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Speaker 1: Pushkin. Hey there, it's Michael Lewis. Before we get to

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Speaker 1: this episode, I want to let you know that you

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Speaker 1: can listen to each episode of Judging Sam The Trial

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Speaker 1: of Sam Bankman Freed ad free by becoming a Pushkin

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Speaker 1: Plus subscriber, and with your subscription you'll also get exclusive

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Speaker 1: McCartney's new podcast, McCartney A Life and Lyrics, Malcolm Gladwell's

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Speaker 1: revisionist history, The Happiness Lab from Doctor Lorie Santos, and

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Speaker 1: tons of other top shows from Pushkin. Sign up an

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Speaker 1: Apple Podcasts or at Pushkin, dot fm, Slash Plus. Welcome

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Speaker 1: to Judging Sam The Trial of Sam Bankman Freed. I'm

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Speaker 1: Michael Lewis. Bankman Freed was worth tens of billions of

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Speaker 1: dollars before FTX his cryptocurrency exchange came a part at

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Speaker 1: the scenes, and now he's being tried for financial crimes.

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Speaker 1: They could send him to prison for the rest of

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Speaker 1: his life.

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Speaker 2: I'm Jacob Goldstein. I'm sitting in for Michael Lewis. I've

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Speaker 2: been covering crypto since twenty eleven. I host a Pushkin

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Speaker 2: show called What's Your Problem, where I actually interviewed Sam

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Speaker 2: Bankman freed before he got indicted, So I am delighted

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Speaker 2: to be here today. It's week two of the Sam

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Speaker 2: Bankman Freed trial, and today was a very big day.

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Speaker 2: Caroline Ellison, who of course was the co CEO of

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Speaker 2: Alameda Research and SBF's former girlfriend, she took the stand

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Speaker 2: today and Lydia Jean you of course were there.

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Speaker 3: Yes. I came to the courthouse bright and early, and

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Speaker 3: it was a day that reporters were particularly excited for.

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Speaker 3: There are a lot of us, and I interviewed a

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Speaker 3: few as we were waiting for the court doors to open,

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Speaker 3: and I'm going to play some of that tape for

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Speaker 3: you right now.

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Speaker 4: I'm Sam Kessler. I'm an editor at Coindasker.

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Speaker 3: What are you looking forward to learning from Caroline Allison's testimony?

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Speaker 4: Aside from the testimony itself, it's going to be really

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Speaker 4: interesting to see the line of questioning that, particularly the

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Speaker 4: defense decides to follow, and they're also going to maybe

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Speaker 4: touch on things around drug use and whether that makes

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Speaker 4: her an unreliable narrator. All that is going to be

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Speaker 4: really fascinating to see.

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Speaker 2: I'm Loz Lopato.

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Speaker 4: I'm a senior reporter at The Verge.

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Speaker 3: I am super curious about why she did this, Like

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Speaker 3: I don't know that she's going to talk about that.

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Speaker 1: But she didn't have equity.

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Speaker 2: And the boys did.

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Speaker 1: I've had some like lousy ex boyfriends in my time,

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Speaker 1: but nothing on the scale.

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Speaker 2: What's your name, I'm Kevin Dugan with New York magazine

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Speaker 2: The Sex. I want all the details.

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Speaker 1: I want all the stories, all the spine tingling kind

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Speaker 1: of sensation of all the sex that happened in the Bahamas.

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Speaker 2: Yeah, that's really what I'm looking forward to most, Lady Jean,

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Speaker 2: I don't want the details of the sex.

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Speaker 3: Well, good news for you. There wasn't a lot of

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Speaker 3: zaid and there was a lot of spreadsheets what happened.

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Speaker 2: I mean, this is like truly a high drama moment, right,

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Speaker 2: Like you have this romantic history, you have this executive history,

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Speaker 2: and you have this alleged crime. So like, what's the

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Speaker 2: like Caroline walking into the courtroom moment.

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Speaker 3: Yeah, so the courtroom was packed and the prosecutor said

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Speaker 3: that they were going to call their next witness, Caroline Allison.

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Speaker 3: You could tell the reporters are all really excited. You know,

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Speaker 3: usually when there's an intermission, people start to talk, but

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Speaker 3: no one was talking. Everyone was looking at the door.

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Speaker 3: Someone whispered that it was a bit like a weird

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Speaker 3: wedding since we were waiting for her walk down the aisle.

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Speaker 4: Oh, very good.

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Speaker 3: Someone went like done, done, done, And then the door

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Speaker 3: opened and she walked through. She was wearing like a

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Speaker 3: reddish pinkish dress. She had on a blazer. She's really small,

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Speaker 3: she's even shorter than I am. She was holding a

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Speaker 3: water bottle and she walked really confidently down the aisle

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Speaker 3: as everyone was watching, to the witness stand, and then

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Speaker 3: she sat down. The prosecutor immediately had her admit that

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Speaker 3: she had committed financial crimes, and she said that she

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Speaker 3: had committed them with Sam.

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Speaker 2: And just to be clear, she's already previously pleaded guilty

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Speaker 2: to these.

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Speaker 3: Crimes, right exactly, she has. And then the prosecutor had

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Speaker 3: her point out Sam. She was sitting down, and then

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Speaker 3: she kind of stood up and she looked all over

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Speaker 3: the courtroom for him. She was looking in the jury box,

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Speaker 3: she was looking in the where the reporters were sitting.

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Speaker 3: It was a full thirty seconds, and it was the

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Speaker 3: longest thirty seconds ever and then finally she found him

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Speaker 3: and she pointed at him when she finally saw him,

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Speaker 3: and I couldn't see his face, but people in the

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Speaker 3: overflow room said that they kind of smiled at each other,

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Speaker 3: and then the prosecutor said, can you say what Sam

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Speaker 3: was wearing? And she said he was wearing a suit?

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Speaker 3: And she laughed a little bit and sat down.

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Speaker 2: So I have a couple questions about that, one like,

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Speaker 2: wasn't he just sitting at the defense table or whatever?

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Speaker 2: She putting on a show? Did she actually not know

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Speaker 2: where he was what was going on there?

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Speaker 3: I don't think she was putting on a show. I

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Speaker 3: think it must be really overwhelming. Was probably her first

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Speaker 3: time in this courtroom. It was really packed. There are

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Speaker 3: a lot of people there. I'm assuming that that walk

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Speaker 3: down the aisle when we were all staring at her

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Speaker 3: was pretty terrifying, and I'm thinking it probably took her

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Speaker 3: a few seconds to orient herself. People have also speculated

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Speaker 3: that she hasn't seen him since he got his hair cut,

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Speaker 3: and she's never seen him in a suit.

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Speaker 2: Okay, I have another question about that. Why do prosecutors

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Speaker 2: do this? I mean, I've seen it in like the

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Speaker 2: movies or whatever. You know, is he in the courtroom

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Speaker 2: with us? Can you point him out? But like Sam

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Speaker 2: Agrinfried was like there were pictures of him on TV

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Speaker 2: and didn't magazine, Like we all know who he is

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Speaker 2: and what he looks like. Is there some legal reason

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Speaker 2: they do it? Is it theater?

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Speaker 3: I don't know. There's a lot of pointing in court. Also,

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Speaker 3: I learned that our opening statements, it's really common to

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Speaker 3: point at the defendant.

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Speaker 2: Okay, so she's there, she's identified, Sam bankmin Freed. We

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Speaker 2: got our drama. Like, are there a few key moments,

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Speaker 2: whether they are emotional moments or kind of substantive moments

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Speaker 2: in terms of, you know, the case itself that stand

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Speaker 2: out to you of what happened today? Like what are

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Speaker 2: the most important things that happen?

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Speaker 3: Yeah, Well, the prosecution started pretty early by having Caroline

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Speaker 3: talk about her romantic relationship with Sam and to characterize

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Speaker 3: a little bit what it was like. And she said that,

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Speaker 3: and I'm quoting from my notes that there is a

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Speaker 3: general theme where I would want more, but he was

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Speaker 3: being distant and not paying attention. So she kind of

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Speaker 3: characterized their on and off again romantic relationship as one

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Speaker 3: where Sam kind of had an upper hand. She also

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Speaker 3: said that Sam was her boss and that at times

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Speaker 3: made things awkward.

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Speaker 2: And what do you think is going on there? I

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Speaker 2: mean I kind of get it, but like, what's the

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Speaker 2: point of that part of it?

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Speaker 3: Well, there's something that lawyers do called taking the sting out,

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Speaker 3: where they bring up things that they think the defense

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Speaker 3: is going to bring out on Cross and they say

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Speaker 3: it during direct So that way it kind of makes

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Speaker 3: it seem less bad because I'm sure that on Cross

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Speaker 3: the defense is going to say something like you dated

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Speaker 3: Sam and it didn't go that loud.

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Speaker 2: So the prosecution is just preempting the you're just the

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Speaker 2: bitter ex girlfriend kind of defense.

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Speaker 3: And they're also setting something else up I think where

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Speaker 3: they talked about Sam and Caroline's professional relationship, and they

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Speaker 3: talked about how in that relationship, Sam also had the

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Speaker 3: upper hand. Caroline talked about how her job at Alameda

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Speaker 3: was really the second job she's ever had before that

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Speaker 3: she worked at Jane Street with Sam, and she felt

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Speaker 3: really insecure and not prepared for that job. And she

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Speaker 3: checked in with Sam about all of the important decisions

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Speaker 3: that she made, and they made it sound like he

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Speaker 3: was very involved and he was overseeing what was happening

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Speaker 3: at Alameda, So any crimes that were happening at Alameda,

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Speaker 3: by extension, Sam would also know about, uh huh and

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Speaker 3: sign off one they really amphasized that he was signed

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Speaker 3: off on everything that Caroline did.

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Speaker 2: That makes sense because I mean, clearly very bad things

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Speaker 2: happened with FTX and Alameda, and the key question is

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Speaker 2: did Sam do them? Everybody else has admitted to doing them.

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Speaker 2: Did Sam do them? And the prosecution is trying to

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Speaker 2: prove that yes, he did. Okay, so they got there,

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Speaker 2: both their personal and their professional relationship. What else?

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Speaker 3: She also give us some interesting insight into Sam as

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Speaker 3: a person. They asked her about what his goals were

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Speaker 3: for himself for FTX, and she said that he was

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Speaker 3: very ambitious and that actually he told her one time

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Speaker 3: that there was a five percent chance that he believed

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Speaker 3: that he might be president one day.

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Speaker 2: You know, I'll say, when I interviewed him, like the

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Speaker 2: hubris was striking, which I mean, I guess that's probably

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Speaker 2: true for everybody. It's not like, oh my insight, but

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Speaker 2: it really is striking. When I interviewed him is when

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Speaker 2: he talked about helping trillions of people, not just the

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Speaker 2: billions of people who are alive today, but he said

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Speaker 2: the trillions or even hundreds of trillions who might summ live.

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Speaker 2: But then it was like, look, there are people who

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Speaker 2: have had a huge impact on the world, why shouldn't

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Speaker 2: it be me? And like similarly, like rich people get

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Speaker 2: to be president, like it was super rich, maybe it

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Speaker 2: could have been Yeah.

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Speaker 3: Yeah, I talked to some reporters who were like, there

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Speaker 3: was a time where it wasn't that crazy to think

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Speaker 3: that there is a five percent chance that he would

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Speaker 3: become president. The prosecutors also asked her about Sam's approach

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Speaker 3: to risk, and she said something that I found really interesting,

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Speaker 3: which is, imagine if you flipped a coin and if

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Speaker 3: the coin landed on tails, the world would be destroyed,

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Speaker 3: and if the coin landed on heads, the world would

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Speaker 3: be twice as good as it is now. Sam would

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Speaker 3: believe in flipping the coin.

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Speaker 2: You know, it's funny you should mention that because again,

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Speaker 2: before he got indicted, he was on this podcast that

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Speaker 2: I like called Conversations with Tyler, with this kind of

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Speaker 2: economist public intellectual, Tyler Cowen, and there was a similar

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Speaker 2: thing in that interview where Tyler Cowan said said, if

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Speaker 2: there was a fifty one to forty nine percent chance

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Speaker 2: of a similar thing. Either the universe is twice as

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Speaker 2: good or the universe gets destroyed. Do you take the bet?

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Speaker 2: And Sam said every time? And Tyler kW was like, yeah,

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Speaker 2: but if you keep taking it every time, you're clearly

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Speaker 2: going to end with the destroyed universe. And Sam was like,

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Speaker 2: or a really awesome universe And I was like what.

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Speaker 2: And then when everything blew up, that was what I

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Speaker 2: thought back to. There was another interview where this other

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Speaker 2: smart person, Matt Levine, sort of get Sam to say

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Speaker 2: that what he was doing was kind of a Ponzi scheme.

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Speaker 2: Was basically a Ponzi scheme. But to me, the more

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Speaker 2: Sam thing was that I'll keep taking the bet. And

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Speaker 2: it seems like that is a sort of perfect metaphor

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Speaker 2: for what he did, or at least a very good

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Speaker 2: metaphor for what he seems.

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Speaker 4: To have done.

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Speaker 3: Yeah. I underlined in my notebook, like this is the

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Speaker 3: crux of the story is he flipped a coin and

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Speaker 3: it landed the wrong way for.

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Speaker 2: A while, it landed the right way right. That's how

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Speaker 2: you get to be worth many tens of billion dollars

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Speaker 2: when you're not thirty.

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Speaker 3: I would never flip that coin. Not only not flip

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Speaker 3: that coin, I would leave the room. I would leave

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Speaker 3: the house.

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Speaker 2: That's why we're making podcasts, low risk, low return. Presumably

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Speaker 2: the prosecutors called Caroline Ellison because you know, they're trying

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Speaker 2: to convict Sam of a bunch of crime. So so

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Speaker 2: you know what was sort of the crime part of

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Speaker 2: her testimony?

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Speaker 3: Yes, okay, So remember that the crime that Sam is

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Speaker 3: accused of is using money that FTX customers thought that

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Speaker 3: they had safely deposited onto the FTX cryptocurrency exchange and

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Speaker 3: instead investing it through his investment firm, Alameda. Caroline is

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Speaker 3: the head of Alameda, and she said that when Alameda

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Speaker 3: used FTX customer funds, it was at Sam's direction.

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Speaker 2: Uh huh. So like that's the core, that's it, Like,

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Speaker 2: that's the.

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Speaker 3: Thing, that's the thing.

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Speaker 2: Yeah, that's like a good portrait of the day. One

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Speaker 2: of the things I've been interested in and listening to

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Speaker 2: the other episodes episodes you did with Michael and with

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Speaker 2: Jacob Weisberg, was what's the jury doing? Who was asleep today?

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Speaker 2: I find it striking that jurors are asleep, Like, were

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Speaker 2: there jurors asleep today? How many was it the same?

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Speaker 2: Was it the juror who works the overnight shift.

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Speaker 3: I think the jurors, just like the journalists, were actually

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Speaker 3: really interested in what Caroline had to say. And she

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Speaker 3: also sounded I had heard her on an interviews before,

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Speaker 3: and she sounded much more confident. I think her voice

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Speaker 3: was deeper, So I wondered whether she got some voice coaching,

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Speaker 3: and I wonder if that was part of why she

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Speaker 3: was able to keep the juror's attention. It was honestly

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Speaker 3: a very technical testimony. They showed a lot of spreadsheets

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Speaker 3: and balance sheets, and I was surprised. I kept looking

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Speaker 3: over at the jury, but I personally did not witness

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Speaker 3: a single sleeping jury today.

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Speaker 2: That is a real testament to how Compella and Caroline

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Speaker 2: Ellison must have been. So how did the day end?

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Speaker 2: Where did you get to in the trial? Today?

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Speaker 3: The prosecution and didn't finish asking Caroline questions, So they're

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Speaker 3: going to continue with that, and then I think we're

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Speaker 3: all really interested to see what's going to come out

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Speaker 3: on cross examination.

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Speaker 2: I'm very curious to hear what comes out in cross examination.

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Speaker 2: We'll be back in a minute with one last thing.

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Speaker 2: Lidia Gene, we're back. Can you please give me one

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Speaker 2: last thing?

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Speaker 3: Our one last thing today is about Gary Wong's testimony.

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Speaker 2: Okay, you and Michael talked about Gary Wong. He's the

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Speaker 2: guy who doesn't talk right. If there's one thing to remember,

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Speaker 2: he's co founder, but mainly is the really quiet guy.

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Speaker 2: And then when he talked, apparently said on the show,

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Speaker 2: we talked really fast.

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Speaker 3: It's kind of interesting.

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Speaker 2: Yes, the guy get it over with.

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Speaker 3: And once he took the stand did actually talk. And

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Speaker 3: today was cross examination, okay, and everyone was really impressed

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Speaker 3: with how the defense lawyers did. I think up until

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Speaker 3: now they seemed really nervous. I think, I said earlier

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Speaker 3: one of their hands seemed to be shaking, and today

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Speaker 3: they moved very quickly. They hardly got interrupted by the prosecution.

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Speaker 3: They seemed very confident, and they did kind of leave

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Speaker 3: me feeling a little bit different about Gary's testimony than

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Speaker 3: I did earlier.

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Speaker 2: Interesting, So those are like the vibes, which is interesting.

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Speaker 2: What was the substance of the cross examination?

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Speaker 3: So to me, one of the most interesting things in

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Speaker 3: this trial is Sam tweeted shortly before FTX declared bankruptcy.

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Speaker 3: FTX is fine assets are fine. And this has been

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Speaker 3: pointed over and over again to an example of Sam

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Speaker 3: lying and on direct Gary said this was a lie

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Speaker 3: because FTX was not fine, assets were not fine, right,

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Speaker 3: But the lawyers pointed out how Gary in earlier conversations

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Speaker 3: with the prosecution did not characterize this as a lie

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Speaker 3: because he said that depending on how you looked at it,

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Speaker 3: FTX maybe was fine and assets were fine. It just

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Speaker 3: depends whether you were talking about liquid or ill liquid assets, which.

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Speaker 2: Is in fact a classic hard problem in financial crises. Right,

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Speaker 2: liquid assets basically means assets you can turn into cash

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Speaker 2: right now, and I liquid assets means yes, we have

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Speaker 2: the money whatever I own a house, say, but I

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Speaker 2: just can't sell it and turn it into money this minute.

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Speaker 2: And so did he say on cross that like, maybe

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Speaker 2: if you're considering I liquid assets, it would have been

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Speaker 2: reasonable to think that that FTX was fine.

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Speaker 3: He did seem to say that he said that Sam's

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Speaker 3: tweet was misleading since he was talking about ill liquid assets,

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Speaker 3: but he admitted that in early conversations with prosecutors he

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Speaker 3: did not call this tweet a lie. And I found

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Speaker 3: that cross examination to be really compelling.

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Speaker 2: Makes me only more interested to hear what happens when

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Speaker 2: Carolyn Ellison undergoes cross examination. Thanks for having me, Lydia, Jen.

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Speaker 3: Bye, Jacob, talk to you soon.

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Speaker 1: This episode of Judging Sam was hosted by Jacob Goldstein.

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Speaker 1: Lydia gen Caught is our court reporter. Catherine Gerrard and

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Speaker 1: Nisha Venken produced this show. Sophie Crane is our editor.

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Speaker 1: Our music was composed by Matthias Bossi and John Evans

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Speaker 1: of stell Wagons Symphonet. Judging Sam is a production of

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Speaker 1: Pushkin Industries. Got a question or comment for me, There's

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Speaker 1: a website for that atr podcast dot com. That's atr

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Speaker 1: podcast dot com. To find more Pushkin podcasts, listen on

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