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Welcome to Judging Sam. I'm Jacob Goldstein and we're recording this on Thursday, October nineteenth. The third week of the trial of Sam Bankman Freed wrapped up today and the prosecution is all but done presenting their case. Their last big star witness was this week. You know this if you've been listening to the show. It was Nishad Singh, one of the three main FTX executives who has pleaded guilty.
Earlier this week, our court reporter Lydia Jenkott talked with Michael Lewis about the beginning of Nishad's testimony today, she gave him a call to talk about the rest of it.
So you told me that out of the three top FTX executives we've heard from in this trial, you spent in the most time with Nishad. What's he like?
He was the most kid like in a lot of ways and also the most earnest. He was it accuse twenty one. When he joined Alimea Research, he had basically one very short stint in the workforce after college. He knew nothing about finance, like zero when he started. So everything he learns about the world of money he learns through the lens of first Alometer Research and then FTX, which is a very peculiar way to learn about finance.
He was she talked to my element and was very bright and kind of free associated when he talked, and would take all kinds of stuff that in retrospect, you know, it's kind of interesting. Like there's a line in the book where he says, you know, in the course of doing their trading at al I mean research, where they had they did some stuff to kind of get around laws to trade. This shot has this line where I
learned what the law is. It's not what's written, it's what people care to enforce, and that he got very cynical about the laws around money and was very open
about it. This is when things were good. He was also very open, extremely open about Sam's lack of any kind of emotional intelligence and how hard it had been on everybody for the previous four years to have this guy sitting at the top of the company who did not care at all about people's feelings and was uninterested in dealing with him, and that all those feelings, especially the negative ones, found their way to the Shot, and the Shot ended up being kind of, you know, emotional
intelligence officer in chief. And the Shot was also, in addition to being kind of the translator of FAM's emotional states or a translator of Sam period to everybody else, he was a translator of Gary's code to everybody else. That he was this kind of like this machine to that acted as a buffer between these two incomprehensible people, Gary and Sam and the rest of the of the firm. But there's all kinds of stuff that, you know, he was.
Just how I got to know him was we just spent endless hours talking it rings true to me that he wasn't alive to the risks they were running with customer money until September. He didn't really have a filter and he would he would he. I think if the shot had known, like he might have blurted it out to me in an interview. He was that he was that on a naive about things that it w'd be a very poor liar.
Well, maybe that's why he didn't know until so late. The other thing I was wondering about is in court they showed us these signal messages between Sam Makman and Freed and a shad and in one of them he says something like this is wildly selfish of me, And then he asked Sam Mankman Freed to publicly explain that there weren't a ton of people orchestrating what happened, and Sam responded, Yeah, I don't think that's super selfish. I think that's correct.
It's funny. Can I just tell you what I found interesting about that whole exchange? Yes?
Please.
This is a new wrinkle in the financial markets. It's like, once they've become automated and they become driven by code, people actually doing the code sometimes are capable of doing things that are writing code without understanding the consequences of the code, without understanding that this line might just lift money from somebody it's really bad to lift money from.
And the kind of myopia of the coder is which struck me about that exchange and the shot of saying, Sam Christ, now that I know what this was used for, I'm implicated because I wrote that code, but I had no idea that that code was going to do that. And that's interesting. Like old time fans, you wouldn't have that old times and finance, there wasn't this level of
an abstraction. And I think people end up doing stuff when when it's being automated that they might not do if it was face to face, normal human interaction.
Yeah, yeah, that makes sense. But Sam's response, Yep, I don't think that's super selfish. I think that's correct. That implies that he did know what was happening. Now to me, it seems pretty damning. It kind of implies that there were people orchestrating it and that was Sam impossible.
Don't you think that? Don't you think the damning thing is that Nashad tells Sam tell people that you orchestrated it and I didn't.
And Sam says.
Yes, that's not a selfish request.
Well, yeah, I thought this was very dad that he doesn't say what orchestrate what? Yeah, but amshoes. He may be just saying that, oh, I know that, I know you didn't know anything. But he's not saying that I know I did, right, you know, just the facts of the thing are so clear. It's like so clear that the money was in the wrong place, and that in and of itself is enough to put him in jail.
And nobody even disagrees with that. But there's this argument of there is this subtle argument about like what's going on inside these people's heads, and we're getting a little more clarity on it, but I don't feel like we've had complete clarity. And I really really want to hear what Sam has to say. I hope he testifies, because that at the end of that, I think we can have the full conversation about what seems most plausible. You know, what is the timeline on this, It feels most plausible.
Yeah, I can't wait for that.
We'll be back in a minute to talk about the many things that have happened in the trial. Since Nashad finished testifying earlier this week. Lidiagen, Welcome back to judging, Sam. Thank you. Is it true that you got in trouble in court today?
I did get in trouble in court today.
What did you do?
I turned around and asked someone a question when the judge and the lawyers were having a side panel conversation, and a marshal came up to me and said that if I did that again, he's gonna throw me out of the courtroom drama.
This is courtroom drama.
Yeah. The marshals have been increasingly angry at the reporters for talking, chewing gum, having snacks. They said that this judge is the strictest judge in the courthouse and that he can see all the way from across the courtroom on his little podium if someone is chewing gum and then will yell at the marshals afterwards. So that's why they have to be so strict.
Wow. So they're like, it's not my fault, it's the judge. Sorry, I'm just the middleman.
And there's been there's been a crackdown. They took someone's newspaper away today. So the early days of chatting doing crossroad puzzles are over now. It kind of feels like when the teachers like tells everyone to put their heads on the desk. That's where we're at.
Well, and there is a break now right as of today, there's going to be what a week long break?
Is that? Right? Yes? Which I think is sorely needed by everyone. The judge has definitely been getting antsy. He's been getting up and kind of leaning over during testimony. He yelled at also both of the lawyers for taking too much time. So I think people are running out of ink in their pens. I think we all need a break.
Why, I mean, apart from letting everybody chill out for a few days, why is there a week long break right now?
The judge is going to a conference.
Wow, I didn't know you could do that. If you were a judge'd be like, sorry, world, I'm going to a conference for a week.
I think you make the rules. It's his courtroom, his rules.
So legitien. There have been several witnesses since Nishad finished testifying earlier this week, and you were telling me earlier on Slack that of all of them, the one who was most striking to you was can Son, the lawyer, the general counsel of FTX, tell me about him. What do you say, Why was it interesting to you?
Yeah? So, first off, out of all of the FTX executives, he seemed like the most comfortable in a suit.
He's like, lawyers might be keeping the suit industry in business at this point, right.
Yes, exactly, And he was pretty self spoken, and he started off by saying that he had no idea that Alameda was using FTX customer funds. He said that he would have never approved that, and he was told over and over again by Sam that these customer funds were safe and separated. And that's what he told other people when they asked, that's what he told customers, that's what
he told investors. And the prosecutors really spent a good ten maybe even thirty minutes, it felt, underlining that point and all the different iterations of he did not know that this was happening. He would have never authorized this in his position as a general counsel.
Okay, so he didn't know what was happening. What's in it for the prosecution to call him, like, why do we care that he didn't know what was happening?
Well, that's where the dramatic moment came in when he talked about when FTX imploded and when customers were trying to withdraw their money and they realized that it wasn't there. And he talked about how at that point he was kind of in a sort of war room with Sam, maikman Fried and Nishad. A bunch of other people were in that room as well, and he described what it was like. He talked about how Sam was on his computer typing away and Nishad he was very poetic, and
how he described Nashad. He said something like how Nishad was really pale and looked like his soul had been tugged out of him.
Huh.
And he said that it was at this point that he was shown a balance sheet, and the balance sheet showed that Alameda was billions of dollars in the red, that they owed this money to FTX, and he was really shocked to see this. And at this point Sam was still looking for someone who could save FTX, and they were trying to figure out, you know, what to do, how to share this balance sheet, what to say about it.
And Ken Sun said that Sam asked him if there was any legal explanation that he could give for this deficit, for this.
Whole meaning, is there any story that you could make up, any fiction you could create that would make this not a crime?
Yes, I think that's the only way to interpret that.
Yes.
And Can Sun said that they ended up that evening going on a walk, and Ken Sun said he had done some digging and he thought about it, and he told Sam that while there are some legal theories he could offer up, there is no legal explanation that's supported by the facts.
Wow, So that seems kind of damning. Did he get us examined? Did the defense have a chance to ask him questions?
Yes, they brought up how he testified as part of a non prosecution agreement, So okay. Can Sun said that, you know, he didn't know that this was happening, but still, as part of his job as general counsel, he did approve certain things that were without his knowledge, certain transactions that we're using customer funds. So he said that out of an abundance of caution, he is testifying under this
non prosecution agreement. But the defense lawyers pointed out that this non prosecution agreement only stands as long as he's saying the truth, and it's the government who gets to decide whether or not he's saying the truth. And that's just a way of casting doubt on his testimony and saying that he has an incentive to say what the government wants him to say, uh.
Huh, which is also true obviously for all the people who made plea deals. And that has been the sort of key thing the defense keeps saying about all these other senior executives who pleaded guilty and don't want to go to prison, basically right.
Exactly, and it lines up with the role of the defense and what the defense has been doing in this case on cross which is really just casting doubts or poking little holes in what the witnesses are saying, which makes sense because at the end of the day, the jury has to decide that Sam is guilty beyond a reasonable doubt, So they're just pointing out why one might have a reasonable doubt about what these witnesses are saying.
So, okay, lydia Jeen, you've been going to court all day, every day for three weeks. You've seen every minute of the trial. The prosecution is basically done. What do you make of things?
At this point, I think that the prosecution has done a really good job of giving us a very clear story. And I've read that in every trial there's certain themes that come up, and on the side for the prosecution, the theme is very clear. The theme is that Sam is a liar. It's that Sam said that FTX was safe for Becusstomers and it actually wasn't. And he lied
about this over and over and over again. He lied about it to the people who are close to him, he lied about it to customers, he lied about it to investors, and they've just been pounding that home over and over and over again. The defense on their cross they haven't really told us a story the same way about what happened, which of course they don't have to. All they have to do is poke holes in the
story of the prosecution. But I am curious as we approach the time for the defense to present their case, if they are going to give us a narrative and explain from their side what happened and how FTX imploded.
Well, and from their side, you mean, when Sam takes the stand right, the big dramatic conclusion to this to this.
Trial exactly, and when Michael Lewis comes in when we get to go to court together, which I can't wait for.
Levision cop. For one last thing, let's talk about Twitter.
Twitter has been coming up a lot in this trial. We've been seeing lots of tweets from say Magmond Freed. It kind of is a great reminder about why it's not good to tweet through it.
Never tweet the story.
Exactly, especially if you're potentially being accused of a massive fraud.
Whatever you tweet, never tweet. All customer accounts are segregated. One thing, never to tweet.
Do not say FTX is fine, assets are fine. The other day there was an SD and Y investigator. He was kind of like a Twitter expert who showed us
how Twitter works, what retweets are, what gms are. He showed us a whole ton of tweets from Sam mcmanfreed, and they all came up on the screen so fast it honestly felt like a clockwork orange you know when you're limoly are your eyes open exactly like you couldn't read them, but you just got this sense, this overwhelming sense of to the prosecution's point of Sam tweeting things
that aren't true. But there was one particular moment that stood out, which is when we were shown private messages dms between Sam Maikmanfreed and a reporter at Vox named Kelsey Piper.
This reporter, Kelsey Piper, actually publish these dms on box when it happened right, This was like big news last November, like right when FTX was blowing up.
This happened exactly, and I think I had a big influence on how people thought about Sam agmn Freed, which is why the lawyers put up a strenuous objection to have these dms not be shown. But in the end the judge ruled that they could be.
Okay, Lidia, to tell you what we're basically done, I'm going to get out of here, say goabye, But why don't you just play us out with some of the greatest hits from those dms.
Kelsey Piper. I was just re listening to that conversation we had this summer about whether you should do an ethical shit for the greater good sam Agmin Freed. What did I say, Kelsey Piper? You were like, Nah, don't do an ethical shit, Like if you're running Philip Morris, no one's going to want to work with you on philanthropy. Sam Mankman Freed. Heh Kelsey Piper, And there's a risk of doing more harm than good. But even if you subtract that out, pretty not worth it. Sam Mankman Freed, Yeah,
Kelsey Piper. I was trying to figure out, like if that was kind of the pr off the cuff answer. Sam Megman Freed, Man all the dumb shit, I said, It's not true, not really, Kelsey Piper. Yeah, I thought it might not be. Sam Megmanfreed. Everyone goes around pretending that perception reflects reality. It doesn't. Some of this decade's greatest heroes will never be known, and some of the most beloved people are basically shams.
This episode of Judging Sam was hosted by Jacob Goldstein. Lydia Jencott 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's Symphinette. Judging Sam is a production of Pushkin Industries. Got a Question or Comment for Me is a website for that atrpodcast dot com. That's ATR podcast. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts,
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