> The word-salad began again, interrupted only by the judge saying things like “So I take it the answer is you don’t remember; is that about it?” or “Listen to the question and answer the question directly.” It was like watching someone get run over by a very slow-moving steam roller.
This line encapsulates everything I've thought about this trial.
Feels like watching the man scream at the steam roller in Austin Powers.[0] He just can't keep his feet out of his own mouth. At this point I can't tell if it's hubris, or just straight ineptitude.
I think it's a combination of a few things. Firstly that he's smart enough that he's got plenty of experience of getting his way just by being smart around people, and yet he's naive enough that he thinks that will work in court under the eye of the whole media.
Secondly though he seems to have quickly latched on to a specific sort of messaging that's built around "honesty" and admitting his own failings, not in a real way it seems though. I think he's seen a bunch of people get "cancelled" in recent years and seen that this sort of admission of guilt tends to work well for people. What he doesn't realise though is that this isn't him being accused in the court of public opinion about something the public don't agree fully on, it's a legal accusation in court about specifics that the law is clear on. I'd say this was just bad advice he was being given, but it seemed to happen so quickly that I think it's just his own bad take on the best way out.
I remember when interviews with Elizabeth Holmes really started to go awry. She would be asked very straightforward questions but respond with these bizarre meandering answers that never really got to the point. It was strikingly different from the way politicians don't respond, and after a few of these I started to think that something was up. However, a fair number of people I talked with back then thought she was absolutely brilliant and that her answers were the workings of a deeply complex mind.
It's mean spirited, but the phrase "she's what stupid people think smart people sound like" struck me at the time. I think the same may be true here. This kind of behavior has been reinforced so much in their lives that in some cases they start to also get high on their own supply. But they to are profoundly stupid people, and start to think that how they interact with the world is what smart people "sound like" and it perpetuates into these spectacular fraudulent failures.
> Defense lawyer Mark Cohen did his best. Unfortunately for him, the cross-examination was conducted by Sassoon, who looks like someone who uses “summer” as a verb, and often appears deceptively timid, with her hands held close to her chest. In her cross, she simply unhinged her jaw and ate Bankman-Fried.
I feel like this has been known for a while. Months ago he essentially admitted to the core of the charges on a morning show and refused to stop after that. The Serious Trouble podcast, hosted by former (I think?) Twitter legal commentarian PopeHat/Ken White, has covered it a lot and just how much he's screwed his own legal defense. This was even before the bouts of witness tampering attempts that landed him in jail instead of plush house arrest.
The best (non-serious) theory I’ve heard is that his parents are coordinating his conviction to get themselves off the hook. To be clear that’s dark humor and not a serious claim, but it sure explains his defense a lot better than any alternative.
Imagine being told you're very smart since a young age and internalizing it so heavily that you think you can talk your way out of everything. What you really end up internalizing is that other people are stupid. And this is why Sam is going to prison. Other people really aren't that stupid. Some of them are even very smart and competent, like the team prosecuting this.
> 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... Finally, Bankman-Fried said, “I am not a lawyer” and definitely said a lot of words, none of which made much sense. Sasson asked the same question again, drawing an objection from Cohen, which Kaplan overruled — because Bankman-Fried had not answered her question. The line Bankman-Fried eventually pointed to was that funds were “held and / or transferred by provider.”
Check
> Bankman-Fried’s defense, in the direct testimony, was trying to put blame on the lawyers: FTX chief regulatory officer Dan Friedberg... A significant thrust of questions was about a bank account controlled by Alameda Research that did not bear Alameda’s name; it was instead called North Dimension, it came into existence around 2020 — that is, while Bankman-Fried was still Alameda’s CEO — and it was where FTX customers were told to wire their funds. Bankman-Fried said that the North Dimension bank account was all Friedberg’s idea. Sassoon asked if Bankman-Fried, as Friedberg’s boss, had given him any direction, or if Friedberg just popped ideas across Bankman-Fried’s desk. The word-salad began again, interrupted only by the judge saying things like “So I take it the answer is you don’t remember; is that about it?” or “Listen to the question and answer the question directly.” ... Then Sassoon did what I had been waiting for: pointed out that Bankman-Fried had been the one who hired Friedberg in 2020. She asked if he’d been hesitant to hire a general counsel. He said he had been hesitant to hire the wrong general counsel — “I did want a general counsel who was comfortable with reasonable risks.” Sassoon then asked if Bankman-Fried was aware of Friedberg’s history of working at a company that had an insider trading scandal? (The company in question, by the way, is UltimateBet.) That there had been a criminal scandal? “Were you aware that Dan Friedberg used illegal narcotics with your employees?”
Not really. SBF didn't write the TOS and doing drugs with coworkers doesn't mean you committed fraud. Obviously SBF did but both of these lines of arguments are distractions to make him look guilty without really proving anything.
Maybe it's because I've mostly become aware of SBF after the shit hit the fan, but I feel I've never seen this guy communicate in a clear and cogent way. It's all just mumbling, dithering, and dissembling. Even reports of how he ran his businesses sound like noise and chaos.
He's clearly "smart" in the sense that he knows how to read a book and operate a computer, but we need to stop treating him as anything other than a middling dude who stumbled into a grift.
The title highlighting the "skimming over" TOS seems a bit alarmist to me. I bet there are very rare CEOs who could even say that much.
As a result my "we don't like this guy so we'll talk up any minor negative thing we find" detectors start to go off. I think he just took money from the wrong people, kinda like Madoff.
1) Not sure how we can take Madoff's ponzi to the level of "he just took money from the wrong people".
2) TOS in financial sectors are generally very well thought out and would not surprise me at the startup level that executive leadership should have a solid understanding of what it does. In this case the TOS in question would allow/disallow FTX the exchange from lending money to sister org Alameda. This seems like a pretty crucial thing that the CEO, SBF, should know.
The most surprising thing about this is how bumbling and incoherent SBF appears. Crooked or not I would expect anybody to be able to convince corporate level execs to invest millions would at least be able to sound like they know what they are talking about.
He didn’t “convince” them of anything. He used family connections and those initial investors didn’t do any DD. Other investors noticed those investors put in some money and did the same. Cryptocurrency was also a buzzword so it was an easy sell. It was less of a “con” and more of privilege. And taking advantage of greed.
Same thing happened with that one woman that ran “Theranos”. Just know the right people. Although I think she was a slightly better public speaker. The yoda voice shit was weird though.
Not really surprising. When he was on his apology tour before getting arrested, he basically fell apart like this anytime someone asked him good questions and forced him off script. He ended up running from public Twitter Spaces several times because of that. Well you can't bail from the witness stand.
I'm continuously amazed that people called him a "charismatic" speaker, etc. Really amazes me that this is the bar for an exec, company leader these days.
>Crooked or not I would expect anybody to be able to convince corporate level execs to invest millions would at least be able to sound like they know what they are talking about.
One of the most effective sales techniques is to sell the customer's own dream right back to the customer.
To qualify the prospects you need a marketing strategy that builds a pipeline of potential customers likely to possess the type of dream that you can work with.
Here there was no persuasive salesmanship needed to convince "investors", someone else had already done that in advance, or the customers had built interest on their own.
Sam was just there to use their money, and if a certain amount of losses were inevitable that was supposed to be overcome by greater amounts of gains in the long run. Skimming just a little bit off the top to where it's obscured by the noise of the losses is what lots of financial outfits have done for centuries. The higher-integrity firms have decades of experience carefully disclosing their terms for this activity to their customers, which is one of the reasons why more persuasive sales efforts might be a lot more common.
As soon as Sam started skimming without proper disclosure, that's what made it ordinary theft.
The best way to get millions invested is to have other investors go first. This is the guy who played video games during a venture pitch and rambling on about a future Everything App.
The business idea of venture capital is not to follow through with the investment all the way to a mature company with long term profits. It is to offload to later investors. It's hard to fault anyone as long as they go in with their eyes open.
Though people are making valid points in the other comments, don't underestimate what stress and bad circumstances can do to one's cognition. This isn't necessarily how he was performing before.
I think our recent 0 interest rate environment resulted in many companies receiving investments that were unlikely if capital markets weren't overflowing with cash.
Both testifying and “advice of counsel” defense are very risky hail Mary strategies. Defendants shouldn’t take the stand in fraud trials. He is probably going against the advice of his lawyers because he thinks he is smarter than them.
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
Ever since I saw that stupid TikTok video about being so “smart” for being a crypto billionaire at age 20 something, I have wished, perhaps even willed into existence, the day Sam Bankman-Fried would go to prison.
What's crazy to me is that his parents are lawyers and they both acquiesced or abetted his illegal behavior and now his atrocious defense of said illegal behavior. Not to mention that they benefited from it the whole way.
They are doing a great job of proving what we already knew: Stanford as an institution is corrupt to its core, from the leadership to the professors, to the alumni. How they continue to have any semblance of a positive reputation is beyond me.
His parents seem low level sociopaths, asking him for money (they must have known was stolen) and using each other as a way to get him to comply (according to leaked emails).
Sam is just a massive sociopath, born out of this.
Michael Lewis makes an appearance in the courtroom ... Everyone's saying he seems to support Bankman-Fried
What happened there ??? The guy who calls out a lot of fraud, now can't see it?
I'm disappointed because I found his books enjoyable ... although maybe in retrospect I can't remember that much from them. Maybe he was never really calling them out, but just liked the story.
I know there have been a bunch of articles about this -- but what's the tl;dr ?
I guess he was always up close and personal with everyone, because that's how he got access to tell these interesting tales. And then you sort of compromise your own viewpoint
I thought this guy was supposed to be super-bright.
He's decided to face cross-examination, so the judge held this session to check that his defence doesn't include saying stuff that's inadmissible. But from this account, it doesn't sound as if he's got anything interesting to say at all; and I find it surprising that someone supposedly so bright talks in "word salad", i.e. can't construct a coherent sentence.
I suspect the story about him being bright comes from people who believe wealth is proof of intelligence.
He did physics as MIT so has to be fairly bright. Also his (in)famous explanation of yield farming was the first time I'd heard anyone explain what was going on there.
This court case stuff is a different skill set though and also I think it would be beyond almost anyone to talk themselves out of his situation.
Both testifying and “advice of counsel” defense are very risky hail Mary strategies. He is probably going against the advice of his lawyers because he thinks he is smarter than them. Defendants shouldn’t take the stand in fraud trials.
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
Can someone explain why they did this "practice run" (I guess?) without the jury? It says the judge wanted to find out what answers would be admissible but it's unclear what that means or how the practice run will help here. When they bring the jury back will they do through the whole set of questioning again?
The main issue at play, from what I read in this story [0], is worry he will gum up the trail by saying everything was on the advice of his lawyers. Which would then require hauling the lawyers in and clarifying they of course never told their client to commit fraud or “borrow” billions of dollars of customer money.
>> One decision for Kaplan is whether Bankman-Fried will be allowed to blame FTX lawyers when the jury is back in the courtroom. As we previously wrote, this is called an "advice-of-counsel defense" in which SBF could argue that he sought advice from company lawyers, received advice that his conduct was legal, and "relied on that advice in good faith."
SBF wanted to advance a defense that he relied on his lawyers telling him that was kosher, which requires there to be enough evidence that his lawyers specifically told him it was kosher. The hearing was to determine if he would be allowed to raise that defense. You don't want the jury to be present because if you ultimately decide the evidence isn't admissible, you can't exactly tell the jury "please forget everything you just heard."
At the end of the hearing, the defense attorney decided they weren't going to proceed with that defense, and instead go with the general defense of, uh, SBF thought the lawyers were telling him this was all kosher, so it can't be fraud.
In any case, he is actually testifying in his defense in front of the jury today, and Monday, and likely Tuesday. Based on this hearing, when he goes into cross-examination, the prosecutor is going to open him up and completely eviscerate him, with SBF happily handing the prosecutor the surgical tools to do so.
It's not a practice run... it's a hearing-within-a-hearing to discuss admissibility. i.e., What evidence can be placed in front of the trier of fact (the jury).
[+] [-] flutas|2 years ago|reply
This line encapsulates everything I've thought about this trial.
Feels like watching the man scream at the steam roller in Austin Powers.[0] He just can't keep his feet out of his own mouth. At this point I can't tell if it's hubris, or just straight ineptitude.
[0]: https://www.youtube.com/watch?v=y_PrZ-J7D3k
[+] [-] danpalmer|2 years ago|reply
Secondly though he seems to have quickly latched on to a specific sort of messaging that's built around "honesty" and admitting his own failings, not in a real way it seems though. I think he's seen a bunch of people get "cancelled" in recent years and seen that this sort of admission of guilt tends to work well for people. What he doesn't realise though is that this isn't him being accused in the court of public opinion about something the public don't agree fully on, it's a legal accusation in court about specifics that the law is clear on. I'd say this was just bad advice he was being given, but it seemed to happen so quickly that I think it's just his own bad take on the best way out.
[+] [-] bane|2 years ago|reply
It's mean spirited, but the phrase "she's what stupid people think smart people sound like" struck me at the time. I think the same may be true here. This kind of behavior has been reinforced so much in their lives that in some cases they start to also get high on their own supply. But they to are profoundly stupid people, and start to think that how they interact with the world is what smart people "sound like" and it perpetuates into these spectacular fraudulent failures.
[+] [-] JumpCrisscross|2 years ago|reply
This line captures the recent wave of Silicon Valley bullshitters so perfectly.
[+] [-] FireBeyond|2 years ago|reply
> Defense lawyer Mark Cohen did his best. Unfortunately for him, the cross-examination was conducted by Sassoon, who looks like someone who uses “summer” as a verb, and often appears deceptively timid, with her hands held close to her chest. In her cross, she simply unhinged her jaw and ate Bankman-Fried.
[+] [-] cm2187|2 years ago|reply
[0] https://www.youtube.com/watch?v=YgJvgESR920
[+] [-] baq|2 years ago|reply
[+] [-] tjrgergw|2 years ago|reply
[+] [-] p4bl0|2 years ago|reply
She's here on Mastodon https://hachyderm.io/@molly0xfff and also did live stream on her YouTube channel https://www.youtube.com/@molly0xfff/streams.
[+] [-] rtkwe|2 years ago|reply
[+] [-] matthewdgreen|2 years ago|reply
[+] [-] ctvo|2 years ago|reply
[+] [-] robertlagrant|2 years ago|reply
[0] https://www.youtube.com/watch?v=4o_jPzBZSIo&t=573s
[+] [-] VHRanger|2 years ago|reply
He's valuing the entertainment of millions above years of his own freedom.
[+] [-] kaycebasques|2 years ago|reply
Check
> Bankman-Fried’s defense, in the direct testimony, was trying to put blame on the lawyers: FTX chief regulatory officer Dan Friedberg... A significant thrust of questions was about a bank account controlled by Alameda Research that did not bear Alameda’s name; it was instead called North Dimension, it came into existence around 2020 — that is, while Bankman-Fried was still Alameda’s CEO — and it was where FTX customers were told to wire their funds. Bankman-Fried said that the North Dimension bank account was all Friedberg’s idea. Sassoon asked if Bankman-Fried, as Friedberg’s boss, had given him any direction, or if Friedberg just popped ideas across Bankman-Fried’s desk. The word-salad began again, interrupted only by the judge saying things like “So I take it the answer is you don’t remember; is that about it?” or “Listen to the question and answer the question directly.” ... Then Sassoon did what I had been waiting for: pointed out that Bankman-Fried had been the one who hired Friedberg in 2020. She asked if he’d been hesitant to hire a general counsel. He said he had been hesitant to hire the wrong general counsel — “I did want a general counsel who was comfortable with reasonable risks.” Sassoon then asked if Bankman-Fried was aware of Friedberg’s history of working at a company that had an insider trading scandal? (The company in question, by the way, is UltimateBet.) That there had been a criminal scandal? “Were you aware that Dan Friedberg used illegal narcotics with your employees?”
Checkmate
[+] [-] treis|2 years ago|reply
[+] [-] chasing|2 years ago|reply
He's clearly "smart" in the sense that he knows how to read a book and operate a computer, but we need to stop treating him as anything other than a middling dude who stumbled into a grift.
[+] [-] foobarian|2 years ago|reply
As a result my "we don't like this guy so we'll talk up any minor negative thing we find" detectors start to go off. I think he just took money from the wrong people, kinda like Madoff.
[+] [-] infecto|2 years ago|reply
2) TOS in financial sectors are generally very well thought out and would not surprise me at the startup level that executive leadership should have a solid understanding of what it does. In this case the TOS in question would allow/disallow FTX the exchange from lending money to sister org Alameda. This seems like a pretty crucial thing that the CEO, SBF, should know.
[+] [-] pb7|2 years ago|reply
[+] [-] system16|2 years ago|reply
[+] [-] xyst|2 years ago|reply
Same thing happened with that one woman that ran “Theranos”. Just know the right people. Although I think she was a slightly better public speaker. The yoda voice shit was weird though.
[+] [-] bragr|2 years ago|reply
[+] [-] taude|2 years ago|reply
[+] [-] fuzzfactor|2 years ago|reply
One of the most effective sales techniques is to sell the customer's own dream right back to the customer.
To qualify the prospects you need a marketing strategy that builds a pipeline of potential customers likely to possess the type of dream that you can work with.
Here there was no persuasive salesmanship needed to convince "investors", someone else had already done that in advance, or the customers had built interest on their own.
Sam was just there to use their money, and if a certain amount of losses were inevitable that was supposed to be overcome by greater amounts of gains in the long run. Skimming just a little bit off the top to where it's obscured by the noise of the losses is what lots of financial outfits have done for centuries. The higher-integrity firms have decades of experience carefully disclosing their terms for this activity to their customers, which is one of the reasons why more persuasive sales efforts might be a lot more common.
As soon as Sam started skimming without proper disclosure, that's what made it ordinary theft.
[+] [-] xorcist|2 years ago|reply
The business idea of venture capital is not to follow through with the investment all the way to a mature company with long term profits. It is to offload to later investors. It's hard to fault anyone as long as they go in with their eyes open.
[+] [-] Tarq0n|2 years ago|reply
[+] [-] tennisflyi|2 years ago|reply
[+] [-] josho|2 years ago|reply
[+] [-] lamontcg|2 years ago|reply
[+] [-] wnevets|2 years ago|reply
[+] [-] nabla9|2 years ago|reply
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
[+] [-] xwdv|2 years ago|reply
[+] [-] steveBK123|2 years ago|reply
They all belong in jail.
[+] [-] callalex|2 years ago|reply
[+] [-] kranke155|2 years ago|reply
Sam is just a massive sociopath, born out of this.
[+] [-] chubot|2 years ago|reply
What happened there ??? The guy who calls out a lot of fraud, now can't see it?
I'm disappointed because I found his books enjoyable ... although maybe in retrospect I can't remember that much from them. Maybe he was never really calling them out, but just liked the story.
I know there have been a bunch of articles about this -- but what's the tl;dr ?
I guess he was always up close and personal with everyone, because that's how he got access to tell these interesting tales. And then you sort of compromise your own viewpoint
[+] [-] AlbertCory|2 years ago|reply
https://www.bbc.com/news/world-us-canada-65625526
[+] [-] denton-scratch|2 years ago|reply
He's decided to face cross-examination, so the judge held this session to check that his defence doesn't include saying stuff that's inadmissible. But from this account, it doesn't sound as if he's got anything interesting to say at all; and I find it surprising that someone supposedly so bright talks in "word salad", i.e. can't construct a coherent sentence.
I suspect the story about him being bright comes from people who believe wealth is proof of intelligence.
[+] [-] tim333|2 years ago|reply
This court case stuff is a different skill set though and also I think it would be beyond almost anyone to talk themselves out of his situation.
[+] [-] nabla9|2 years ago|reply
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
[+] [-] HideousKojima|2 years ago|reply
Does it also remove his ability to appeal on a "competence of counsel" basis or is that only if he goes full-blown self-representation?
[+] [-] rwmj|2 years ago|reply
[+] [-] generj|2 years ago|reply
>> One decision for Kaplan is whether Bankman-Fried will be allowed to blame FTX lawyers when the jury is back in the courtroom. As we previously wrote, this is called an "advice-of-counsel defense" in which SBF could argue that he sought advice from company lawyers, received advice that his conduct was legal, and "relied on that advice in good faith."
[0] https://arstechnica.com/tech-policy/2023/10/sam-bankman-frie...
[+] [-] jcranmer|2 years ago|reply
At the end of the hearing, the defense attorney decided they weren't going to proceed with that defense, and instead go with the general defense of, uh, SBF thought the lawyers were telling him this was all kosher, so it can't be fraud.
In any case, he is actually testifying in his defense in front of the jury today, and Monday, and likely Tuesday. Based on this hearing, when he goes into cross-examination, the prosecutor is going to open him up and completely eviscerate him, with SBF happily handing the prosecutor the surgical tools to do so.
[+] [-] peyton|2 years ago|reply
[+] [-] AlanYx|2 years ago|reply
[+] [-] xyst|2 years ago|reply
[+] [-] neilv|2 years ago|reply
Wouldn't it be better if these journalists stopped coaching the accused?
The only other effect I see is prejudicial rubbernecking entertainment.
[+] [-] erehweb|2 years ago|reply