FTX founder Sam Bankman-Fried is back in court on Tuesday, getting arraigned on the most recent version of his indictment.
The state of crypto is presented by Ron connecting the world to the power of Cryptocurrency. Sam Bateman Fried is back in the legal hot seat. The FTX founder is getting arraigned this morning on the most recent version of his indictment. Joining us now to discuss is former federal prosecutor and partner at Brian Cave Leighton Paisner, Renato Marriot. Welcome to the show, Renato. Happy to be here. Thanks. Good morning. We are happy to have you here. All right, tell us what's going on this morning. What are you expecting to see in this arraignment? Well, a couple things. First of all, this is going to be an interesting peak. It Sam Bank been freed after he's been imprisoned. Remember that he was repeatedly violating his conditions of release. He had the bright idea that he was going to be trying to get his retaliation against witnesses and so on and the judge has put him in prison. So it's going to be interesting there, there should be a fight at this court appearance over his communications and with his lawyers, his lawyers access to him that has been an ongoing issue that his lawyers have been raising they want to have more time with him to prepare for trial. They want days where he can be at their office, they want interrupted hours with him and then separately, there will be some discussion soon about jury instructions. There is I'd say a very traditional typical fight here between the defendant and the government about jury instructions. Unfortunately, for Mr Bank fraid, he is facing a lot of counts even without this count that has been, you know, dismissed for now due to the extradition treaty with the Bahamas. So obviously, there's a lot we don't know right now and the proceeding is currently ongoing. Uh He was with his defense, you know, lawyers for the last hour or so preparing for this arraignment. Now, the arraignment is going to happen and then he's going to go back with the defense lawyers to prepare for his defense uh for the next five hours or so. We, we think, uh depending on how long the arraignment goes on, I just want to understand given the fact that you work for the US Attorney's office and were assigned interestingly to the securities and commodities fraud section at the time you charged and convicted. Just several violators. Is there a precedence for a person charged to be let out of jail five days a week even if it is in the attorney's office to prepare for his defense. Does that happen? It does happen in a complex case? I do think it's fair to say that the judge is giving extra accommodation to Mr Bank Man Fried and it's being done because the judge does not want to try this case the second time and doesn't want to deal with issues on appeal. In other words, let's just say that the judge made a decision, said, you know, we're going to heavily restrict the amount of time that you spend with your attorneys. What what would happen is after the trial, Mr Bank Man Fried would challenge the verdict claiming that he did not have adequate time to prepare, he was not properly afforded his right to counsel. And so good judges anticipate this. They only want to try the case once they don't want to deal with lengthy appeals. And so they're accommodating to the defense of pretrial, particularly in a case like this where the evidence is overwhelming. I expect the judge thinks this is likely going to be a conviction and it's a complex case that the judge really doesn't want to have to try more than one time. All right. Ok. Uh You know, a follow up here because the other thing that's happening is that he's going to go with an approach, the defense is going to go with an approach which is potentially going to reveal the lawyer who gave him the advice to do what he did. You know, uh, the, that, that, that, that leads to this problem of a particular lawyer or lawyers who will be certainly in the limelight if their names are allowed out, I suppose. Uh, what do you, what do you make of that? The advice of counsel defense that SPF is going to use, uh, you know, including the identification of the attorney. That's something that's been demanded by the US attorney, uh, that if you are going to take that, then I need to know well, in advance before we go into the case and what that could really mean because, you know, this is, he said, she said kind of thing eventually, yes, regarding the advice of counsel defense, you know, I don't know if you know that meme on the internet, it's a bold move cotton. Let's see if it works out for him. I think it's a very bold move. It's sort of a hail Mary, but it has a lot of pitfalls. One of which is that once he identifies the attorney, he is to waive attorney client privilege and the government will have the opportunity to ask questions and inquire regarding his communications with that attorney that often works against the defendant because it's rarely the case that a defendant asks for advice about committing a crime and the lawyer in a straightforward way without a bunch of caveats or, or other other legal legalisms says, yes, you should go forward and commit a crime. That's a great idea. I expect when you look at those communications, they're not going to read the way that Sam Bank Man Fried wants them to read. And in my experience when lawyers are brought on the stand, and I've been in that position when I was a federal prosecutor, you know, cross examining a lawyer and an invasive counsel defense. The lawyer buried the defendant. Why? Because the lawyer has his own reputation and of course, is not going to suggest or say that in any way he was counseling someone to commit fraud. Well, you know, we saw Sam Baman freed out on bail at his parents' house, limited communications. Now he's being accused of tampering with witnesses. He's back behind the behind bars, in your opinion, is his defense team doing a good job so far. Yes, the problem with the Sam Baman defense free defense team is not the lawyers. It's Sam Bank man free. He is really making wrong very bad choices for himself from his media blitz where he was talking everyone under the sun, essentially giving the prosecutors a free crack at him. They can use those statements against him at trial to, you know, his vendetta against, for example, his former paramour, MS Ellison will be testifying against him at trial and his other shenanigans while he was on release, he really made a lot of bad choices and he only has himself to blame for the predicament that he's in. I really don't blame his attorneys at all. I think particularly given the resources the limited resources he has, I think he has, you know, reputable attorneys. I think the issue is Mr Bank man freed himself. You know, Ronaldo, I want to push back against what you said because the bottom line is that these lawyers agreed to work with him. And when they agree to work with a particular client, you tell the client that you don't do anything, I don't want you to do. And clearly the lawyers were not either, you know, convincing enough for SPF or there is that alternative theory that you are putting out there that he's just, you know, somebody who goes uh wild. Uh So yeah, what about that? That's a fair point. They did agree to this. I feel a little bit an analogy might be to Donald Trump who has many lawyers who I imagine tell him to comply with rules, but he goes and does and says what he wants anyway. He, he's not someone who is easy for lawyers to control. Look, I represent clients across the country all the time. I've been out of the government now for several years and I have my own share of clients who don't follow my instructions. I've represented politicians myself who will, you know, want the limelight and answer questions from reporters and take interviews even though I tell them this is a really bad idea while you're under criminal investigation. So I do feel his lawyer's pain and don't blame them for that. Yes. They did sign on for this. Yes, they are probably not going to get paid with their worth and they're going to have to deal with the client who doesn't follow their instructions. So, but I do think I put the blame here with the client because I can't imagine any competent lawyer not heavily warning this client as he is frankly warned by the judge in court that everything he says can be used against him and that's exactly what's going to happen. Speaking of following instructions that Doj and Sam Bakeman Fried have filed competing sets of jury instructions for the trial in October. Talk to us about what's going on here. Is this usual? Yeah, it's pretty common place, you know, at the end of the day, the Samba Man Fried case really looks a lot like other large fraud cases. And when I was fighting large fraud cases myself, when I was a federal prosecutor, I would have big fights over jury instructions, including the one that you know that there's a big fight about right now. You know, Samba Man Fried wants to include what's called a good faith instruction. Defendants often want to include a good faith instruction and basically what the good faith instruction says is that if the defendant was acting in good faith, he did not have the intent to defraud, which is one of the elements that the government has to prove in order to prove his guilt. So it's in some, you know, the government will argue it's repetitive. It's not necessary, the instructions already say we have to prove intent to fraud. But judges routinely give that to the defense because they want to make sure there's no issue on appeal. The same reason I mentioned regarding, you know, why, why he's given time to, you know, to, to work with his lawyers and what I, what I would expect there ultimately is for the government to win their, for the defense to win that fight as well. All right. Uh You know, you're already in the hot seat, but I'm gonna make it hotter. Uh Here's the thing, hypothetically, if you're given only one choice, which is that you have to predict an outcome for this case right now. Uh And you know, nobody's gonna hold you to it because obviously this is just discussion and speculation. What would that outcome be? Sam Bank free will be guilty on most but not all counts. In other words, the jury is facing a lot of different are to select, you know, not guilty for everything and the evidence is pretty damning. So I'll expect him to get to be found guilty on most counts, which by the way is a complete and utter defeat. The fact that he gets not guilty on a few counts is irrelevant because he'll be guilty of many felonies and ultimately receive a very lengthy sentence. And lastly, Renado, I got to ask you because we've asked almost every lawyer who's been on this show weighing in on the Sam Bank Fried case. And I hope that one day we'll make uh an epic compilation of it. What advice would you give? Sam Bank Fried right now? If you were his lawyer, shut up, um, stop talking, um, stop doing, you know, stop doing anything that your lawyers don't do. It's time to take this seriously and realize that you're not the smartest guy in the room you never were. Uh And it's time to follow the experts advice and try to help them save your life. Renado. Thank you very much for joining us this morning. Thank you. That was Brian Cave, Leighton Pazner partner, Renado Marti.