Both testifying and “advice of counsel” defense are very risky hail Mary strategies. Defendants shouldn’t take the stand in fraud trials. He is probably going against the advice of his lawyers because he thinks he is smarter than them.
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
> He is probably going against the advice of his lawyers because he thinks he is smarter than them.
I think it's a hail Mary. All his buddies were offered deals to flip on him because he was the big fish. There's no bigger fish for him to flip on, so prosecutors will throw the book at him, no reason to go easy. A conviction is pretty certain and would be pretty bad, so any strategy that could make things better but can't make things worse is ideal.
More substantively I wonder if he will try to argue his use of the money towards effective altruism made fraud OK during sentencing - surely the money was better spent on charity rather than remaining with the credulous.
Why he’s a modern day Robin Hood! And who could be more deserving of charity than himself?
Ngl, I feel terrible for all the people that lost FTX money, but it is kinda amazing to see the world see what a terrible mess and how irreducibly dumb most of the effective altruists are.
Kinda like when gwern went off on his eugenics rant and people went: are all of these "rationalists" libertarian lunatics?
> The word-salad began again, interrupted only by the judge saying things like “So I take it the answer is you don’t remember; is that about it?” or “Listen to the question and answer the question directly.” It was like watching someone get run over by a very slow-moving steam roller.
This line encapsulates everything I've thought about this trial.
Feels like watching the man scream at the steam roller in Austin Powers.[0] He just can't keep his feet out of his own mouth. At this point I can't tell if it's hubris, or just straight ineptitude.
> By recent, you mean since the beginning of time?
No. Rambling idiots were historically judged.
The quick-talking stream-of-consciousness bullshitter relies on rapid technological change to suspend listeners' disbelief. Because ex ante, you can't know if you've got someone brilliant but nervous (or simply neurodivergent), or one of these.
Its very easy to look at your own time, and the particular details of your time, and see something unique and special, but it's rarely true. The quick-talking-stream-of-connsciousness bullshitter aptly describes snake oil salesman and evangelists also. It's the bread-and-butter of classic carnival barkers, and the heart of the con.
SBF is the same classic huckster, but wrapped up in a hoodie.
So you just moved the goalposts from "this is new and unique to the recent wave of Silicon Valley bullshitters" to "well, this started in the industrial era"?
Also the complete lack of critical thinking in tech journalism. Just a few years back reputable publications heaped praise on SBF as it was fashionable to jump on the crypto miracle bandwagon. Now it's fashionable to jump on the crypto crookery bandwagon. As an industry, it seems to just play to and reinforce the readership's prevailing biases. It's a good case for why reading tech journalism is a waste of time with very little net insight gain coming from it.
I think it's a combination of a few things. Firstly that he's smart enough that he's got plenty of experience of getting his way just by being smart around people, and yet he's naive enough that he thinks that will work in court under the eye of the whole media.
Secondly though he seems to have quickly latched on to a specific sort of messaging that's built around "honesty" and admitting his own failings, not in a real way it seems though. I think he's seen a bunch of people get "cancelled" in recent years and seen that this sort of admission of guilt tends to work well for people. What he doesn't realise though is that this isn't him being accused in the court of public opinion about something the public don't agree fully on, it's a legal accusation in court about specifics that the law is clear on. I'd say this was just bad advice he was being given, but it seemed to happen so quickly that I think it's just his own bad take on the best way out.
> he's naive enough that he thinks that will work in court under the eye of the whole media
I mean his publicity tour immediately after FTX went under worked pretty well for a while. He got Kevin O’ Leary to blame CZ in front of congress. And Michael Lewis painted a pretty positive picture. He talked to everyone he could and the vast majority of the media were not sure if he did or did not commit a crime.
All he has to do is convince the jury to have a reasonable doubt.
Me too, since in _The Big Short_ he was so good at untangling a lot of complicated financial machinery to say “this is what was going wrong” in very tangible terms. That he doubts SBF et al actually committed a crime is boggling.
The best explanation I’ve seen is that the book was mostly done when it all came crashing down, and SBF was already the befuddled hero and herald of a new age, and Lewis just didn’t want to rewrite the whole damn thing.
It’s the build exploit cycle of trust, Michael Lewis has built up trust that he can now exploit. Though SBF is so far beyond the pale that instead of trusting SBF more I just trust Michael Lewis much less.
In his couric interview he keeps calling SBF a “kid”. He’s a 30 year old man.
But I know Lewis has gone through some personal tragedy, and I think it has softened his gaze, at least upon young people who act like a foundling in Brave New World.
It is a jury he needs to convince... Maybe if this technique works in the media and on twitter, it will work against a jury, even if the judge sees right through it.
I'd guess most jury members will have no clue what any of this is about. It'll just sound like big numbers, weird people speaking in jargon, and acronym soup.
If he's convicted it won't be on the details, but on credibility. The "I don't recall" strategy won't fool a judge, but it might fool enough jurors.
I think the prosecution is going to have to work unexpectedly hard to nail him to the wall.
But I also suspect there's more to the story than we're being told.
The fact that so much of the money seems to have gone on bribes and political donations, the fact that his parents are lawyers but apparently were shocked - shocked! - to discover he was doing something illegal, the fact that he seems so casual about the whole thing - it's all a little strange.
His father "is considered a leading scholar in the discipline of tax law" and is a Stanford Professor of Law and Business.
So with no obvious warning signs this must have come as a complete surprise to him.
Being remanded into incarceration in the middle of the trial in the courthouse for contempt of court isn't going to look good to the jury, even if the judge instructs them to disregard it.
Yes, but that doesn't mean he can't get a different and longer punishment for contempt of court -- which would be a charge independent of the ones he's in court to address.
The dude masterminded the embezzling and frittering away of billions of dollars, and there is plenty of documentation and testimony from his lieutenants that he knew what he was doing. It's not like some slightly more coherent testimony will prove it was just a wacky misunderstanding.
His only plausible strategy is confusion and delay to buy time. A shame that it ends up burning millions more dollars of prosecutor resources.
The "specific source of messaging that's built around 'honesty'" is a classic malignant narcissist behavior. "Oh gosh gee, yes, I did that but you should go easy on me because I'm admitting it - there's no reason to punish me harshly if pretend to be honest now, I've learned my lesson!"
I remember when interviews with Elizabeth Holmes really started to go awry. She would be asked very straightforward questions but respond with these bizarre meandering answers that never really got to the point. It was strikingly different from the way politicians don't respond, and after a few of these I started to think that something was up. However, a fair number of people I talked with back then thought she was absolutely brilliant and that her answers were the workings of a deeply complex mind.
It's mean spirited, but the phrase "she's what stupid people think smart people sound like" struck me at the time. I think the same may be true here. This kind of behavior has been reinforced so much in their lives that in some cases they start to also get high on their own supply. But they to are profoundly stupid people, and start to think that how they interact with the world is what smart people "sound like" and it perpetuates into these spectacular fraudulent failures.
> a fair number of people I talked with back then thought she was absolutely brilliant and that her answers were the workings of a deeply complex mind.
I bet it's because she spoke with confidence. Stupid people follow confidence disregarding everything else.
> However, a fair number of people I talked with back then thought she was absolutely brilliant and that her answers were the workings of a deeply complex mind.
There are a subset of people, and Elizabeth herself who, to this day, believe we and the world were robbed of Theranos' revolutionary advances, because they "really, truly, were this close and would have done it by now", and think that that is the miscarriage of justice.
Well to be fair, there are some diseases and conditions that Theranos detected without issue. And actually it would be really helpful to have a in-home or in-store instant diagnosis for those.
The failure was in trying to be the everything box and committing fraud to get there. I actually do think it would have been revolutionary and the failure of Theranos has set the field back.
> Well to be fair, there are some diseases and conditions that Theranos detected without issue.
With their own equipment? I don't believe so. Theranos as a company could reliably do this... they just did it with Siemens equipment with the labels removed.
> I actually do think it would have been revolutionary
It would be, were it possible. Not that we can't find things to be possible that were previously thought not to be, but this is pretty well established biology, and has been steadily researched for decades by both academia and industry (all of the big lab players would love it if they could do droplet analysis)... if there is an advance there, it's a pretty safe bet to say it was never coming from a 19 yo freshman chem eng dropout.
> It's mean spirited, but the phrase "she's what stupid people think smart people sound like" struck me at the time.
The phrase is a 'poetic' comeback. It's successful in the sense that it's exactly what everyone wishes they could come up with when put on the spot, so it's easy to remember. Like you say, it is unfortunately rather mean spirited, and I say unfortunate because I suspect that it contains truth and usefulness.
My running theory is that the structure of natural language and jargon is encoded such that it carries with it useful information. And this sort of makes sense. The problems we encounter in reality have a certain structure to them. And the natural progression of encoding is to make frequent things short and infrequent things long (thanks information theory). Over time communities shape language and jargon into the structural shape that is most useful to solve the problems they encounter.
Primarily, I've started down this road to try and get my head wrapped around LLMs. Why are they useful at all? And how can something like prompt engineering even exist? The answer being (maybe) language structure sometimes matches problem structure. And prompts from people who "know" how to speak "right" carry additional structure that helps the LLM to provide better results.
However, I think the same can be applied to "what stupid people think smart people sound like". If I'm right then there's a certain sense in which (for extremely well known problems) talking "correctly" helps you to be successful (although all things being equal actually knowing is going to be a better scenario).
And if you abstract this, then there's a benefit to not knowing what the truth is (it frees up your time) but knowing what the sentence structure of "smart" approximately is (it allows you to pick winners to invest in).
So perhaps we can de-meanify the phrase: "She's what non-experts think experts sound like." Or to maybe up the poetry: "Bach and pop use the same notes, but as the children mature so does their taste."
> "she's what stupid people think smart people sound like"
It is what people without any real depth of thought think that geniuses sound like.
Stringing together a lot of occasionally insightful sentences without having any overarching and consistent point to the whole thing.
And if you're conditioned by social media to have a low attention span and you have difficulty noticing how frequently the argument skips between tracks then it all sounds brilliant to you.
> Defense lawyer Mark Cohen did his best. Unfortunately for him, the cross-examination was conducted by Sassoon, who looks like someone who uses “summer” as a verb, and often appears deceptively timid, with her hands held close to her chest. In her cross, she simply unhinged her jaw and ate Bankman-Fried.
I feel like this has been known for a while. Months ago he essentially admitted to the core of the charges on a morning show and refused to stop after that. The Serious Trouble podcast, hosted by former (I think?) Twitter legal commentarian PopeHat/Ken White, has covered it a lot and just how much he's screwed his own legal defense. This was even before the bouts of witness tampering attempts that landed him in jail instead of plush house arrest.
The best (non-serious) theory I’ve heard is that his parents are coordinating his conviction to get themselves off the hook. To be clear that’s dark humor and not a serious claim, but it sure explains his defense a lot better than any alternative.
The best theory I've heard is he's banking on a hung jury. Only have to convince/persuade one person to get off and he's been able to weasel his way through life so far. As for the pretrial stuff I think that's just not realizing he's in real trouble not just trying to convince an investor to give him money to play with.
What's the long game on banking on a hung jury? That would typically lead to a retrial, especially given the publicity and amount of money involved here – the prosecution aren't going to let him off from one hung jury.
I feel like he'd need a game plan, either waiting for something additional his team can bring in, or seriously thinking that the practice run would result in a higher likelihood of a not guilty verdict. I don't think either of these is likely, and think the prosecution would likely do better out of the practice run.
A hung jury does not automatically mean a retrial. The prosecutor has to re-evaluate the situation. If SBF could convince 1 person on this jury, what does the prosecution need to do to prevent that from happening again? Is the expense of a second trial worth trying to put a single non-violent person in jail?
They'd retry him. They retry non-famous people with less serious charges and worse cases. Plus there's no other way to get that scarlet letter off the prosecutor's record.
This is pretty huge around tech, finance, politics/political donations, VCs, and advertising. Between that and it being one of the biggest fraud cases ever seen, a retrial is inevitable.
I did a quick search and the first result was clipped saying 100 million but it was from a longer sentence that was about one instance. I thought it was billions but trusted the quick googling instead.
It depends a lot on the prosecutor and how well the trial went, they have to decide to take the trial up again and after the first swing they've lost a significant portion of their advantage because the defense has had a preview of the evidence and tactics that's going to be used against them.
Once upon a time a man was accused of a crime. [..] The king of that land sentenced the man to death, and he pleaded for his life, offering to teach the king's horse to talk if he would be spared. The king agreed; if the accused could teach the horse to talk in two years, he would be pardoned. Otherwise, the original sentence would be carried out.
Sometime after that, the man's best friend asked him why he made a promise he couldn't keep, and why he was acting so cheerful about the whole business. The would-be horse teacher said, "A lot can happen in two years. The king could die. I could die. Or the horse could talk."
That joke seems to be unbelievably old; I’ve heard a version with Nasreddin Hodja and a donkey (and the donkey is used almost universally when it’s told in Russian, despite donkeys not exactly being common in most of the country), but I wouldn’t bet on even that being the first iteration. (Neither do I have a good source for the authenticity of the Nasreddin version, unfortunately.)
Acquittal rates rise in cases retried after hung juries, the prosecution has already revealed most of their evidence and strategy in the initial trial so the defense can more effectively defend against it in the case of a retrial. Some prosecutors just drop the case instead of retrying because of this (though for high profile cases like SBF they're more likely to continue pursuing it).
Personally probably not but I'm not the one making the decisions, SBF is and he's been able to guile his way through life quite successfully so I don't have much trouble believing he believes he can get out of this.
Perhaps he's planning to tamper with the jury. Perhaps he thinks he can bribe jurors; I imagine he still has access to plenty of moolah, and he certainly has some powerful friends.
Which is why it's so bizarre that he expected to get away with blatantly "borrowing" billions of dollars without permission. Even if he didn't lost one penny he would still have gone to prison for many years.
People keep saying this. I’ve seen literally no evidence of it. Open to having my mind changed. (Working for Jane Street for three years is insufficient without knowing what he accomplished.)
So how do you tell and how long do you have to wait - because the difference only ever seems to come visible with a certain degree of hindsight and/or luck.
> how do you tell and how long do you have to wait
The day we can define it is the day we can create it. Until then, genius and insanity will be indistinguishable until after the fact. (That said, there are clues.)
I suppose you can't; not definitively. I find it very hard to tell whether someone brighter than me is only a little brighter than me, or dramatically brighter than me.
My heuristics are:
* Nobody is dramatically brighter than me; I don't believe in geniuses.
* Bullshit is a giveaway. If I detect bullshit (e.g. "word salad"), then he's not brighter than me.
[Edit] In my experience, barristers/courtroom attorneys tend to be very bright, and also very good with language. Language is "what they do". Word salad doesn't seem to me to be a good strategy, when facing a good lawyer.
People somehow keep thinking rich = smart or even loud = smart. But I tend to perceive quiet and calm as smarter. The people who loudly talk and may be great at marketing are more often the ones impressing the general masses though. It just seems much smarter not to draw any attention (to your project sure, to you as a person, probably not so smart).
There was a time when public speaking was ranked as peoples' number one fear. Many saw someone, particularly a young someone, willing to speak publicly as a mark of greatness.
Social media has dragged us out of that infancy. But the bias, particularly among the pre-digital generations, remains. Bankman-Fried's word salads played that bias, which generated social proof. That, in turn, played into others' bias towards judging character by social proof. That generated wealth, which played into still others' quick filters.
SBF seems to fit a certain on-the-spectrum techie version of being "too smart for own good" / "not as smart as he thinks" / "other people aren't as dumb as he thinks".
So he takes the concept of having a paper trail of communications can put people in jail to heart - smart.
He then sets up their instant messaging to auto-delete such that there is literally no paper trail - dumb.
A smarter fraud version would have been to have clean paper trail of communications that were legal & a secondary channel where all the sketchier stuff goes on.
The even smarter version is to not discuss anything illegal in electronic form.
The smartest version being to just not do illegal stuff and run a legal business that makes money.
> The even smarter version is to not discuss anything illegal in electronic form.
Well, yeah. But he belongs to a social circle that lurves technology; his generation does everything via mobile devices, AND all his buddies are into cryptocurrencies and fintech. They discuss everything electronically.
He’s a smart sociopath and the two things collide.
I wouldn’t say SBF is dumb, just that he was intelligent enough to get a crypto startup out of the ground, then he was sociopathic enough that the business ended up being a giant fraud machine.
He’s not like dumb dumb. It’s that his sociopathic tendencies prevent him of doing or continuing in any serious endeavour without taking supreme advantage of it. He was smart enough to make a business, but since he’s a sociopath he couldn’t deal with the fact that that business had to be reasonably honest, because to him people and money are just tools for him to get what he wants.
Im convinced by the trial and other info he is actually an EA, he just has a radically different understanding of what that means than you or me. For him, killing 500 people to save 500,000 is a no brainier, the same way stealing from millions of customers to save a company that can help tens of millions is just obviously correct.
He doesn’t care because he can’t care. It’s not in his DNA.
The tendency of the tech community to view "smartness" as a single axis variable is a major achilles heel.
Clearly, it is possible for the same person to be both quite smart and deeply, profoundly stupid.
To use a relatable metaphor, there's a reason D&D splits mental stats into separate components: intelligence, wisdom, charisma and alignment aren't the same! Except in real life there's probably way more variables even than those and they're often correlated or anti-correlated in various ways.
This is the primary reason conversations on HN involving SBF, Elon Musk, Peter Thiel, Steve Jobs, Eliezer Yudkowsky etc can be so tedious.
I wouldn't say this is unique to the world of tech. In fact I suspect that most people working as software engineers are well aware that there's different "kinds" of intelligence, and you'll instead find this single-axis thinking more among the "general population."
It is certainly something everyone needs to be reminded of. Being (or sounding) smart on one subject doesn't make you smart on others by definition.
As someone who has surfed the Dunning-Kruger wave myself many times, I'm super cautious of looking out for other people doing the same.
Eh, maybe. The tech community seems predisposed to a certain kind of hero worship based on perceived intellect that I don't really see in the rest of society.
Yeah I forget the exact quote & attribution but theres a saying that holds true for any of these big names -
Don't be surprised when someone who is exceptional/think different in a way you do like, is also exceptional/think different in ways you don't like.
I mean one example was Jobs was an exceptionally good product/UX guy but an exceptionally bad parent. Arguably similar for Musk, lol.
Depending on your views you might see Thiel as an exceptionally good tech exec but an exceptionally bad political kingmaker (unleashing forces he regrets & can't control).
But yes, also terribly mundane. Musk for example seems to fall for every midtwit conspiracy and agitprop post on the social media platform he owns, like your random poorly educated uncle.
I’m friends with several university professors. One of them has a comment on RateMyProfessor that reads “She’s the dumbest smart person I’ve ever met.” I’ve also spent several years working with Honeywell, with a bunch of people with masters degrees or PhDs in engineering. They are all, collectively, some of the dumbest people I know. And they’re uniquely dumb in smart ways. They don’t pull on a door marked push because they missed the sign; they pull on it because they come up with a complicated rationalization that “push” actually means “pull.”
And I think I’ve identified the cause: lack of continual contact with reality. I’ve yelled on a conference call with a bunch of Honeywell engineers “STOP FUCKING HYPOTHESING AND CHECK THE LOGS!” Smart people are prone to forming their own little bubbles; groups of smart people even moreso. They suffer from a lack of continually having their bubbles popped by abrasive facts, or dumb people who point out the obvious.
I’m having work done on my house, and my contractor is an endless source of simple, “this is how it works” data. I conceive of interesting structures for my wife’s greenhouse, and then he explains why it won’t work in single syllable words.
This is the primary reason conversations on HN involving SBF, Elon Musk, Peter Thiel, Steve Jobs, Eliezer Yudkowsky etc can be so tedious
In 2015, I told my circle of friends at college that Elizabeth Holmes was a fraud, and that she was only able to get so far by masking as the female Steve Jobs. I simply stated that what she was claiming was impossible. I got called a misogynist lol.
Really smart people sometimes get lost in the structure of narrative and forget to do basic queries. I also learned that you gotta be careful who you criticize even if you are totally right. People won't change their opinion on your statement when the evidence vindicates you.
"pretty smart guy" fallacy is the incorrect assumption that high psychometric intelligence is all that you need to act rationally.
Anything related to executive functions, like like impulse control, irritability, attention problems, mental disorders, personality disorders, and many other things–including bad attitude and too much self confidence–can make smart people act foolishly.
Can someone explain why they did this "practice run" (I guess?) without the jury? It says the judge wanted to find out what answers would be admissible but it's unclear what that means or how the practice run will help here. When they bring the jury back will they do through the whole set of questioning again?
Courts are selective about what evidence can be entered. You can't just show up with say reams of papers or random (deepfake) videos and present them.
If you weren't aware of this consider it an awakening. One of the best ways to beat somebody in court is not to have a stronger argument but to prevent them from presenting evidence.
No, in the same way lawyers and the judge can decide ahead of time not to admit an unqualified expert witness, or to dismiss the jury for someone like Darrell Brooks representing himself by bringing up irrelevant information and hearsay which is inadmissible in court. If someone says the wrong thing in front of the jury it is somewhat difficult to erase it from their brains or to convene a new jury.
The main issue at play, from what I read in this story [0], is worry he will gum up the trail by saying everything was on the advice of his lawyers. Which would then require hauling the lawyers in and clarifying they of course never told their client to commit fraud or “borrow” billions of dollars of customer money.
>> One decision for Kaplan is whether Bankman-Fried will be allowed to blame FTX lawyers when the jury is back in the courtroom. As we previously wrote, this is called an "advice-of-counsel defense" in which SBF could argue that he sought advice from company lawyers, received advice that his conduct was legal, and "relied on that advice in good faith."
It's worth reading Judge Kaplan's earlier rulings related to the "advice of counsel" defense. As the judge writes, you can only invoke this if you "made a complete disclosure to counsel," right at the beginning, of what you planned to do. Sounds like the kind of situation where, once on trial, you'd need to produce an original "Memo to Lawyers" spelling out all of the intended FTX/Alameda games.
Once that's on the the table, then you need to have asked the lawyers: can we do this? And then you need a clear response from the lawyers (i.e. a memo) saying: "Yep!"
SBF's testimony, peeling away some of the word haze, amounts to: "I think the lawyers were loosely aware of at least some of this stuff and I don't exactly remember them telling me we couldn't do it." That's miles short of the standard (Kaplan-summarized) test.
It's not a practice run... it's a hearing-within-a-hearing to discuss admissibility. i.e., What evidence can be placed in front of the trier of fact (the jury).
SBF wanted to advance a defense that he relied on his lawyers telling him that was kosher, which requires there to be enough evidence that his lawyers specifically told him it was kosher. The hearing was to determine if he would be allowed to raise that defense. You don't want the jury to be present because if you ultimately decide the evidence isn't admissible, you can't exactly tell the jury "please forget everything you just heard."
At the end of the hearing, the defense attorney decided they weren't going to proceed with that defense, and instead go with the general defense of, uh, SBF thought the lawyers were telling him this was all kosher, so it can't be fraud.
In any case, he is actually testifying in his defense in front of the jury today, and Monday, and likely Tuesday. Based on this hearing, when he goes into cross-examination, the prosecutor is going to open him up and completely eviscerate him, with SBF happily handing the prosecutor the surgical tools to do so.
Michael Lewis makes an appearance in the courtroom ... Everyone's saying he seems to support Bankman-Fried
What happened there ??? The guy who calls out a lot of fraud, now can't see it?
I'm disappointed because I found his books enjoyable ... although maybe in retrospect I can't remember that much from them. Maybe he was never really calling them out, but just liked the story.
I know there have been a bunch of articles about this -- but what's the tl;dr ?
I guess he was always up close and personal with everyone, because that's how he got access to tell these interesting tales. And then you sort of compromise your own viewpoint
I haven't read the book, I have read reviews and been listening to his podcast.
It seems that he likes SBF on a personal level, which I think is reasonable, but then it seems that he falls short of making strong statements about the fraud. I think people have interpreted this combination as an implicit support of SBF, where it could in fact just be that, publishing before the trial, Lewis didn't want to "call it" the wrong way and limit the relevance of his book.
I suspect that to his (and his publishers' minds) the collapse itself is the finale, and the trial is a marketing campaign. The more press the trial gets, the more people are going to get curious to learn about the background and judge for themselves, and just in time a book about the company/SBF by an author who is notable for his ability to explain and humanize complicated business concepts to a general audience is right there on the front shelf at Barnes and Noble.
If anything, when the trial is over they re-release with an epilogue evaluating the trial.
I think since the GFC he has taken a bit of a turn in that he sees the traditional economy/financial markets/players as rigged against the little guy.. and taken a sort of oppositional defiance disorder approach to the whole thing.
So any Don Quixote will look like Robin Hood to him.
Flash Boys was just taking sides in a dispute with no real good guys, but the upstart/little guy to him was default "good guy".
He took some more explicitly political positions in some of his other books.
And now his SBF/FTX fanboyism falls under the same category that "the little guy" has to be the good guy.
The Big Short is probably his last great book / and film.
> the same category that "the little guy" has to be the good guy.
Definitely present in Moneyball where the A's are the good guys - they play a similar role as Burry, exploiting inefficiencies in the market created by the big, bad guys (e.g. the Yankees, or housing lenders), for profit.
Through line of his books seem to be "little guy is good".
In many of the stories the little guy he valorizes is just another neutral actor in a zero sum game.
The Big Short it just so happens that the "little guy" who was right got to make money off fairly bad actors! I wouldn't say they were themselves "good", rather more neutral players in a financial market.
He now seems to have chosen a little guy (SBF/FTX) who were explicitly bad actors.
Also interesting questions in the whole Blind Side story now.
Listen to his podcast (Against the Rules) from today and you can hear his take on the trial.
I also recommend his interview of Matt Levine (5 episodes ago) to get a good TLDR of the book. Here's my TLDR on the book after finishing it, which mirrors Levine's closely: Michael Lewis sees that Sam thinks he's above the rules and acted with wild disregard for risk because he thought he was smarter than everyone else. It was all illegal and will land him in jail for a long time. But, he did it because he thinks he's the smartest man who ever lived and has the best intentions, not because he sees himself as a crook.
It's a minor nuance, but an important one. It speaks more to the ego of founders and children of privilege, than to a criminal conspiracy. The articles you've read don't like that nuance, and call Lewis soft.
>What happened there ??? The guy who calls out a lot of fraud, now can't see it?
He calls it Fraud many times in his book and in his podcast. He just doesn't call it theft.
Ever since I saw that stupid TikTok video about being so “smart” for being a crypto billionaire at age 20 something, I have wished, perhaps even willed into existence, the day Sam Bankman-Fried would go to prison.
The most surprising thing about this is how bumbling and incoherent SBF appears. Crooked or not I would expect anybody to be able to convince corporate level execs to invest millions would at least be able to sound like they know what they are talking about.
He didn’t “convince” them of anything. He used family connections and those initial investors didn’t do any DD. Other investors noticed those investors put in some money and did the same. Cryptocurrency was also a buzzword so it was an easy sell. It was less of a “con” and more of privilege. And taking advantage of greed.
Same thing happened with that one woman that ran “Theranos”. Just know the right people. Although I think she was a slightly better public speaker. The yoda voice shit was weird though.
It's disappointing seeing how many of these startup frauds are basically connections laundering at inception. Makes you wonder what % of successful startups are the same (far from 0).
Not really surprising. When he was on his apology tour before getting arrested, he basically fell apart like this anytime someone asked him good questions and forced him off script. He ended up running from public Twitter Spaces several times because of that. Well you can't bail from the witness stand.
I'm continuously amazed that people called him a "charismatic" speaker, etc. Really amazes me that this is the bar for an exec, company leader these days.
I think our recent 0 interest rate environment resulted in many companies receiving investments that were unlikely if capital markets weren't overflowing with cash.
Though people are making valid points in the other comments, don't underestimate what stress and bad circumstances can do to one's cognition. This isn't necessarily how he was performing before.
The best way to get millions invested is to have other investors go first. This is the guy who played video games during a venture pitch and rambling on about a future Everything App.
The business idea of venture capital is not to follow through with the investment all the way to a mature company with long term profits. It is to offload to later investors. It's hard to fault anyone as long as they go in with their eyes open.
>Crooked or not I would expect anybody to be able to convince corporate level execs to invest millions would at least be able to sound like they know what they are talking about.
One of the most effective sales techniques is to sell the customer's own dream right back to the customer.
To qualify the prospects you need a marketing strategy that builds a pipeline of potential customers likely to possess the type of dream that you can work with.
Here there was no persuasive salesmanship needed to convince "investors", someone else had already done that in advance, or the customers had built interest on their own.
Sam was just there to use their money, and if a certain amount of losses were inevitable that was supposed to be overcome by greater amounts of gains in the long run. Skimming just a little bit off the top to where it's obscured by the noise of the losses is what lots of financial outfits have done for centuries. The higher-integrity firms have decades of experience carefully disclosing their terms for this activity to their customers, which is one of the reasons why more persuasive sales efforts might be a lot more common.
As soon as Sam started skimming without proper disclosure, that's what made it ordinary theft.
What's crazy to me is that his parents are lawyers and they both acquiesced or abetted his illegal behavior and now his atrocious defense of said illegal behavior. Not to mention that they benefited from it the whole way.
His parents seem low level sociopaths, asking him for money (they must have known was stolen) and using each other as a way to get him to comply (according to leaked emails).
Sam is just a massive sociopath, born out of this.
They are doing a great job of proving what we already knew: Stanford as an institution is corrupt to its core, from the leadership to the professors, to the alumni. How they continue to have any semblance of a positive reputation is beyond me.
> Sassoon brought out the terms of service Bankman-Fried had testified to and asked him to point out where in the agreement it specified that FTX was permitted to spend customer funds. The court sat in absolute silence for more than a minute... Finally, Bankman-Fried said, “I am not a lawyer” and definitely said a lot of words, none of which made much sense. Sasson asked the same question again, drawing an objection from Cohen, which Kaplan overruled — because Bankman-Fried had not answered her question. The line Bankman-Fried eventually pointed to was that funds were “held and / or transferred by provider.”
Check
> Bankman-Fried’s defense, in the direct testimony, was trying to put blame on the lawyers: FTX chief regulatory officer Dan Friedberg... A significant thrust of questions was about a bank account controlled by Alameda Research that did not bear Alameda’s name; it was instead called North Dimension, it came into existence around 2020 — that is, while Bankman-Fried was still Alameda’s CEO — and it was where FTX customers were told to wire their funds. Bankman-Fried said that the North Dimension bank account was all Friedberg’s idea. Sassoon asked if Bankman-Fried, as Friedberg’s boss, had given him any direction, or if Friedberg just popped ideas across Bankman-Fried’s desk. The word-salad began again, interrupted only by the judge saying things like “So I take it the answer is you don’t remember; is that about it?” or “Listen to the question and answer the question directly.” ... Then Sassoon did what I had been waiting for: pointed out that Bankman-Fried had been the one who hired Friedberg in 2020. She asked if he’d been hesitant to hire a general counsel. He said he had been hesitant to hire the wrong general counsel — “I did want a general counsel who was comfortable with reasonable risks.” Sassoon then asked if Bankman-Fried was aware of Friedberg’s history of working at a company that had an insider trading scandal? (The company in question, by the way, is UltimateBet.) That there had been a criminal scandal? “Were you aware that Dan Friedberg used illegal narcotics with your employees?”
Not really. SBF didn't write the TOS and doing drugs with coworkers doesn't mean you committed fraud. Obviously SBF did but both of these lines of arguments are distractions to make him look guilty without really proving anything.
Maybe it's because I've mostly become aware of SBF after the shit hit the fan, but I feel I've never seen this guy communicate in a clear and cogent way. It's all just mumbling, dithering, and dissembling. Even reports of how he ran his businesses sound like noise and chaos.
He's clearly "smart" in the sense that he knows how to read a book and operate a computer, but we need to stop treating him as anything other than a middling dude who stumbled into a grift.
I thought this guy was supposed to be super-bright.
He's decided to face cross-examination, so the judge held this session to check that his defence doesn't include saying stuff that's inadmissible. But from this account, it doesn't sound as if he's got anything interesting to say at all; and I find it surprising that someone supposedly so bright talks in "word salad", i.e. can't construct a coherent sentence.
I suspect the story about him being bright comes from people who believe wealth is proof of intelligence.
He did physics as MIT so has to be fairly bright. Also his (in)famous explanation of yield farming was the first time I'd heard anyone explain what was going on there.
This court case stuff is a different skill set though and also I think it would be beyond almost anyone to talk themselves out of his situation.
Imagine being told you're very smart since a young age and internalizing it so heavily that you think you can talk your way out of everything. What you really end up internalizing is that other people are stupid. And this is why Sam is going to prison. Other people really aren't that stupid. Some of them are even very smart and competent, like the team prosecuting this.
The title highlighting the "skimming over" TOS seems a bit alarmist to me. I bet there are very rare CEOs who could even say that much.
As a result my "we don't like this guy so we'll talk up any minor negative thing we find" detectors start to go off. I think he just took money from the wrong people, kinda like Madoff.
1) Not sure how we can take Madoff's ponzi to the level of "he just took money from the wrong people".
2) TOS in financial sectors are generally very well thought out and would not surprise me at the startup level that executive leadership should have a solid understanding of what it does. In this case the TOS in question would allow/disallow FTX the exchange from lending money to sister org Alameda. This seems like a pretty crucial thing that the CEO, SBF, should know.
At the level of FTX's operations, I don't think Sam should have been expected to read the TOS at all. That said:
1. A CEO obviously should have a basic understanding of the rules on using customer assets regardless of whether he read the TOS. It's like Sam claiming he didn't know he had to pay taxes since he never read the tax code.
2. More importantly, when issues arise, a non-criminal organization would have called up legal and said "can we do this?", and waited for them to review the TOS, respond with an answer, and follow that. Sam seems to have purposefully avoided oversight, building out a Board, building out legal, sharing information, etc.
Both testifying and “advice of counsel” defense are very risky hail Mary strategies. He is probably going against the advice of his lawyers because he thinks he is smarter than them. Defendants shouldn’t take the stand in fraud trials.
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
173 comments
[ 2.9 ms ] story [ 221 ms ] threadTestifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
I think it's a hail Mary. All his buddies were offered deals to flip on him because he was the big fish. There's no bigger fish for him to flip on, so prosecutors will throw the book at him, no reason to go easy. A conviction is pretty certain and would be pretty bad, so any strategy that could make things better but can't make things worse is ideal.
He's valuing the entertainment of millions above years of his own freedom.
More substantively I wonder if he will try to argue his use of the money towards effective altruism made fraud OK during sentencing - surely the money was better spent on charity rather than remaining with the credulous.
Why he’s a modern day Robin Hood! And who could be more deserving of charity than himself?
Ngl, I feel terrible for all the people that lost FTX money, but it is kinda amazing to see the world see what a terrible mess and how irreducibly dumb most of the effective altruists are.
Kinda like when gwern went off on his eugenics rant and people went: are all of these "rationalists" libertarian lunatics?
This line encapsulates everything I've thought about this trial.
Feels like watching the man scream at the steam roller in Austin Powers.[0] He just can't keep his feet out of his own mouth. At this point I can't tell if it's hubris, or just straight ineptitude.
[0]: https://www.youtube.com/watch?v=y_PrZ-J7D3k
This line captures the recent wave of Silicon Valley bullshitters so perfectly.
No. Rambling idiots were historically judged.
The quick-talking stream-of-consciousness bullshitter relies on rapid technological change to suspend listeners' disbelief. Because ex ante, you can't know if you've got someone brilliant but nervous (or simply neurodivergent), or one of these.
SBF is the same classic huckster, but wrapped up in a hoodie.
Who were widespread in the industrial era. Less so before. (In part because peasants didn't have the disposable income to scam.)
Two years later.
"How it's going?" "Making progress, not quite there yet. I'm going to need more funding."
And so on.
FTX founder gets by on 4 hours' sleep and multitasks on 6 screens https://news.ycombinator.com/item?id=29580668
In 2021, FTX had a funding round of $420.69M https://news.ycombinator.com/item?id=33530674
Sam Bankman-Fried and Matt Levine on How the Crypto Market Works https://news.ycombinator.com/item?id=28075024
[1] https://www.forbes.com/sites/willskipworth/2023/10/16/sbfs-l...
Secondly though he seems to have quickly latched on to a specific sort of messaging that's built around "honesty" and admitting his own failings, not in a real way it seems though. I think he's seen a bunch of people get "cancelled" in recent years and seen that this sort of admission of guilt tends to work well for people. What he doesn't realise though is that this isn't him being accused in the court of public opinion about something the public don't agree fully on, it's a legal accusation in court about specifics that the law is clear on. I'd say this was just bad advice he was being given, but it seemed to happen so quickly that I think it's just his own bad take on the best way out.
I mean his publicity tour immediately after FTX went under worked pretty well for a while. He got Kevin O’ Leary to blame CZ in front of congress. And Michael Lewis painted a pretty positive picture. He talked to everyone he could and the vast majority of the media were not sure if he did or did not commit a crime.
All he has to do is convince the jury to have a reasonable doubt.
The best explanation I’ve seen is that the book was mostly done when it all came crashing down, and SBF was already the befuddled hero and herald of a new age, and Lewis just didn’t want to rewrite the whole damn thing.
But I know Lewis has gone through some personal tragedy, and I think it has softened his gaze, at least upon young people who act like a foundling in Brave New World.
If he's convicted it won't be on the details, but on credibility. The "I don't recall" strategy won't fool a judge, but it might fool enough jurors.
I think the prosecution is going to have to work unexpectedly hard to nail him to the wall.
But I also suspect there's more to the story than we're being told.
The fact that so much of the money seems to have gone on bribes and political donations, the fact that his parents are lawyers but apparently were shocked - shocked! - to discover he was doing something illegal, the fact that he seems so casual about the whole thing - it's all a little strange.
His father "is considered a leading scholar in the discipline of tax law" and is a Stanford Professor of Law and Business.
So with no obvious warning signs this must have come as a complete surprise to him.
His only plausible strategy is confusion and delay to buy time. A shame that it ends up burning millions more dollars of prosecutor resources.
slaps hood “These gears turn slowly but watch how fine they grind!” Money well spent imho.
I think he's clearly very smart, but not nearly as smart as he thinks he is.
[0] https://www.youtube.com/watch?v=YgJvgESR920
It's mean spirited, but the phrase "she's what stupid people think smart people sound like" struck me at the time. I think the same may be true here. This kind of behavior has been reinforced so much in their lives that in some cases they start to also get high on their own supply. But they to are profoundly stupid people, and start to think that how they interact with the world is what smart people "sound like" and it perpetuates into these spectacular fraudulent failures.
I bet it's because she spoke with confidence. Stupid people follow confidence disregarding everything else.
There are a subset of people, and Elizabeth herself who, to this day, believe we and the world were robbed of Theranos' revolutionary advances, because they "really, truly, were this close and would have done it by now", and think that that is the miscarriage of justice.
https://www.nytimes.com/2022/11/29/technology/sam-bankman-fr...
Earlier comment:
https://news.ycombinator.com/item?id=33984977
The failure was in trying to be the everything box and committing fraud to get there. I actually do think it would have been revolutionary and the failure of Theranos has set the field back.
With their own equipment? I don't believe so. Theranos as a company could reliably do this... they just did it with Siemens equipment with the labels removed.
> I actually do think it would have been revolutionary
It would be, were it possible. Not that we can't find things to be possible that were previously thought not to be, but this is pretty well established biology, and has been steadily researched for decades by both academia and industry (all of the big lab players would love it if they could do droplet analysis)... if there is an advance there, it's a pretty safe bet to say it was never coming from a 19 yo freshman chem eng dropout.
The phrase is a 'poetic' comeback. It's successful in the sense that it's exactly what everyone wishes they could come up with when put on the spot, so it's easy to remember. Like you say, it is unfortunately rather mean spirited, and I say unfortunate because I suspect that it contains truth and usefulness.
My running theory is that the structure of natural language and jargon is encoded such that it carries with it useful information. And this sort of makes sense. The problems we encounter in reality have a certain structure to them. And the natural progression of encoding is to make frequent things short and infrequent things long (thanks information theory). Over time communities shape language and jargon into the structural shape that is most useful to solve the problems they encounter.
Primarily, I've started down this road to try and get my head wrapped around LLMs. Why are they useful at all? And how can something like prompt engineering even exist? The answer being (maybe) language structure sometimes matches problem structure. And prompts from people who "know" how to speak "right" carry additional structure that helps the LLM to provide better results.
However, I think the same can be applied to "what stupid people think smart people sound like". If I'm right then there's a certain sense in which (for extremely well known problems) talking "correctly" helps you to be successful (although all things being equal actually knowing is going to be a better scenario).
And if you abstract this, then there's a benefit to not knowing what the truth is (it frees up your time) but knowing what the sentence structure of "smart" approximately is (it allows you to pick winners to invest in).
So perhaps we can de-meanify the phrase: "She's what non-experts think experts sound like." Or to maybe up the poetry: "Bach and pop use the same notes, but as the children mature so does their taste."
It is what people without any real depth of thought think that geniuses sound like.
Stringing together a lot of occasionally insightful sentences without having any overarching and consistent point to the whole thing.
And if you're conditioned by social media to have a low attention span and you have difficulty noticing how frequently the argument skips between tracks then it all sounds brilliant to you.
> Defense lawyer Mark Cohen did his best. Unfortunately for him, the cross-examination was conducted by Sassoon, who looks like someone who uses “summer” as a verb, and often appears deceptively timid, with her hands held close to her chest. In her cross, she simply unhinged her jaw and ate Bankman-Fried.
I feel like he'd need a game plan, either waiting for something additional his team can bring in, or seriously thinking that the practice run would result in a higher likelihood of a not guilty verdict. I don't think either of these is likely, and think the prosecution would likely do better out of the practice run.
> Another $413 million had gone directly to Bankman-Fried himself, through his wholly-owned company Paper Bird.
This article says $7.3 Billion have been recovered: https://www.reuters.com/technology/bankrupt-crypto-exchange-...
If I steal your entire wealth and your family ends up on the street, it doesn’t matter that I wasn’t violent.
Hope he gets what he deserves: a ton of prison time.
Once upon a time a man was accused of a crime. [..] The king of that land sentenced the man to death, and he pleaded for his life, offering to teach the king's horse to talk if he would be spared. The king agreed; if the accused could teach the horse to talk in two years, he would be pardoned. Otherwise, the original sentence would be carried out.
Sometime after that, the man's best friend asked him why he made a promise he couldn't keep, and why he was acting so cheerful about the whole business. The would-be horse teacher said, "A lot can happen in two years. The king could die. I could die. Or the horse could talk."
A hung jury buys you, I dunno, another year of freedom/jail instead of prison.
Perhaps he's planning to tamper with the jury. Perhaps he thinks he can bribe jurors; I imagine he still has access to plenty of moolah, and he certainly has some powerful friends.
Which is why it's so bizarre that he expected to get away with blatantly "borrowing" billions of dollars without permission. Even if he didn't lost one penny he would still have gone to prison for many years.
People keep saying this. I’ve seen literally no evidence of it. Open to having my mind changed. (Working for Jane Street for three years is insufficient without knowing what he accomplished.)
Yes. Very deeply, yes.
The day we can define it is the day we can create it. Until then, genius and insanity will be indistinguishable until after the fact. (That said, there are clues.)
I suppose you can't; not definitively. I find it very hard to tell whether someone brighter than me is only a little brighter than me, or dramatically brighter than me.
My heuristics are:
* Nobody is dramatically brighter than me; I don't believe in geniuses.
* Bullshit is a giveaway. If I detect bullshit (e.g. "word salad"), then he's not brighter than me.
[Edit] In my experience, barristers/courtroom attorneys tend to be very bright, and also very good with language. Language is "what they do". Word salad doesn't seem to me to be a good strategy, when facing a good lawyer.
Social media has dragged us out of that infancy. But the bias, particularly among the pre-digital generations, remains. Bankman-Fried's word salads played that bias, which generated social proof. That, in turn, played into others' bias towards judging character by social proof. That generated wealth, which played into still others' quick filters.
So he takes the concept of having a paper trail of communications can put people in jail to heart - smart.
He then sets up their instant messaging to auto-delete such that there is literally no paper trail - dumb.
A smarter fraud version would have been to have clean paper trail of communications that were legal & a secondary channel where all the sketchier stuff goes on.
The even smarter version is to not discuss anything illegal in electronic form.
The smartest version being to just not do illegal stuff and run a legal business that makes money.
He should have read far more Matt Levine.
Well, yeah. But he belongs to a social circle that lurves technology; his generation does everything via mobile devices, AND all his buddies are into cryptocurrencies and fintech. They discuss everything electronically.
I wouldn’t say SBF is dumb, just that he was intelligent enough to get a crypto startup out of the ground, then he was sociopathic enough that the business ended up being a giant fraud machine.
He’s not like dumb dumb. It’s that his sociopathic tendencies prevent him of doing or continuing in any serious endeavour without taking supreme advantage of it. He was smart enough to make a business, but since he’s a sociopath he couldn’t deal with the fact that that business had to be reasonably honest, because to him people and money are just tools for him to get what he wants.
Im convinced by the trial and other info he is actually an EA, he just has a radically different understanding of what that means than you or me. For him, killing 500 people to save 500,000 is a no brainier, the same way stealing from millions of customers to save a company that can help tens of millions is just obviously correct.
He doesn’t care because he can’t care. It’s not in his DNA.
Really? It seems to me all evidence points to the opposite.
Clearly, it is possible for the same person to be both quite smart and deeply, profoundly stupid.
To use a relatable metaphor, there's a reason D&D splits mental stats into separate components: intelligence, wisdom, charisma and alignment aren't the same! Except in real life there's probably way more variables even than those and they're often correlated or anti-correlated in various ways.
This is the primary reason conversations on HN involving SBF, Elon Musk, Peter Thiel, Steve Jobs, Eliezer Yudkowsky etc can be so tedious.
It is certainly something everyone needs to be reminded of. Being (or sounding) smart on one subject doesn't make you smart on others by definition.
As someone who has surfed the Dunning-Kruger wave myself many times, I'm super cautious of looking out for other people doing the same.
It's totally possible for someone who is exceptional in one way (e.g. rich and famous) to be quite pedestrian, boring and mundane otherwise.
Depending on your views you might see Thiel as an exceptionally good tech exec but an exceptionally bad political kingmaker (unleashing forces he regrets & can't control).
But yes, also terribly mundane. Musk for example seems to fall for every midtwit conspiracy and agitprop post on the social media platform he owns, like your random poorly educated uncle.
And I think I’ve identified the cause: lack of continual contact with reality. I’ve yelled on a conference call with a bunch of Honeywell engineers “STOP FUCKING HYPOTHESING AND CHECK THE LOGS!” Smart people are prone to forming their own little bubbles; groups of smart people even moreso. They suffer from a lack of continually having their bubbles popped by abrasive facts, or dumb people who point out the obvious.
I’m having work done on my house, and my contractor is an endless source of simple, “this is how it works” data. I conceive of interesting structures for my wife’s greenhouse, and then he explains why it won’t work in single syllable words.
This is the primary reason conversations on HN involving SBF, Elon Musk, Peter Thiel, Steve Jobs, Eliezer Yudkowsky etc can be so tedious
Exactly.
Really smart people sometimes get lost in the structure of narrative and forget to do basic queries. I also learned that you gotta be careful who you criticize even if you are totally right. People won't change their opinion on your statement when the evidence vindicates you.
https://www.urbandictionary.com/define.php?term=failson#1748...
Anything related to executive functions, like like impulse control, irritability, attention problems, mental disorders, personality disorders, and many other things–including bad attitude and too much self confidence–can make smart people act foolishly.
If you weren't aware of this consider it an awakening. One of the best ways to beat somebody in court is not to have a stronger argument but to prevent them from presenting evidence.
I'm curious whether or not this kind of thing was what the Constitution's authors had on mind.
(I've also heard that the meaning of "peers" has changed, but no idea if that's really true.)
>> One decision for Kaplan is whether Bankman-Fried will be allowed to blame FTX lawyers when the jury is back in the courtroom. As we previously wrote, this is called an "advice-of-counsel defense" in which SBF could argue that he sought advice from company lawyers, received advice that his conduct was legal, and "relied on that advice in good faith."
[0] https://arstechnica.com/tech-policy/2023/10/sam-bankman-frie...
Once that's on the the table, then you need to have asked the lawyers: can we do this? And then you need a clear response from the lawyers (i.e. a memo) saying: "Yep!"
SBF's testimony, peeling away some of the word haze, amounts to: "I think the lawyers were loosely aware of at least some of this stuff and I don't exactly remember them telling me we couldn't do it." That's miles short of the standard (Kaplan-summarized) test.
https://storage.courtlistener.com/recap/gov.uscourts.nysd.59...
At the end of the hearing, the defense attorney decided they weren't going to proceed with that defense, and instead go with the general defense of, uh, SBF thought the lawyers were telling him this was all kosher, so it can't be fraud.
In any case, he is actually testifying in his defense in front of the jury today, and Monday, and likely Tuesday. Based on this hearing, when he goes into cross-examination, the prosecutor is going to open him up and completely eviscerate him, with SBF happily handing the prosecutor the surgical tools to do so.
Wouldn't it be better if these journalists stopped coaching the accused?
The only other effect I see is prejudicial rubbernecking entertainment.
I imagine he's had good legal advice from good, smart lawyers. But I doubt SBF thinks they're as smart as he is - oh, no!
[0] https://www.youtube.com/watch?v=4o_jPzBZSIo&t=573s
What happened there ??? The guy who calls out a lot of fraud, now can't see it?
I'm disappointed because I found his books enjoyable ... although maybe in retrospect I can't remember that much from them. Maybe he was never really calling them out, but just liked the story.
I know there have been a bunch of articles about this -- but what's the tl;dr ?
I guess he was always up close and personal with everyone, because that's how he got access to tell these interesting tales. And then you sort of compromise your own viewpoint
It seems that he likes SBF on a personal level, which I think is reasonable, but then it seems that he falls short of making strong statements about the fraud. I think people have interpreted this combination as an implicit support of SBF, where it could in fact just be that, publishing before the trial, Lewis didn't want to "call it" the wrong way and limit the relevance of his book.
If anything, when the trial is over they re-release with an epilogue evaluating the trial.
It would probably be more than a chapter of material too.
So any Don Quixote will look like Robin Hood to him.
Flash Boys was just taking sides in a dispute with no real good guys, but the upstart/little guy to him was default "good guy". He took some more explicitly political positions in some of his other books. And now his SBF/FTX fanboyism falls under the same category that "the little guy" has to be the good guy.
The Big Short is probably his last great book / and film.
Definitely present in Moneyball where the A's are the good guys - they play a similar role as Burry, exploiting inefficiencies in the market created by the big, bad guys (e.g. the Yankees, or housing lenders), for profit.
Through line of his books seem to be "little guy is good".
In many of the stories the little guy he valorizes is just another neutral actor in a zero sum game.
The Big Short it just so happens that the "little guy" who was right got to make money off fairly bad actors! I wouldn't say they were themselves "good", rather more neutral players in a financial market.
He now seems to have chosen a little guy (SBF/FTX) who were explicitly bad actors. Also interesting questions in the whole Blind Side story now.
I also recommend his interview of Matt Levine (5 episodes ago) to get a good TLDR of the book. Here's my TLDR on the book after finishing it, which mirrors Levine's closely: Michael Lewis sees that Sam thinks he's above the rules and acted with wild disregard for risk because he thought he was smarter than everyone else. It was all illegal and will land him in jail for a long time. But, he did it because he thinks he's the smartest man who ever lived and has the best intentions, not because he sees himself as a crook.
It's a minor nuance, but an important one. It speaks more to the ego of founders and children of privilege, than to a criminal conspiracy. The articles you've read don't like that nuance, and call Lewis soft.
>What happened there ??? The guy who calls out a lot of fraud, now can't see it?
He calls it Fraud many times in his book and in his podcast. He just doesn't call it theft.
Hasn't Lewis said as much?
I haven't read his books, but I think he writes about people that he basically admires. He doesn't set out to destroy his subjects.
Same thing happened with that one woman that ran “Theranos”. Just know the right people. Although I think she was a slightly better public speaker. The yoda voice shit was weird though.
The business idea of venture capital is not to follow through with the investment all the way to a mature company with long term profits. It is to offload to later investors. It's hard to fault anyone as long as they go in with their eyes open.
One of the most effective sales techniques is to sell the customer's own dream right back to the customer.
To qualify the prospects you need a marketing strategy that builds a pipeline of potential customers likely to possess the type of dream that you can work with.
Here there was no persuasive salesmanship needed to convince "investors", someone else had already done that in advance, or the customers had built interest on their own.
Sam was just there to use their money, and if a certain amount of losses were inevitable that was supposed to be overcome by greater amounts of gains in the long run. Skimming just a little bit off the top to where it's obscured by the noise of the losses is what lots of financial outfits have done for centuries. The higher-integrity firms have decades of experience carefully disclosing their terms for this activity to their customers, which is one of the reasons why more persuasive sales efforts might be a lot more common.
As soon as Sam started skimming without proper disclosure, that's what made it ordinary theft.
They all belong in jail.
Sam is just a massive sociopath, born out of this.
She's here on Mastodon https://hachyderm.io/@molly0xfff and also did live stream on her YouTube channel https://www.youtube.com/@molly0xfff/streams.
Check
> Bankman-Fried’s defense, in the direct testimony, was trying to put blame on the lawyers: FTX chief regulatory officer Dan Friedberg... A significant thrust of questions was about a bank account controlled by Alameda Research that did not bear Alameda’s name; it was instead called North Dimension, it came into existence around 2020 — that is, while Bankman-Fried was still Alameda’s CEO — and it was where FTX customers were told to wire their funds. Bankman-Fried said that the North Dimension bank account was all Friedberg’s idea. Sassoon asked if Bankman-Fried, as Friedberg’s boss, had given him any direction, or if Friedberg just popped ideas across Bankman-Fried’s desk. The word-salad began again, interrupted only by the judge saying things like “So I take it the answer is you don’t remember; is that about it?” or “Listen to the question and answer the question directly.” ... Then Sassoon did what I had been waiting for: pointed out that Bankman-Fried had been the one who hired Friedberg in 2020. She asked if he’d been hesitant to hire a general counsel. He said he had been hesitant to hire the wrong general counsel — “I did want a general counsel who was comfortable with reasonable risks.” Sassoon then asked if Bankman-Fried was aware of Friedberg’s history of working at a company that had an insider trading scandal? (The company in question, by the way, is UltimateBet.) That there had been a criminal scandal? “Were you aware that Dan Friedberg used illegal narcotics with your employees?”
Checkmate
He's clearly "smart" in the sense that he knows how to read a book and operate a computer, but we need to stop treating him as anything other than a middling dude who stumbled into a grift.
He's decided to face cross-examination, so the judge held this session to check that his defence doesn't include saying stuff that's inadmissible. But from this account, it doesn't sound as if he's got anything interesting to say at all; and I find it surprising that someone supposedly so bright talks in "word salad", i.e. can't construct a coherent sentence.
I suspect the story about him being bright comes from people who believe wealth is proof of intelligence.
This court case stuff is a different skill set though and also I think it would be beyond almost anyone to talk themselves out of his situation.
https://www.bbc.com/news/world-us-canada-65625526
As a result my "we don't like this guy so we'll talk up any minor negative thing we find" detectors start to go off. I think he just took money from the wrong people, kinda like Madoff.
2) TOS in financial sectors are generally very well thought out and would not surprise me at the startup level that executive leadership should have a solid understanding of what it does. In this case the TOS in question would allow/disallow FTX the exchange from lending money to sister org Alameda. This seems like a pretty crucial thing that the CEO, SBF, should know.
1. A CEO obviously should have a basic understanding of the rules on using customer assets regardless of whether he read the TOS. It's like Sam claiming he didn't know he had to pay taxes since he never read the tax code.
2. More importantly, when issues arise, a non-criminal organization would have called up legal and said "can we do this?", and waited for them to review the TOS, respond with an answer, and follow that. Sam seems to have purposefully avoided oversight, building out a Board, building out legal, sharing information, etc.
Testifying opens SBF to cross-examination. He is so arrogant that he thinks he will ace it, but evidence points towards him fumbling it.
“advice of counsel” defense waives the right to attorney-client privilege.
Does it also remove his ability to appeal on a "competence of counsel" basis or is that only if he goes full-blown self-representation?