Pinning FTX Collapse on Ex-Alameda Research CEO Is a 'Very Classic Defense Move,' Lawyer Says

Former Alameda Research, Ceo Caroline Allison is expected to be the next witness to testify in the SPF trial. Joining us now is partner at law firm Lowenstein Sandler Rachel Maman. Welcome Rachel. Thank you so much for having me. Thank you for being here. So you were a pro uh a former federal prosecutor at the southern district of New York. You now uh specializing in white collar criminal defense in the opening arguments. We have the defense uh trying to pin some of the blame here on Caroline Ellison if not a lot of the blame on her. Uh They claim that she did not do this. She did not do the proper safeguards. What do you think the jurors need to hear? How do you think this will, will, will play out? So this is a very classic defense move by uh by defense counsel which is to discredit the cooperators and she is arguably the government's most important cooperator. So, what they're going to want to get out is any evidence of her lying um saying one thing to one person and one thing to another um saying different things than what she said previously, perhaps during her guilty plea or during her many, many meetings with the government, various ways to undermine her credibility. So uh Gary Wang, he uh yeah, last week he uh he, he, he, he testified that Saman Manfried was the ultimate decision maker in, in every pro in the, the big decisions here in the, in the process of uh trades, et cetera. Uh His, his testimony. Did you find it compelling at all? Yes, I mean, I find it compelling. Um But like anyone, especially the jurors and um others who have watched trials like this, obviously reserving judgment to see what happens. Um You can expect that someone in Wang's position who has uh pled guilty pursuant to a cooper operation agreement with the government and whose ongoing co-operation and substantial assistance is going to affect what sentence he has, his testimony may be affected by that. Hi Rachel. The uh the big question for many is, will Sam himself take the stand? Do you think he should? I have a slightly unorthodox view on, on those things when it comes to criminal trials? In my experience, I have found that jurors find criminal defendants very compelling when they testify. It's very humanizing. It's very difficult if all you see are a person's text messages um and hear about things they're saying you don't really get to see them as a human being. And even if the cross examination of Mr Beman Fried were to be brutal and I expect that it would be brutal by the government. At least the jury would have an opportunity to see him as a human being but looking at his text messages and in fact, a barrage of information that he has sort of divulged to the world, you know, while he's been in captivity. Actually, um, you know, what's your takeaway from that in terms of what type of witness he's likely to be? Well, I would have some concerns on the part. Um, if I were defense counsel on his ability to follow instruction, um he would have to be prepared very carefully by defense counsel, but it, it is very unlikely that his lawyers sanctioned um, any of the disclosures or other things that happened in this case that ultimately led to him being detained. And so there is a possibility that he is someone who would likely to be go likely to go rogue and you don't want to have a train wreck on the stand. It's better to just remain silent. You know, as we discussed earlier with our colleague, Nick mcd, this is primarily a case of fraud that's clear and simple and it looks like the prosecution is saying this, the, the, the technicalities of, of crypto don't matter here. How about the regulation of crypto or the lack thereof, the lack of clarity that have any play here? Prosecution says, no, it doesn't. I, is that something the defense can use and say look, this is still unregulated. We don't know who's in charge. What did, what did Sam really do wrong? He didn't, did he violate an actual statute regarding crypto? No. Does that fly or is this a very clear cut? Are, are they going down the wrong path if they tried to do that? Well, I don't know that the judge would permit them to introduce evidence of whether or not he's broken any regulations or anything along those lines. I think that type of evidence could be relevant to the extent that it shows his state of mind. Um And that he didn't have a guilty state of mind because he thought he was doing right. Um But the, but the judge isn't going to let there be and the evidentiary rules don't let there be a sideshow about what the law was or wasn't. Um, the judge will instruct the jury on what the law is that's relevant at the end of the trial. Uh Rachel prosecutors um want uh Beman Fried to be banned from bringing up uh his investment in A I start up anthropic um uh A as, as, as part of the defense. Um This talk of course, that this could be a very successful investment and the FTX creditors could be made whole as a result of it. Uh And I think the doj believe that that could be um misleading in terms of its impact on the interpretation. What are your thoughts on that. Well, it's a question of relevance. So evidence has to be relevant and not unduly, prejudicial. Um What is the relevance to whether or not the investors could be made whole? Um in connection with the question that is before the jury, which is whether or not these crimes were committed. Question of whether or not restitution can be made. That's a really a sentencing question. It's a question that may be relevant to his sentence itself, but it's not necessarily relevant to whether or not he actually committed the crimes. Alrighty. Well, thank you, Rachel. That was partner at Lowenstein Sandler Rachel Maman.