Sam Bankman-Fried's testimony began on Thursday without the jury present.
The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. All right. Joining us now to discuss Sam Bateman Fried's trial is Brian Cave Leighton Paisner L LP partner Renato Marotti. Welcome back to the show. Renato. Glad to be here. I don't know if I could talk that rendering from Nick, but you're always welcome to try and bring it on the next time we have you on the show. Sounds good. It's like a photograph. All right. Uh Renato yesterday, the jury was sent home early as Sam Bateman free took the stand. Judge Kaplan said that he hasn't done this in years. Were you surprised to see this happen? And why do you think the judge did this? It is very, very surprising. I, I've been practicing criminal law for decades. Uh I've tried many, many criminal trials and watched many others and I've never seen testimony go on this long without the jury present. Uh I think the reason the judge did it is actually something that you guys talked about a minute ago, which is uh SPF constantly talking about lawyers. So in criminal law, there is something called an advice of counsel defense. It's a very specific thing in the law and you, you have to give notice beforehand before the trial starts to the government to the prosecutors and say that you are asserting it. And then you actually have to waive attorney client privilege between yourself and the attorney and what you have to prove in order to make out that defense is, you have to make it clear and, and demonstrate that you have let those lawyers know about all the relevant facts and that they approved of or authorized all of the activity that you're charged with. As you can imagine, it is very rare for defendants to actually be able to, uh, you know, have testimony from lawyers that are going to establish that. And so they try to get around that by having what I'll call a quasi advice of counsel defense. And that's really what SPF is trying to do here. He's basically saying, yeah, there's a bunch of lawyers running around and they were on the scenes and things like that. So, uh I presume that they were taking care of this. I presume that they were on top of it and they were making sure it was legal. That's not a divisive counsel defense. And I think what the judge is trying to understand here is, is there enough here that goes to his state of mind, which is relevant, which is, you know, something that would actually be helpful to the jury or is SPF and his team, are they really just trying to confuse the jury and essentially try to confuse the issues. That's what I think the judge is trying to understand. So will the, so the jury will never see any of this, right? As assuming that they, they didn't see Nick's photo, you know, lifelike image there. Um Other than that, they will not see any of the testimony. Correct. No, this testimony, they won't see what, what's gonna happen is the judge at a certain point is gonna say he's heard enough, he's going to have them bring the jury back in and before he does that, he's going to give some guidelines to the uh attorneys. He's gonna say this, I'm gonna let in this testimony, but not that testimony, this sort of thing I can offer of proof. It, it occurs. It's often when, you know, there's maybe a few minutes of testimony, what, what's unusual here is, it's, it, it appears to have gone on for hours for my. So when you said that they'll, they'll let in certain aspects of the testimony. That's the testimony he just gave or he'll have to do it again. You'll have to do it again. But the, the, you know, the, the reality is, you know, he's gonna say, presumably the same thing he already said uh in front of the judge or else that would be very problematic for him if he if he tries to sneak in something different in front of the jury. Well, yesterday, he was questioned by the defense and the prosecution when he was questioned by his own lawyers, he came off as very crisp, very polished, very trained. But during cross examination, he seemed caught off guard during questioning, what do you make of this? Uh, one would think that his lawyers would prepare him for both sides. Well, it's very hard to prepare for a testimony. It's a very challenging experience. Uh Even you, no matter how smart and able you are, uh you can get rattled by cross examination. And I think he's really put himself into a difficult situation. You know, SPF basically told the world every thing on his mind regarding this case, even after, uh FTX declared bankruptcy, even after he was under criminal investigation, even after he was indicted, he was talking to the New York Times. That's why he got his bond revoked. And so the prosecutors essentially have a collection of his greatest hits and they can basically hem him in. Um, and he's got to be very careful when he's trying to think on the, on the fly and answer questions, not to contradict things he said before, with his own attorneys, they've got rehearsed questions and answers. That's much, that's pretty easy. But when you're trying to think on the fly about all the thousands of things you said before, I think that could be pretty challenging. Uh, but to that, to that effect, is there any defense he can make after this to say, well, his lawyer, his lawyers will say, look, this guy is an income poop and, uh, he goes against everything we've asked him to, he keeps shooting himself in the foot. That doesn't necessarily mean he's guilty. We need to, we need to challenge this is, is that, is that something that could happen, is that a, is that a legitimate defense or, or is it, is he going to end up like everyone else who commits a crime in this country? And, and uh you know, has a tougher time getting an appeal. So a couple of things. So I, I do believe that the evidence against SPF is overwhelming. I expect him to be convicted of serious felony counts is a, is a starting point. I will say that um that said there are defenses here. I mean, the main issue is whether he had the intent to defraud. Uh It's very possible to be someone who engaged in very problematic behavior and didn't intend to defraud people. Ironically, his best defense here would be that he was in over his head that he was inattentive that he wasn't on top of things. Um You know, that he essentially wasn't paying attention to the very important details that are being proved in this case that that show that fraud occurred. Unfortunately, that's not the image that SBF himself wants to portray. I mean, he's always thought of himself as some sort of visionary genius and he's not willing to stray from that. And so I think that's really his, his main problem is that he's not going to be able to lean into the sort of defense that might actually be helpful to him here. So, so you're saying it's, it's his personality versus if he were a more compliant, uh, defendant, he would be like, sure you want to say I'm a chicken, I'm a chicken, you know, like do whatever, I'll, I'll, I'll, I'll dress up with feathers and, and put on a beak. If that, if that gets me out, there's no question that if SPF kept his mouth shut and didn't talk to the press and then followed a very careful strategy outlined by his legal team. He'd be in a much stronger position today. He is the cause of the difficult position that he's in. I want to turn now and talk about some of the star witnesses we've seen testify we heard from Caroline Ellison. She's the former Alameda Ceo Anisha Singh, former FTX Director of Engineering. I'm curious to hear your opinion on what kind of sentencing they might see or what kind of sentencing. Uh, star witnesses like these have seen in the past when they cooper. That's a great question. Uh The judge is going to view cooperators much differently than he's going to view SBF first of all, um, they ultimately took responsibility. They're on team America so to speak and are, and are testifying for the prosecution against the defendant that the judge is going to give them credit for that. And the prosecutors are going to ask the judge for a lower sentence as a result. That's, that's first thing. Second of all these witnesses are able to focus on painting themselves in a flattering light. Caroline Alison's testimony was emotional and she talked about essentially how in her, you know, in her view, SPF caused her to, uh, you know, you know, you know, remove her moral compass and, and whittled away her, you know, inner, um you know, her inner sense of right and wrong, things like that. So she's able to paint herself in a very flattering light, whereas the process of course, are going to be very focused on going after SPF. I think when it's all said and done, they're all going to be in the single digits when it comes to years in prison, they're going to serve, you know, her and the other cooperators are going to serve prison time, but it's going to be substantially lower than SPF who's going to receive something in the double digits in years in prison. I would be surprised if it's below, let's say 12 to 15 years in prison, probably significantly longer than that when you say significantly longer. I think Elizabeth Holmes, was it like 11 years for Elizabeth Holmes? Uh and that was, that was a pretty big one. The, the, the size of the amount of, uh something like 90% of the invest, the assets will be returned to investors. Um at, at least the uh account holders it looks like or potentially we'll see what it is. Uh But does that change anything if some of the account holders are made? Uh almost whole, if not, uh totally, that will be a big uh big difference if that actually happens. I mean, the, the, the, the numbers that the government citing for the amount of loss to victims is, are very high. Right. Right. Now, if that changes, that will be very helpful. Uh I, I'm operating under the assumption that SBF is going to have a larger loss to victims than Holmes did Holmes. Also, what you know, is a female who tend, they often get a better sentencing in my experience from judges and she was pregnant and had a young kid. And you may say, well, why is that, why is that relevant? Actually, the judge can consider any factor about the person and is required to consider the personal history and characteristics. And so I think the judge might have been lenient because he might have wanted her child to um, you know, experience her mother at a younger age or something along those lines. So in addition, SPF violated the conditions of release. That's why he got his bond revoked. I just think there's a lot of reasons to believe that Judge Kaplan is going to go very hard on SPF All right. And as we mentioned before, Sam will take, will testify in front of jurors today. How likely do you think it is that he convinces just one juror that he was completely in over his head. He didn't mean to do any of this. And if he does, what could that mean? If he convinces even one juror not to convict, then the government is not going to get a conviction in this trial and they're going to have to try him again. And that's a really big deal for him. Uh Because first of all, it gives him some leverage if he wants to cut a deal, uh the government at that point might be willing to cut a deal, um and give him some sort of a break. Even if he goes to trial again, he'll have another bite at the apple and he'll have seen sort of how the government puts together their case that said the prosecutors usually have a very good record on retrials because the defense plays all their cards and the government can see them in the first trial and they usually can retool. So, uh you know, defendants like Bill Cosby or Rod Blagojevich, you know, were, had a hung jury in the first trial in a, in a conviction in the second, I will say that that is probably why um you know, SBS legal team was ok with him making, I think a very personal choice to testify because ultimately, this is a bit of a Hail Mary and all he needs to do is is essentially if one juror really like him and that might get him to where he wants to be. All right, Renato, we are going to leave it there this morning. Thanks for coming on the show again and sharing that insight and we'll continue watching what happens in court. Thank you. That was Brian Cave, Leighton Paisner, L LP P, Renato Mariati.