Sam Bankman-Fried Dodges Fierce Questioning on The Stand

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By Calvin S. Nelson

For three weeks, Sam Bankman-Fried sat silently within the third row of a Manhattan federal courthouse as his former closest colleagues and ex-girlfriend tore him aside. 

All three members of his inside circle—Caroline Ellison, Gary Wang, and Nishad Singh—testified that the previous FTX CEO directed them to commit fraud, mislead buyers, and create particular exceptions to permit his buying and selling agency Alameda Analysis to borrow billions of {dollars} from FTX prospects. They mentioned that he knowingly deceived the general public about the best way his enterprise labored. Bankman-Fried has been charged with eight counts, together with wire fraud and conspiracy to commit cash laundering.

All through the trio’s testimonies, it was but unclear as as to if Bankman-Fried would reply to their allegations by taking the stand himself. A felony defendant’s option to testify comes with excessive danger, authorized specialists say: The defendant opens themselves as much as harsh cross-examination, wherein they need to dodge each admission of wrongdoing and perjury. 

However Bankman-Fried determined that the flexibility to inform his story himself to the jury was well worth the danger. So on Thursday, Oct. 26, he was sworn in for the primary time, in entrance of a giant crowd of crypto fans and curious onlookers that spilled into a number of overflow rooms within the courthouse. 

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Bankman-Fried’s remarks on Thursday afternoon, nonetheless, weren’t a part of the trial proof heard by the jury to find out his guilt or innocence. Quite, they had been a part of a listening to wherein Bankman-Fried’s lead protection legal professional Mark Cohen tried to influence Decide Lewis Kaplan that they need to be capable to admit sure proof once they start presenting their case on Friday. The duty for Bankman-Fried, his legal professionals, and the prosecution was to not enchantment to the jurors—who had been despatched residence for the day—however to influence Decide Kaplan himself. 

On this approach, the listening to served as a form of dry run for Bankman-Fried’s precise testimony. It supplied a preview of his makes an attempt to deflect blame for the collapse of FTX, and the prosecutors’ makes an attempt to induce errors from him. After three hours, the listening to didn’t seem to go notably properly for Bankman-Fried: Decide Kaplan mentioned on the finish of it that he was “fairly doubtful” about his legal professionals’ arguments, and Bankman-Fried’s mom Barbara Fried, who was within the crowd, at one level appeared to place her head in her palms. 

Cohen’s central intention on Thursday was to current the case that Bankman-Fried had acquired poor authorized recommendation from his former FTX legal professionals. Cohen argued that whereas Bankman-Fried had taken “consolation” from the counsel of attorneys like Dan Friedberg, that they had induced him into making fallacious selections. As an example, Bankman-Fried contended that Friedberg and different legal professionals handed him paperwork to signal—together with one which allegedly misled a financial institution in regards to the objective of opening a checking account—which Bankman-Fried solely skimmed, trusting that they had been correct. 

“There have been loads of issues that occurred that I used to be both not knowledgeable of, or after the actual fact, kind of summarily knowledgeable of,” he mentioned at one level, including later: “I want I had had extra conversations; that I personally had been extra knowledgeable.” 

As soon as Cohen was completed, prosecutor Danielle Sassoon took her flip, and subjected Bankman-Fried to a few hours of rapidfire, hyper-specific questions on his conversations with Friedberg: when and the place they occurred and what was mentioned in them. The aggressive method appeared to stymie Bankman-Fried at sure factors: He stuttered often, used a labyrinth of jargon and repeated the phrase “I don’t recall” 25 occasions. 

Bankman-Fried’s circuitous method to answering Sassoon’s questions appeared to harass Decide Kaplan. “Hearken to the query and reply the query straight,” he admonished Bankman-Fried at one level. At one other juncture, he mentioned to Cohen: “A part of the issue is that the witness has, what I will merely name, an attention-grabbing approach of responding to questions.” 

The tensest second of the listening to got here when Sassoon requested Bankman-Fried a forceful query about “embezzling buyer belongings.” Whereas the query was thrown out by Decide Kaplan, Bankman-Fried responded anyway, refuting her query with amusing. 

His lawyer reduce in and scolded him in a playful tone: “You did not have to reply if it has been sustained. Have not you been sitting right here for 4 weeks? 

“I felt the necessity to reply that one,” Bankman-Fried replied.

On the finish of the listening to, Decide Kaplan mentioned he would resolve on Friday whether or not the proof about Bankman-Fried’s former legal professionals can be allowed. However he mentioned he was “doubtful” about Cohen’s place, and even drew an analogy to somebody robbing a financial institution, hiring a lawyer to assist him launder the funds, after which pinning the crime on the lawyer. “How is that totally different from what you are attempting to do in precept?” he requested, including: “I’m not saying something about your consumer’s guilt or innocence.” 

If Decide Kaplan guidelines in opposition to Bankman-Fried on this listening to, it might scale back the protection’s out there approaches even additional: In a pretrial ruling, Decide Kaplan sharply restricted the variety of professional witnesses the protection might name. No matter what occurs, Bankman-Fried will return to the stand—with the jurors current—on Friday.

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