Pushkin. Welcome to Judging Sam, the trial of Sam Bankman Freed. I'm Michael Lewis. We're recording this on Tuesday evening, Halloween, October the thirty first, and we're finally in the home stretch. The prosecution finished their cross examination of Sam today and then the defense followed up with a redirect and then everybody rested. Tomorrow we'll start closing arguments. Lydia Jean, you waited outside the courthouse for nearly seven hours last night. What was that like?
Honestly, I feel embarrassed that I did that, especially because there was no need because people were arriving at six am and able to get into the courthouse. Fine, but I got scared from yesterday.
Well, the market turned right. It was so interesting to hear people talk there this etiquette that nobody divulged what time they got there because the night the night before, because it is going to cause people to get there even earlier the next day. Yeah. I've been this creep to the point where two days ago the first guy shows up at like eleven o'clock at night.
Yeah, I feel like I've done every hour I've done at this point, I've done two. I've done three, I've done four. I always thought I've never really considered part of my day before.
So you got there, you said one in the morning to fifteen. I think two fifteen. You got there to fifteen, And how many people were ahead of you? Thirteen? But at six in the morning you could still get a.
Spot in the cause twenty one people can usually get in, and I think the twenty first person arrived at like six thirty am.
So I was in the overflow room for the first half of the day anyway, with people. I was surrounded by people who'd foresworn in the morning line, so that wasn't worth it and they didn't care anymore. It round sick. Yeah, this is no way to lead a life. And there was all that kind of stuff going on in the in the overflow room, but there were I don't know eighty people there, ninety people there, it was. There was a crowd still, So give this a brief summary of what happened today.
Yeah, So the prosecution finished questioning Sam, and I'd say it wasn't too different from yesterday where he kept saying that he didn't remember things. Then the defense did to redirect, and then they rested, and then the prosecution decided not to do a rebuttal.
And then what happened for the back end of the day.
Then there was it's called a charging conference, which is when the lawyers and the judge talked about what instructions the jury should get about each of about the charges, so basically what they're supposed to consider when they're considering Sam's case.
And did they finish with that?
They did, yes?
And what did they did you were you able to hear what they were saying?
Basically, the judge is going to read to the jury this sixty page document that explains every single charge and how they need to think about that charge. And they went through the sixty page document pretty much line by line, and it was everything from fixing typo was like talking about like whether a sentence should be in the subjunctive or not, which they actually did disagree about, to more substantial things as well.
So what did you sense was there were the bones of contention between the defense and either the judge or the prosecution.
It was pretty much what you would expect. For instance, the prosecution wanted to have a clause that said conscious avoidance, so basically the idea of purposefully not knowing something. If you're purposefully not knowing, it doesn't make you not guilty of the thing like.
Skipping the meeting where you're talking about the bug and how to fix the bug exactly.
And then the defense said that they don't want conscious avoidance to be one of the charges.
Gotcha, What did you make of Sam on the stand? Did he seem that he had shifted his strategy at all? No?
I think it was still it was just a daze of I don't remember, I don't remember, I don't remember.
Yeah, I ever seen anybody not remember so many memorable things?
Well, yeah, well that's because he had so much more to lose by remembering, you know what I mean, Like nothing that he would remember could actually help him that much, and things that he said could actually hurt him. So probably his lawyer said it was a safer strategy to just say he doesn't remember, because that way he can't get caught for lying on the stand, which could add extra time.
Yeah, that part of it was kind of unsatisfying. I thought that what did you think of the redirect? The redirect to me is very satisfying because he finally will talk and sort of explain stuff, and a lot of what you know, and a lot of what he's explaining makes sense. The frustration with the courtroom is neither side
is actually operating in the spirit of honesty. They're both trying to make a case and so taking stuff out of context and blowing stuff up and making it mean something different than it actually meant back when it was happening, and it was I find it kind of a relief to let him go a little bit, let him explain. Judging Sam will be right back. Welcome back to Judging Sam. The trial of Sam Bangman freed.
You told me at lunch that you learned I think you said you learned two things today.
Right, We're now at the end of the testimony, and I have a long list of things that I'm surprised I didn't learn more about. You know, I thought the trial was going to clear some stuff up for me that it did that. It just didn't today. You know, one thing that was interesting to me. They gave us a glimpse of a memo that Caroline had written to Sam. And most of the random stuff was very very positive stuff like oh, we made ten billion dollars this quarter
or on FTT or whatever it was. But they had. It was. It was the moment they took the loss for what was essentially a theft of the exchange. It was a gaming of the risk engine using a couple of obscure crypto tokens. I thought the loss from that episode was six million, and she listed it at eight hundred and fifty million, and that was you know, I've been humbering for. There's still money that's not accounted for.
If you listen to the prosecution case from the point of view of a jury who's sort of like only half paying attention, you might come away with the belief that, oh, Sam Bankman Freed stole eleven billion dollars in customer money and spent it all. Kept using that term who you spent it? You spent it, You spent Yes, you spent very little of it. Most of it is either there or invested in things that actually have some value, some of some things that have some great value.
Because you know, in the judge's eyes, right, it's like if you stole money and then you win the lottery, you're luckily found it. It doesn't really impact that you stole the money.
Yeah, but that's not what happened here. The bankruptcy. People have collected seven point three billion dollars of liquid assets that seem to have been stuffed in various exchanges and bank accounts. And there was a bunch of liquid assets still on hand when they collapsed, and he made a big bunch of venture capital investments. And so I was surprised I didn't find its way in. They still the opportunity to call witnesses, for example, in the rebuttal, I didn't know who to recall.
Yeah, and they said they were going to call some yesterday.
There were four or five characters. Five characters from the book got principal characters in the book. And in particular, I thought, you know, Ramnick Aurora was basically on a plane to come here. He thought he was on he thought he was on the witness stand. He thought he had a date, I think at one point, and.
Romni Ga is one of He was a pretty high up FTX person, race.
Very high up. I kind of half thought that a couple of things from other things from the book were going to make their way in via the prosecution. And we found out that the book was apparently disallowed or something. I got a note today that the Wall Street Journal I guess it's in the transcripts reported that the defense tried to introduce a passage from the book, and we're told they couldn't do it.
Yeah, was doing a side panel, so we couldn't hear it in quirt.
If you'd ask me what was going to be introduced from the book? And I thought, how could it not be? Sam telling me when I asked him what he would have said if someone had directly, precisely asked him the question, is Alameda subjected to the same risk engine as every other trader on on FTX? And he says, I would have made a word, Salid, or I would have or I have found some way to answer a different question. I just thought, wow, so damning that that would Yeah,
how did that and not find its way in? But it didn't. It just shows you that, like telling a story in a courtroom is different from telling the story as you would as a as a writer.
What was it like to hear because moments that you spent with Sam came up in court right Like they asked him about when he took a private debt to a Super Bowl game.
I remember that it was a private plane because I was on the plane.
You don't not recall.
I don't not recall, and in fact I can. I can give you blow by a blow of being on the plane. Kind of. I mostly remember who was on the plane. I remember conversations from the super Bowl. I mean, I could kind of understand when he says, I don't remember exactly what I said to this journalist or that journalist. That I understand. You know, it's like one interview after another you just forget. But stuff you do like that
seems stranger. Like he was asked if he had dinner with Bill Clinton in the Prime Minister of the Bahamas, and he kind of basically tried to say no, and then he said he wasn't sure of Yeah, he said.
He didn't know if it was a dinner, but it was an evening gathering.
It was during his crypto Bahamas thing last April. And it was a moment because they showed a video of them all together, and that was kind of a cool moment because Clinton appointed Lewis Kaplan to the bench. I mean, so scout Kaplan was seeing his benefactor up there on the screen. But I did, you know, I did have a thought about the prosecution's strategy of trying to make the case that Sam was trying to basically bribe the Prime Minister of the Bahamas.
Yeah, I wanted to bring that up with you because they also mentioned that he said he was going to pay off the national debt of the Bahamas, which is also in your book, and.
I've never seen it anywhere else. That was so not in the beginning, an attempt to bribe the Prime Minister
of the Bahamas. It was an idea that it was one of the many bonkers ideas Sam had, including like paying Trump five billion dollars not to run for president, that he had immediately upon arrival in the Bahamas when they first moved the company there days after, because he was he was having trouble getting his whole company to move from Hong Kong, and especially a lot of the Chinese people staff said there's no place to put their
kids in school. The roads had botholes. You're complaining about the.
Country, and he was, so he was like, I'll fix the country.
I'll fix the country. Yes, that's exactly what it was. He thought. He didn't know what he was thinking. Maybe I'll have to do this in order to attract the ten to come work in the Bahamas. So that was
the original notion. But anyway, the thought I had about that was, no matter what happens in this trial, and it seems unlikely that anything's going to happen but a conviction, they're supposed to be a second trial in March or April with these other charges that the Bahamas government had not agreed to, and that they have to agree to allow them to proceed with the charges in order to
bring them to even have that trial. And it seemed a strange strategy, indeed, to antagonize the Prime Minister of the Bahamas before you're asking the Bahamas permission to do this all over again. That surprised me a bit, but it also made me wonder if the prosecutions basically decided that they're going to win so big and Sam's going to go away for so many years that there's never going to be a second trial.
That's what I've That's kind of what I've assumed.
The second trial would be very interesting because a lot of American politicians who will be implicated, and that that could be a show. One of Sam's advisors suggested to me a weird possibility that if Sam is convicted and remanded to the Metropolitan Detention Center, awaiting sentencing from the judge. That the judge could actually wait to sentence him for you know, many many months and allow the second trial to happen before he even sentenced him for the first.
Just actually, yeah, because sentencing can normally take a while.
Yeah, And so that is it's conceived. It's gonna be up to captain. But it's conceivable that Katherlin could will into being the second trial, which apparently would be in his courtroom too.
Oh my god, really, we could all renate.
There are things that made an impression on me. The cross examination over the two days. It surprised me that Sam, if Sam was going to testify, and he did as he did, if you're going to scheme up a hail Mary, you've got to throw the pass. And I felt he didn't throw the pass. I felt like that they're not answering, kind of choking it off and not responding to the prosecution made him look evasive to the jury, that his one one hope was to be radically open. I thought,
but that might be just stupid. But I thought, if you're going to if.
You're gonna go through, you're already in that world though right of like, that's right.
That's right, that's that's right. The other thing is it's started lurking in the background because it was it's like a buzz in my head when I'm listening to the prosecutors because their line, their insistent line, is you stole the money, you stole the money. The sin, through my eyes, is that he risks the money without permission. He borrowed it and put it at risk without asking anybody's permission, and he put people at risk without their consent, which
is something he does pretty naturally. He does it in his romantic life, he does it in his relationship with his employees. Some of the characters were particularly upset that he put them in a position of lying for him. I always felt like the way they were coming at him wasn't capturing the spirit of the Yeah, I hear you.
I think so. Soon had one time where she said, you know, would you say that you're someone who would take a huge risk and risk a big loss or something? Right, the one time she kind of got at it, and when she said that that's something maybe like I actually
think maybe she does understand same makeman freed. Yeah, but maybe the story of him as a gambler, isn't It's a slightly more complicated story than just him as a thief, right, right, You have a little bit more sympathy for a gambler than a crook, right, And he was both, so she could choose a story that worked best.
And while it's very hard for a person to contrive a self defense after a simple theft, if I steal your person run off with it, it's totally understandable what I did. But if I put you at risk because I've misjudged the risk.
And isn't that the gambler mindset, like being forever optimistic and always believing in yourself and that it will work out, which is why you can always continue to take risks well.
And the added twist being that it's conceivable that it could work out, It could work after so that's even weirder, right, So it's conceivable. The money is there and more because this stake in anthropic.
But at the end of the day, like even if you're a good gambler, doesn't it you know, doesn't it always come does anyone just always win in the end? Like it was always going to come crushing down?
Yeah, eventually, And the way this place was run, it was chaos. Something was going to happen. Judging Sam will
be right back. So I have a question for you, because maybe this isn't an odd thing about this trial, but it seems like an odd thing to me about this trial that a lot of the facts were agreed upon, like the fact fact that the money was in the wrong place from the start, and that the reason the money was in the wrong place was this risk engine exemption and this this FIAT at account where they were taking deposits directly in Alameda rather than taking them into FTX.
When they find out that the money's not just in the wrong place, but that it's at risk, So when they know, and then what they do about what they know? That was sort of what was at issue during this whole trial, and the prosecutors never really go back before May of last year in their in their argument.
About this right briefly but mostly are.
So my question is, having listened to this whole trial, when do you think Sam Bankman Freed knew that this huge sum of money was in the wrong place And when did you think he was really worried it was that right?
I don't think that mattered to him I.
Think that's true. It didn't even occur to him. It's just a big post. Yeah, okay, so that's that's which is so I agree with that. Then. So second and the second part of this is when do you think he was actually alarmed and being devious about it?
Okay? I think it's weird because in all of the conversations that even Adam Yddia, Caroline Gary, and Nishad recount, he's always acting a bit weird in those conversations, Like even in their stories, he's not acting like a man who's like, we're in a terrible situation. You know, even in their stories he's kind of saying, but our nett
acid value is okay. Like he sounds always a little bit worried, but no one ever describes him as panicked, even you know, after everything has crashed, when he's talking to can Sun about asking him for legal you know, legal reason for why the money could be in the wrong place, he doesn't even sound that worried. Right, His reactions don't really ever seem to match what they you think they should be, I guess, and all these stories his reactions read odd to me.
Do you find him an interesting character? Still?
He just reminds me of like those guys at the lunch table who are really good at math and science talk forever and you're just like, none of this is actually relevant to my life. And then but I wouldn't say that. I feel like I completely understand him. And maybe that is partly why I woke up at two ten this morning and slept on, you know, a poncho and my laptop is because I did want to see him talk, because I was hoping that if I could see him. I think I do understand him.
So, but you do feel imm elusive. You don't feel like you completely understand it.
I think you're right. I think if I felt like I could confidently say I understand him, I wouldn't have been so keen on feeling like I had to see him.
The second question is does it surprise you now you've heard this, all the evidence, you've heard all the testimony, that no one identified the problem like that.
You know, people were worried about FTX and elom relationship, but that no one was No one suggested that actually Alameda was just taking and using ftx's money.
Yeah, I think there's a reason no one called uh huh it didn't make It didn't make any sense. Like, it wouldn't make a lot of sense for Alameda to, I don't know, get preferential access to customers trading data and do on FTX what high frequency traders do on the New York stocky stage and it's legal there. That would make a lot of sense. It was so dumb for the all for these principles. His wealth was all tied up in just the success of FTX. To allow Alameda to do that, you don't guess it. It's not
an obvious crime to commit. The obvious thing to do end of twenty nineteen, beginning twenty twenty, when FTX is just exploding, like in a good way, is do everything keep FTX safe. That's the obvious thing to do, and like either get rid of Alameda or do this. Alameda is is in the beginning very helpful. But when the minute Alomed is not really necessary to make markets on FTX, the minute it becomes unimportant there, you do everything to
distance it. You can get rid of it. You do everything to preserve FTX because it's a source of such vast wealth. You don't jeopardize it by making weird venture capital investments with customers money in Alameda, it's just dumb.
Why that's I mean, I have been wondering why.
Actually, yeah, the trial, the trial has not asked answered the question. Right the trial. I guess if you're a juror and you're sitting there and you'd have to really not be paying too close attention, you could, but you might come away if you got to ask it at a dinner party. Why did this guy do that? You might say, Oh, he wanted to fly on private planes and hang out with Tom Brady, or.
Name the stadium after his company. You have those sorts of reasons.
Yeah, but he could have done anyway. He didn't need he didn't need to do what he did in Alameda to do all that other stuff. My answer is he was going infinite. His ambition was so grandiose. Forty billion wasn't enough. He needed hundreds and hundreds and hundreds of billions to do the thing he thought he wanted to do. And so he's he's playing it's all board game. Everything in Sam Bangerfree's life is a game, but he's playing
the game with those kind of sums in mind. So Alamed is that all of a sudden becomes relevant that most people would have been incredibly satisfied. It would have been like risk averse once they had a company that was value of forty billion dollars, right, and that for him it's just the anti It's just like the beginning of the game. Anyway. So what's where we have to look forward to. I'm going back home in the morning. You're going to go into the courthouse. What happens tomorrow?
The prosecution will say they're clar argument, Then the defense says they're closing argument. That's two to three hours each and then the prosecution does like a forty five minute rebuttal. They said it would take about forty five minutes to the defense's closing arguments.
So the prosecution gets to go last.
The prosecution gets to go last, and so soon who I think will be doing the last rebuttal. She actually asked if she could get a podium without a monitor and move it to face the jury, and Judge Couplan said, no, there's a reason the podiums don't move.
You remember the Saturday Night Live skitt was shown Spicer as the moving his podium around and ramming it into the jury. I know, I know what that just that just that just popped to mind, Daniel Daniel Sessen ramming the podium into the jury until that.
I don't think that's true. I mean we were talking about how so soon you know, to your if so Soon told me I was guilty, I would, I would believe it. I would apologize for everything I'd ever done in my life.
All Right, So you have fun tomorrow. I'll be on a plane tomorrow and I will talk again on Thursday.
Yes, I speak for myself and all the journalists to say that we're gonna miss you, Well, I'll.
Miss you too. It's been fun. See ya hy. We'll be back in your feed soon with more expert analysis and news from Sam bankman Fried's trial. Thanks for listening. This episode of Judging Sam was hosted by Me, Michael Lewis. Lydia Gencott is our court reporter. Katherine Girardeau and Nisha Venken produced this show. Sophie Crane is our editor. Our music was composed by Matthias Bossi and John Evans of stell Wagon Symphonette. Judging Sam is a production of Pushkin Industries.
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