Azure A.I. Model Use, Token Use, and "Good Answers"
With multiple versions of ChatGPT available now, and an eye on Token consumption to answer questions, the latest focus is on whether the newer models are "better", whether more tokens used produces better responses, and how to choose from the myriad of options available.
Taking a Comparative Approach to the Challenge
Wanting to derive some level of insight so we could provide our clients guidance on the "best" model and configuration possible, we did a standardized test across various options.
Note: while we used identical procedures to do as consistent of a comparative as we could, our testing was far from a scientific or statistically qualified model. We do feel our results were repeatable with similar results and provides insight for decision making.
The Best ChatGPT Model is...
Ha!? If it were only that easy...? What is a "good answer" for one person isn't good chat answer for another.? Of course in the A.I. world if you don't like the answer you get, there are ways to improve the response you get back by asking a "better question" as I covered a couple months ago in this article -?https://www.dhirubhai.net/pulse/improving-your-ai-chats-data-rand-morimoto-4fn2c
What we realized, and the net of this article, isn't about buying a specific configuration and model to guarantee you’ll get a “better answer” from?your A.I. chats, but simply understand what you do get if you run one deployment model of GPT vs another.
Summary of Models Compared...
Of the models and configurations we tested, we netted out:
So in simplified form:
Adding in Chunk Size for More Complexity
Beyond the GPT model, we also compared the older default 1024 chunk size to the newer 1536 chunk size to determine if having more data per chunk for A.I. to analyze is "better".
What we found with the older GPT 3.5 model, it really didn't matter if it was looking at smaller 1024 chunks or larger 1536 chunks, its answers spewed out just as fast, just as brief between the two settings.?
For the two GPT4 models, for simple questions, it seemed to take 2-3 times longer to produce a similar response when the chunk size was larger than when it was smaller.? So simple questions didn’t get any better, they just took longer.
However for complex questions on the GPT4 models, while still taking 2-3 longer with the larger 1536 chunk size vs the smaller 1024 chunk size, the "answer" from the?larger chunk size was MUCH more detailed.? If “more detail” on “complex questions” is important to you, and time (2-3 times longer) is okay with you, then the larger 1536 chunk size produced robust answers.
So in simple terms:
The Data?
Below is a table of the metrics and copies of the questions and responses so you can see for yourself the variances?of what we tried, and what we got back. There's a LOT there (and we have a LOT more questions/answers we tested), this was just "some" of the raw data.
Wrap-up
The old GPT 3.5 model definitely makes things easier, it does what it does, is relatively fast and cheap, doesn’t provide robust responses, just short and sweet answers.? The GPT 4 models vary in their responses, where the newer (and cheaper) GPT-4o model with the standard 1024 chunk size would be the good overall selection.? It provided robust responses, at a reasonable cost on token usage.
The most expensive GPT-4-32k model with larger 1536 chunks provided extremely detailed responses on complex questions and would be a great model for organizations?that?are okay spending more money to get the most robust response possible (just know it's about 6x-12x more expensive to get a response back than the GPT 3.5 or GPT 4o models).
As such, based on our “current” tests (which of course will change in a few months as everything in this A.I. world changes every few weeks), the decision sits on the quick/cheap GPT 3.5 or the slightly more expensive more robust responding GPT-4o models.?
(note: The comparative testing and initial analysis was completed by CCO's A.I. Specialist, Stacey Sutter, who worked through the prompts, models, and testing - September/2024)
********
Comparative Data Table
Sampling of the questions/responses
gpt-35-turbo 1024 chunks
Prompt #1: Who are the named defendants in SEC vs. Ripple?
Response #1: The named defendants in the case of SEC vs. Ripple are Ripple Labs, Inc., Bradley Garlinghouse, and Christian A. Larsen?1?.
Prompt #2: What is the fair notice defense?
Response #2: The fair notice defense requires that laws must provide a person of ordinary intelligence fair notice of what is prohibited, or they risk being invalidated for being impermissibly vague?1?. The defense is based on the Due Process Clause of the Fifth Amendment and is meant to ensure that parties and the public can respond fully and in a timely manner to an agency's exercise of authority?2?. Laws that fail to provide such notice can be challenged as unconstitutional?1?.
Prompt #5:? What is the difference between the individual and family deductibles for the Silver 70 HMO 2100/55 + Child Dental Alt plan?
Response #5: For the Silver 70 HMO 2100/55 + Child Dental Alt plan, the individual deductible is $2,100 and the family deductible is $4,200?1?2?.
Prompt #6: What is the fair notice defense, and how do Defendants Larsen and Garlinghouse assert it in their case against the SEC?
Response #6: Defendants Larsen and Garlinghouse assert a "fair notice" defense in their case against the SEC, claiming that the SEC violated their due process rights 1 . This defense asserts that laws which regulate individuals or entities must give fair notice of the conduct that is forbidden or required 2 . The fair notice defense requires that the statute in question provides insufficient notice that the behavior at issue was prohibited, and an evaluation of the defense is objective and does not require an inquiry into whether a particular party actually received a warning that alerted them to the danger of being held accountable for the behavior in question 2 . The Defendants' fair notice defense and vagueness defense have been rejected by the court 1 .
Prompt #9: How does the Second Circuit's interpretation of the term "solely" in the Howey test impact the SEC's case against Ripple, and what evidence supports the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts?
Response #9: The Second Circuit's interpretation of the term ""solely"" in the Howey test plays a significant role in the SEC's case against Ripple by broadening the scope of what constitutes an investment contract. According to the Second Circuit, the term ""solely"" should not be taken as a literal limitation. Instead, the courts should consider whether, under all circumstances, the scheme was being promoted primarily as an investment, where participants could pool their activities, money, and the promoter's contribution in a meaningful way 1 . This interpretation allows the SEC to argue that investors' expectations of profits do not need to be solely from the efforts of others, but primarily from such efforts.
In the case against Ripple, the court found that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts based on several pieces of evidence:
Ripple's Marketing and Communications: Ripple marketed XRP to potential investors, including Institutional Buyers, by distributing promotional materials that highlighted XRP as an investment tied to the company's success. For example, Ripple's ""Deep Dive"" brochure mentioned that the business model was predicated on the belief that demand for XRP would increase if the Ripple protocol became widely adopted, thereby increasing XRP's value 1 .
Nature of Institutional Sales: The sales contracts with some Institutional Buyers included lockup provisions or resale restrictions based on XRP's trading volume, which are inconsistent with the notion that XRP was used as a currency or for consumptive use. These provisions indicated that the parties viewed the sale of XRP as an investment in Ripple's efforts 2 .
Pooling of Proceeds: The proceeds from Ripple's Institutional Sales were pooled into a network of bank accounts controlled by Ripple. The funds raised were used to finance operations, develop uses for XRP, and protect the XRP trading market. This pooling of assets meant that the fortunes of the Institutional Buyers were tied to Ripple's fortunes and the success of the enterprise 3 .
Reasonable Expectations of Profit: Based on Ripple's communications, marketing campaigns, and the nature of the Institutional Sales, the court concluded that reasonable investors would expect to derive profits from Ripple's efforts to improve the market for XRP and develop its uses 1 .?
These factors collectively supported the court's finding that Ripple's Institutional Sales of XRP constituted the unregistered offer and sale of investment contracts, in violation of Section 5 of the Securities Act 2 ."
Prompt #10: Compare and contrast the legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision. How did the government argue that the decision was committed to agency discretion and therefore unreviewable, and what evidence did it cite to support this argument? How did the respondents argue that the decision was reviewable and that the government's decision was arbitrary and capricious, and what legal precedents did they rely on to support their argument?
Response #10: The dispute in the DACA rescission case was primarily about the procedure the agency followed in rescinding the program, not whether DHS may rescind DACA 1 . The government argued that the decision was committed to agency discretion and therefore unreviewable . The government cited the Immigration and Nationality Act (INA), which provides the Secretary of Homeland Security with the authority to administer and enforce immigration laws, and limits that authority by specifying that the determinations of the Attorney General "shall be controlling" with respect to "all questions of law" 1 . The government further argued that Acting Secretary Duke plainly exercised discretionary authority in winding down the program . On the other hand, the respondents argued that the decision was reviewable and that the government's decision was arbitrary and capricious 1 . They relied on the Administrative Procedure Act (APA), which requires agencies to engage in "reasoned decisionmaking" and directs that agency actions be "set aside" if they are "arbitrary" or "capricious" 1 . The respondents claimed that the Duke Memorandum did not adequately explain the conclusion that DACA is unlawful, and that this conclusion is wrong . They further argued that Acting Secretary Duke "failed to consider . . . important aspect[s] of the problem" before her 2 .
gpt-4o 1024 chunks
Prompt #1: Who are the named defendants in SEC vs. Ripple?
Response #1: The named defendants in the case of SEC vs. Ripple are Ripple Labs, Inc., Bradley Garlinghouse, and Christian A. Larsen?1?.
Prompt #2: What is the fair notice defense?
Response #2: The ""fair notice"" defense is a legal argument based on the principle that laws must provide clear notice of what conduct is prohibited or required. This principle is rooted in the Due Process Clause of the Fifth Amendment. Specifically, laws fail to meet due process requirements when they:
1. Fail to provide a person of ordinary intelligence fair notice of what is prohibited.
2. Are so standardless that they authorize or encourage seriously discriminatory enforcement?1?.
In the context of the Ripple case, the defendants argued that the SEC violated their due process rights by not providing sufficient notice that their conduct was in violation of the law. They claimed that the SEC's inconsistent statements and approaches to regulating digital assets did not give clear guidance on whether XRP was considered a security?1?. However, the court rejected the defendants' fair notice defense concerning the Institutional Sales, stating that existing caselaw provided sufficient clarity on what constitutes an investment contract, thereby satisfying due process requirements?1?."
Prompt #5:? What is the difference between the individual and family deductibles for the Silver 70 HMO 2100/55 + Child Dental Alt plan, and how does this affect the cost-sharing for covered health care services?
Response #5: The Silver 70 HMO 2100/55 + Child Dental Alt plan has different deductible amounts for individuals and families. The individual deductible is $2,100, while the family deductible is $4,200 1 .
Impact on Cost-Sharing for Covered Health Care Services:
Individual Deductible: Each individual on the plan must pay out-of-pocket for covered health care services up to the $2,100 deductible before the insurance starts to pay its share 1 .
Family Deductible: For a family, the combined total out-of-pocket expenses for all members must reach $4,200 before the insurance begins to pay for covered services for the entire family 1 .
Specific Services Deductibles: There are additional specific deductibles for brand and specialty prescription drugs, which are $500 for an individual and $1,000 for a family 1 .?
Until these deductible limits are met, the plan generally requires the insured to bear the full cost of the covered services, with some exceptions like preventive care, which are covered without meeting the deductible 1 ."
Prompt #6: What is the fair notice defense, and how do Defendants Larsen and Garlinghouse assert it in their case against the SEC?
Response #6: The ""fair notice"" defense is grounded in the principle that laws must provide clear guidance on what constitutes prohibited conduct. This principle is rooted in the Due Process Clause of the Fifth Amendment, which mandates that laws must give fair notice of forbidden or required actions to ensure they are not impermissibly vague 1 . Specifically, a law fails to meet due process requirements if it does not provide a person of ordinary intelligence with fair notice of what is prohibited or if it is so vague that it allows for arbitrary or discriminatory enforcement 1 .
In the case involving Defendants Larsen and Garlinghouse, they assert a fair notice defense by claiming that the SEC's enforcement of securities laws against them violated their due process rights. They argue that they did not receive clear guidance that their conduct related to the sale and distribution of XRP was in violation of securities laws. Larsen and Garlinghouse also assert an as-applied vagueness defense, which is based on the same due process principles 2 .
The court, however, rejected the Defendants' fair notice and vagueness defenses as they pertain to the Institutional Sales of XRP. The court found that existing caselaw, such as the Howey test and its progeny, provided sufficient clarity and guidance to a person of ordinary intelligence regarding what constitutes an investment contract 1 . Therefore, the court concluded that the SEC's approach to enforcing securities laws in this context was consistent and did not violate due process 1 ."
Prompt #9: How does the Second Circuit's interpretation of the term "solely" in the Howey test impact the SEC's case against Ripple, and what evidence supports the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts?
Response #9: The Second Circuit’s interpretation of the term ""solely"" in the Howey test significantly impacts the SEC's case against Ripple. According to the Second Circuit, the word ""solely"" should not be taken as a literal limitation. Instead, courts should consider whether, under all circumstances, the scheme was promoted primarily as an investment or as a way for participants to pool their activities, money, and the promoter’s contributions meaningfully 1 . This broader interpretation allows for a more flexible understanding of what constitutes deriving profits from the efforts of others, potentially making it easier for the SEC to argue that Ripple's activities meet the Howey test criteria.
Evidence Supporting Court's Finding
Marketing and Communications: Ripple marketed XRP to potential investors by distributing promotional materials that emphasized XRP as an investment tied to the company's success. For example, Ripple's ""Deep Dive"" brochure indicated that demand for XRP would increase if the Ripple protocol became widely adopted, suggesting a direct link between Ripple's efforts and the value of XRP 1 .
Institutional Sales: The nature of Ripple's Institutional Sales further supports the court's conclusion. These sales included lockup provisions and resale restrictions, which are inconsistent with the notion of XRP being used as a currency or for consumptive purposes. Instead, these provisions indicate that the sales were viewed as investments 2 . Additionally, some Institutional Sales contracts explicitly stated that the buyer was purchasing XRP solely to resell or distribute, not for personal use 2 .
Use of Funds: Ripple used the capital received from its Institutional Sales to improve the market for XRP and develop uses for the XRP Ledger, thereby increasing XRP's value. This aligns with the expectation that investors would profit from Ripple’s efforts 1 3 .
Sophisticated Investors: The Institutional Buyers were sophisticated entities, such as institutional investors and hedge funds, who were likely to understand Ripple's marketing and public statements connecting XRP’s price to Ripple's efforts. This indicates that these buyers had a reasonable expectation of deriving profits from Ripple’s efforts 4 .
In conclusion, the Second Circuit's broader interpretation of ""solely"" in the Howey test and the various forms of evidence presented support the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts."
Prompt #10: Compare and contrast the legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision. How did the government argue that the decision was committed to agency discretion and therefore unreviewable, and what evidence did it cite to support this argument? How did the respondents argue that the decision was reviewable and that the government's decision was arbitrary and capricious, and what legal precedents did they rely on to support their argument?
Response #10: The legal arguments regarding the scope of the Court's review of the DACA rescission decision can be broken down into the positions held by the government and the respondents, along with the evidence and legal precedents they cited.
Government's Argument:
Agency Discretion and Unreviewability:
Claim: The government argued that the DACA rescission decision was committed to agency discretion and therefore unreviewable under the Administrative Procedure Act (APA).
Supporting Evidence:
The government likened the rescission of DACA to a general non-enforcement policy, referencing the Supreme Court’s decision in Heckler v. Chaney (470 U.S. 821), which held that an agency’s decision not to institute enforcement actions is presumed unreviewable 1 .
They contended that the DACA program was merely a discretionary non-enforcement policy rather than a substantive rule, thus falling within the scope of agency discretion that is not subject to judicial review 2 .
Respondents' Argument:
Reviewability of the Decision:
Claim: The respondents argued that the rescission of DACA was not merely a discretionary enforcement decision but involved the termination of a program conferring affirmative immigration relief, making it reviewable.
Supporting Evidence and Legal Precedents:
The respondents pointed out that the DACA memorandum did not merely decline to institute enforcement proceedings but instead created a program for conferring affirmative immigration relief, which provided a focus for judicial review 1 .
They relied on the APA’s “basic presumption of judicial review” of agency action, citing Abbott Laboratories v. Gardner (387 U.S. 136) to argue that the presumption can only be rebutted by showing that the agency action is committed to agency discretion by law, which they claimed was not applicable here 1 .
The lower courts ruled that the rescission was reviewable because it was not a simple non-enforcement decision but rather a significant policy change, thus falling within the scope of judicial review 3 .
Arbitrary and Capricious Standard:
Claim: The respondents argued that the government's decision to rescind DACA was arbitrary and capricious under the APA.
Supporting Evidence and Legal Precedents:
They cited the Supreme Court's decision in Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. (463 U.S. 29), which requires that an agency must examine relevant data and articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choice made 4 .
The respondents emphasized that Acting Secretary Duke's memorandum failed to consider important aspects of the problem, such as the reliance interests of DACA recipients, which is a key component of the arbitrary and capricious standard 5 6 .
In summary, the government’s position centered on the assertion that the DACA rescission was a discretionary enforcement decision, thus unreviewable. In contrast, the respondents argued that the decision was reviewable and arbitrary and capricious, relying on established precedents that require thorough and reasoned explanations for significant policy changes."
gpt-4-32k 1024 chunks
Prompt #1: Who are the named defendants in SEC vs. Ripple?
Response #1: The named defendants in the case of SEC vs. Ripple are Ripple Labs, Inc. ("Ripple") and two of its senior leaders, Bradley Garlinghouse and Christian A. Larsen 1 .
Prompt #2: What is the fair notice defense?
领英推荐
Response #2: The "fair notice" defense is a legal principle stating that laws which regulate persons or entities must provide clear indication of conduct that is forbidden or required. This is essential to the protections provided by the Due Process Clause of the Fifth Amendment. Laws that fail to give a person of ordinary intelligence fair notice of what is prohibited, or are so standardless that they authorize or encourage seriously discriminatory enforcement, do not comport with due process. The evaluation of any fair notice defense is objective and does not require inquiry into whether a particular party actually received a warning that alerted them to the danger of being held accountable for the behavior in question 1 .
Prompt #5:? What is the difference between the individual and family deductibles for the Silver 70 HMO 2100/55 + Child Dental Alt plan, and how does this affect the cost-sharing for covered health care services?
Response #5: The Silver 70 HMO 2100/55 + Child Dental Alt plan has an individual deductible of $2,100 and a family deductible of $4,200 1 2 . Deductibles are the amount you must pay for health care services each year before the insurance company starts to pay. After meeting the deductible, you share the cost with the insurance company, a practice known as cost-sharing.
In this plan, the cost-sharing takes the form of copayments, coinsurance, and specific deductibles for certain services 1 . For example, there's a $500 individual and $1,000 family specific deductible for brand and specialty prescription drugs 1 . This means you must pay all of the costs for these services up to the specific deductible amount before the plan begins to pay for these services.
For most services, the cost-sharing only starts after the deductible has been met 3 . However, this plan covers some items and services even if you haven’t yet met the deductible amount, like preventive care, but a copayment or coinsurance may apply 1 .
The plan also features an out-of-pocket limit, which is the maximum amount an individual or family will pay for certain services in a year. For this plan, the out-of-pocket limit is $8,200 for an individual and $16,400 for a family 1 . Once these limits are reached, the insurance company pays for all covered services, with no cost-sharing from the individual or family. However, any costs paid towards premiums or services not covered by the plan do not count towards this limit 1 .
In summary, the difference between individual and family deductibles in this plan affects the amount an individual or a family must pay before the insurance company starts covering health care services. This, in turn, influences the cost-sharing mechanism, which dictates how much you pay for covered services after the deductible has been met."
Prompt #6: What is the fair notice defense, and how do Defendants Larsen and Garlinghouse assert it in their case against the SEC?
Response #6: The ""fair notice"" defense is a legal doctrine that asserts that laws regulating persons or entities must provide clear and fair notice of the conduct that is forbidden or required. This principle is vital for the protections provided by the Due Process Clause of the Fifth Amendment. Laws that fail to provide such fair notice or are impermissibly vague do not comply with due process. Therefore, a party claiming a lack of notice must demonstrate that the statute in question provided insufficient notice that their behavior was prohibited. This evaluation is objective and does not require inquiry into whether a particular party actually received a warning that alerted them to the potential illegality of their behavior 1 .
In the case against the SEC, Defendants Larsen and Garlinghouse assert the ""fair notice"" defense, claiming that the SEC violated their due process rights. Additionally, they assert an as-applied vagueness defense based on the same due process principles. They argue that they did not have adequate notice that their conduct was in violation of the law. Their arguments include foreign regulators' determinations that XRP was not a security, and the U.S. Department of Justice and the U.S. Treasury Department’s Financial Crimes Enforcement Network's labeling of XRP as a ""virtual currency"" which they understood as an exemption from U.S. securities laws 2 ?
However, the court rejected Defendants' fair notice and vagueness defenses as to the Institutional Sales, stating that the caselaw defining an investment contract provides a person of ordinary intelligence a reasonable opportunity to understand what conduct it covers 1 ."
Prompt #9: How does the Second Circuit's interpretation of the term "solely" in the Howey test impact the SEC's case against Ripple, and what evidence supports the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts?
Response #9: The Second Circuit's interpretation of the term ""solely"" within the Howey test, as outlined in the United States v. Leonard case, posits that the term should not be read as a literal limitation. Rather, courts should consider whether, under all the circumstances, the scheme was primarily promoted as an investment or as a means for participants to pool their own activities, money, and the promoter's contribution in a meaningful way 1 .
In the case against Ripple, the court found that reasonable investors, such as the institutional buyers, would have purchased XRP with the expectation of deriving profits from Ripple's efforts based on several factors. Firstly, Ripple's communications, marketing campaigns, and the nature of the institutional sales led investors to believe that Ripple would use the capital received from its institutional sales to enhance the market for XRP and develop uses for the XRP Ledger, thus increasing XRP's value 1 . Secondly, Ripple marketed XRP to potential investors, including institutional buyers, by distributing promotional brochures that presented XRP as an investment tied to Ripple's success 1 . Lastly, the court observed that some institutional buyers agreed to lockup provisions or resale restrictions based on XRP's trading volume in their sales contracts, which would be inconsistent if XRP was used purely as a currency or for other consumptive uses 2 .
Therefore, the broader interpretation of the term ""solely"" in the Howey test and the totality of the evidence presented to the court led to the conclusion that Ripple's sales of XRP constituted the unregistered offer and sale of investment contracts 2 ?
Prompt #10: Compare and contrast the legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision. How did the government argue that the decision was committed to agency discretion and therefore unreviewable, and what evidence did it cite to support this argument? How did the respondents argue that the decision was reviewable and that the government's decision was arbitrary and capricious, and what legal precedents did they rely on to support their argument?
Response #10: The legal arguments regarding the scope of the Court's review of the DACA (Deferred Action for Childhood Arrivals) rescission decision differed significantly between the Government and the respondents.
The Government argued that the rescission decision was committed to agency discretion and therefore unreviewable under the Administrative Procedure Act (APA). Their contention was that the DACA Memorandum was a non-enforcement policy equivalent to the individual non-enforcement decision in Heckler v. Chaney, suggesting that the agency's decision not to institute an enforcement action falls within a narrow exception of the APA's reviewability. The Government cited the INA (Immigration and Nationality Act) as proof that all questions of law are the jurisdiction of the Attorney General, limiting the scope of review of agency decisions 1 2 .
In contrast, the respondents contended that the decision was reviewable and that the Government's decision to rescind DACA was arbitrary and capricious. They argued that the rescission not only declined to institute enforcement proceedings but also dismantled a program that conferred affirmative immigration relief. Hence, they believed that DACA's creation and rescission provided a focus for judicial review. They relied on precedents like Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., which argued that an agency must be based on a consideration of the relevant factors and clear of errors of judgment 1 . Furthermore, they highlighted that Acting Secretary Duke, who announced the rescission, had not adequately explained the conclusion that DACA was unlawful and had not taken into account important aspects of the problem before her 3 .
However, the Government countered that Acting Secretary Duke was bound by the Attorney General's legal determination and thus was not required to explain a legal conclusion that was not hers to make 3 . The respondents contested this, arguing that Duke had failed to consider important aspects of the problem, which made the rescission arbitrary and capricious 3 . The respondents also referred to the Nielsen Memorandum, issued nine months after the rescission, arguing that it impermissibly asserted prudential and policy reasons not relied upon by Duke 3 ?
In conclusion, the legal arguments revolved around the scope of agency discretion, the adequacy of the explanation for rescinding DACA, and the legality of DACA itself. The Government relied heavily on the INA and the concept of agency discretion, while the respondents focused on principles of administrative law, the APA, and case law to argue for the reviewability of the decision and its arbitrary and capricious nature 1 3 ."
gpt-35-turbo 1536 chunks
Prompt #1: Who are the named defendants in SEC vs. Ripple?
Response #1: The named defendants in SEC vs. Ripple are Ripple Labs, Inc., Bradley Garlinghouse, and Christian A. Larsen 1 .
Prompt #2: What is the fair notice defense?
Response #2: The fair notice defense is a legal principle that requires laws to provide a person of ordinary intelligence fair notice of what is prohibited or required. This principle is essential to the protections provided by the Due Process Clause of the Fifth Amendment and requires the invalidation of laws that are impermissibly vague 1 . Laws fail to comport with due process when they fail to provide a person of ordinary intelligence fair notice of what is prohibited or required or are so standardless that they authorize or encourage seriously discriminatory enforcement 1 . The evaluation of any fair notice defense is objective and does not require inquiry into whether a particular party actually received a warning that alerted him or her to the danger of being held to account for the behavior in question 1
Prompt #5:? What is the difference between the individual and family deductibles for the Silver 70 HMO 2100/55 + Child Dental Alt plan?
Response #5: The individual deductible for the Silver 70 HMO 2100/55 + Child Dental Alt plan is $2,100 and the family deductible is $4,200?1?2
Prompt #6: What is the fair notice defense, and how do Defendants Larsen and Garlinghouse assert it in their case against the SEC?
Response #6: The fair notice defense is a principle that states that laws which regulate persons or entities must give fair notice of conduct that is forbidden or required to ensure the protections provided by the Due Process Clause of the Fifth Amendment, and requires the invalidation of laws that are impermissibly vague. The evaluation of any fair notice defense is objective; it does not require inquiry into whether a particular party actually received a warning that alerted him or her to the danger of being held to account for the behavior in question. Defendants Larsen and Garlinghouse assert a fair notice defense, claiming that the SEC violated their due process rights. They argue that the SEC's approach to enforcement, at least as to the Institutional Sales, is consistent with the enforcement actions that the agency has brought relating to the sale of other digital assets to buyers pursuant to written contracts and for the purpose of fundraising. The Court rejects Defendants' fair notice and vagueness defenses as to the Institutional Sales 1
Prompt #9: How does the Second Circuit's interpretation of the term "solely" in the Howey test impact the SEC's case against Ripple, and what evidence supports the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts?
Response #9: The Second Circuit has held that the term "solely" in the Howey test should not be taken literally and that courts should consider whether the scheme was being promoted primarily as an investment or as a means for participants to pool their own activities, money, and the promoter's contribution in a meaningful way 1 . The court found that reasonable investors, situated in the position of the Institutional Buyers, would have purchased XRP with the expectation that they would derive profits from Ripple's efforts, based on Ripple's communications, marketing campaign, and the nature of the Institutional Sales 1 . Ripple marketed XRP to potential investors by distributing promotional brochures that touted XRP as an investment tied to the company's success and explained that its business model was predicated on the belief that demand for XRP would increase if the Ripple protocol became widely adopted 1 . The XRP Market Reports also continued to connect XRP's price and trading to Ripple's own efforts and highlighted the impact of its announcements on XRP's price increase and trading volume 1 . Therefore, the court concluded that Ripple's Programmatic Sales of XRP constituted the offer and sale of investment contracts 2 .
Prompt #10: Compare and contrast the legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision. How did the government argue that the decision was committed to agency discretion and therefore unreviewable, and what evidence did it cite to support this argument? How did the respondents argue that the decision was reviewable and that the government's decision was arbitrary and capricious, and what legal precedents did they rely on to support their argument??
Response #10: The government argued that the decision to rescind the Deferred Action for Childhood Arrivals (DACA) was committed to agency discretion and therefore unreviewable. They contended that the decision to rescind DACA was an enforcement decision, and as such, fell within the discretionary powers of the agency. The government relied on the Administrative Procedure Act (APA), which states that agency actions are unreviewable if they are ""committed to agency discretion by law"" 1 . The government further contended that DACA was unlawful, drawing parallels with the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program that was deemed illegal 1 .
The respondents, on the other hand, argued that the decision was reviewable and that the government's decision was arbitrary and capricious. They contended that the DACA rescission was a major policy change that required a reasoned explanation 2 . Furthermore, they claimed that the government failed to consider important aspects of the problem, such as potential reliance interests and the impact of the rescission on DACA recipients 3 . Respondents emphasized that the APA requires a reasoned explanation for rescinding a policy . They drew on legal precedents such as Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., which established that an agency must provide a reasoned explanation for its action, especially when it rescinds a prior policy 4 . They also cited the case of Heckler v. Chaney, which states that an agency's decision not to enforce certain laws is presumptively unreviewable. However, they argued that this presumption does not apply when an agency has ""consciously and expressly adopted a general policy"" that is so extreme as to amount to an abdication of its statutory responsibilities .
gpt-4o 1536 chunks
Prompt #1: Who are the named defendants in SEC vs. Ripple?
Response #1: The named defendants in the case SEC v. Ripple are Ripple Labs, Inc., Bradley Garlinghouse, and Christian A. Larsen 1 .
Prompt #2: What is the fair notice defense?
Response #2: The fair notice defense is a legal principle that requires laws regulating persons or entities to provide clear and adequate notice of what conduct is forbidden or required. This principle is essential to the protections provided by the Due Process Clause of the Fifth Amendment, which mandates that laws must not be impermissibly vague. Specifically, laws fail to meet due process requirements when they either (1) fail to provide a person of ordinary intelligence fair notice of what is prohibited, or (2) are so standardless that they authorize or encourage seriously discriminatory enforcement 1 .
In evaluating a fair notice defense, courts assess whether the statute in question provided sufficient notice that the behavior at issue was prohibited. This evaluation is objective and does not consider whether a particular party actually received a warning about the conduct 1 .?
In the case discussed, the court rejected the defendants' fair notice and vagueness defenses as to the Institutional Sales, stating that the caselaw defining an investment contract provides sufficient clarity for a person of ordinary intelligence to understand what conduct is covered. The court emphasized that judicial decisions interpreting such statutes can provide the requisite fair notice 1 ."
Prompt #5:? What is the difference between the individual and family deductibles for the Silver 70 HMO 2100/55 + Child Dental Alt plan?
Response #5: The Silver 70 HMO 2100/55 + Child Dental Alt plan has different deductible structures for individuals and families.
For an individual, the overall deductible is $2,100 1 .
For a family, the overall deductible is $4,200 1 .
This means each family member must meet their own individual deductible until the total amount of deductible expenses paid by all family members meets the overall family deductible 1"
Prompt #6: What is the fair notice defense, and how do Defendants Larsen and Garlinghouse assert it in their case against the SEC?
Response #6: The fair notice defense is rooted in the principle that laws must provide clear guidance on what conduct is prohibited or required. This is essential to ensure due process under the Fifth Amendment. Specifically, laws must not be impermissibly vague and should offer a person of ordinary intelligence a reasonable opportunity to understand what conduct is prohibited, and must not be so standardless that they allow or encourage discriminatory enforcement 1 .
In the case involving Defendants Larsen and Garlinghouse against the SEC, they assert a ""fair notice"" defense by claiming that the SEC violated their due process rights. Their argument is based on the assertion that the SEC failed to provide sufficient notice that their behavior, specifically related to the sale of XRP, was prohibited under the law 1 . The defendants argue that the existing case law defining an investment contract should have provided them with a reasonable understanding of what conduct was covered, and that the SEC's inconsistent statements and lack of clear guidance on digital assets contributed to their lack of fair notice 1 .
Additionally, they contend that multiple foreign regulators had determined that XRP was not a security, and that earlier statements and actions by U.S. agencies like the Department of Justice and the Financial Crimes Enforcement Network labeled XRP as a ""virtual currency,"" which they interpreted as exempting XRP from U.S. securities laws 2 . This further supports their claim that they did not have fair notice that their conduct might be considered a violation of securities laws."
Prompt #9:? How does the Second Circuit's interpretation of the term "solely" in the Howey test impact the SEC's case against Ripple, and what evidence supports the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts?
Response #9: The Second Circuit's interpretation of the term ""solely"" in the Howey test significantly impacts the SEC's case against Ripple. According to the Second Circuit, the term ""solely"" should not be construed as a literal limitation. Instead, courts should consider whether the scheme was being promoted primarily as an investment or as a means for participants to pool their own activities, money, and the promoter’s contribution in a meaningful way 1 .
In the case against Ripple, the court found that reasonable investors, situated in the position of the Institutional Buyers, would have purchased XRP with the expectation of deriving profits from Ripple's efforts. This conclusion was based on the totality of circumstances, including Ripple's communications, marketing campaigns, and the nature of the Institutional Sales 1 .
Evidence supporting this finding includes:
Promotional Materials: Ripple distributed promotional brochures that touted XRP as an investment tied to the company’s success. For instance, the ""Deep Dive"" brochure circulated to prospective investors explained that Ripple's business model was predicated on the belief that demand for XRP would increase if the Ripple protocol became widely adopted 1 .
Marketing Statements: The ""Ripple Primer"" stated that Ripple hoped to make money from XRP if the world found the Ripple network useful 1 .
Public Communications: Ripple's senior leaders publicly emphasized the importance of XRP’s value and the company's role in protecting and increasing that value. Statements from executives like Larsen and Schwartz highlighted Ripple's efforts to develop the XRP ecosystem and their impact on XRP’s price and trading volume 1 2 .
Market Reports: Ripple’s XRP Market Reports linked the price and trading volume of XRP to Ripple’s efforts, such as forming new business relationships and signing up banks to use its enterprise blockchain solutions 1 .
This evidence collectively demonstrated that Ripple’s efforts were a significant factor in the potential increase in XRP’s value, leading reasonable investors to expect profits from these efforts."
Prompt #10: Compare and contrast the legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision. How did the government argue that the decision was committed to agency discretion and therefore unreviewable, and what evidence did it cite to support this argument? How did the respondents argue that the decision was reviewable and that the government's decision was arbitrary and capricious, and what legal precedents did they rely on to support their argument??
Response #10: The legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision focused on whether the rescission was committed to agency discretion and thus unreviewable, or if it was reviewable under the Administrative Procedure Act (APA) as arbitrary and capricious.
Government's Arguments
Unreviewability Under APA:
Agency Discretion: The government argued that DHS's decision to rescind DACA was committed to agency discretion by law and therefore unreviewable under the APA. They cited the APA's exception for actions ""committed to agency discretion by law"" under 5 U.S.C. § 701(a)(2) 1 .
Non-Enforcement Policy: The government contended that DACA was essentially a non-enforcement policy, similar to a prosecutor’s decision not to prosecute, which is traditionally committed to agency discretion and typically unreviewable. They referenced Heckler v. Chaney, where the Court held that an agency's decision not to take enforcement action is presumptively unreviewable 1 .
Legal Authority: The government also invoked the Attorney General's determination that DACA was illegal, stating that the program was beyond DHS's statutory authority. They argued that since the program was unlawful, the decision to rescind it could not be arbitrary and capricious 2 3 .
Respondents' Arguments
Reviewability Under APA:
Judicial Review Presumption: The respondents argued that there is a ""basic presumption of judicial review"" for one suffering legal wrong because of agency action, as established in Abbott Laboratories v. Gardner. They claimed this presumption was not rebutted in the case of DACA's rescission 1 .
Focus for Judicial Review: Respondents contended that unlike the non-enforcement decision in Heckler v. Chaney, DACA was not merely a refusal to act but created a structured program that conferred affirmative benefits, thus providing a clear focus for judicial review. They argued that DACA's creation and rescission were actions that courts are equipped to review 1 .
Reliance Interests: They emphasized that the rescission failed to consider the reliance interests of DACA recipients, who had made life decisions based on the program's benefits. The respondents cited the precedent set in Encino Motorcars, LLC v. Navarro, which requires agencies to consider serious reliance interests when changing longstanding policies 4 .
Arbitrary and Capricious Standard:
Inadequate Reasoning: The respondents argued that DHS's decision was arbitrary and capricious because it failed to provide a reasoned explanation for the rescission. They relied on Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co., which requires that an agency must consider important aspects of the problem and provide a satisfactory explanation for its actions 5 .
Post Hoc Rationalization: They also argued that the reasoning provided by Secretary Nielsen, which came after the initial rescission decision, was an impermissible post hoc rationalization and could not be used to justify the decision. This was based on the principle from SEC v. Chenery Corp. that courts should only consider the grounds invoked by the agency at the time the action was taken 6 .
In summary, the government argued that the DACA rescission was unreviewable as it was a discretionary non-enforcement policy and that the program was unlawful. In contrast, the respondents argued that the rescission was reviewable and arbitrary and capricious, failing to consider the reliance interests and providing inadequate reasoning for the policy change."
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Prompt #1: Who are the named defendants in SEC vs. Ripple?
Response #1: In the case between the Securities and Exchange Commission (SEC) and Ripple Labs, Inc., the named defendants are Ripple Labs, Inc. and two of its senior leaders, Bradley Garlinghouse and Christian A. Larsen?1
Prompt #2: What is the fair notice defense?
Response #2: The "fair notice" defense is a principle in the legal system stating that laws which regulate persons or entities must provide clear notice of the conduct that is forbidden or required. This principle is essential to the protections provided by the Due Process Clause of the Fifth Amendment of the U.S. Constitution. Laws that fail to provide such notice are considered impermissibly vague and are invalidated. The fair notice defense comes into play when a party claims that a law or statute did not provide sufficient notice that their behavior was prohibited. The evaluation of this defense is objective, not requiring inquiry into whether a particular party actually received a warning about the potential for being held accountable for their behavior 1
Prompt #5:?? What is the difference between the individual and family deductibles for the Silver 70 HMO 2100/55 + Child Dental Alt plan?
Response #5: The Silver 70 HMO 2100/55 + Child Dental Alt plan has an individual deductible of $2,100 and a family deductible of $4,200 1 . This means that for an individual, the plan starts to pay for covered services after the individual has paid $2,100 out of pocket. For a family, the plan begins to pay after the total amount of deductible expenses paid by all family members reaches $4,200 1
Prompt #6: What is the fair notice defense, and how do Defendants Larsen and Garlinghouse assert it in their case against the SEC?
Response #6: The fair notice defense, as asserted by Defendants Larsen and Garlinghouse in their case against the SEC, is based on the claim that the SEC violated their due process rights by not providing sufficient notice that their conduct was in violation of the law. This defense argues that the Defendants were not aware that securities laws, rather than laws under other regulatory regimes, applied to XRP 1 .
Defendants Larsen and Garlinghouse further stated that they did not believe XRP was a security because multiple foreign regulators, including regulators in Japan, Singapore, Switzerland, the United Arab Emirates, and the United Kingdom, had determined that XRP was not a security . They also cited the U.S. Department of Justice and the U.S. Treasury Department’s Financial Crimes Enforcement Network's labeling of XRP as a “virtual currency” in 2015, interpreting this as an official U.S. government declaration that XRP was a currency and exempt from U.S. securities laws 1 .
In addition, they received a memorandum from the Perkins Coie LLP law firm in October 2012 stating that there was a small risk that the SEC might disagree with their analysis that XRP tokens did not constitute 'securities' under federal securities laws 1 . Following the receipt of the memorandum, Ripple took specific steps to ensure compliance with the advice contained within the memorandum .
Therefore, Larsen and Garlinghouse assert that they lacked fair notice that their actions were in violation of the law, arguing that they could not have known or recklessly disregarded the facts that made Ripple’s transactions and schemes illegal 1 . Their defense is based on the assertion that they were not provided with adequate warning that their actions were potentially unlawful."
Prompt #9:? How does the Second Circuit's interpretation of the term "solely" in the Howey test impact the SEC's case against Ripple, and what evidence supports the court's finding that reasonable investors would have purchased XRP with the expectation of deriving profits from Ripple's efforts?
Response #9: The Second Circuit's interpretation of the term ""solely"" in the Howey test, as cited in the case documents, suggests that the word should not be construed as a literal limitation. Instead, courts should consider whether, under all the circumstances, the scheme was being promoted primarily as an investment or as a means whereby participants could pool their activities, their money, and the promoter's contribution in a meaningful way 1 . This interpretation was applied in the case against Ripple, which revolved around whether Ripple's sales of XRP tokens constituted unregistered securities transactions.
The court found that reasonable investors, situated in the position of the Institutional Buyers, would have purchased XRP with the expectation that they would derive profits from Ripple’s efforts. This conclusion was based on several pieces of evidence:
Ripple's communications and marketing campaigns indicated that it would use the capital received from its Institutional Sales to improve the market for XRP and develop uses for the XRP Ledger, thereby increasing the value of XRP 1 .
Ripple marketed XRP to potential investors, including the Institutional Buyers, by distributing promotional brochures that touted XRP as an investment tied to the company’s success. For example, one brochure stated that Ripple's ""business model is predicated on a belief that demand for XRP will increase . . . if the Ripple protocol becomes widely adopted"" 1 .
Ripple's Q1 2017 XRP Markets Report stated that the company's efforts, including its ""vocal . . . commitment to XRP,"" the announcement of a new business relationship, and ""continu[ing] to sign up banks to commercially deploy its enterprise blockchain solution and join its global payments network"" may have impacted XRP’s price increase and ""impressive"" trading volume 1 .
Ripple's senior leaders made public statements connecting XRP's price and trading to the company's efforts. For instance, in a February 2014 interview, Larsen said, ""for Ripple . . . to do well, we have to do a very good job in protecting the value of XRP and the value of the network"" 1 .
Given this evidence, the court concluded that the totality of circumstances demonstrated that reasonable investors would have understood that Ripple was pitching a speculative value proposition for XRP with potential profits to be derived from Ripple’s entrepreneurial and managerial efforts 1 ."
Prompt #10: Compare and contrast the legal arguments made by the parties regarding the scope of the Court's review of the DACA rescission decision. How did the government argue that the decision was committed to agency discretion and therefore unreviewable, and what evidence did it cite to support this argument? How did the respondents argue that the decision was reviewable and that the government's decision was arbitrary and capricious, and what legal precedents did they rely on to support their argument?
Response #10: The government argued that the decision to rescind the Deferred Action for Childhood Arrivals (DACA) was committed to agency discretion and therefore unreviewable. They contended that the decision to rescind DACA was an enforcement decision, and as such, fell within the discretionary powers of the agency. The government relied on the Administrative Procedure Act (APA), which states that agency actions are unreviewable if they are ""committed to agency discretion by law"" 1 . The government further contended that DACA was unlawful, drawing parallels with the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program that was deemed illegal 1 .
The respondents, on the other hand, argued that the decision was reviewable and that the government's decision was arbitrary and capricious. They contended that the DACA rescission was a major policy change that required a reasoned explanation 2 . Furthermore, they claimed that the government failed to consider important aspects of the problem, such as potential reliance interests and the impact of the rescission on DACA recipients 3 . Respondents emphasized that the APA requires a reasoned explanation for rescinding a policy . They drew on legal precedents such as Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., which established that an agency must provide a reasoned explanation for its action, especially when it rescinds a prior policy 4 . They also cited the case of Heckler v. Chaney, which states that an agency's decision not to enforce certain laws is presumptively unreviewable. However, they argued that this presumption does not apply when an agency has ""consciously and expressly adopted a general policy"" that is so extreme as to amount to an abdication of its statutory responsibilities"
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