At the FTX fraud trial Sam Bankman-Fried has decided to testify in his own defense. Today he's getting sort of a trial run without the jury present, and it's not going well. Here are opening snippets from the Wall Street Journal's updates throughout the day:
After Bankman-Fried gave several evasive answers.... Sam Bankman-Fried said he didn’t recall.... Sam Bankman-Fried said he’s “not sure”.... The FTX founder said he couldn’t recall.... U.S. District Judge Lewis Kaplan criticized Sam Bankman-Fried for continuing to be evasive....
I've become sort of half convinced that SBF is delusional about the entire FTX affair and truly believes his own story, namely that FTX imploded because of honest mistakes, not knowing fraud. But now I'm not so sure. If he really believed his own version of events, would he be so consistently evasive? Or would he have innocent explanations at hand for all this stuff?
But it doesn't matter. Regardless of whether he's lying or delusional, his story can only survive friendly questioning. Prosecutors are going to tear him to shreds when this gets going for real.
He gets to practice before a judge? I never knew this happens.
I don’t understand it either. He has an absolute right to testify on his own behalf. I don’t understand the purpose of letting him practice in front of the judge unless it’s some kind of trial prep that for some inexplicable reason the judge has agreed to participate in.
I haven't seen a transcript of the proceedings, but the Wall Street Journal says that the judge wanted to hear the testimony before deciding whether to allow it to be presented to the jury. The defendant has the right to testify in his defense, but the testimony has to be relevant. The normal procedure for resolving this is that the defendant takes the stand, and the judge then rules on objections to individual questions. But if the defense is trying to put forth some type of affirmative defense, it may not be clear whether the defendant's testimony actually supports that defense without hearing the defendant's entire testimony, or at least a large portion of it. So the judge many ask to hear the defendant's testimony in prior to the defendant testifying in front of the jury.
I just read the account by Elizabeth Lopatto. The Bankman-Fried defense is arguing that Bankman-Fried had no criminal intent because he was relying on his lawyer's advice, which is tricky because the defense is not waiving attorney/client privilege. So the judge listens to the testimony, and if the judge rules that “you can't testify to that unless you waive attorney/client privilege,” the defendant will still have his attorney/client privilege intact because he hasn't actually testified to that in front of the jury. Otherwise, the defense would be forced to guess on how the judge would rule.
One particularly striking moment from Lopatto's account: “Sassoon brought out the terms of service Bankman-Fried had testified to and asked him to point out where in the agreement it specified that FTX was permitted to spend customer funds. The court sat in absolute silence for more than a minute.”
The Seattle Times reprinted an article from AP (Ken Sweet and Larry Neumeister). It mentioned the question about the terms of service - and said that the silence lasted "minutes", before Bankman-Fried "vaguely explained how he used funds".
When the prosecutor tried to ask the question again, Cohen (defense) objected that BF had answered the question. The prosecutor disagreed, and the judge agreed that BF had NOT, in fact, answered the question about the actual terms of service.
Jesus. That's brutal. I didn't think they did this.
He's going to reflect on what he said today, and he'll want to phrase some things differently in front of a jury tomorrow (or whenever.) And he's already locked in. The prosecution will have a transcript of today's testimony right in front of them on the table, and every time he gives an answer that's one shade different from the one yesterday, they'll be reading back his different answer.
I've seen this from the jury box when the lawyers cite variations from the deposition. It can wreck a witness' credibility with the jury.
"If he really believed his own version of events, would he be so consistently evasive? Or would he have innocent explanations at hand for all this stuff?"
My guess is that his attorneys got to him and told him to keep his foot out of his mouth.
The problem is that the evasiveness won't make a good impression on the jury (This is not the same thing as drawing adverse inferences from taking the fifth).
This is a Hail Mary attempt to try to create reasonable doubt in the mind of a single juror.
"Serious Trouble" podcast, perchance?
Exactly.
I really don't think he's delusional. He's a con artist, and he's good at conning people, and he needs others to believe he believes what he did was fine.
This is no different than the shit he pulled to seduce VCs - acting like an arrogant kid playing games in meetings, pretending he slept on a bean bag...
Dude knows exactly what he did. You could see his internal censor flashing when he was talking back when he was on top of the world - he'd suddenly catch himself, and his phrasing would change. And you can see it now, when he knows he's under oath with a smart judge watching, and he knows he can't think fast enough to not miss an angle, so he's left with "I don't remember".
He's a predator. A weird one, but a lot of the dangerous ones are.
I think in both his case and Elizabeth Holmes, they were kids (in Holmes' case basically a high school kid) who drank the Silicon Valley Kool-ade about the young genius whose startup turns the world upside down. I don't think that has ever been true, but unlike Larry Page and Sergey Brin, who had the sense to hire an experienced businessman to run things until they learned how, Holmes and SBF didn't know anything about running a real business, didn't know what was legal and what was not, got themselves in trouble and didn't know how to get themselves out, and for that reason committed financial crimes. They were trying to keep the plates in the air until they could figure out how to save their companies. I have some sympathy for that but not a lot. Hubris is something you do have the ability to control. I have exactly zero sympathy for SBF's parents, who deserve what comes to them.
During my career I ran into a number of phonies, people who talked a good game but really had no idea how to do their job. The funny thing was that in some cases I was struck that they didn't even know they were phonies. They thought everyone else was just winging it the same way they were.
Very true. It's precisely why Trump is so outraged that he's being charged with fraud over the valuation of his properties. Everyone else does it! Why is he being singled out?
I'm sure, however, there are other real estate entities out there engaged in similar shenanigans, and the AG should come down on them as well. But nailing Trump was a good start...
When I was still working in computer systems engineering (specializing in measuring and fixing performance problems) I would sometimes wind up in bonkers discussions with SW engineers who were capable of writing REALLY good code - nd had no idea how it was being used or how it really worked in actual use.
I agree with the basic sentiment wholeheartedly but SBF's resume puts Holmes to shame. He at least completed a physics and math degree and worked at Jane Street for 3+ years before going out on his own. Holmes dropped out of college in her second year. To expand on another point you made, I doubt that either could have found an experienced business person to lead their companies. They both seemed to target people with name recognition but little business experience.Because of where in the hype cycle tech was at the time, Page and Brin had no other path than develop a good product and find competent business people.
I disagree on Holmes. From what I've gathered they never had anything. They claimed a lot, and (among other things) fraudulently presented resutls from standard labs as results from their machines.
I have to confess that I get all sorts of cheap thrills and schadenfreude when some uberwealthy SOB has to confront the reality that he isn't a god.
When I want schadenfreude, I just think about all the MAGAts that invested in Digital World Acquisition Corp, the spac that is supposed to merge with Trump's Truth Social. Many of them bought in at $40 to $97 a share, and now the stock drifts along at arund $16. Fools, no one makes money off a Trump deal who isn't named Donald Trump.
How are his NFTs doing?
If Michael Lewis (Moneyball, The Big Short) is to be believed, SBF is always evasive. I'm about two-thirds of the way through "Going Infinite," Lewis' latest work. From Lewis' description SBF is far along the autism spectrum. By Lewis' account, SBF rarely engages directly and even when he does, he's more than likely to say whatever he thinks the other person wants to hear.
Beyond that, I have no opinion. It's all so weird.
In his mind, he's the good guy he always thought he was. This is the fundamental premise of the Evil Speech of Evil. The villain always thinks they are the good guy. SBF does too. He's put a new twist on it, too.
But this illustrates the issue of feeling righteous. It often translates to "everything I do is righteous because I am righteous". Uh, no.