1 00:00:00,400 --> 00:00:03,720 Hello and welcome you are listening to Patrick Boyle on 2 00:00:03,720 --> 00:00:08,039 Finance, a podcast exploring ideas from quantitative finance, 3 00:00:08,320 --> 00:00:11,640 examining events occurring in markets right now and financial 4 00:00:11,640 --> 00:00:15,400 history to see what lessons can be taken away, including 5 00:00:15,400 --> 00:00:18,200 interviews with some of the most interesting people in the world 6 00:00:18,200 --> 00:00:20,960 of finance. To learn more about the podcast, 7 00:00:20,960 --> 00:00:29,520 visit on finance.org. A federal prosecutor told. 8 00:00:29,520 --> 00:00:34,200 The 12 person jury on Wednesday that Sam Bankman freed had built 9 00:00:34,200 --> 00:00:38,600 his crypto exchange into a pyramid of deceit, resting on a 10 00:00:38,600 --> 00:00:43,480 foundation of lies and false promises That Sam was ultimately 11 00:00:43,480 --> 00:00:48,120 responsible for raiding FTX depositors accounts to make a 12 00:00:48,120 --> 00:00:53,080 series of risky bets, repay loans and buy real estate. 13 00:00:53,320 --> 00:00:56,640 He spent customers money and he lied about it. 14 00:00:57,120 --> 00:01:01,080 The defense countered that Sam was simply a math nerd. 15 00:01:01,320 --> 00:01:04,560 Who may have made? Some bad business decisions, but 16 00:01:04,560 --> 00:01:07,480 they argued those were not a crime. 17 00:01:08,320 --> 00:01:12,520 The closing arguments from both sides brought together the five 18 00:01:12,520 --> 00:01:16,760 weeks of testimony presented to the jury, which shone a light on 19 00:01:16,760 --> 00:01:20,800 the inner workings of FTX and its related trading firm, 20 00:01:20,800 --> 00:01:24,280 Alameda Research. The trial wrapped up almost 21 00:01:24,280 --> 00:01:28,320 exactly a year after FTX fell into bankruptcy. 22 00:01:28,640 --> 00:01:33,160 Bankman Freed was convicted on all seven charges by a New York 23 00:01:33,160 --> 00:01:37,320 jury that's likely to send him to prison for decades. 24 00:01:37,560 --> 00:01:41,640 Prosecutors plan to try him on several other counts in a 25 00:01:41,640 --> 00:01:46,800 separate trial that's expected to take place early in 2024. 26 00:01:47,200 --> 00:01:50,760 Evidence was given that some had bribed Chinese government 27 00:01:50,760 --> 00:01:54,000 officials. And hired Thai prostitutes to 28 00:01:54,000 --> 00:01:57,640 help move money. We learned that Caroline Ellison 29 00:01:57,640 --> 00:02:01,640 had created seven different balance sheets to make Alameda's 30 00:02:01,640 --> 00:02:06,000 financials look less risky than they were to lenders. 31 00:02:06,240 --> 00:02:10,120 We learned that Sam believed that his curly hair was the 32 00:02:10,120 --> 00:02:14,240 source of his powers and helped him to get higher bonuses when 33 00:02:14,240 --> 00:02:18,400 he worked at Jane St. This may be true, as he had a 34 00:02:18,400 --> 00:02:22,800 cut just before his trial. Which didn't really work out for 35 00:02:22,800 --> 00:02:23,720 him. We. 36 00:02:23,720 --> 00:02:27,440 Learned that he and. Ellison drove luxury cars before 37 00:02:27,440 --> 00:02:31,480 deciding that it was better for their image to own budget cars 38 00:02:31,480 --> 00:02:34,480 and claim not to care about material goods. 39 00:02:34,960 --> 00:02:40,240 Sam's longtime friend Gary Wang began his testimony by saying 40 00:02:40,240 --> 00:02:44,680 that he had committed financial crimes with Sam explaining that 41 00:02:44,680 --> 00:02:48,040 he had written code that gave Alameda privileges. 42 00:02:48,320 --> 00:02:52,800 Such as the ability to have a negative balance on FTX and the 43 00:02:52,800 --> 00:02:57,520 ability to borrow up to $65 billion of customer money. 44 00:02:58,520 --> 00:03:03,280 During his testimony, Wang was shown an SPF tweet claiming that 45 00:03:03,280 --> 00:03:07,160 FTX had $100 million insurance fund. 46 00:03:07,400 --> 00:03:11,160 He explained that this was untrue and that the number that 47 00:03:11,160 --> 00:03:15,520 they publicized was calculated. By taking the daily trading 48 00:03:15,520 --> 00:03:19,480 volume, multiplying it by a random number, and dividing it 49 00:03:19,480 --> 00:03:22,960 by 1 billion. All of this is bad. 50 00:03:22,960 --> 00:03:26,200 And if you've been considering doing any of these things, 51 00:03:26,360 --> 00:03:30,360 hopefully you're learning from Sam Bankman Freed's mistakes. 52 00:03:30,840 --> 00:03:34,560 The jury decision came after less than five hours of 53 00:03:34,560 --> 00:03:37,280 deliberation over the seven charges. 54 00:03:37,480 --> 00:03:40,960 It was expected that the jury would take at least a day to 55 00:03:40,960 --> 00:03:44,840 come to a verdict. So this was surprisingly quick. 56 00:03:45,280 --> 00:03:49,280 Bankman Freed is said to have shown no emotion as the verdict 57 00:03:49,280 --> 00:03:51,840 was read out. Now it's quite possible that he 58 00:03:51,840 --> 00:03:55,600 was playing video games at the time and didn't hear what had 59 00:03:55,600 --> 00:03:58,120 happened. I I don't really know of what 60 00:03:58,120 --> 00:04:02,600 the rules are around that. Some could still face further 61 00:04:02,600 --> 00:04:06,560 charges in the trial scheduled for March of next year on 62 00:04:06,560 --> 00:04:10,920 allegations including bribery of foreign officials and campaign 63 00:04:10,920 --> 00:04:14,760 finance violations. There's apparently a chance that 64 00:04:14,760 --> 00:04:18,480 the judge could hold off on sentencing until after the 65 00:04:18,480 --> 00:04:22,560 second trial, though I'm not sure how likely that actually 66 00:04:22,560 --> 00:04:25,000 is. Additionally, it's possible that 67 00:04:25,000 --> 00:04:29,200 Sam receives such a severe sentence on these seven charges. 68 00:04:29,480 --> 00:04:33,200 That the prosecution dropped the additional charges against him, 69 00:04:33,560 --> 00:04:37,680 the upcoming trial could be even more of a spectacle, as it would 70 00:04:37,680 --> 00:04:42,120 involve many of the politicians who took money from FTX. 71 00:04:42,480 --> 00:04:47,120 The guilty verdict comes after Bankman Free decided, against 72 00:04:47,120 --> 00:04:51,000 his lawyer's advice, to testify in his own defense. 73 00:04:51,320 --> 00:04:54,640 It was expected that there might be some sort of Hail Mary 74 00:04:54,640 --> 00:04:59,640 attempt, a big gamble to get at least one juror to acquit him. 75 00:04:59,920 --> 00:05:02,400 But his? Testimony mostly involved 76 00:05:02,400 --> 00:05:07,080 claiming not to remember any of his actions, which possibly only 77 00:05:07,080 --> 00:05:11,280 made him appear both untrustworthy and annoying to 78 00:05:11,280 --> 00:05:14,400 jurors. My friend Tiffany Fong has been 79 00:05:14,400 --> 00:05:18,440 in the court every day for the trial and has spent hours 80 00:05:18,440 --> 00:05:21,800 interviewing Sam over the last year about the crimes he's been 81 00:05:21,800 --> 00:05:25,680 convicted of and she is here to explain the highlights of the 82 00:05:25,680 --> 00:05:29,560 trial. OK, so welcome to the video, 83 00:05:29,560 --> 00:05:31,880 Tiffany. You've been covering this whole 84 00:05:31,880 --> 00:05:34,920 thing for quite some time. In fact, I think it's the the 85 00:05:34,920 --> 00:05:39,200 best coverage on the Internet. Can you tell me what the vibe 86 00:05:39,200 --> 00:05:41,800 was like at the trial? Like what it's like being there? 87 00:05:42,600 --> 00:05:46,200 God, I mean, the days vary at first of all, they're early 88 00:05:46,200 --> 00:05:47,800 days. For anyone who wants to actually 89 00:05:47,800 --> 00:05:49,520 attend the trial in person, there were some. 90 00:05:49,520 --> 00:05:52,200 Days that I was heading to court at one or two. 91 00:05:52,200 --> 00:05:54,280 AM. Just to line up and there would 92 00:05:54,280 --> 00:05:56,520 already be people there. So first of all, everyone, 93 00:05:56,520 --> 00:05:59,240 Everyone attending And who? Is in the actual courtroom and 94 00:05:59,240 --> 00:06:01,120 fighting for one of those. Few 20. 95 00:06:01,120 --> 00:06:04,240 Spots. Is extremely exhausted, but 96 00:06:04,240 --> 00:06:07,160 we've all been doing our best to check out what the vibes are 97 00:06:07,160 --> 00:06:10,120 like in the courtroom, so. Some days are definitely more 98 00:06:10,120 --> 00:06:12,560 high tension than others. Obviously, a lot of people were 99 00:06:12,560 --> 00:06:15,080 anticipating Caroline. Ellison's testimony. 100 00:06:15,080 --> 00:06:19,040 So those were really. Packed high anticipatory days. 101 00:06:19,520 --> 00:06:22,320 And I think a lot of us have just been looking to see what. 102 00:06:22,560 --> 00:06:25,360 Sam Bateman Freed's reactions have been and what his parents 103 00:06:25,360 --> 00:06:28,520 reactions have been. Sam first of all is not the most 104 00:06:28,640 --> 00:06:30,160 emotional person in the 1st place. 105 00:06:30,160 --> 00:06:33,560 So you don't get a lot of facial expressions from Sam, but you do 106 00:06:33,560 --> 00:06:36,400 see a lot of reactions from the parents, so. 107 00:06:36,840 --> 00:06:38,880 There are some days where they're like very clearly 108 00:06:38,880 --> 00:06:41,240 visibly upset, very understandably so. 109 00:06:41,280 --> 00:06:44,840 So a lot of tension in the room, but it's been interesting. 110 00:06:44,840 --> 00:06:46,640 To watch it all. Unfold in person and. 111 00:06:47,680 --> 00:06:51,000 What were the big was was Caroline and Sam, were they kind 112 00:06:51,000 --> 00:06:56,360 of the two most important or the most interesting people at the 113 00:06:56,360 --> 00:06:58,720 trial? I feel like everyone was looking 114 00:06:58,720 --> 00:07:01,560 forward to Caroline's testimony the most, but I actually thought 115 00:07:01,560 --> 00:07:05,160 that Nishad Singh was. To me, the bombshell to listen 116 00:07:05,160 --> 00:07:08,480 to, I think Nishad just described everything in an 117 00:07:08,480 --> 00:07:11,720 almost theatric way. He like he he was describing 118 00:07:12,480 --> 00:07:14,920 private, one-on-one. Conversations with Sam Bateman 119 00:07:14,920 --> 00:07:17,440 freed and was really setting the scene he was describing. 120 00:07:17,800 --> 00:07:19,160 The time of day. And. 121 00:07:19,360 --> 00:07:22,880 Where they were sitting. On the balcony and Sam was 122 00:07:22,880 --> 00:07:26,000 reclined on a chair while he was pacing around in some of these 123 00:07:26,000 --> 00:07:28,120 conversations. So Nishad was. 124 00:07:28,520 --> 00:07:29,840 Actually the most interesting to listen. 125 00:07:29,840 --> 00:07:31,880 To out of the testimonies in my opinion and I. 126 00:07:31,880 --> 00:07:34,120 Think other other journalists. Felt the same but. 127 00:07:34,320 --> 00:07:36,760 All of the star witnesses. Had had bombshells. 128 00:07:36,800 --> 00:07:40,920 So every day has been, there's just been so much information. 129 00:07:40,920 --> 00:07:42,760 That it's all just. Becoming sort of a blur. 130 00:07:42,760 --> 00:07:45,000 In my head. I guess the thing that the press 131 00:07:45,000 --> 00:07:49,160 didn't really expect. Was Caroline's story of the 132 00:07:49,640 --> 00:07:54,840 bribes to Chinese politicians and the Thai prostitutes. 133 00:07:55,480 --> 00:07:59,080 Yeah, Caroline really just threw in a a banger there with the 134 00:07:59,600 --> 00:08:03,640 they weren't actually the prosecution or I think I don't 135 00:08:03,640 --> 00:08:05,800 remember if it came up. In the director or the redirect 136 00:08:05,800 --> 00:08:08,520 but or or the cross examination but. 137 00:08:09,800 --> 00:08:12,040 She wasn't actually asked. Anything about the Chinese 138 00:08:12,040 --> 00:08:15,960 bribes or Thai prostitutes? But she just threw in a banger 139 00:08:15,960 --> 00:08:17,680 and she gave. It as an example of something 140 00:08:17,680 --> 00:08:18,640 they were doing and she was like. 141 00:08:19,000 --> 00:08:20,360 Oh yeah. Well, there was that one time 142 00:08:20,360 --> 00:08:23,560 when we paid. The Chinese government 100,000 143 00:08:23,560 --> 00:08:26,840 or $100 million. And I think that. 144 00:08:26,960 --> 00:08:28,640 The. Whoever was. 145 00:08:28,640 --> 00:08:29,440 Questioning. Her asked. 146 00:08:29,440 --> 00:08:31,440 Like oh. Can you elaborate on that? 147 00:08:31,520 --> 00:08:34,440 And then she just decided to throw in that apparently Thai 148 00:08:34,440 --> 00:08:36,679 prostitutes were somehow involved in. 149 00:08:38,120 --> 00:08:41,080 Alameda's attempt to. Regain access to $1 billion of. 150 00:08:41,080 --> 00:08:43,120 Funds that were essentially being held hostage. 151 00:08:43,120 --> 00:08:45,440 By the Chinese government. Or were. 152 00:08:45,440 --> 00:08:50,560 Frozen in some Chinese. Crypto accounts and apparently 153 00:08:50,560 --> 00:08:53,560 somehow Thai prostitutes were worked into their scheme to 154 00:08:53,600 --> 00:08:55,000 regain. Access to that money. 155 00:08:55,760 --> 00:08:58,680 I think it makes sense. If you have a story like that, 156 00:08:58,680 --> 00:09:01,360 you should tell it, you know, like you're this is your one 157 00:09:01,360 --> 00:09:04,720 time on the stage, you've got a good story about Thai 158 00:09:04,720 --> 00:09:07,360 prostitutes. Get it out, you know. 159 00:09:07,600 --> 00:09:08,800 She did. She certainly did. 160 00:09:09,040 --> 00:09:11,200 Made headlines. Good on you, Caroline. 161 00:09:12,720 --> 00:09:18,960 And I guess other things that she put forth was related to 162 00:09:18,960 --> 00:09:25,880 sort of Sam's, what can we say sort of morality that that he 163 00:09:25,880 --> 00:09:29,800 felt that rules like don't lie and don't steal weren't 164 00:09:29,800 --> 00:09:33,280 necessarily justified. Like do you, do you believe 165 00:09:33,280 --> 00:09:35,120 because it seems Michael Lewis sort of. 166 00:09:35,680 --> 00:09:40,880 Fell for this story that Sam's overwhelming thing is this urge 167 00:09:40,880 --> 00:09:46,160 to do good through charitable givings and that almost any 168 00:09:46,240 --> 00:09:48,480 crime is justifiable based on that. 169 00:09:48,480 --> 00:09:50,360 Do you do you think he believes that? 170 00:09:50,360 --> 00:09:52,920 Is this just a story like? What's your take? 171 00:09:53,000 --> 00:09:55,720 Yeah, I mean, I've talked to Sam quite a. 172 00:09:55,720 --> 00:09:57,800 Bit I talked to him a lot over house arrest and. 173 00:09:58,160 --> 00:10:00,400 I actually. Do genuinely believe that he 174 00:10:00,560 --> 00:10:03,120 does believe in effective. Altruism, but I don't know if 175 00:10:03,120 --> 00:10:05,560 it's necessarily for the reasons why other people in the. 176 00:10:05,680 --> 00:10:09,240 The EA community, Do I think that Sam mostly just feels like 177 00:10:09,240 --> 00:10:12,680 he's the smartest guy in any? Room he tends to think that 178 00:10:12,920 --> 00:10:15,600 he's. Superior to most people, I think 179 00:10:15,600 --> 00:10:17,160 I've even asked him. Once like if. 180 00:10:17,160 --> 00:10:21,280 He felt he sort of was superior to people and he was like, yeah, 181 00:10:21,280 --> 00:10:25,080 I don't know if I would put it that way, but I kind of agree 182 00:10:25,080 --> 00:10:27,200 with that. So I think that Sam believes in 183 00:10:27,200 --> 00:10:29,040 this. Idea of effective altruism 184 00:10:29,040 --> 00:10:32,240 because he believes that he is best equipped to decide where 185 00:10:32,240 --> 00:10:34,480 money should go and how money should be spent to. 186 00:10:34,960 --> 00:10:37,600 Make the world a better place. So I actually think he believes 187 00:10:37,600 --> 00:10:40,160 in. EA, but more because he thinks 188 00:10:40,160 --> 00:10:41,800 he's the smartest guy in any room. 189 00:10:41,920 --> 00:10:45,480 One of the things that confused me with with some of his giving, 190 00:10:45,480 --> 00:10:48,560 because you read all of this EA stuff and about how much he 191 00:10:48,560 --> 00:10:51,720 cares and this idea that you know, if there's a starving 192 00:10:51,720 --> 00:10:54,680 person in the other side of the world that you know you, you 193 00:10:54,680 --> 00:10:58,040 should really care about them. But then when you look at sort 194 00:10:58,040 --> 00:10:59,720 of his spending, there's a lot of. 195 00:11:00,160 --> 00:11:03,440 Real estate, private jets, there's, you know, a lot of 196 00:11:03,480 --> 00:11:07,800 American politicians. There's celebrities you know, 197 00:11:08,240 --> 00:11:11,760 there doesn't like, I haven't yet heard of, like the starving 198 00:11:11,760 --> 00:11:14,640 person who received a loaf of bread from Sam. 199 00:11:14,640 --> 00:11:16,960 Like, what are your thoughts on that? 200 00:11:16,960 --> 00:11:18,080 No. I agree. 201 00:11:18,080 --> 00:11:19,360 I mean looking at the spending they. 202 00:11:19,360 --> 00:11:22,920 Spent a lot on venture capital. They or, yeah, Venture VC 203 00:11:22,920 --> 00:11:25,520 investments, real estate, political donations. 204 00:11:25,760 --> 00:11:28,040 I think there were some charitable contributions as 205 00:11:28,040 --> 00:11:29,800 well, but the. Government certainly didn't want 206 00:11:29,800 --> 00:11:33,320 to talk about those. But to me, obviously. 207 00:11:33,320 --> 00:11:34,840 There's a disconnect. I'm like OK. 208 00:11:34,880 --> 00:11:36,680 So you're spending billions of dollars? 209 00:11:36,680 --> 00:11:39,600 On, I don't know, like advertising and everything like 210 00:11:39,600 --> 00:11:41,280 that. I think in Sam's mind, I've. 211 00:11:41,280 --> 00:11:44,040 Posed those questions to. Him and in his head I think he 212 00:11:44,040 --> 00:11:45,600 saw it as. Sort of a stepping stone. 213 00:11:45,800 --> 00:11:49,240 To get access to more money. So I mean in his head buying 214 00:11:49,240 --> 00:11:51,360 this real estate, where you in this real estate? 215 00:11:51,360 --> 00:11:52,720 In the. Bahamas might attract. 216 00:11:53,160 --> 00:11:56,360 Top tier employees to FTX and Alameda then it makes. 217 00:11:56,360 --> 00:11:59,680 The company a better. Place and and then in his head I 218 00:11:59,680 --> 00:12:03,520 think he was thinking and we'll get more revenue ultimately but. 219 00:12:03,560 --> 00:12:05,520 Obviously looking at it at. Face value I'm like. 220 00:12:06,120 --> 00:12:08,400 I don't know. And and things like things like 221 00:12:08,400 --> 00:12:13,120 private jets, He spent I think $15 million on private jet 222 00:12:13,120 --> 00:12:15,880 travel, which I guess for a billionaire maybe isn't so much. 223 00:12:15,880 --> 00:12:18,920 But obviously, you know, that could have been going to 224 00:12:18,920 --> 00:12:20,880 starving children in Africa, Sam. 225 00:12:21,960 --> 00:12:25,000 What do you think the goal of his testimony even was? 226 00:12:25,000 --> 00:12:27,920 Because there was sort of a build up that he, you know, he 227 00:12:27,920 --> 00:12:31,000 was obviously advised not to. I think he sort of thinks he's 228 00:12:31,000 --> 00:12:34,800 smarter than his lawyers and decided to testify. 229 00:12:35,240 --> 00:12:38,480 And then I think many people felt there'd be some Hail Mary 230 00:12:38,480 --> 00:12:41,960 pass where he'd sort of pull a rabbit out of a hat and dazzle 231 00:12:41,960 --> 00:12:48,840 the the jury with something that would get him off the hook. 232 00:12:48,840 --> 00:12:50,720 And then when I heard your account of. 233 00:12:50,720 --> 00:12:52,200 His. Testimony. 234 00:12:52,200 --> 00:12:57,200 It seems that he largely just sort of the opposite of Nishad. 235 00:12:57,200 --> 00:13:01,680 He didn't remember anything apparently, and just sort of 236 00:13:02,000 --> 00:13:05,240 annoyed people like is is that like, did do you think he 237 00:13:05,240 --> 00:13:07,360 accomplished anything by speaking? 238 00:13:08,080 --> 00:13:11,360 I mean, you know what? Like I I went to every single 239 00:13:11,360 --> 00:13:14,760 day of trial and I felt it was going so poorly for. 240 00:13:14,760 --> 00:13:17,640 Him and the picture was obviously being painted in such 241 00:13:17,640 --> 00:13:21,120 a negative way that by the time he decided to testify. 242 00:13:21,840 --> 00:13:24,480 I kind of felt like, you know what? 243 00:13:24,560 --> 00:13:26,680 I don't know if you can make it. Any worse at this point because? 244 00:13:26,680 --> 00:13:28,800 Prior to that. I would have said he should not 245 00:13:28,800 --> 00:13:31,680 testify, obviously. But there was so much. 246 00:13:31,680 --> 00:13:34,960 Damning and evidence. And obviously all of his closest 247 00:13:35,080 --> 00:13:36,880 confidants were testifying against him. 248 00:13:37,160 --> 00:13:38,920 So I I just. Felt. 249 00:13:38,920 --> 00:13:42,440 He was screwed pretty. Early on into the trial. 250 00:13:42,840 --> 00:13:46,000 So I kind of, I kind of think it wasn't even the worst decision 251 00:13:46,000 --> 00:13:48,400 he made. You think there was just no 252 00:13:48,400 --> 00:13:52,760 coming back like it it? Like after watching after. 253 00:13:52,760 --> 00:13:55,240 Watching the trial and watching other witness testimonies, I was 254 00:13:55,240 --> 00:13:56,800 like. I don't see any. 255 00:13:56,800 --> 00:13:59,720 Shot that any of these jurors find him not guilty. 256 00:13:59,720 --> 00:14:01,560 Like I thought, there was no shot in hell. 257 00:14:01,840 --> 00:14:05,120 So at that point, I was like, yeah, I don't know. 258 00:14:05,120 --> 00:14:06,320 I don't know if you have anything to lose. 259 00:14:06,320 --> 00:14:09,840 And it might be good for Sam to sort of attempt to get his side 260 00:14:09,840 --> 00:14:14,000 of the story out. But did he even do that? 261 00:14:14,000 --> 00:14:16,280 Like because when he did testify. 262 00:14:16,880 --> 00:14:19,800 It's not like he sort of spun a story. 263 00:14:19,800 --> 00:14:24,640 He as you said he just largely claimed to not remember things 264 00:14:24,640 --> 00:14:27,040 and then the the prosecution would read the. 265 00:14:28,080 --> 00:14:29,920 Right. Like put a Exhibit A of where he 266 00:14:29,920 --> 00:14:32,600 said that. So Sam, there is the direct. 267 00:14:32,600 --> 00:14:34,720 Testimony where he was just telling his side of the story. 268 00:14:34,720 --> 00:14:37,160 And basically answering his own. Lawyers sort of softball 269 00:14:37,160 --> 00:14:38,880 questions that seemed very pre rehearsed. 270 00:14:39,200 --> 00:14:41,480 I actually thought. Sam did a decent job in that 271 00:14:41,480 --> 00:14:43,880 section, as he should. It'd be horrible if he wasn't 272 00:14:43,880 --> 00:14:46,360 able to answer questions he already knew were coming, so. 273 00:14:46,520 --> 00:14:49,360 He actually did a decent part or a decent job. 274 00:14:49,360 --> 00:14:50,880 There where he. Was able to, sort of. 275 00:14:50,880 --> 00:14:53,880 Explain things that might look sinister and explain why those 276 00:14:53,880 --> 00:14:56,320 things came into place. For example, obviously a. 277 00:14:56,320 --> 00:14:57,840 Lot of us know that Alameda research. 278 00:14:57,840 --> 00:15:00,600 Had a lot of special. Privileges on FTX but. 279 00:15:00,600 --> 00:15:02,880 Sam was able to explain. His side of the story in that. 280 00:15:03,600 --> 00:15:06,880 In the early days, Alameda was the primary market maker on FTX, 281 00:15:06,880 --> 00:15:08,680 so there were actually some reasons why. 282 00:15:09,160 --> 00:15:11,960 They needed some special privileges so that they so that 283 00:15:11,960 --> 00:15:14,800 Alameda and FTX didn't just both basically implode immediately if 284 00:15:14,800 --> 00:15:17,760 there was like a tiny issue. And obviously those. 285 00:15:18,080 --> 00:15:20,360 Those things still don't look great for him, but he. 286 00:15:20,360 --> 00:15:22,800 Was able to give some excuses and reasoning for why they 287 00:15:22,800 --> 00:15:25,160 weren't necessarily sinister from the start. 288 00:15:25,160 --> 00:15:27,400 Some of these, some of the choices he made. 289 00:15:28,000 --> 00:15:30,160 So I actually thought he did decently well in those. 290 00:15:30,760 --> 00:15:32,720 But once he started getting cross. 291 00:15:32,720 --> 00:15:35,800 Examined by the prosecution. He just wasn't able to. 292 00:15:35,800 --> 00:15:38,760 Answer a single question straight he claimed to not 293 00:15:38,760 --> 00:15:40,480 recall. Anything the prosecution 294 00:15:40,480 --> 00:15:43,120 actually counted. And said that he basically 295 00:15:43,120 --> 00:15:45,160 evaded questions or claimed not to remember. 296 00:15:45,160 --> 00:15:47,520 Things over 100. And 40 times in his cross 297 00:15:47,520 --> 00:15:50,360 examination and so. Obviously that was very. 298 00:15:50,360 --> 00:15:52,200 Frustrating to watch. Especially I'm sure. 299 00:15:52,360 --> 00:15:54,560 All the jurors would just. He just didn't look like a 300 00:15:54,560 --> 00:15:55,600 transparent. Guy. 301 00:15:55,880 --> 00:15:58,280 And after we had seen him sort of retell his story. 302 00:15:58,280 --> 00:16:00,200 In his direct. Testimony where he was 303 00:16:00,200 --> 00:16:02,720 retelling. These the story of how. 304 00:16:02,720 --> 00:16:05,560 FTX and Alameda started and oh, we started. 305 00:16:05,560 --> 00:16:08,520 In Airbnb. So you look at this guy and he 306 00:16:08,520 --> 00:16:12,120 remembers everything. Dating back to 2017 about how 307 00:16:12,120 --> 00:16:13,040 things started. But. 308 00:16:13,240 --> 00:16:15,880 Once he starts getting questions about, you know, things that 309 00:16:15,880 --> 00:16:18,200 came much later. But made him look pretty bad he. 310 00:16:18,200 --> 00:16:21,280 Suddenly has no recollection, doesn't remember a thing. 311 00:16:21,760 --> 00:16:24,920 So the direct testimony, I thought. 312 00:16:25,480 --> 00:16:27,360 It went OK for him. Most of the other journalists 313 00:16:27,360 --> 00:16:28,680 felt that way too. And then the cross. 314 00:16:28,680 --> 00:16:30,880 Examination absolutely demolished him. 315 00:16:31,200 --> 00:16:34,560 In my intro to this, I I put forth that there was a chance 316 00:16:34,560 --> 00:16:41,080 that they would withhold the sentencing until after the next 317 00:16:41,080 --> 00:16:44,160 trial, and it looks like that actually is what's happening is. 318 00:16:44,160 --> 00:16:46,800 That is that what? You you believe as well? 319 00:16:47,240 --> 00:16:48,920 Yeah. So obviously Sam was found 320 00:16:48,920 --> 00:16:52,840 guilty on all seven charges and he's already he was already 321 00:16:52,840 --> 00:16:54,280 scheduled. To have a second. 322 00:16:54,280 --> 00:16:58,760 Trial, I believe it starts on March. 11th of 2024. 323 00:16:59,480 --> 00:17:01,760 And those are on I think five additional. 324 00:17:01,760 --> 00:17:05,040 Charges that he received in superseding indictments after he 325 00:17:05,040 --> 00:17:06,680 was extradited to the United States. 326 00:17:07,079 --> 00:17:11,839 So some of us. The some of us journalists and 327 00:17:11,839 --> 00:17:13,920 even some like, sort of. Lawyers in the room feel a bit 328 00:17:13,920 --> 00:17:16,920 uncertain about whether or not that that trial will actually go 329 00:17:16,920 --> 00:17:19,119 through, since he was found guilty of all these other 330 00:17:19,119 --> 00:17:21,560 charges. Sometimes, apparently, those 331 00:17:21,920 --> 00:17:25,680 second trials get dropped, but his sentencing is scheduled 332 00:17:25,680 --> 00:17:28,720 currently for, I believe, March 28th, if I'm remembering the 333 00:17:28,720 --> 00:17:31,320 date correctly. So I guess he could technically 334 00:17:31,840 --> 00:17:33,000 do the. Second trial and then be 335 00:17:33,000 --> 00:17:36,520 sentenced for both together. Yeah 'cause it would be the same 336 00:17:36,520 --> 00:17:37,560 judge, right? It's. 337 00:17:37,600 --> 00:17:40,680 Yeah. And I'm sure the judge isn't too 338 00:17:40,680 --> 00:17:44,640 pleased with Sam at this point. One reason I think that they 339 00:17:44,640 --> 00:17:49,280 might do the second trial is quite simply because it could 340 00:17:49,280 --> 00:17:52,640 look like a bit of a political cover up if they don't, because 341 00:17:52,640 --> 00:17:56,000 a lot of, in fact the real fireworks might be at the next 342 00:17:56,000 --> 00:17:59,360 trial because it will relate to all of the illegal campaign 343 00:17:59,360 --> 00:18:03,440 donations and things like that. And I believe the judge is a 344 00:18:03,600 --> 00:18:05,880 Clinton nominee. So if he were. 345 00:18:06,360 --> 00:18:08,520 Sort of seem to be covering that up. 346 00:18:08,520 --> 00:18:11,800 It might not look good but. Oh, I didn't know that about him 347 00:18:11,800 --> 00:18:13,120 being a Clinton. Nominee No. 348 00:18:13,160 --> 00:18:13,880 That makes. Sense. 349 00:18:13,880 --> 00:18:16,560 Yeah, that's actually been umm. What other journalists I've 350 00:18:16,560 --> 00:18:19,200 spoken to have said that like? Because of the. 351 00:18:19,440 --> 00:18:21,840 Campaign finance. Charge the. 352 00:18:21,920 --> 00:18:24,320 Second trial has more likelihood of getting the green light. 353 00:18:25,120 --> 00:18:28,280 Now when you're at the trial, like the people you speak to 354 00:18:28,280 --> 00:18:31,200 there, I saw that, you know, Michael Lewis has attended a 355 00:18:31,200 --> 00:18:32,880 lot. Are there many people? 356 00:18:33,440 --> 00:18:37,480 Who like like do do people generally sort of sit there hear 357 00:18:37,480 --> 00:18:40,800 the testimony and say, gosh, you know kind of your take that this 358 00:18:40,800 --> 00:18:45,040 looks pretty bad or are there many people who feel that that 359 00:18:45,040 --> 00:18:46,920 sort of Sam should be let go like. 360 00:18:47,080 --> 00:18:49,320 Yeah. So Michael Lewis was there and I 361 00:18:49,320 --> 00:18:50,800 didn't actually speak. To him but I. 362 00:18:51,320 --> 00:18:52,800 Talked. To someone who apparently spoke 363 00:18:52,800 --> 00:18:55,280 to him in the elevator and apparently Michael Lewis walked 364 00:18:55,280 --> 00:18:58,120 out of there and said like. I thought he did pretty well, so 365 00:18:58,120 --> 00:18:59,320 I think Michael Lewis had a pretty. 366 00:18:59,320 --> 00:19:01,440 Positive take on how Sam did on the stand. 367 00:19:02,320 --> 00:19:04,320 But he didn't say that to me. So I'm not. 368 00:19:04,760 --> 00:19:06,160 I'm not saying that that is a. Fact. 369 00:19:06,480 --> 00:19:10,040 But I do think that most journalists, we all tend to sort 370 00:19:10,040 --> 00:19:11,480 of. Congregate during the breaks or 371 00:19:11,480 --> 00:19:13,640 during lunch and sort of be like, what did you guys think of 372 00:19:13,640 --> 00:19:16,160 that and? The consensus is typically 373 00:19:16,200 --> 00:19:19,880 pretty unanimous and we all, we all did think that Sam did 374 00:19:19,880 --> 00:19:21,920 pretty well on the direct and then we were all. 375 00:19:21,920 --> 00:19:23,360 After the cross examination we were like. 376 00:19:24,960 --> 00:19:26,720 He screwed himself. He screwed himself. 377 00:19:26,720 --> 00:19:30,960 Doesn't look so good. Now what happens to the others, 378 00:19:30,960 --> 00:19:35,600 to people like Caroline and Gary and so on, They've pled guilty. 379 00:19:35,600 --> 00:19:38,720 Do they get sentenced at the same time as Sam or is their 380 00:19:38,720 --> 00:19:42,360 sentencing separate or something that's been pre agreed or? 381 00:19:42,680 --> 00:19:44,800 Yeah, So they pled guilty and they're cooperating. 382 00:19:44,800 --> 00:19:48,680 With the government obviously against Sam, so apparently based 383 00:19:48,680 --> 00:19:50,720 on how. Helpful or useful? 384 00:19:50,720 --> 00:19:51,960 They were, apparently. They'll get. 385 00:19:51,960 --> 00:19:54,120 Sort of. I believe they're called 5K 386 00:19:54,120 --> 00:19:56,360 letters to. I'm not a lawyer, so I'm just 387 00:19:56,360 --> 00:19:58,560 trying to remember this. From their testimonies, but. 388 00:19:59,120 --> 00:20:00,920 Apparently that will drastically. 389 00:20:01,120 --> 00:20:03,200 Help to reduce their sentence if they were found to be. 390 00:20:03,200 --> 00:20:08,720 Useful to the government and. I I haven't spoken to actual 391 00:20:08,720 --> 00:20:11,600 lawyers about this, but I've had friends who spoke to lawyers and 392 00:20:11,600 --> 00:20:15,640 have said that. Some some lawyers who were 393 00:20:15,640 --> 00:20:19,000 actually former AUSA prosecutors have said that there is. 394 00:20:19,000 --> 00:20:21,520 Actually a chance that they could walk out of this with no 395 00:20:21,560 --> 00:20:24,240 jail time, which. In my eyes would be shocking 396 00:20:24,240 --> 00:20:27,440 because I think that out of the star witnesses, I actually think 397 00:20:27,440 --> 00:20:32,000 Caroline Ellison is nearly. Almost as guilty as Sam Bateman 398 00:20:32,000 --> 00:20:35,640 freed because she was actually the one to be doing The Dirty 399 00:20:35,640 --> 00:20:38,680 work and pulling the trigger on a lot of the I guess I was. 400 00:20:38,680 --> 00:20:40,920 Going to say alleged fraud, but I guess Sam's been convicted 401 00:20:40,920 --> 00:20:43,800 now, so on a lot of the fraud because she was actually the one 402 00:20:43,800 --> 00:20:45,800 to make a lot of. These misleading balance sheets 403 00:20:45,800 --> 00:20:48,320 that were sent to lenders and you know. 404 00:20:48,600 --> 00:20:50,320 Directly communicating with people, so. 405 00:20:51,080 --> 00:20:54,000 I would personally be surprised if she walked out with zero jail 406 00:20:54,000 --> 00:20:55,520 time. That would seem sort of like an 407 00:20:55,520 --> 00:20:56,480 injustice. To me. 408 00:20:57,440 --> 00:21:00,000 So I've spoken to other people who have said that they could 409 00:21:00,000 --> 00:21:03,840 maybe expect the single digits in years in jail time. 410 00:21:04,800 --> 00:21:07,760 Which I guess seems pretty light given the scale of what 411 00:21:07,760 --> 00:21:09,480 happened. When you read the. 412 00:21:09,680 --> 00:21:13,400 Series of events, it seems like a criminal conspiracy. 413 00:21:13,400 --> 00:21:16,000 Like it's not. There wasn't one criminal in the 414 00:21:16,000 --> 00:21:18,280 room and the others kind of got, have you seen what he's doing 415 00:21:18,840 --> 00:21:23,200 like and and actually even if you were saying have you seen 416 00:21:23,200 --> 00:21:24,600 what he's doing? You're sort of. 417 00:21:25,000 --> 00:21:27,000 Guilty as well, so. Right. 418 00:21:27,240 --> 00:21:30,840 It's funny, though, because I feel like they each, apparently, 419 00:21:30,840 --> 00:21:33,080 according to their testimonies, learned about what was happening 420 00:21:33,080 --> 00:21:34,200 at very different. Times. 421 00:21:34,200 --> 00:21:36,480 So I don't know if it started from the beginning as something 422 00:21:36,480 --> 00:21:39,080 where they all got together and huddled up and said let's steal 423 00:21:39,080 --> 00:21:42,120 customer funds. But it sounded like Gary Wong 424 00:21:42,480 --> 00:21:45,720 understood what was happening a little bit before Caroline and 425 00:21:45,720 --> 00:21:46,880 then Caroline. Understood. 426 00:21:46,880 --> 00:21:49,320 And then Nishad Singh claimed that he found out about what was 427 00:21:49,320 --> 00:21:52,240 happening in September of 2022, which was only months before the 428 00:21:52,240 --> 00:21:54,320 collapse. So in some ways, it is a 429 00:21:54,320 --> 00:21:55,960 conspiracy. But it also sounded like they 430 00:21:55,960 --> 00:21:59,640 weren't all like huddling up for the start to to steal customer. 431 00:21:59,640 --> 00:22:00,640 Funds. So it's been sort of 432 00:22:00,640 --> 00:22:01,600 interesting. Well. 433 00:22:02,160 --> 00:22:06,000 I guess your big thing is YouTube and and Twitter, right? 434 00:22:06,000 --> 00:22:08,360 People can follow you and it's Tiffany Fung. 435 00:22:08,360 --> 00:22:11,120 I'll put a link in the description for people to follow 436 00:22:11,120 --> 00:22:14,480 you. Tiffany's channel is both 437 00:22:15,320 --> 00:22:18,720 informative and hilarious. I think everyone will enjoy it. 438 00:22:19,280 --> 00:22:21,920 And yeah, and you're on Twitter as well. 439 00:22:21,920 --> 00:22:25,560 You're very big on Twitter. And so, yeah, I would recommend 440 00:22:25,560 --> 00:22:30,400 people to to follow Tiffany. I'm so honored, Patrick. 441 00:22:30,680 --> 00:22:33,240 You're the best. I also want everyone to know 442 00:22:33,240 --> 00:22:34,320 how. How hilarious. 443 00:22:34,320 --> 00:22:37,880 Patrick is off camera. Patrick is like one of the 444 00:22:37,880 --> 00:22:41,280 funniest people I know. I mean, you're also funny on 445 00:22:41,280 --> 00:22:44,840 camera, but anyway. Thanks for tuning into this 446 00:22:44,840 --> 00:22:47,960 week's podcast. If you'd like to help out, I'd 447 00:22:47,960 --> 00:22:51,720 love if you could write a short review on iTunes, Spotify, or 448 00:22:51,720 --> 00:22:55,520 whatever app you listen on in order to help the podcast. 449 00:22:55,520 --> 00:22:58,720 Grow, have a great. Week and talk to you again soon. 450 00:22:58,960 --> 00:23:04,000 Bye. If you enjoyed this episode, be 451 00:23:04,000 --> 00:23:06,880 sure to subscribe so you're notified when a new episode is 452 00:23:06,880 --> 00:23:09,120 posted. Thank you to everyone who is 453 00:23:09,120 --> 00:23:11,200 supporting this content on Patreon. 454 00:23:11,640 --> 00:23:14,440 If you enjoyed this content, you can find more like it on 455 00:23:14,440 --> 00:23:18,960 YouTube, on the Patrick Boyle on Finance channel or follow us on 456 00:23:18,960 --> 00:23:22,160 Twitter at Patrick E Boyle. Thanks for listening. 457 00:23:22,160 --> 00:23:22,520 Bye.