I want to quickly address a couple of points of disagreement I have with Jason’s take. (Please don’t take this to mean that I accept the rest—there’s a lot I disagree with—I just don’t have time to respond to it all right now.)
For instance, at one point SBF directed Ellison “to use FTX customer funds to repay loans” (her words)
This is misleading. The complete line from Ellison is, “I understood that he was telling me to use FTX customer funds to repay our loans,” then she proceeds to explain how she inferred this.
At no point in the trial does she say that he explicitly instructed her to touch customer fiat deposits.
About $4.5B more in customer funds was used to pay Alameda’s lenders as a result
The defense doesn’t seem to think so. “Caroline testified to you that what happened was, Alameda ‘would have to take the money from our line of credit to pay the lenders.’ And that’s at transcript page 763. And I asked her, Well, if that’s true, if the lenders were being repaid off the line of credit, wouldn’t the amount of the line of credit go up? She said, Yes, it would. And I said, How much did it go up by? Oh, 5 to 10 billion. But when you look at the actual data that was pulled by Dr. Pimbley——and that’s Defendant’s Exhibit 617——you see that in fact the line of credit did not go up during the period when the loans were being repaid. In fact, it went down for much of the period.”
Note that I am quoting the source I identified and summarized, which in turn quotes the trial transcript at page 675. As I noted, the prosecution’s statement here is a summary written for the trial judge who heard all the testimony—whether the memo’s use of that quotation was fair in that summary depends on all of Ellison’s testimony at trial. In particular, the prosecution’s memo was not meant to stand alone as proof beyond a reasonable doubt of SBF’s guilt of the charges. That had already been established by the jury’s verdict. I don’t think “read the trial transcripts” was a helpful answer to Michael’s original question which led me to post the comment.
For those of us who are not inclined to spend days reading over the transcripts, I would note that the jury convicted SBF on all counts with only four hours’ deliberation, the experienced district court appears to have bought ~0 of the defense’s positions at sentencing, and the media coverage does not suggest many (if any) of the journalists and legal analysts who carefully followed the trial bought SBF’s protestations of innocence either.
Moreover, in my view what one would have to believe to find SBF innocent here is simply implausible—e.g., that he was that of the loop about multibillion dollar cash flows that he failed to grasp what should have been obvious from the conversations established by the testimony and documentary evidence, that he honestly believed ~all of the material public statements he made about how FTX operated and Alameda’s relationship to it, that he was so misinformed about how much non-customer money FTX had that he could direct Ellison to have Alameda “borrow” billions and billions of it without understanding that much of that was coming from customer funds, etc.
I think all that justifies a strong starting point that everyone else got it right, and it would take a lot of convincing analysis of ~ all of the prosecution’s evidence to move the needle on that.
that he was so misinformed about how much non-customer money FTX had
+ the customer money FTX had that the customers explicitly consented to be loaned out, through margin lending or staking?
He might not have been well-informed about how much this was. It’s a number that changes by the minute. But maybe he would have a general idea, and enough to know that what he was asking for was more than customers would have consented to being loaned out.
whether the memo’s use of that quotation was fair in that summary depends on all of Ellison’s testimony at trial
And I think it was not fair because as far as I can tell, that quotation was the strongest piece of evidence the prosecution had that SBF directed Ellison to use customer funds in an improper way.
I think all that justifies a strong starting point that everyone else got it right, and it would take a lot of convincing analysis of ~ all of the prosecution’s evidence to move the needle on that.
I agree. I don’t expect anyone to take my word for it on the basis of a couple of anonymous comments. But I’m trying to make a start on this forum because I am someone who is “inclined to spend days reading over the transcripts” and much else besides and given the conclusions I’ve come to, I’m not sure what else to do.
I want to quickly address a couple of points of disagreement I have with Jason’s take. (Please don’t take this to mean that I accept the rest—there’s a lot I disagree with—I just don’t have time to respond to it all right now.)
This is misleading. The complete line from Ellison is, “I understood that he was telling me to use FTX customer funds to repay our loans,” then she proceeds to explain how she inferred this.
At no point in the trial does she say that he explicitly instructed her to touch customer fiat deposits.
The defense doesn’t seem to think so. “Caroline testified to you that what happened was, Alameda ‘would have to take the money from our line of credit to pay the lenders.’ And that’s at transcript page 763. And I asked her, Well, if that’s true, if the lenders were being repaid off the line of credit, wouldn’t the amount of the line of credit go up? She said, Yes, it would. And I said, How much did it go up by? Oh, 5 to 10 billion. But when you look at the actual data that was pulled by Dr. Pimbley——and that’s Defendant’s Exhibit 617——you see that in fact the line of credit did not go up during the period when the loans were being repaid. In fact, it went down for much of the period.”
Note that I am quoting the source I identified and summarized, which in turn quotes the trial transcript at page 675. As I noted, the prosecution’s statement here is a summary written for the trial judge who heard all the testimony—whether the memo’s use of that quotation was fair in that summary depends on all of Ellison’s testimony at trial. In particular, the prosecution’s memo was not meant to stand alone as proof beyond a reasonable doubt of SBF’s guilt of the charges. That had already been established by the jury’s verdict. I don’t think “read the trial transcripts” was a helpful answer to Michael’s original question which led me to post the comment.
For those of us who are not inclined to spend days reading over the transcripts, I would note that the jury convicted SBF on all counts with only four hours’ deliberation, the experienced district court appears to have bought ~0 of the defense’s positions at sentencing, and the media coverage does not suggest many (if any) of the journalists and legal analysts who carefully followed the trial bought SBF’s protestations of innocence either.
Moreover, in my view what one would have to believe to find SBF innocent here is simply implausible—e.g., that he was that of the loop about multibillion dollar cash flows that he failed to grasp what should have been obvious from the conversations established by the testimony and documentary evidence, that he honestly believed ~all of the material public statements he made about how FTX operated and Alameda’s relationship to it, that he was so misinformed about how much non-customer money FTX had that he could direct Ellison to have Alameda “borrow” billions and billions of it without understanding that much of that was coming from customer funds, etc.
I think all that justifies a strong starting point that everyone else got it right, and it would take a lot of convincing analysis of ~ all of the prosecution’s evidence to move the needle on that.
+ the customer money FTX had that the customers explicitly consented to be loaned out, through margin lending or staking?
He might not have been well-informed about how much this was. It’s a number that changes by the minute. But maybe he would have a general idea, and enough to know that what he was asking for was more than customers would have consented to being loaned out.
And I think it was not fair because as far as I can tell, that quotation was the strongest piece of evidence the prosecution had that SBF directed Ellison to use customer funds in an improper way.
I agree. I don’t expect anyone to take my word for it on the basis of a couple of anonymous comments. But I’m trying to make a start on this forum because I am someone who is “inclined to spend days reading over the transcripts” and much else besides and given the conclusions I’ve come to, I’m not sure what else to do.