WEBVTT - Judging Sam: Millennial Frauds 0:00:15.356 --> 0:00:15.716 Push k. 0:00:20.596 --> 0:00:25.596 Welcome to judging Sam. I'm Liddy Jean Kott. The trial 0:00:25.636 --> 0:00:28.836 of Sam Makemon Freed is now over and our coverage 0:00:28.876 --> 0:00:31.796 is winding down, but there are a few things that 0:00:31.876 --> 0:00:34.756 are still in my mind. While I was at reporting, 0:00:35.036 --> 0:00:38.156 family and friends would often send me articles, and a 0:00:38.156 --> 0:00:42.516 lot of these articles were by one particular writer, Elizabeth Lopato. 0:00:42.996 --> 0:00:44.516 She's a reporter at The Verge. 0:00:44.956 --> 0:00:48.916 Her stories about Sam Magmon Freed were sometimes funny, sometimes empathetic, 0:00:49.236 --> 0:00:52.316 and they were always full of razor sharp insights. I 0:00:52.356 --> 0:00:55.556 am so excited that she's joining me. Liz, thanks for 0:00:55.596 --> 0:00:55.996 being here. 0:00:56.556 --> 0:00:57.916 Let's get into it. 0:00:57.916 --> 0:01:01.196 It's really nice to talk to you inside at a 0:01:01.236 --> 0:01:08.556 normal hour instead of at one am or two am 0:01:08.596 --> 0:01:09.716 in front of the courthouse. 0:01:10.036 --> 0:01:12.236 No, it's amazing that we're not in the dark. I 0:01:12.276 --> 0:01:13.396 think that's fantastic. 0:01:15.396 --> 0:01:17.116 Yeah, what was this whole experience like for you? 0:01:18.196 --> 0:01:19.956 I was kind of like getting shot out of a cannon. 0:01:20.036 --> 0:01:20.236 You know. 0:01:20.516 --> 0:01:23.036 I live in California most of the time, and so 0:01:23.836 --> 0:01:25.876 I was living in New York for a month in 0:01:25.916 --> 0:01:30.956 this sort of terrible bachelor pad with like modular everything 0:01:30.996 --> 0:01:33.316 that came out of cupboards and a kitchen the size 0:01:33.356 --> 0:01:36.636 of a postage stamp, and the trial was about all 0:01:36.676 --> 0:01:39.036 I was doing. You know, I have some friends in 0:01:39.076 --> 0:01:40.636 New York that I got to see on the weekends, 0:01:40.676 --> 0:01:44.556 but really like I would stand outside the courthouse and 0:01:44.596 --> 0:01:47.116 then I would sit through the trial, and then I 0:01:47.116 --> 0:01:49.116 would go home and write, and then I would immediately 0:01:49.116 --> 0:01:51.276 go to bed. So that was like an entire month 0:01:51.316 --> 0:01:53.236 of just really being in it. 0:01:54.276 --> 0:01:57.716 Did you have like a moment of extreme low, like 0:01:57.836 --> 0:01:59.836 my lowest of the low when I was trying to 0:02:00.116 --> 0:02:03.716 sleep on top of my computer on a poncho in 0:02:03.756 --> 0:02:06.276 the rain at three am by the courthouse. That's when 0:02:06.316 --> 0:02:08.556 I was like, how is this my life? 0:02:08.716 --> 0:02:09.716 Did you have like that? 0:02:13.236 --> 0:02:15.476 Did I have a moment like that? I don't think 0:02:15.516 --> 0:02:18.876 I did. I kind of knew what I was getting 0:02:18.916 --> 0:02:21.596 into because this is not my first time doing like 0:02:22.196 --> 0:02:26.236 a pretty hardcore trial outing that that is going to 0:02:26.276 --> 0:02:29.596 necessitate a certain amount of like standing outside. But I 0:02:29.636 --> 0:02:34.276 will say there was a moment when it started raining 0:02:34.436 --> 0:02:36.556 and I was like fully in rain gear and had 0:02:36.556 --> 0:02:39.956 already been standing outside for hours when the rain started, 0:02:39.996 --> 0:02:44.036 where I was like, Okay, well it's a good thing 0:02:44.116 --> 0:02:46.596 I'm outdoorsy, because otherwise I think I would be pretty 0:02:46.636 --> 0:02:47.236 upset by this. 0:02:51.796 --> 0:02:54.396 I'm pretty sure you beat me pretty much every single day, 0:02:54.596 --> 0:02:56.476 and most of the days you did make it into 0:02:56.516 --> 0:02:58.956 the courtroom. There was one day where I asked another 0:02:58.996 --> 0:03:00.996 reporter how much I would have to pay him to 0:03:01.036 --> 0:03:03.276 get a spot, and he told me his price was 0:03:03.316 --> 0:03:07.316 two thousand dollars. What what would have your price been? 0:03:08.116 --> 0:03:10.236 So the entire reason and that I was getting into 0:03:10.276 --> 0:03:12.276 the courtroom and I did get in every day, was 0:03:12.316 --> 0:03:15.596 that for me and covering the trial, it was important 0:03:15.636 --> 0:03:17.676 to give people a sense of what it was like 0:03:18.276 --> 0:03:21.876 in the courtroom. You know. There were moments. I think 0:03:21.876 --> 0:03:25.476 the most obvious one was when Sam was having that 0:03:25.516 --> 0:03:29.156 sort of weird evidentiary hearing and there had been an 0:03:29.156 --> 0:03:32.756 objection to the question about whether embezzlement was keeping customer 0:03:32.796 --> 0:03:36.916 money safe, and he answered it anyway, and his lawyer 0:03:36.956 --> 0:03:39.756 was like, Sam, you've been here for weeks now, you 0:03:39.796 --> 0:03:43.116 didn't have to answer that question, and say I was like, 0:03:43.116 --> 0:03:45.836 I know, but I felt like it was important. And 0:03:45.876 --> 0:03:47.636 that was like a very light moment in the courtroom. 0:03:47.676 --> 0:03:49.516 It was really really funny. And then I came out 0:03:49.516 --> 0:03:51.876 of the courtroom and I realized that people were taking 0:03:51.876 --> 0:03:54.396 it as like a rebuke, like his lawyer was mad 0:03:54.436 --> 0:03:58.916 at him. And so there are moments like that where 0:03:59.836 --> 0:04:02.636 actually physically being in the room is important for reading 0:04:02.676 --> 0:04:04.516 the tone and you want to see what sort of 0:04:04.596 --> 0:04:07.196 the jury is seeing. Although the jury wasn't there for this. 0:04:08.276 --> 0:04:10.516 So I guess this is a long winded way of saying, 0:04:10.556 --> 0:04:12.476 like the assignment was for me to get into the courtrooms. 0:04:12.556 --> 0:04:14.436 The answer is you could not have paid me un 0:04:14.436 --> 0:04:16.276 Thus you were going to give me, like, you know, 0:04:17.076 --> 0:04:19.196 enough to cover the my salary. 0:04:20.156 --> 0:04:23.196 Like, yeah, that's so true. I do. 0:04:23.316 --> 0:04:25.796 I remember that moment that you're talking about, and if 0:04:25.836 --> 0:04:28.116 you looked at the transcripts, it could have been interpreted 0:04:28.156 --> 0:04:31.116 one way, and if you're actually there, it seemed really different. 0:04:31.876 --> 0:04:33.956 One of my favorite articles that you wrote early on 0:04:34.316 --> 0:04:38.556 was about the millennial vocabulary that came up during Sam 0:04:38.556 --> 0:04:42.876 Aemunfried's trial. What are some examples of the millennial words 0:04:42.916 --> 0:04:44.716 that were used that you still remember? 0:04:45.676 --> 0:04:48.436 Everything was stuff and things and those are the two 0:04:48.476 --> 0:04:50.356 things that really stood out to me. You know, I 0:04:50.436 --> 0:04:54.236 was looking at these charts, these Excel spreadsheets that Caroline 0:04:54.236 --> 0:04:58.276 Ellison had made, and it would be like she's referring 0:04:58.276 --> 0:05:00.796 to what was she says was a bribe paid to 0:05:00.876 --> 0:05:04.156 Chinese officials, and she was like, you know, several million 0:05:04.236 --> 0:05:07.076 for the thing. And it's like, I am so embarrassed 0:05:07.076 --> 0:05:11.196 from my entire generation right now. This is humiliating. This 0:05:11.316 --> 0:05:13.356 is not even a good code. And also this is 0:05:13.396 --> 0:05:17.436 like such specific internet speak. You know, if you've looked 0:05:17.436 --> 0:05:19.556 at like the Enron documents or any of the other 0:05:19.596 --> 0:05:22.556 sort of documents associated with financial frauds, they're usually a 0:05:22.556 --> 0:05:26.636 little more sophisticated than this, you know, I mean, in 0:05:26.716 --> 0:05:31.236 fairness to Caroline Elison, I think that the sort of 0:05:31.516 --> 0:05:34.036 language she was using was truer to how she spoke 0:05:34.356 --> 0:05:37.956 and was truer to like her personality. So in that sense, 0:05:38.076 --> 0:05:44.476 you know, it's it's it's less embarrassing than some of 0:05:44.476 --> 0:05:47.236 the corporate speak that we've heard. Like, you know, if 0:05:47.276 --> 0:05:50.276 you've ever read a press release where a company is 0:05:50.436 --> 0:05:52.156 kind of trying to hide the fact that they're doing 0:05:52.236 --> 0:05:55.556 layoffs and they're talking about like headcount reductions or like 0:05:55.756 --> 0:05:59.756 strategic restructurings or whatever, there's like a certain kind of 0:05:59.836 --> 0:06:04.276 like goofy bloodlessness to it. And so it's just like, 0:06:04.436 --> 0:06:07.196 I guess a question of which sort of goofy euphemism. 0:06:07.236 --> 0:06:10.716 You want do you want the one that's that Internet speaker. 0:06:10.796 --> 0:06:14.036 Do you want the one that's you know, MBA speak 0:06:14.196 --> 0:06:16.116 because it's going to be Charkin either way. 0:06:16.596 --> 0:06:17.316 Yeah, exactly. 0:06:17.356 --> 0:06:20.276 And the word the thing as a millennial To defend 0:06:20.276 --> 0:06:23.116 it for a second, it's a super versatile word. You 0:06:23.116 --> 0:06:25.196 can say I did a thing, which maybe means you 0:06:25.876 --> 0:06:29.196 bought a house, got engaged. It can also be a 0:06:29.556 --> 0:06:32.436 word used apparently to cover up a massive fraud. The 0:06:32.476 --> 0:06:35.556 thing could be possibly allegedly a bribe. 0:06:36.876 --> 0:06:38.356 It's a word. 0:06:38.436 --> 0:06:41.676 Not many words can cover such a vast array of 0:06:41.796 --> 0:06:42.676 possible meanings. 0:06:42.716 --> 0:06:44.996 And I also have to say when I wrote that, 0:06:45.116 --> 0:06:47.756 I sent it to one of my editors and he 0:06:47.956 --> 0:06:50.196 was like, you have just blown up my entire spot. 0:06:50.316 --> 0:06:52.236 All of my edits sound like this. And I was like, 0:06:52.636 --> 0:06:56.516 I know, Richard, like I'm aware I also talk like this. 0:06:57.596 --> 0:07:00.156 I was hyper aware of every time I said thing 0:07:00.236 --> 0:07:03.156 or stuff I think for the next two weeks where 0:07:03.196 --> 0:07:05.036 I was like, oh my god, I sound just like this. 0:07:05.036 --> 0:07:07.076 This is what I sound like to judging. 0:07:07.076 --> 0:07:17.076 Sam will be back in a minute, we're back. I'm 0:07:17.116 --> 0:07:20.236 also curious, so you know, before you covered the trial 0:07:20.236 --> 0:07:23.916 of Sam Kmunfried. You covered the Elizabeth Holmes trial, and 0:07:24.076 --> 0:07:27.636 I'm curious what similarities and differences you saw between both 0:07:27.676 --> 0:07:31.516 of them. Starting with let's say the similarities, I'm going to. 0:07:31.556 --> 0:07:36.316 Start by saying this is specifically my opinion, but I 0:07:36.356 --> 0:07:41.836 think that there is a similar level of delusion involved 0:07:41.956 --> 0:07:45.436 with both Sam Beckmunfried and Elizabeth Holmes. And the reason 0:07:45.436 --> 0:07:48.876 I say that is that if you go and look 0:07:49.236 --> 0:07:54.876 at the statistics for going to trial against the federal government, 0:07:56.156 --> 0:07:59.476 people don't succeed, you know, in the Southern District of 0:07:59.516 --> 0:08:04.636 New York. Those odds are are terrible. And if you 0:08:04.996 --> 0:08:08.316 just plead guilty and you sort of throw yourself on 0:08:08.396 --> 0:08:12.836 the judge's and you say I've done I've done something terrible, 0:08:13.236 --> 0:08:14.996 I feel bad about it. I want to repay my 0:08:15.036 --> 0:08:16.916 debt to society. One of the things that you can 0:08:16.956 --> 0:08:20.956 possibly do is shorten your sentence because you seem like 0:08:21.316 --> 0:08:24.436 you have accepted that you've done wrong, and you are, 0:08:24.676 --> 0:08:26.676 you know, contrite. 0:08:26.476 --> 0:08:29.276 And you're saving the government a lot of money exactly. 0:08:30.196 --> 0:08:34.356 And so if you are going to trial, it's because 0:08:34.396 --> 0:08:38.396 you think you have a chance of acquittal. I think, 0:08:39.036 --> 0:08:44.596 and both Elizabeth Holmes and Sam Bankman freed were obviously 0:08:44.716 --> 0:08:47.196 very good at talking to people before their fall. They 0:08:47.196 --> 0:08:49.196 were very good at convincing people to give them money, 0:08:50.236 --> 0:08:53.796 and so I think there was some level of, oh, well, 0:08:53.836 --> 0:08:56.156 if I just tell my side of the story, everybody 0:08:56.156 --> 0:09:00.156 will immediately understand, because everybody always understands when I tell 0:09:00.196 --> 0:09:02.716 my side of the story. So that was the big 0:09:02.756 --> 0:09:07.596 similarity I saw. I think Elizabeth Holmes was better at 0:09:07.636 --> 0:09:11.956 that than Sam was. She was certainly better at engendering sympathy. 0:09:12.236 --> 0:09:15.356 It didn't, you know, wind up mattering that much because 0:09:15.396 --> 0:09:17.396 she was still found guilty on most of the counts. 0:09:17.836 --> 0:09:19.716 But you mean, do you mean when she took the stand, 0:09:19.756 --> 0:09:22.156 because they both also took the stand, right. 0:09:22.076 --> 0:09:24.876 Yeah, So when Elizabeth Holmes got on the stand, I 0:09:24.916 --> 0:09:28.676 think she did a much better job of seeming sympathetic, 0:09:28.956 --> 0:09:32.516 and I think in some ways she ameliorated some of 0:09:32.556 --> 0:09:35.956 the damage that had been done by the prosecution, because 0:09:35.996 --> 0:09:38.236 up to that point, every time we had heard her voice, 0:09:38.716 --> 0:09:42.836 it had been a recording of her lying and you know, 0:09:43.116 --> 0:09:46.676 establishing that she was a person, establishing that you know, 0:09:46.716 --> 0:09:49.396 she had a background that you know, there were specific 0:09:49.436 --> 0:09:51.356 things in the company that she was really invested in 0:09:51.476 --> 0:09:54.676 or really believed in. I think that worked to her advantage. 0:09:54.796 --> 0:09:57.396 I think that the evidence in her case was pretty overwhelming, 0:09:58.836 --> 0:10:01.516 but she did They did manage to knock down a 0:10:01.516 --> 0:10:05.516 couple of the charges, specifically the ones related to patients. 0:10:06.156 --> 0:10:09.236 She was found not guilty of defrauding patients, and I 0:10:09.316 --> 0:10:13.156 think that, again, given the overwhelming statistics, when it comes 0:10:13.156 --> 0:10:15.676 to a government prosecution, is actually a pretty big whim 0:10:16.556 --> 0:10:18.476 So in that sense, I think she was much more 0:10:18.516 --> 0:10:21.876 convincing than Sam, partially because she was basically the same 0:10:21.916 --> 0:10:24.796 person on the direct and on the cross. There were 0:10:24.836 --> 0:10:28.356 to certainly times where she seemed uncomfortable, or she seemed nervous, 0:10:28.676 --> 0:10:33.236 or even angry or frustrated, but she was visibly and 0:10:34.036 --> 0:10:35.356 audibly the same. 0:10:36.236 --> 0:10:38.996 I have to ask us did she use the voice? 0:10:40.236 --> 0:10:44.796 Oh my god? So I have a lot of thoughts 0:10:44.796 --> 0:10:47.516 about this. I can't believe I'm about to go to 0:10:47.516 --> 0:10:50.236 bat for Elizabeth Holmes. I think we're the same age. 0:10:50.596 --> 0:10:53.796 There was an idea that the reason women weren't being 0:10:53.796 --> 0:10:56.036 taken seriously in the workplace was just that we didn't 0:10:56.036 --> 0:10:59.836 talk right. We talked to girly, we up talked. It 0:10:59.956 --> 0:11:02.676 was vocal fry and like if you ever heard Matt 0:11:02.716 --> 0:11:06.476 Levine speak, he does all of those things, but nobody cares. 0:11:07.316 --> 0:11:12.516 And so there were women who change the way that 0:11:12.556 --> 0:11:14.796 they spoke and the hopes of being taken more seriously. 0:11:14.876 --> 0:11:17.196 And I think that Elizabeth Holmes probably did that too, 0:11:17.796 --> 0:11:19.836 And so the thing that people think of as being 0:11:20.036 --> 0:11:24.156 quote unquote the voice is actually a response to the 0:11:24.276 --> 0:11:28.276 idea that if she spoke the way that women naturally speak, 0:11:28.316 --> 0:11:28.836 she wasn't. 0:11:28.676 --> 0:11:31.636 Going to be taken seriously by anybody, right, And it's like, 0:11:31.676 --> 0:11:33.716 you can't win, right because if you change the way 0:11:33.716 --> 0:11:37.476 you speak, people are like wondering why you sound different. 0:11:37.596 --> 0:11:39.956 And then if you sound like a woman, people don't 0:11:40.036 --> 0:11:41.756 like that you sound like a woman. So maybe that's 0:11:41.756 --> 0:11:44.956 not a fair thing to hold against her, and maybe 0:11:44.996 --> 0:11:48.076 the fraud is, but maybe the voice is actually a 0:11:48.116 --> 0:11:49.516 bit of a red herring here. 0:11:50.116 --> 0:11:52.956 Yeah, the fraud is totally fair. The voice thing I 0:11:52.996 --> 0:11:55.876 think is, I think that that's sort of a distraction. 0:11:56.956 --> 0:11:59.156 You know, it's people wanting to say that she's so fake, 0:11:59.236 --> 0:12:01.476 that even her voice is fake, that everything about her 0:12:01.556 --> 0:12:04.116 is fake, and I just don't think that's true. But 0:12:04.556 --> 0:12:07.436 you know, I certainly understand how when somebody carries off 0:12:07.436 --> 0:12:11.436 a fraud of that scale comes possible to think, you know, 0:12:11.516 --> 0:12:14.396 all of these quirks are these real too? And I 0:12:14.396 --> 0:12:16.716 think there was some of that with Sam as well, 0:12:16.916 --> 0:12:19.516 you know. And so in Sam's case, it's like the 0:12:19.516 --> 0:12:22.236 wild hair and like he's kind of unkempt and a 0:12:22.236 --> 0:12:25.316 little shaggy because he doesn't care about what he looks like, 0:12:25.356 --> 0:12:27.156 because he's not shallow like the. 0:12:27.076 --> 0:12:29.356 Rest of us thinking of that deeper things. 0:12:29.796 --> 0:12:33.196 Right, And you know, I do think that that was 0:12:33.236 --> 0:12:35.756 an image thing, but I also suspect it's an image 0:12:35.756 --> 0:12:38.796 thing that came from something real. I do think that 0:12:38.916 --> 0:12:42.236 on some level he probably doesn't care that much about 0:12:42.916 --> 0:12:47.196 what he looks like, and that you know, underneath any 0:12:47.276 --> 0:12:49.356 kind of image making, if it's going to be successful, 0:12:49.396 --> 0:12:52.116 there is like a stratum of something real. Like we 0:12:52.116 --> 0:12:55.836 were looking at the photos of him from his frat days, 0:12:55.836 --> 0:12:57.476 Like there was that photo of him with Gary Wong, 0:12:57.836 --> 0:13:00.876 and he's dressed the same way, and like, certainly like 0:13:01.036 --> 0:13:04.796 branding is an important part of business, but the branding 0:13:04.876 --> 0:13:07.396 does come from the way this guy actually did dress. 0:13:07.716 --> 0:13:10.716 So you know, it's one of those things whereas like 0:13:10.756 --> 0:13:13.836 there's not the sharp delineation between what's real and what's 0:13:13.876 --> 0:13:15.556 not that I think a lot of people would. 0:13:15.356 --> 0:13:17.276 Like, Yeah, it's interesting. 0:13:17.316 --> 0:13:19.396 But they also are both parallel in the sense that, 0:13:20.236 --> 0:13:22.076 and I think you wrote about this, they both did 0:13:22.676 --> 0:13:25.236 make themselves into characters, and that's part of what made 0:13:25.236 --> 0:13:28.996 them so compelling to write about, right, Yeah, or became characters. 0:13:29.116 --> 0:13:31.556 I guess it's arguable how much they did it on purpose, 0:13:32.196 --> 0:13:34.116 but to some degree it feels like they both must 0:13:34.116 --> 0:13:37.196 have a little bit been making themselves into characters. 0:13:37.956 --> 0:13:39.556 I think it was more than a little bit. They 0:13:39.596 --> 0:13:44.036 both had hired very powerful pr people, and so you know, 0:13:44.196 --> 0:13:47.076 I do think that they had these images that were 0:13:47.076 --> 0:13:50.836 shaped for them, but I think the images came from 0:13:50.876 --> 0:13:53.716 something underneath that that was real. Because again, like if 0:13:53.716 --> 0:13:56.676 you're thinking about marketing, you're thinking about advertising, the most 0:13:56.716 --> 0:13:59.436 powerful stuff you can use is the truth, you know, 0:14:01.596 --> 0:14:04.836 So there is some sort of stratum under there where 0:14:04.876 --> 0:14:07.196 there is a thing that's real and it's just been 0:14:07.516 --> 0:14:10.356 you know, presented in a certain way or polished to 0:14:10.396 --> 0:14:14.676 a certain sheen that makes it into a character or 0:14:14.676 --> 0:14:17.996 even a caricature that's then easier for people to digest 0:14:18.036 --> 0:14:20.036 and easier for people to write about, and easier for 0:14:20.036 --> 0:14:21.756 people to think about and that sort of sticks in 0:14:21.796 --> 0:14:22.156 the mind. 0:14:23.316 --> 0:14:25.436 I remember, I think, I remember you telling me that 0:14:25.516 --> 0:14:28.196 you felt a little bit differently about Elizabeth Holmes after 0:14:28.236 --> 0:14:29.036 she took the stand. 0:14:30.276 --> 0:14:33.676 I felt again, I felt more sympathetic to her. I 0:14:33.716 --> 0:14:36.356 still felt that she had probably done what she was 0:14:36.396 --> 0:14:40.036 accused of, but she was successfully humanized herself, and so 0:14:40.356 --> 0:14:42.556 in that sense, I think her testimony was successful in 0:14:42.636 --> 0:14:45.236 making me sympathetic in a way that Sam's was not. 0:14:45.996 --> 0:14:47.116 Yeah, that was my question. 0:14:47.636 --> 0:14:52.156 What impact did Sam Mankman Free taking the stand have 0:14:52.516 --> 0:14:53.796 on how you thought about the case? 0:14:54.196 --> 0:14:57.476 You know, there are a couple of things, and one 0:14:57.516 --> 0:15:01.716 of the big ones is the obvious lying. Just the 0:15:01.876 --> 0:15:05.796 obvious lying that took place on the cross examination. And 0:15:05.796 --> 0:15:08.196 there were places where I think Elizabeth Holmes was obviously 0:15:08.236 --> 0:15:12.276 obfus skating to but she wasn't being presented with something 0:15:12.316 --> 0:15:14.916 she'd obviously said and then going oh, I don't remember that, 0:15:15.356 --> 0:15:18.756 you know, especially because we had all of this detailed 0:15:18.836 --> 0:15:21.916 recollection of his glory days at Jane Street on the 0:15:21.956 --> 0:15:24.396 direct where he was remembering stuff that had happened five 0:15:24.476 --> 0:15:26.836 ten years before, and then we get to the cross 0:15:26.836 --> 0:15:29.116 and he can't remember what he said last week come on, 0:15:30.076 --> 0:15:33.156 So there was That was something that really I think 0:15:33.516 --> 0:15:35.636 changed how I felt about him, because coming off of 0:15:35.676 --> 0:15:39.436 the direct, he did manage to present what I think 0:15:39.516 --> 0:15:41.996 was probably something like the old Sam mcmunfried. He was 0:15:42.036 --> 0:15:45.036 occasionally charming, He managed to tell a story pretty well. 0:15:45.556 --> 0:15:48.316 There were moments in which you sort of where he 0:15:48.396 --> 0:15:50.996 was funny, I think, and where I think he could 0:15:51.036 --> 0:15:54.636 be convincing, even though there were definitely moments where he 0:15:54.716 --> 0:15:57.556 was definitely answering a question that was not the question 0:15:57.596 --> 0:15:59.196 that was put to him, and that seemed to get 0:15:59.196 --> 0:16:01.596 on the judge's nerves quite a bit because it was 0:16:01.636 --> 0:16:05.596 a recurring phenomenon and it's not how court works. You 0:16:05.596 --> 0:16:07.756 can do that with journalists, but you can't do that 0:16:07.836 --> 0:16:10.756 under oath. They'll ask the same question again. You're on 0:16:10.796 --> 0:16:15.116 their time, so the you know, I think that the 0:16:15.196 --> 0:16:23.276 direct mostly worked for him, except that he was providing 0:16:23.276 --> 0:16:27.316 an alternative explanation for something that we had heard several 0:16:27.316 --> 0:16:30.876 witnesses corroborating each other's stories on and he was the 0:16:30.916 --> 0:16:34.436 only person providing that explanation and he had no documentation 0:16:34.556 --> 0:16:36.796 to come with it, and like that was one of 0:16:36.796 --> 0:16:38.876 the things that I think the prosecution really had going 0:16:38.916 --> 0:16:41.516 for them is that even though a lot of you know, 0:16:43.436 --> 0:16:46.756 text messages, slack messages, all of those things had been destroyed, 0:16:47.676 --> 0:16:50.996 they still had some emails, and they had some spreadsheets, 0:16:51.036 --> 0:16:55.316 and they had some memos, and that provided sort of 0:16:55.356 --> 0:16:59.716 an undergirding for the testimony. So that was a big 0:16:59.756 --> 0:17:01.836 part of it. And the other piece of it was 0:17:01.876 --> 0:17:08.476 that he seemed to be trying to thread the needle 0:17:08.796 --> 0:17:14.196 in a way that he was not exactly lying, but 0:17:14.316 --> 0:17:21.196 he wasn't exactly telling the truth, and that read both 0:17:21.196 --> 0:17:23.636 as arrogant and untrustworthy, I think, at least to me, 0:17:23.996 --> 0:17:28.156 where he would start, you know, these sort of word 0:17:28.196 --> 0:17:31.756 salad answers with to my recollection, as I recall at 0:17:31.796 --> 0:17:37.116 the time, whatever jargon, jargon, jargon, jargon, jargon, and then 0:17:37.156 --> 0:17:39.756 the judge would say something like, so you're saying you 0:17:39.796 --> 0:17:42.756 could do whatever you wanted, essentially, and then Sam would 0:17:42.756 --> 0:17:44.716 have to say yes, because that was what he meant. 0:17:45.396 --> 0:17:47.636 And that was like about the document retention policy, you 0:17:47.676 --> 0:17:51.356 may recall. So there were these moments where he just 0:17:53.716 --> 0:17:57.196 he made himself read as much more untrustworthy than I 0:17:57.196 --> 0:18:00.036 think he needed to, and so that made me a 0:18:00.036 --> 0:18:03.996 lot less sympathetic to him, even though I think maybe 0:18:04.036 --> 0:18:08.796 a lot of the circumstances around THERENOS and FTX were similar. 0:18:10.156 --> 0:18:12.556 Yeah, do you think what you're saying is kind of 0:18:12.596 --> 0:18:14.436 making me think that maybe, at the end of the day, 0:18:15.076 --> 0:18:18.556 Elizabeth Holmes was just better at people than say, makemen freed. 0:18:19.276 --> 0:18:22.516 Oh, that's definitely true. Elizabeth Holmes's big skill was people. 0:18:23.756 --> 0:18:28.916 And I was thinking about it because with a lot 0:18:28.996 --> 0:18:31.756 of these folks where you're told someone is charming, like 0:18:32.316 --> 0:18:34.476 I'm thinking of like Adam Newman at WEE Work, even 0:18:34.516 --> 0:18:37.356 though he hasn't done anything fraudulent. He just enriched himself 0:18:37.396 --> 0:18:40.316 and told everybody what he was doing. But the skills 0:18:40.396 --> 0:18:44.036 don't always translate on screen, so you might see a 0:18:44.036 --> 0:18:46.556 clip of this person and just being like, why why 0:18:46.596 --> 0:18:49.116 were people following him? I don't get it. But with 0:18:49.196 --> 0:18:51.396 Elizabeth Holmes, the thing that she was really good at, 0:18:51.436 --> 0:18:52.996 I think, and we got this in a lot of 0:18:52.996 --> 0:18:57.236 the testimony was making other people feel heard and feel important. 0:18:57.596 --> 0:18:59.516 And that was the thing that we would hear over 0:18:59.596 --> 0:19:02.876 and over again, was that you'd bring her a concern 0:19:03.756 --> 0:19:05.996 and it sounded like she was taking it seriously and 0:19:06.036 --> 0:19:09.876 really listening to you. And then Sunny Balani and be like, 0:19:09.876 --> 0:19:14.636 we're not doing that, and also you suck and obviously 0:19:14.676 --> 0:19:18.156 the two of them were coordinating. But her skill set 0:19:18.236 --> 0:19:21.676 was really making people feel important, and that was part 0:19:21.676 --> 0:19:24.836 of you know, that's that's a fairly important people skill. 0:19:24.956 --> 0:19:27.276 Like that is a really good people skill, like being 0:19:27.276 --> 0:19:32.036 able to make someone feel listened to, and Sam is 0:19:32.076 --> 0:19:32.716 not good at that. 0:19:33.756 --> 0:19:35.956 So what do you think you know from watching the 0:19:35.996 --> 0:19:40.076 trial following the case, at some point he did build 0:19:40.076 --> 0:19:43.756 this company that was very successful. What was his skill set? 0:19:44.996 --> 0:19:51.036 I think Sam was uniquely suited to crypto because he 0:19:51.116 --> 0:19:55.396 made people feel like if they didn't understand him, it 0:19:55.436 --> 0:19:59.556 was because they were too stupid to understand him. Just 0:19:59.716 --> 0:20:05.876 real talk thinking about like the way that he answered 0:20:05.956 --> 0:20:10.436 questions when they were put to him, and also Nishad 0:20:10.516 --> 0:20:13.356 Singh's testimony that he found Sam really intimidating. I think 0:20:13.396 --> 0:20:18.556 probably a lot of people found Sam really intimidating, and 0:20:19.116 --> 0:20:23.876 so I think there was a certain element of being 0:20:23.916 --> 0:20:28.516 able to make other people feel stupid and feel that 0:20:28.596 --> 0:20:31.476 he was smart and they were dumb. That was part 0:20:31.476 --> 0:20:36.076 of what built that empire, because you know, there is 0:20:36.116 --> 0:20:40.676 a it's a strategy you can do that you can 0:20:40.716 --> 0:20:42.916 bowldlose your way through people if you want. It's not 0:20:42.956 --> 0:20:46.636 a strategy I personally would recommend, particularly because it tends 0:20:46.676 --> 0:20:48.796 to leave a lot of really pissed off people behind you. 0:20:50.996 --> 0:20:53.756 But it can work. And so if you think about, 0:20:54.636 --> 0:20:59.276 you know, going into a VC meeting and playing a 0:20:59.356 --> 0:21:03.036 video game during it while you're answering these questions, which 0:21:03.076 --> 0:21:06.036 is a very famous anecdote. Right, he did that several times. 0:21:06.756 --> 0:21:09.516 To me, that reads as arrogant and insulting. That's not 0:21:09.596 --> 0:21:11.596 somebody I want to work with. That's not somebody who 0:21:11.636 --> 0:21:13.596 I think is going to be receptive to my ideas 0:21:13.756 --> 0:21:17.156 or who I want to trust with my money. But 0:21:17.276 --> 0:21:19.996 to other people, I can certainly see that reading as like, 0:21:20.076 --> 0:21:22.116 this guy is so smart he doesn't actually have to 0:21:22.116 --> 0:21:24.396 pay attention to me in order to answer my questions. 0:21:24.836 --> 0:21:27.596 This guy is so far beyond what I'm doing that 0:21:28.116 --> 0:21:34.076 our conversation isn't enough to stimulate him, and so he 0:21:34.116 --> 0:21:37.116 can simultaneously do two or three other things and not 0:21:37.196 --> 0:21:41.276 miss abeit. Ge whiz. He's so smart, right. 0:21:41.156 --> 0:21:44.036 And it's perfect for an industry that's kind of built 0:21:44.196 --> 0:21:47.556 on people maybe not fully understanding it, but feeling a 0:21:47.556 --> 0:21:49.676 bit dumb about not fully understanding it. 0:21:50.596 --> 0:21:55.916 Yeah, that's right. I mean I have explained NFTs to 0:21:56.076 --> 0:21:59.316 a number of people, and every time I explain it 0:21:59.436 --> 0:22:02.716 to a normal person, they say, wait, is that it is? 0:22:02.716 --> 0:22:05.876 That all? And I'm like, yes, that's it. That's all. 0:22:06.276 --> 0:22:08.796 There's no other extra, like there's you're not stupid, Like 0:22:08.836 --> 0:22:11.956