Tuesday, October 31, 2023
Monday, October 30, 2023
Saturday, October 28, 2023
Sam Bankman-Fried on Stand Spins Shorts and Trashes Caroline and KC Royals Crypto Creeps
by Matthew Russell Lee, Patreon Book Substack
LITERARY SDNY, Oct 27 -- Twenty seventh day of October and SBF was finally on the witness stand. In front of the jury. It was, as it should be when a defendant testifies, a complete counter narrative, another way of telling the story.
From an Airbnb in Berkeley to a small suite in Hong Kong, before the garish Bahamas condo.
The image too: Mark Cohen asked Sam why he always appeared in shorts and T-shirts. "It's comfortable," Sam replied. Would the jury be convinced?
Caroline Ellison had said it was all an act, that Sam bragged that his hair got him bonuses at Jane Street. What did that say about Jane Street?
Cohen presented Jane Street as the arbiter of what front-running is, and got Sam to say of course he was against frontrunning. What about misappropriation? The question of course didn't come up on direct.
Judge Kaplan told Cohen to return at 1:30 pm with a estimate of how much longer he'd be. When he did, he said... into Monday morning.
This trial was now stretching on. Who would remember, when it was over, what Caroline much less Adam Yedidia and the cocoa broker had said?
By late afternoon the strategy emerged: Sam said Caroline was a good manager, but implicitly dissed her trading, specifically hedging. She had refused to hedge, he said. But why then hadn't he fired her? And how could these sh*tcoins, as some now called the FTT token, be hedged?
With the jury gone for the day, Judge Kaplan asked both sides for their time estimates. AUSA Sassoon said while no one would benefit from a day and a half of cross (!) she would go from midday Monday into Tuesday.
Each side wanted two to three hours for closing arguments, not including the government's rebuttal. Then there was the charging conference, which Kaplan predicted would be long, and the the reading of the charge to the jury: several hours, Judge Kaplan said.
So the jury wouldn't get the case to deliberate until a full week from Sam's direct, the next Friday. And unlikely to reach any decision that day. So into another week. And what could happened by then?
More on this on Substack here
More book sample on Substack here. Extended on Patreon here.
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CRA Challenge to Burke & Herbert Summit Merger After Linkbank Conditioned by FDIC
By Matthew Russell Lee, Patreon Maxwell Book
SOUTH BRONX, Oct 28 – Virginia and Delaware portrayed as diverse and ever progressive places. But their banks, not so much.
Consider for example the proposed acquisition by Viriginia-based Burke & Herbert Bank & Trust Company of Summit Community Bank.
Inner City Press and Fair Finance Watch have long exposed redlining - and in this vein, on October 28 they filed a Community Reinvestment Act challenge with the FDIC:
"In Virginia in 2022, Burke & Herbert Bank & Trust Company made 104 mortgage loans to whites, but only 12 to African Americans. This is out of keeping with the demographics of its footprint, and its competitors.
Beyond Virginia, Burke & Herbert Bank & Trust Company is scarcely better. In 2022, Burke & Herbert Bank & Trust Company overall made 119 mortgage loans to whites, but only 16 to African Americans.
Summit Community Bank is also of concern. In West Virginia in 2022 it made 403 mortgage loans to whites, and only EIGHT to African Americans. Meanwhile it denied 3 applications from African Americans, and only 97 from whites (compared to 403 originations). This is disparate, and more disparate both than the aggregate in West Virginia.
See also, as to proposed acquirer Burke & Herbert, this "civil action seeking monetary damages, restitution and declaratory relief from Defendant Burke & Herbert Bank & Trust Company (“Burke & Herbert”), arising from the unfair and unconscionable assessment and collection of “overdraft fees” (“OD Fees”) on accounts that were never actually overdrawn. 2. This practice breaches contract promises made in Burke & Herbert’s adhesion contracts. 3. In plain, clear, and simple language, the checking account contract documents discussing OD Fees promise that Burke & Herbert will only charge OD Fees or Non-Sufficient Funds Fees (“NSF Fees”) on transactions where there are insufficient funds to cover them. 4. As happened to Plaintiff, however, Burke & Herbert charges OD Fees even when there are sufficient funds to cover a debit card transaction," citation, etc.
Earlier in October, after a similar challenge by Fair Finance Watch on data and complaints not even as bad, the FDIC required from LINKBANK a plan to improve its lending to African Americans, which Inner City Press has published on its DocumentCloud here.
If the regulators at the FDIC means what they claim, including in the new CRA regulation, this application should be denied. Watch this site.
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In DEA Corruption Trial of Costanzo & Recio Fight Over Audio Tapes as Agent Jaycox Speaks
By Matthew Russell Lee, Patreon Maxwell Book
SDNY COURTHOUSE, Oct 27 – On May 20, 2022 DOJ announced that "JOHN COSTANZO JR., a Drug Enforcement Administration Special Agent, and MANUEL RECIO, a former DEA Assistant Special Agent-in-Charge, were indicted in Manhattan federal court."
Costanzo appeared in the U.S. District Court for the Southern District of New York Magistrates Court that day and was released on $30,000 bond. His case was assigned to District Judge J. Paul Oekten, who held a conference in the case on June 6. Inner City Press attended and live tweeted, below.
In the run-up to the October 23 trial, Judge Oetken denied Recio's bid to quash a subpoena to his Global Legal Consulting (GLC), finding among other things that "Recio argues that the subpoena seeks testimonial information in violation of his Fifth Amendment privilege against self-incrimination. The Court has already rejected this argument in connection with Recio’s previous argument to quash a grand jury subpoena. The Second Circuit has held that corporations cannot avail themselves of the Fifth Amendment’s protection against the compelled production of potentially incriminating testimonial communications, based on the “long-established” collective entity rule. In re Grand Jury Subpoena Issued June 18, 2009, 593 F.3d 155, 157 (2d Cir. 2010)." Watch this site.
On October 27, with the trial belatedly underway, Inner City Press was in the courtroom when Special Agent Brandon Jaycox testified. Audio tapes were being played. Behind the scenes there were dueling letters on the admissibility of recordings about Recio telling Costanzo about the impending arrest of Cesar Peralta. We will continue to cover the trial.
Back on July 15, Judge Oekten held a conference, which Inner City Press live tweeted here
US letter alleging conflict on Patreon here.
The case is US v. Costanzo, 22-cr-281 (Oetken)
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Bob De Niro Heads to Trial For Discrimination in SDNY, Said Accuser Binge Watched Netflix
By Matthew Russell Lee, Patreon
SDNY COURTHOUSE, Oct 27 – Robert De Niro and Canal Productions were sued in 2019 for gender discrimination by Graham Chase Robinson, who had begun working as De Niro's executive assistant in 2008, at 25 years old.
She said she was discriminated against - then De Niro sued her, and she sued him.
On March 10, 2020 U.S. District Court for the Southern District of New York Magistrate Judge Katharine H. Parker held a proceeding. Inner City Press covered it. Inner City Press had previously checked in on the case, on January 30, 2020, here.
"in SDNY, Robert De Niro is being sued by former employee Graham Chase Robinson for gender discrimination, not paying overtime - and retaliating. De Niro's lawyers complaint to SDNY Magistrate Judge Parker that the plaintiff won't say to whose salary she's comparing what she was paid."
The case was reassigned to District Judge Lewis J. Liman; a protective order was filed.
On October 30, 2023, the trial is set to begin with jury selection, and to sit daily from 9 to 5. It begin a civil case, each side gets 20 hours...
Inner City Press called to cover the June 28, 2021 conference, and found the defendants hammering away at plaintiff Robinson's alleged misrepresentations.
On December 15, 2021, there was another conference, that Inner City live tweeted here
On January 31, 2022 Judge Parker held another proceeding and Inner City Press again covered it. Judge Parker extended discovery, reluctantly she said, "for the sole purpose of deposing the five individuals identified by Plaintiff: Mr. Robert De Niro, Mr. Michael Kaplan, Tom Harvey, Michael Tasch and Tiffany Chen.
On December 30, 2022, Judge Parker denied a request to seal a filing concerning among other things De Niro's claim that Robinson was "binge-watching Netflix" and misusing SkyMiles. And so it goes. Watch this site.
The case is Robinson v. De Niro et al., 19-cv-9156 (Liman / Parker)
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Bankman-Fried Says He Wanted to Impact the World But Surprised by $8 Billion Hole
by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Oct 27 – For US v Sam Bankman-Fried, after more than a day of jury selection, late morning on October 4 the twelve and six alternate were selected. Inner City Press live tweeted the voir dire here and more below
On October 27, SBF was on the stand all day. Inner City Press live tweeted, including thread
Cohen: Why did you where the shorts and T-shirts? SBF: I found them comfortable. Cohen: Why the long hair? SBF: I was lazy.
Cohen: Who is in this photo: SBF: Katy Perry, Michael Kives, Kate Hudson and me. We were running a Super Bowl ad.
Cohen: When had you met Michael Kives? SBF: It was Kives' and I had been wandering the stadium, I ran into them and they invited me in
Cohen: Did you invest in Kives' K5? SBF: Yes. I thought they had promising incubations. And celebrity contacts. Cohen: Did you want to contribute to candidates? SBF: Yes. In 2020, then more in 2021 and 2022. Cohen: Why? SBF: I thought I could impact the world
SBF: I was interested in pandemic prevention. So I thought policy was important, Congres and the Executive Branch. Some were by FTX for crypto currency lobbying - some, not most. Cohen: The crypto lobbying was for? SBF: A US regulatory structure
Cohen: Who else made donations? SBF: Nishad and Ryan Salame? Cohen: Did you discuss them with Mr. Salame [he pronounces it Salaam]? SBF: No. Cohen: Your donations were from? SBF: Loans from Alameda research.
Cohen: Did you work with political consultants? SBF: Yes. I had a full time job. So I hired them. Cohen: Did you know Michael Sadowsky? SBF: He, of Guarding Against Pandemics. Cohen: What about Congressmembers? SBF: I discussed crypto and other issuesCohen: Did you testify to Congress?
SBF: Late 2021, and early 2022 and one in late Spring early Summer of 2022. The House Financial Services Committee invited me. I declined. They invited more strongly and I accepted. Then Agriculture, about the CFTC.
SBF: Then Agriculture had a hearing about our application to the CFTC. Our competitors were -- AUSA: Sassoon: Objection. No foundation. Judge Kaplan: Sustained. Cohen: New topic. Are you familiar with EcoSerum and SRM? SBF: Yes. I spoke with Nishad about it
SBF: I spoke with them about if our 2021 revenue was in fact over $1 billion. Cohen: Why was that important? SBF: It's a round number.
Cohen: Why did FTX use Slack and Signal? SBF: They are conversational. Cohen: What is encryption? SBF: It's like in World War II... on the Internet, it's about only the sender and receiver seeing the message. We thought it was good.
AUSA Sassoon: Objection - who is "we"? SBF: I am sorry, I meant me, I often say "we" to not single myself out from other employees. Cohen: What about records retention? SBF: Some had to be kept, some should be not kept, and then those in the middle.
Cohen: What about these calls? SBF: We had on Dan Friedberg.. and Brett Harrison.
More on Substack here
Inner City Press live tweeted the voir dire and now, more on Substack here
and all on Patreon here
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On Gaza in UNGA Canada Amendment Fails So No Hamas as Bob Rae Blocks Press as Guterres
by Matthew Russell Lee, Patreon Book Substack
UN GATE, Oct 27 – On October 7 amid Gaza - Israel, Inner City Press heard that Brazil claimed it has taking the lead to schedule a Sunday UN Security Council meeting. Nothing in email - and it emerged that the Brazil Mission has *blocked* Inner City Press on X, photo here
On October 17 despite UNSC and UN censorship, Inner City Press reported on Brazil's doomed draft. And on October 18, as predicted, it failed, with the US vetoing, and Russia and the UK abstaining.
On October 25, another double failure, with a China and Russia double veto of the US draft, and nine abstentions on Russia's. Mansour praised Guterres, whose arrogance (he won't respond to calls to resign from a single member state, echo of Boutros) is becoming wider known- as he bans Press.
On October 26 in a UNGA meeting chaired by Dennis Francis, who refuses Press questions on his funding by Qatar, China, Saudi, Kuwait and now Morocco, Iran said the US will "not be spared from this fire." Then he strolled back to the hotel on 43rd Street.
To the pending GA resolution, Canada has a proposed amendment on Hamas - while Canadian ambassador Bob Rae blocks Inner City Press on X.
On October 27, the Canada amendment failed, 88-55-23. The Jordan resolution, without the Hamas language passed amid applause, 120-14-45. A fish rots from the head.
Watch this site.
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Bankman-Fried Melts Down on the Mock Cross on Dan Friedberg Use of Drugs Crypto Creeps
by Matthew Russell Lee, Patreon Book Substack
LITERARY SDNY, Oct 26 --Twenty sixth day of October and in the US v. Bankman-Fried trial, it and SBF were on...
Or not.
Judge Kaplan said that Sam would take the stand at 2 pm. And at 1:55 there he was, in a too-big suit and lavender tie, sitting in the witness box. But before Judge Kaplan came back in, Sam returned to the defense table.
And then a fast change of plans. The judge asked the lawyers who much time each expected with the witness. The numbers were absurdly low: 60 to 90 minutes for direct, Mark Cohen said; 45 minutes for cross, replied AUSA Danielle Sassoon.
That did it. Judge Kaplan said that in order to hold the hearing he'd alluded to, a dress rehearsal of Team SBF's attempt to get advice of counsel before the jury - the idea that Sam couldn't be guilty if lawyers he hired told him it had all been OK - he'd send the jury home and play it again Sam for them on Friday.
For a moment it seemed that Judge Kaplan might also exclude the press from the dress rehearsal. Most producers would. But it remained open.
On direct examination with Cohen, Sam was in his element, talking about block explorers and saying, in essence, that it was all dan Friedberg's fault.
On cross examination it fell apart. Hadn't Sam known that Friedberg had previously been general counsel at a firm with a criminal insider trading scandal? Cohen's objections to that were overruled. Hadn't Friedberg used illegal narcotics to --
That objection was sustained. Used illegal narcotics to what? The damage was done. Now Sam was talking in circles, saying he didn't remember, saying I, I, I, or aye, aye, aye. Was his Adderall wearing off?
Or was he just being exposed? And how much of this would the jurors get or have to hear the next day?
More on this on Substack here
More book sample on Substack here. Extended on Patreon here.
Book here
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Bankman-Fried Crossed Without Jury On Lawyers Advice on Document Retention
by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Oct 26 – For US v Sam Bankman-Fried, after more than a day of jury selection, late morning on October 4 the twelve and six alternate were selected. Inner City Press live tweeted the voir dire here and more below
On Thursday, October 19 there was Robert Boroujerdi of Third Point. Inner City Press live tweeted, thread
On October 26, with SBF expected to testify in front of the jury, Judge Kaplan sent them home at 2 pm in order to hold a hearing - with SBF on the stand - about the advice of lawyers on FTX's document retention policy and terms of service. Inner City Press live tweeted the cross, thread:
[US v SBF without jury present] All of the prosecutors have left the courtroom, to confer about what AUSA Sassoon should ask SBF on mock direct. This was the purpose of the break...
Prosecutors are back, and SBF is back on the witness stand. Still no Judge Kaplan. Deputy Andy: I've been asked to remind everyone to avoid conversations while the hearing is going on. Save that for afterward. Thanks.
OK [US v SBF without jury present] AUSA Sassoon: Mr. Bankman-Fried I want to ask you about Signal. Did you discuss your use with lawyers? SBF: Yes. In 2020. There were lawyers in the Signal chats - Dan Friedberg was on the chats. AUSA: And auto-deletion? SBF: Yes
AUSA Sassoon: When did you discuss auto-deletion with them? SBF: I'm not sure if you're referring to... Shortly after I started using Signal. AUSA: When did you start auto-deleting? 2021? SBF: That sounds plausible.
SBF: At some point I remember changing my toggle to one week auto delete AUSA Sassoon: Did you seek approval? SBF: No. AUSA: When did the document retention policy go into effect? SBF: Mid 2021. Under Dan Friedberg AUSA Sassoon: Did the policy deal with auto-deletion on Signal? SBF: Not on Signal specifically. AUSA Sassoon: When did it say you could destroy company records? SBF: There was permissibility--
Judge Kaplan: Meaning you could do whatever you wanted?
SBF: Uh... AUSA Sassoon: Where is the document retention policy? SBF: We look for it-- Judge Kaplan: You stick to the blockchain. SBF: The policy specifically addressed email, not other platforms. AUSA: What lawyer did you discuss this with? SBF: Dan Friedberg
AUSA Sasoon: How was retention period decided on? SBF: My time period was not meant to be the policy company wide for documents. AUSA: Did any lawyer tell you you could delete your messages with Caroline Ellison, Gary Wang and Nishad Singh? SBF: Not specifically
SBF: I apologize, I wish I had that policy now. My memory... AUSA Sassoon: Do you consider Caroline Ellison's seven spread sheets a formal document? SBF's lawyer Cohen: Objection! Beyond the scope of this hearing! Judge Kaplan: Overruled
AUSA Sassoon: So you believe that deleting the message with the seven different spreadsheets was permissible? SBF: Yes. For example, verbal discussions were not required to be reported. AUSA: You were the CEO of FTX? and she of Alameda? SBF: Yes
AUSA Sassoon: And you think deleting such messages was permissible? SBF: I don't have the policy in front of me right now. AUSA: What about discussions of shutting down Alameda? SBF: I wouldn't characterize it that way.
AUSA: Did you have discussions about a $13 billion hole? SBF: I don't recall such conversations. AUSA: You think it should be preserved? SBF: It depends. AUSA: Adam Yedidia quoted you that preserving Signals would be all downside SBF: I don't recall thatSBF: I was concerned that statements could be taken out of context, that it could be embarrassing.
AUSA: Did you share that with lawyers? SBF: Not specifically in connection with the data retention policy.
AUSA: Did you tell lawyers it would be all downside? SBF: I don't recall that Judge Kaplan: Did you believe it would be all downside, these Signals? SBF: At my previous firm Jane Street we said anything might under on the front page
AUSA: Did you tell employees to have certain discussions only on Signal? SBF: Not specifically. AUSA: Did FTX get a subpoena, to not destroy documents? SBF: Yes. AUSA: Did you ask lawyers which Signals you should preserve? SBF: Yes. Ryne Miller and Dan Friedberg
AUSA: Who decided which to retain? SBF: Ultimately Dan and Ryne. AUSA: Did you tell them you were discussing company business on Signal chats? SBF: Yes. AUSA: What did they tell you? SBF: Preserve only formal business decisions.
AUSA: They used that phrase? SBF: I don't recall them using that phrase. AUSA: Did anyone use the words informal business conversations and say that spreadsheets qualified? SBF: They were aware that would sometimes happen
AUSA: What about Alameda? SBF: I believe they had a similar policy. It was mentioned sometimes. AUSA: When? SBF: Late 2021. After the CEO-ship went to Caroline Ellison and Sam Trabucco AUSA Sassoon: You don't actually have the document retention policy? SBF: No.
AUSA Sassoon: Do you believe you ever violated it? SBF: I don't recall ever violating it. AUSA: North Dimension, why did you incorporate it? SBF: Dan Friedberg
AUSA: What was the relationship between you and Dan Friedberg? SBF: It changed over time. Can you zoom in? AUSA: OK, North Dimension. SBF: I don't recall giving him direction. AUSA: Why was it called North Dimension? SBF: I don't recall
AUSA: Why did FTX transition from a bank account with Alameda in its name to North Dimension- did you think banks wanted to avoid crypto hedge funds? SBF: Something like that AUSA: As CEO of Alameda you didn't know why it moved deposits to North Dimension? SBF: No
AUSA: Did you discuss the bank account with Dan Friedberg? SBF: I'm not sure, I just don't recall. AUSA: You weren't involved in deciding on North Dimension? SBF: Not in particular. I may have been in conversations.
Judge Kaplan: So you don't remember specifically, is that it? SBF: I want to make sure I'm answering the right question Judge Kaplan: The permissibility of using North Dimension to take funds SBF: Only if you count Alameda Judge Kaplan: Listen and answer directly
AUSA: Let's look at GX 267, the banking application document you signed, Dec 9, 2020 - you were CEO of Alemeda? SBF: Yes. AUSA: That's a wet signature? SBF: Yes. AUSA: Did you review it? SBF: Briefly. A lawyer presented it to me, but no discussion.
AUSA: Let's go to page 1, description of business: trading firm. Was North Dimension that? SBF: It was part of Alameda. AUSA: Did North Dimension acts as a trading firm? SBF: Not that I'm aware of. AUSA: Did you review witness notes of Dan Friedberg? SBF: Not all
AUSA: Are there any other lawyers you talked to about North Dimension being able to accept FTS customers' funds.
SBF: I'm not entirely sure. AUSA: Were there conversation with auditors about the funds going to Alameda and North Dimension? SBF: Not that I recall... I should say, I am not a lawyer, I am just trying to answer based on my recollection... At the time FTX, certain customers thought accounts would be sent to Alameda. FTX would keep a debt, repayable ... I did not create this Payment Agent Agreement [GX 245]
AUSA: As far as you know was this agreement every disclosed to the public? SBF: I'm not aware of that. AUSA Sasoon: Your Honor, I'm sorry I'm not going to finish by 4:30. I can do past. Judge Kaplan: Go on. AUSA Sassoon: The terms of service, Section 16
AUSA: What is this provision about? SBF: Assets posted as collateral for their positions. AUSA: Did you have discussion with Can Sun about Alameda's exemption from automatic liquidation? SBF: No.. I, I, not by name. I was not aware of these topics by name
AUSA: What do you mean by that? SBF: I, I... I don't believe I was aware at that time - sorry - I was aware of lines of credit - AUSA: You said speed bumps - what did you mean? SBF: I apologize. This will be a somewhat substantial digression
AUSA: I am asking about Alameda's exemption from auto liquidation, and said speed bumps. what did you mean? SBF: Some combination of delays and alerts, I apologize, I wish I could give you a more specific answer. AUSA: I am asking about a typical customer
SBF: If you mean, Not a market maker. AUSA: Were you aware that Alameda could have an overall negative balance? SBF: Adding up all assets, is that correct? AUSA: Yes. Now please answer. SBF: I'm not sure it was in the codebase.
SBF: I may be misunderstanding what the Allow Negative feature was... Do you mean Negative asset value? AUSA: Let's pull up the exhibit. SBF's lawyer: I object to this. This is a deposition now. AUSA: May I explain? It has to do with what he told counsel.
Judge Kaplan: I'm going beyond my tether here. Part of the problem is that the witness has an interesting way of responding to questions. Cohen: Part of the problem is this type of hearing.
Judge Kaplan: If you want to put this defense on it's through this hearing or not at all. Cohen: I understand. Judge Kaplan: The question never mentioned net asset value. But you keep using it in your answers. SBF: I apologize AUSA: I'm going to move on
AUSA: When did you believe Alameda was permitted to borrow funds from FTX? SBF: I believed it was permissible to borrow from assets held as collateral for margin positions... AUSA: Did that include withdrawing assets off the exchange? SBF: With risk analysis
AUSA: Which attorneys did you discuss this with? SBF: I talked with Ramnik [Arora] about Three Arrows Capital -- AUSA: Ramnik Arora is not an attorney. So, no attorneys? The answer is no. AUSA: Let's talk about loans. Where they all documented? SBF: I thought so
AUSA: Did you discuss with lawyers that the funds were coming from FTX customer funds? SBF: I would not characterize it that way. So no, I didn't discuss that with lawyers. AUSA: Why not just do it through Alameda? SBF: The investment target did not want Alameda
AUSA: For example with Robinhood you did not want Alameda to be the investor? SBF: Right. It could be a conflict of interest. AUSA: Was the buy out of Binance financed through loans? SBF: My memory is that it may have been a loan to Paper Bird
AUSA: Did you believe you should not embezzle customer assets? Cohen: Objection! Judge: Sustained. SBF: No I did not believe I should do that. Cohen: You don't have to answer after sustained. Haven't you been here for four weeks? SBF: I felt I had to answer it
AUSA: What about CEOs of exchanges using customer funds for personal expenses? Cohen: Objection. Judge Kaplan: Sustained as to form. AUSA: Did you have conversation that led you to believe it was correct? SBF: We spoke about margin calls AUSA: Let's talk about Dan Friedberg - you hired him?
SBF: Yes. AUSA: You were reluctant in hiring a general counsel? SBF: I was reluctant to hire the wrong general counsel. Cohen: Objection Sassoon: It is relevant if he did not want to hire a respectable lawyer
Judge Kaplan: I'll allow it, without necessarily endorsing the word "respectable." AUSA: Were you aware that Dan Friedberg was general counsel at a firm that had an insider trading scandal? SBF: Yes. A high level scandal. AUSA: A criminal scandal? Cohen: Objection
Judge Kaplan: I'll allow it. AUSA: Were you aware that Dan Friedberg used illegal narcotics -- Cohen: Objection! Judge Kaplan: Sustained. Ms. Sassoon! AUSA: May I have a moment? No further questions Cohen: Nothing further. Judge: You're excused, Mr. Bankman-Fried
Judge Kaplan: I'll hear from counsel on the issues have I have to decide. Cohen: We think we can elicit the testimony we got today. We are not advancing the formal advice of counsel defense. Only that he reasonably relied
Judge Kaplan: Let's assume someone robs a bank, knocks over a Walmart, whatever, and get a chunk of money. Do we agree that engaging in a transaction to conceal the source of the money is money laundering? Cohen: Sure.
Judge Kaplan: Now he gets legal advice about how to buy a condo with the money. The defendant is charged with money laundering. The defense is, I had a lawyer, I didn't have a criminal intent. How is that different from what you're trying to do, in principle?
Cohen: Robbing a bank is illegal. Our position is that the source of fund was not illegal. Judge Kaplan: But you need to tell the lawyer what the facts are. Cohen: There were times, like with the founders' loans. Judge: I'm dubious, but I understand your position Inner City Press @innercitypress · 9m AUSA Roos: This is a collateral involvement of a lawyer which doesn't go to the key question, the use of funds. There's no testimony that Dan Friedberg was told about the Agent Agreement. Judge Kaplan: Can Sun said there were omnibus wallets. I put that to 1 side
Judge Kaplan: I plan to rule tomorrow morning AUSA: We're planning cross examination- Judge Kaplan: Why am I not surprised?
AUSA: If the witness is non responsive it'll take longer. Cohen: Our subpoena to Fenwick & West was denied. Judge: A trial subpoena? A: No. Judge Kaplan: OK, thank you. Adjourned.
More on Substack here
Inner City Press live tweeted the voir dire and now, more on Substack here
and all on Patreon here
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