Predictions for what happens to Sam Bankman-Fried and his co-conspirators?
Let’s see if I got the Sam Bankman-Fried (SBF) trial right… All of the co-conspirators who enabled the fraud at FTX agreed to testify against SBF in exchange for reduced punishment. They all then testified that everything was SBF’s fault and they were helpless puppets (somehow incapable of quitting FTX or exposing the fraud before it got bigger). Now SBF has been found guilty and will be sentenced to up to 110 years in prison in March 2024.
CNN:
Over the four weeks of his trial, Bankman-Fried watched a parade of people he once considered his closest confidantes testify against him. They included friends from math camp and MIT who became his co-founders; and, critically, his ex-girlfriend and trusted business adviser, 28-year-old Caroline Ellison.
The most damning evidence against Bankman-Fried came from Ellison, who testified for the prosecution over three days.
As both the CEO of Alameda and Bankman-Fried’s romantic partner for two years, Ellison was uniquely positioned to comment on what was happening within the tight inner circle of Alameda and FTX executives, many of whom lived together in a $30 million luxury apartment in the Bahamas.
Ellison’s at times emotional testimony offered a narrative of events in which virtually every decision at both Alameda and FTX came down to Bankman-Fried, who founded and was the majority owner of both firms. A common refrain from Ellison, when asked who directed her to carry out various actions, criminal or otherwise, was a variation on the words “Sam did.”
From reading early reports on the meltdown, I got the impression that it was Ms. Ellison’s investment losses that had created the necessity for the fraud. Did that turn out to be false?
What happens to all of the co-conspirators, without whom SBF couldn’t have stolen a dime? Back in December, the New York Post predicted that Caroline Ellison might get off with probation.
This TechCrunch article is titled “Ex-SDNY prosecutor says Caroline Ellison, Gary Wang and Nishad Singh probably won’t get jail time”:
‘I’ve had cooperating witnesses who did get jail time, but it’s the exception not the rule.’
When Wang testified, prosecutors asked at the end of their examination how many years he was hoping to be sentenced. “Ideally hoping for no time,” he replied, which prompted some quiet laughter in the courtroom.
If this plays out as predicted, do we think it is fair? One altruist goes to prison for 100 years while co-conspirators who stole at least $millions for themselves are free to move on to the next scam? If SBF’s guilt had been challenging to establish, maybe this would make sense in some practical way, but it didn’t seem like a tough case for prosecutors to make.
Related:
- “SBF’s mom told him to ‘avoid’ disclosing millions in FTX donations to her pro-Dem PAC: suit” (New York Post, Sept 22, 2023): Bankman-Fried has been accused by federal prosecutors of funneling $100 million in political donations through “straw donors” including Nishad Singh, the former head of engineering at FTX and sister company Alameda Research, and Ryan Salame, another former top executive at the company.