Economics Corner: SBF Trial

[El Presidente]

The whole FTX -  Almeda - Sam Bankman-Fried story has to be made into a NETFLIX series 

Its got everything! 

• Crypto heights and bottom.
• Super Nerds
• Headquarters a house in Bahamas
• No showering for weeks. 
• Massive Democrat donations
• Super Bowl adds
• Tom Brady!
• Double Crossing
• Fraud
• Rich hellicopter parents. 

This has been the trial of the year! Fascinating. Closing arguments coming up 🍿

Who else is watching? 

Will he do time? 

How much time? 

[BrightonCorgi]

Slap on the wrist.  Year or two in minimum security federal prison at best is my hunch.

[TacoSauce]

A lawyer acquaintance mentioned to me that the trial can only address a fraction of the overall wrongdoing as a result of the way the extradition (from the Bahamas) was handled. As a result, there is no mechanism (at least in US courts) to adjudicate much of the financial malfeasance that transpired. This will be convenient for a subset of people who benefited from the "money hose" that FTX directed at various parties and causes. I'm not in a position to verify this, but I found it to be an interesting idea.

[Namisgr11]

According to what I've read, many lawyers are expecting between 10-20 year sentencing, and only that short because so many of the charges are similar in nature, and so likely to be served concurrent rather than consecutive.

[Boxer31]

You forgot sex parties - but Margot Robbie has to play the lead

[MrBirdman]

Yeah if he’s convicted he’s going away for at least 7-8 years, bare minimum. The level of mismanagement and breach of duty here is off the charts. I wouldn’t be surprised at all by a 12-15 year sentence. 

 

8 hours ago, TacoSauce said:

A lawyer acquaintance mentioned to me that the trial can only address a fraction of the overall wrongdoing as a result of the way the extradition (from the Bahamas) was handled. As a result, there is no mechanism (at least in US courts) to adjudicate much of the financial malfeasance that transpired. This will be convenient for a subset of people who benefited from the "money hose" that FTX directed at various parties and causes. I'm not in a position to verify this, but I found it to be an interesting idea.

Yes this is correct - many of the charges were dismissed because of how the extradition was handled. But ultimately if they get him on even one count of wire fraud he can do 10 years, and more if you add a conspiracy charge that runs consecutive. 

[NSXCIGAR]

2 hours ago, Boxer31 said:

You forgot sex parties - but Margot Robbie has to play the lead

Based on his taste in women I think I'll skip that party. 

[dominattorney]

16 hours ago, NSXCIGAR said:

Based on his taste in women I think I'll skip that party.

Concur wholeheartedly. My only interest in this case is whether the government is going to make securities fraud stick, and what that will open up in that arena of appellate law. My interest is vague, at best, and I haven't followed the trial, or even the theory of how crypto can be considered a security. I'm not even sure if that's the theory of prosecution. I've got enough of my own problems, and every time I dig into this mess I see pictures like this one and get sidetracked daydreaming about how money can buy any woman you want and whatnot. And then.....

We are all going to hell. 

[RDB]

Money can buy you anything that is for sale…

[Lamboinee]

I'm curious how much time he would actually serve, where he would be incarcerated, and whether he would be allowed internet access while serving.

As it says on the Statue of Liberty, "All Americans are equal before the law,  but the time they serve in prison is not." 

[Ken Gargett]

On 11/1/2023 at 7:34 AM, El Presidente said:

The whole FTX -  Almeda - Sam Bankman-Fried story has to be made into a NETFLIX series 

Its got everything! 

• Crypto heights and bottom.
• Super Nerds
• Headquarters a house in Bahamas
• No showering for weeks. 
• Massive Democrat donations
• Super Bowl adds
• Tom Brady!
• Double Crossing
• Fraud
• Rich hellicopter parents. 

This has been the trial of the year! Fascinating. Closing arguments coming up 🍿

Who else is watching? 

Will he do time? 

How much time? 

i believe that Michael Lewis has already sold his book to Apple for five million! apparently the book is far less critical than one would have imagined, especially for someone like lewis. 

 

On 11/1/2023 at 10:53 AM, Boxer31 said:

You forgot sex parties - but Margot Robbie has to play the lead

Margot Robbie was on the same flight as me a couple of weeks ago. an extremely early Melbourne to brizzy flight. quite fascinating. there was no waiting in the lounge for her. she and her group - a bunch of about half a dozen of the saddest looking blokes you have ever seen (they looked like they were a bunch of failed baristas who had just auditioned for back up roles for a grunge band and missed those as well) were just hanging around at the gate. she was in beanie and basically sweat gear (probably very expensive sweat gear). i assume she was pointy end as she did not come into economy. much smaller than i thought she'd be. 

it might sound odd but you could actually see or at least feel the star power. when she left the hangers on, it was like a black cloud descended. when she returned, they would light up like Christmas trees. she had a big grin the entire time, taking pictures on the phone, bouncing around, having fun (which was a bit rude at 6am). even if i had not recognised her, she was someone who would have attracted your attention. 

[NSXCIGAR]

9 hours ago, Lamboinee said:

I'm curious how much time he would actually serve, where he would be incarcerated, and whether he would be allowed internet access while serving.

He'll get somewhere in the 5-15 year range. Will be in some federal prison in the middle of nowhere. And I'm not aware of any prison or jail in this country that allows internet access outside of limited emails and school programs. 

I saw somewhere he'd rather be dead than not have internet. If young people can really think something like that our society is in serious trouble. 

[BrightonCorgi]

5 hours ago, NSXCIGAR said:

I saw somewhere he'd rather be dead than not have internet.

Fine by me.  Save us the expense of incarceration.

[Wookie]

For me, crypto is a modified pyramid scheme. Madoff got life. How does SBF not get at least 25 years to deter other crypto bros from the same stuff? 

[MrBirdman]

11 hours ago, NSXCIGAR said:

And I'm not aware of any prison or jail in this country that allows internet access outside of limited emails and school programs. 

That’s about it. “Internet” is available in a lot of prisons today, and many have tablets assigned to inmates. But I put it in quotations because it’s really just a connection to a VPN with very limited outside connectivity. They can download books and other kinds of entertainment, access certain services (like job searches nearing release), and read news articles, but not much else.

They do increasingly have email, although that’s actually more about security than the prisoners - snail mail is the biggest source of contraband, so more and more prisons have eliminated it entirely. And email is monitored, so no “Nudy Judy’s” or Twitter posting by proxy allowed.

As for his sentence, the amount defrauded is the biggest factor in financial crimes. He probably won’t be sentenced until all of his trials are complete (he has a bribery trial scheduled for the spring). If the total amount defrauded is determined to be over $550 million the guidelines would put him in the 12-17 year range before any enhancements. Expect that figure to be hotly contested at sentencing, since FTX is still in bankruptcy. 

[NSXCIGAR]

8 hours ago, Wookie said:

For me, crypto is a modified pyramid scheme. Madoff got life. How does SBF not get at least 25 years to deter other crypto bros from the same stuff? 

I would say crypto is more like a Tulip Fever or some of the land speculation schemes of the early US. There are actual "assets" owned but what they're ultimately worth is the issue. 

I do agree I don't see much difference in terms of morality compared to Madoff. I do think Madoff actually stole more money from the individuals as opposed to SBF using the money from the crypto gains, meaning the individuals didn't give him that much money although it should have been gains belonging to them. All the money Madoff took was from the individuals. 

[MrBirdman]

Guilty on all counts. Sentencing set for March 28th.