Sam Bankman-Fried lawyer complains US portrays him as “cartoon villain”

FTX founder's fraud trial kicks off with opening statements.

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[PeterWimsey]

The more I read about this, I do not think he is a bad guy. I think he was the tool of his parents.

edit: this is not a defense of him, just a reading of the situation.

It's just a dumb take, based on ignorance and your imagination.

If you have actually followed this case, there is nothing that would lead you to this conclusion.

It's a conspiracy theory.

 

[graylshaped]

It's just a dumb take, based on ignorance and your imagination.

If you have actually followed this case, there is nothing that would lead you to this conclusion.

It's a conspiracy theory.

View: https://www.npr.org/2023/10/02/1200764160/sam-bankman-fried-sbf-parents-ftx-crypto-collapse-trial-stanford-law-school

 

[PeterWimsey]

The problem with that angle, at least on a moral level (IANAL) is that the incompetence is the fraud - or rather, the central fraud was that he extensively represented to customers that FTX was run in a sound and competent manner, both in general and in specific claims, while knowing that those representations were false. Claiming incompetence isn’t a defence, it’s an admission of guilt.

No. That's not how it works. Incompetence isn't fraud. Or even a crime.

This " he extensively represented to customers that FTX was run in a sound and competent manner, both in general and in specific claims, while knowing that those representations were false" is fraud.

It's the lying. Actually disclosing what you are doing, even if what you are doing is incompetent, isn't fraudulent.

It's the same with Elizabeth Holmes. If she had said "We'd like you to invest in our startup that we hope will allow blood tests from a single drop of blood. So far, we have not been able to make our technology work, but even though there is no scientific basis to beleive that we will be able to do so, we still hope to be able to succesfully pull this off" ... she would not have been guilty of fraud.

The basis of fraud is dishonesty, not incompetence.

I once saw a disclosure in a private placement [of stock] for a ski resort that stated: "The most important factor in the success of a small business is the experience of the management. The management of this proposed ski resort have no experience."

If investors buy and the resort fails, it's not fraud; it's on them. People are allowed to make dumb investments, as long as they are not lied to.

 

[FabiusCunctator]

View attachment 64582

Shh. Be very very quiet. I'm fleecing FTX investors. - SBF.

Heh heh heh heh...

 

[unequivocal]

He's undebatably an idiot, but I also disagree with the characterization that he was anything more than a tech bro hypeman. At least Elon is both equally the same level of idiot but still has some semblance of sense just ever enough to not bankrupt Tesla. Although, that's about the worst "award" you could possibly bestow upon someone.

I would love to hear you distinguish a cartoonish villain and a tech bro hype man in some meaningful ways..

 

[Eldorito]

I think very well. The more I read about this man I am convinced he, much unlike Elizabeth Holmes, was only the most massive idiot of idiots who could ever have been idiots, but not truly a fraudster in that he did not actually undertake his actions on prior knowledge and specific intention to mislead. The end result is about the same anyway as you end up losing your monies and/or investments, but this very thin tightrope of a line is what makes or breaks the legal side. I'm no defender of Sam Fried just to be extra clear, but this is what the courts will surely spend months arguing about.

What about him taking $10b out of client deposits in FTX and loaning it to his own company in order to buy investments in FTX and lavish items for himself and his family doesn't just spell "fraud" to you?

The only way he is an idiot is that he thought so highly of himself, and figured he could take the money and invest it to make even bigger gains. But he worked, successfully, at a trading firm. His parents were lawyers. His companies had CEOs and lawyers who have made it clear they all knew what they were doing.

He wasn't walking a tightrope here, imagine if the CEO of a bank borrowed $10b and spent it on whatever they wanted, doing dodgy investments and buying stuff for themselves. That's what SBF did. There's no grey area on how illegal this is.

 

[L0neW0lf]

I mean, if the shoe fits...

 

[Crying Croc]

.....

 

[Bzored]

If you had money on FTX then he's more just a straight up actual villain.

 

[Shavano]

On the other hand, it seems like everything was simply "standard crypto industry practice".

All those other people were committing fraud too isn't an actual legal defense.

 

[graylshaped]

All criminal cases are based on hindsight. You cannot prosecute until the crime has been committed.

 

[MNP]

Ah, well I already dislike Michael Lewis. So my preconceived notions are reinforced

 

[enmity76]

Secret island lair
Lasers
A super-hero nemesis
Master plan for global domination and personal enrichment
Looking after cronies
Persecution complex
Distinctive cartoonish look
Moral flexibility
Overconfidence

Still some work to be done. Looking forward to the fake redemption arc followed by the inevitable sneaky backstab before justice is served.

 

[POSIX]

Is he playing League of Legends on the laptop? I assume it's been a little while since he's played it.

The reason he's being held in jail during the trail is because he's completely worn out the judge's patience with repeated bail violations involving witness-tampering via the internet. Each time the bail order was adjusted, he'd go against the spirit of it again because he just couldn't learn to keep his mouth shut and behave himself for a few months. Since he's proven he can't be trusted with internet access, the court has ordered the laptop to be airgapped. I supposed that might make it a bit difficult to play LoL.

As for what "notes" he could possibly taking that he thinks might help him at this point, god only knows.

 

[herozero]

His own tweets will be admitted into evidence. Roaring 20’s cartoon villain sounds about right. Enjoy pison.

 

[zogus]

Cartoon villains usually do way more outlandish things than fleece investors.

He's not interesting enough to be a cartoon villain; he's just a really bad guy.

What SBF really needed, much earlier in his life, was Brian’s mom from Monty Python’s Life of Brian.
“He’s not the (crypto) messiah! He’s a very naughty boy!”

 

[Pueo]

The sketch artist didn't fill in his screen, but any bets on what game SBF was playing on his laptop in court?

Probably running an isk doubling "service" in Jita 4-4

 

[gridlach]

Secret island lair
Lasers
A super-hero nemesis
Master plan for global domination and personal enrichment
Looking after cronies
Persecution complex
Distinctive cartoonish look
Moral flexibility
Overconfidence

Still some work to be done. Looking forward to the fake redemption arc followed by the inevitable sneaky backstab before justice is served.

In fairness, he was well on the way to checking off "Secret Island Lair" when it all went to wet tissue paper. FTX's planned headquarters in the Bahamas was reportedly going to be F-shaped, have a side that looked like Bankman-Fried's hairdo, and feature a tungsten cube on a plinth.

The best part of the story? These weren't even SBF ideas but rather someone else at the company telling the architects what they thought he'd like.

 

[Hispalensis]

What about him taking $10b out of client deposits in FTX and loaning it to his own company in order to buy investments in FTX and lavish items for himself and his family doesn't just spell "fraud" to you?

I don't think their strategy is to deny that fraud was committed, instead he is going to try the Holmes maneuver and pin it on the people who already pleaded guilty and say that he was just using his credit card to buy all those nice things. And with a straight face.

 

[graylshaped]

Secret island lair
Lasers
A super-hero nemesis
Master plan for global domination and personal enrichment
Looking after cronies
Persecution complex
Distinctive cartoonish look
Moral flexibility
Overconfidence

Still some work to be done. Looking forward to the fake redemption arc followed by the inevitable sneaky backstab before justice is served.

In fairness, a secret island lair would be secret, and probably involve laser defenses.

 

[rochefort]

Wholly agreed. His dad wasn't complaining about SBF's salary. He just wanted a bigger cut of it.

Oh, I know the father wasn't complaining about SBF's salary; I think he was on sabbatical from Stanford at the time and apparently wanted a really fat FTX salary for himself.

 

[rochefort]

Cartoon villain would be a massive step up for him. Sure, he's cartoonish in general but only wishes he were as cool charismatic and powerful as Doctor Doom, Magneto etc. Maybe if he's lucky he can one day be as cool as Leapfrog, or Polka Dot Man.

TBF, no one is as cool as Doctor Doom.

 

[rochefort]

I once saw a disclosure in a private placement [of stock] for a ski resort that stated: "The most important factor in the success of a small business is the experience of the management. The management of this proposed ski resort have no experience."

It's a good thing I wasn't drinking anything when I read that.

 

[graylshaped]

No. That's not how it works. Incompetence isn't fraud. Or even a crime.

This " he extensively represented to customers that FTX was run in a sound and competent manner, both in general and in specific claims, while knowing that those representations were false" is fraud.

It's the lying. Actually disclosing what you are doing, even if what you are doing is incompetent, isn't fraudulent.

It's the same with Elizabeth Holmes. If she had said "We'd like you to invest in our startup that we hope will allow blood tests from a single drop of blood. So far, we have not been able to make our technology work, but even though there is no scientific basis to beleive that we will be able to do so, we still hope to be able to succesfully pull this off" ... she would not have been guilty of fraud.

The basis of fraud is dishonesty, not incompetence.

I once saw a disclosure in a private placement [of stock] for a ski resort that stated: "The most important factor in the success of a small business is the experience of the management. The management of this proposed ski resort have no experience."

If investors buy and the resort fails, it's not fraud; it's on them. People are allowed to make dumb investments, as long as they are not lied to.

In my experience, the major factor of my evaluation in deciding on vendors was the quality of the local managers. Not the upper-ups, but the ones who would be managing the work.

 

[DaVuVuZeLa]

Is it just me or is this court artist not as accurate as I expect?

Agreed. He's not cartoonish enough.

 

[NotEntirelySirius]

Never a good sign as a defendant when you are not offered a plea deal of any kind.

And the defense lawyers are reduced to nothing more than appeals to emotion in the face of lots of documented criminal acts. The CEO who didn't bother with audits, record keeping and was a hapless, cute math nerd isn't a good look in a fraud and theft trial. Not when victims are people with no more retirement savings.

 

[PopeBenedict]

Michael Lewis' behavior is shameful.

 

[DeeplyUnconcerned]

No. That's not how it works. Incompetence isn't fraud. Or even a crime.

This " he extensively represented to customers that FTX was run in a sound and competent manner, both in general and in specific claims, while knowing that those representations were false" is fraud.

It's the lying. Actually disclosing what you are doing, even if what you are doing is incompetent, isn't fraudulent.

It's the same with Elizabeth Holmes. If she had said "We'd like you to invest in our startup that we hope will allow blood tests from a single drop of blood. So far, we have not been able to make our technology work, but even though there is no scientific basis to beleive that we will be able to do so, we still hope to be able to succesfully pull this off" ... she would not have been guilty of fraud.

The basis of fraud is dishonesty, not incompetence.

I once saw a disclosure in a private placement [of stock] for a ski resort that stated: "The most important factor in the success of a small business is the experience of the management. The management of this proposed ski resort have no experience."

If investors buy and the resort fails, it's not fraud; it's on them. People are allowed to make dumb investments, as long as they are not lied to.

That’s… exactly what I said? Telling the world that FTX is run competently while knowing that it isn’t is fraudulent, right?

 

[sarusa]

Mr Burns, tapping his fingers: 'It's just a DISGRACE how I'm being misrepresented as a cartoon villain.'

 

[SnoopCatt]

SBF's Lawyer: "Your honour, the procecutors say my client is a cartoon villain. We reject that! Behold him, a living, breathing, three-dimensional villain...um...er...
The defence rests!"

 

[AngryEssay]

What about him taking $10b out of client deposits in FTX and loaning it to his own company in order to buy investments in FTX and lavish items for himself and his family doesn't just spell "fraud" to you?

The only way he is an idiot is that he thought so highly of himself, and figured he could take the money and invest it to make even bigger gains. But he worked, successfully, at a trading firm. His parents were lawyers. His companies had CEOs and lawyers who have made it clear they all knew what they were doing.

He wasn't walking a tightrope here, imagine if the CEO of a bank borrowed $10b and spent it on whatever they wanted, doing dodgy investments and buying stuff for themselves. That's what SBF did. There's no grey area on how illegal this is.

As I said, the end result is the same. But legally, you'd have to prove that SBF specifically knew and understood what he was doing enough that he couldn't be excused for just being stupid. I don't support the man, but this technicality is usually what a lot of yearslong lawusits are based upon. I haven't gone inside his mind and found out, but only the future will tell us...

 

[AngryEssay]

I would love to hear you distinguish a cartoonish villain and a tech bro hype man in some meaningful ways..

I was referring to the additional qualifier of "savant", I tend to dislike obsequious biographies that paint every single rich dude as some sort of massive genius.

 

[AngryEssay]

He is not an idiot. He is not a cartoon. He is a full-grown man with a first-rate education and every advantage that wealth, connections, and life can give a person.

It pains me to see the number of people, even here on Ars, who are swayed by this awe-shucks, he's just a kid who was a bit naive.

That naivety is an intentional construct to elicit exactly that reaction. It is precisely the same manufactured image as the genius who can play video games during investor meetings.

He masterminded a shell game to move money from investor accounts through Almeda and into interest free "loans" to himself, personally.

That is intentional, premeditated criminality engaged in by someone who had to understand exactly what they were doing and the reasons to do it that way in order to do it.

That reason to do it that way is because it is illegal, and one needs to hide the illegality.

SBF does not appear to me to be somebody smart enough to pretend to be naive or otherwise have poor personality traits. If you listen to him speaking you'll see he lacks some basic intelligence skills. That said, I don't think the distinction is one with a difference for those purposes.

 

[SVD_NL]

No he is getting nailed to the wall for commingling customer deposits with his hedgefund and then making outrageous gambles with it.

All while constantly denying that specific fact!

 

[graylshaped]

As I said, the end result is the same. But legally, you'd have to prove that SBF specifically knew and understood what he was doing enough that he couldn't be excused for just being stupid. I don't support the man, but this technicality is usually what a lot of yearslong lawusits are based upon. I haven't gone inside his mind and found out, but only the future will tell us...

Ignorance of the law is no defense would seem to apply here. His parents included a law professor and a tax "expert," in fact, yet allegedly had no problems hassling him to loot his company for their benefit.

 

[tidbits]

Really? Because there are cartoon villains way more sympathetic that this idiot.

Like Thanos, and Magneto and ....

 

[Gibborim]

On the other hand, it seems like everything was simply "standard crypto industry practice".

Yes, it is standard practice to be an illegal bank and violate every conceivable banking regulation. Now that one has taken a tumble and lost almost inconceivable amounts of wealth, the government now has the cause to peel back the curtain and crucify everyone involved. It will be an excellent stepping stone in getting regulation of the industry moving.

 

[Gibborim]

Like Thanos, and Magneto and ....

Almost all of the big recurring villains in the major comic lines that aren't "baddies from space" or completely insane have redeeming qualities and a reasonable point of view. That is what makes a good villain.

 

[mhalpern]

Almost all of the big recurring villains in the major comic lines that aren't "baddies from space" or completely insane have redeeming qualities and a reasonable point of view. That is what makes a good villain.

heck it's not uncommon for the villains (or antagonists in general) to be better developed than the protagonist who can be a viewer/author insert type character that makes it easy for the viewer to imagine themselves as that character. That's why antiheros often are so interesting, they have to be very well developed because they do things you don't expect the reader would morally agree with, at least not so quickly

 

[MacBrave]

His work should be treated as fiction. I am hoping the ongoing exposure around The Blind Side will highlight to more people that while he tells a story people want to believe, it is at best a highly stylized version.

Moneyball is still Lewis's best work.