system, legally dragging the SEC's investigative resources into a quagmire with millions of pages of confidentiality defenses, jurisdictional disputes, and endless requests for independent hearings.
As long as the courts continue to hear these numerous procedural objections, Arthur's investigation team will not be able to obtain a legal search warrant to further penetrate the network of offshore fund accounts.
That billion dollars was indeed locked up in the clearinghouse's account.
But Arthur Vance was also trapped in this hearing room by the quagmire of this billion-dollar lawsuit.
Across the Pacific, global financial media outlets are in an uproar.
The Wall Street Journal, the Financial Times, and Japan's Nikkei all published front-page reports on this transnational financial sanction.
[A Thunderous Strike from a Superpower: The Saionji Zaibatsu's Overseas Funds Are Completely Frozen]
[Legal Battle: SA Investment Deeply Entangled in New York Lawsuit, Cross-Border Expansion Halted]
From the outside, this newly emerging Japanese zaibatsu, which had been running rampant in the past few years, finally suffered a devastating administrative crackdown for angering Washington. The more than one hundred lawyers who were struggling to stay afloat in court were irrefutable evidence of the Saionji family's weakness and panic.
Of course, from the outside perspective, the Saionji family is the weaker party no matter what.
Arthur looked at the lawyers across from him, who all wore professional smiles, and slowly clenched his fists on the table.
This "sanction," which has been heavily publicized by global media, has perfectly sent a fatally wrong signal. All the spotlight has been drawn to this billion-dollar tug-of-war.
Meanwhile, those short-selling main accounts, hidden deep in the ocean with a nominal principal of up to three hundred billion US dollars, are completely concealed in the blind spot of all regulatory radars under the perfect cover of this weak illusion, quietly waiting for the moment to explode.
……
Tokyo, Chiyoda-ku, Nagata-cho.
Room 508, First Members' House of Representatives.
The air in the spacious office of the secretary-general was filled with the strong aroma of Cuban cigars.
Ichiro Osawa sank into the deep red leather sofa. He crossed his legs and held a large, half-smoked cigar between his fingers in his right hand.
A large color television on the wall is playing the midday news.
Two weeks have passed since the Osawa faction forcefully pushed through a proposal to repeal the Large Store Law in the Diet, sparking a full-blown brawl. During these two weeks, the entire town of Nagata remains in turmoil and strife. But right now, the news focus is entirely on the other side of the Pacific Ocean.
The scene shifts to the steps of the Southern District of New York federal courthouse, where the Saionji Group's massive multinational legal team is surrounded by numerous American reporters. The well-dressed legal elites, their faces grim, struggle to squeeze into cars under the escort of security personnel, appearing utterly exhausted.
Ichiro Osawa looked at the television screen and took a deep drag on his cigar.
The red encrypted phone on the desk suddenly started ringing rapidly.
He calmly placed the cigar on the edge of the crystal ashtray, stood up, walked to his desk, and grabbed the receiver.
"Member of Parliament Osawa."
On the other end of the line came William, the economic minister of the U.S. Embassy in Japan, speaking Japanese with a slight accent.
"Minister William," Ichiro Osawa said in a low voice, his tone revealing undisguised satisfaction, "I've already seen the news from New York."
"A perfect encirclement." William chuckled on the other end of the phone. "It's been half a month. The Saionji family's offshore fund pool hidden in the Cayman Islands is firmly locked in a low-level regulatory account at the clearing center by CFIUS. They've spent millions of dollars on legal fees in Manhattan, but they can't move a single cent. Representative Osawa, the United States has given you the strongest administrative support."
William paused on the other end, his tone turning extremely cold.
"Now is the time for you to demonstrate your sincerity in reform."
"Washington hopes to see the repeal of the Large Retailer Law pass smoothly during the final congressional deliberations next week. We need a completely open Japanese market without any barriers to cross-shareholding."
Osawa Ichiro's breathing suddenly quickened by half a beat.
"Minister William, please rest assured."
"The final version of the repeal bill has been submitted. With my current control within the party, the final review next week will definitely pass smoothly."
"Very good. The United States looks forward to your performance."
"beep--"