Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Caroline Ellison sentenced to two years in jail in the
Speaker 2: FTX case. She if you remember, pledged guilty to seven
Speaker 2: felony accounts, a fraud and conspiracy in the wake of
Speaker 2: basically the undoing of Samuel bank Binfried and his FTX company,
Speaker 2: which really made everybody in the world, as we know
Speaker 2: we covered it day to day, but just really rethink
Speaker 2: kind of what was going when it comes to digital
Speaker 2: assets in crypto in particular.
Speaker 3: Yeah, indeed, the Tea Life blog running on the terminal
Speaker 3: as well with the details of the sense thing hearing
Speaker 3: Carl Allison addressing the core talking about how sorry she
Speaker 3: was as well that she'd agreed to give up all
Speaker 3: the money that she gained from FTX according to her lawyer,
Speaker 3: and according to her lawyer, she'll never profit in the
Speaker 3: future for her role in this crime. As well. In
Speaker 3: her statement she talked about apologizing to lenders, investors, victims
Speaker 3: who lost money as a result of her actions, and
Speaker 3: everyone in her words that she lied to in the
Speaker 3: process of the FTX issues. One interesting quote, the human
Speaker 3: brains really bought at understanding big numbers, she said, and
Speaker 3: a day goes by, I don't think about all of
Speaker 3: the people that I heard that is Caroline Ellison being
Speaker 3: sentenced in New York described as being a cornerstone in
Speaker 3: the prosecution case against Sam Bankman freed and prosecutors have
Speaker 3: asked the judge to spare carl and Ellison from prison in.
Speaker 1: That as well.
Speaker 2: Yeah, she'll also have to forfeit about eleven billion dollars
Speaker 2: as a result of this, So we're getting more details.
Speaker 2: She is sentenced to as we said the twenty four
Speaker 2: months and talking about her cooperation specifically, the judge did
Speaker 2: say that she was by no means free of culpability,
Speaker 2: So again something we covered from day to day for
Speaker 2: a long time, but just seeing certainly as a result
Speaker 2: some of the sentences.
Speaker 3: And look, they'll also be looking more closely now the
Speaker 3: sensing of other cooperators in this case as well, Gary
Speaker 3: Wang and Nishad Singing as well. Perhaps this may indicate
Speaker 3: that they may also get jail time. We know if
Speaker 3: the prosecutes have asked her to spare from a prison sentence,
Speaker 3: but she is now being sentenced to two years at
Speaker 3: a minimum security facility as well, and the judge did
Speaker 3: praise Allison profusely said that in this case, this series,
Speaker 3: there cannot be a get out of jail free card.
Speaker 3: So we are talking about Carl and Alison being sentenced
Speaker 3: over the collapse of FTX, and that hearing happening right now.
Speaker 3: We're just showing you some pictures of her leaving course
Speaker 3: of course during the trial, as we have been covering
Speaker 3: in detail of the collapse of that company and the
Speaker 3: consequences that have been for sam Banguin Freed and for others.
Speaker 2: Well, we should remind everybody right she was the former
Speaker 2: CEO of Alimeter Research and that was the trading from
Speaker 2: that was affiliated with FTX, specifically the cryptocurrency exchange, which
Speaker 2: was founded by Samuel Makmin Freed, and then of course
Speaker 2: we know came to its undoing in twenty twenty two,
Speaker 2: so we're also talking about two years ago, or roughly
Speaker 2: two years ago, she pled guilty to fraud, money laundering,
Speaker 2: conspiracy charges related to her role specifically at Alameda Research.
Speaker 2: So again we know FTX Alamedia they off out for
Speaker 2: bankruptcy and it was really that case that undoing. Here
Speaker 2: was an individual who was seen as the JP Morgan,
Speaker 2: if you will, of the crypto world, and so many
Speaker 2: people followed him, respected him. He was the go to
Speaker 2: when it comes or when it came to cryptocurrencies, and
Speaker 2: of course the undoing made everybody look very differently at
Speaker 2: the crypto world, and we think about what kind of
Speaker 2: oversight was necessary.
Speaker 3: Indeed, and look, I mean, this issue for getting jail
Speaker 3: time is something that keep coming back to as well,
Speaker 3: because the expectation had been that she wouldn't receive jail time,
Speaker 3: and our colleagues pointing to the fact that the judge
Speaker 3: made a comment that he couldn't remember when Caroline Nelson
Speaker 3: had been even slightly inconsistent in her testimony during this trial,
Speaker 3: think about how that contrast was sort of commentary that
Speaker 3: we heard around testimony from SBF as well from San
Speaker 3: Bankment Freed as well during his trial as well, which
Speaker 3: there had been frequent criticism from the judge obviously inconsistencies
Speaker 3: in his testimony and at one point that that was
Speaker 3: something where they had to be extensive hearings without the
Speaker 3: presence of the jury because of the issues with the
Speaker 3: testimony from sein Brand bin Fried and the fact that
Speaker 3: there was such a big contrast and how the judge
Speaker 3: of described carlais and makes the sentencing here very noteworthy.
Speaker 2: All Right, just to rehash, Caroline Ellison sentenced to twenty
Speaker 2: four months prison ordered to forfeit eleven billion dollars by
Speaker 2: a federal judge for her role in the FTX collapse.
Speaker 2: And this was despite helping prosecutors in the conviction of
Speaker 2: Sam Bankman Freed, which of course was her former boss
Speaker 2: but also her former boyfriend. So let's get to Bloomberg News.
Speaker 2: Bloomberg News. Excuse me, Legal Alliston, host of Bloomberg Law
Speaker 2: on Bloomberg Radio. Jim Rosso is with us back at
Speaker 2: New York headquarters for Bloomberg. So June two years. First
Speaker 2: of all, fair sentence. Where was this in terms of
Speaker 2: what she was facing.
Speaker 1: Well, it's very low compared to what she was facing.
Speaker 1: And you know, the judge kept comparing her cooperation to
Speaker 1: what happened with Sam Bankman Freed. He said he's never
Speaker 1: seen a cooperating witness like this. There wasn't any inconsistencies
Speaker 1: in her testimony, but that still she commit a crime
Speaker 1: here and that you know, there has to be some
Speaker 1: kind of punishment. You know. What's unusual is the Probation
Speaker 1: Department did not ask for any time, and the prosecutors
Speaker 1: didn't ask for any time, So the judge has to
Speaker 1: balance that and the fact that you want to encourage
Speaker 1: people to come forward even if they're guilty, to later testify,
Speaker 1: and that she exposed this whole thing, so he brought
Speaker 1: that out a lot, but he still wanted to send
Speaker 1: a message that you know, you can't get away with this,
Speaker 1: so he balanced that out. Now, Sam Beckman free got
Speaker 1: twenty five years, so compared to that, she only got
Speaker 1: two years. It seems I would consider it pretty lenient,
Speaker 1: although there was a possibility that she would get no time.
Speaker 3: What should we be thinking about them when think about
Speaker 3: the other sentencing that we're still waiting for over the
Speaker 3: collapse of FTX. What could that mean then for their prospects?
Speaker 1: Well, I think it probably means that they're going to
Speaker 1: get some kind of a minimal sentence. She was the
Speaker 1: star witness and she was the one who came forward
Speaker 1: for and, you know, help the prosecutors to unveil the conspiracy,
Speaker 1: and the judge even took out some spreadsheets that had
Speaker 1: helped the prosecutors in the case. So they will probably
Speaker 1: get I probably a light sentence, but I don't know
Speaker 1: if it'll be as light as two years. So we'll
Speaker 1: have to see that. There are two more cooperators, but
Speaker 1: none of them she was the star witness. It was
Speaker 1: obvious that she was the star witness. So I don't
Speaker 1: know if they're going to get as you know, as
Speaker 1: low a sentence as she did. And I say as
Speaker 1: low a sentence because you know, she really was facing
Speaker 1: you know, ten twenty years if you'd gone by the guidelines.
Speaker 1: So as Sam bankmin Freed was sentenced to twenty five years,
Speaker 1: and you know, the judge took account of her cooperation,
Speaker 1: and the prosecutors also mentioned. It seemed like everybody was
Speaker 1: talking about the same thing, how she helped the prosecution
Speaker 1: so much by cooperating, but so that it was a
Speaker 1: little bit of a surprise because the judge was talking
Speaker 1: about her cooper then all of a sudden bam. But
Speaker 1: you know, he said you did commit a crime, and
Speaker 1: then he said that you have to serve time for that.
Speaker 1: I had thought it maybe he might even let her
Speaker 1: off without any sentence from the way he was going,
Speaker 1: but he was just laying a foundation, I think, so
Speaker 1: he could explain himself.
Speaker 2: Hey, jan one last question that eleven billion dollars that
Speaker 2: she has to forfeit. How do we explain that or
Speaker 2: what specifically does that denote.
Speaker 1: It seems awfully high to me, and that's something that
Speaker 1: I was just talking to someone about. I have to
Speaker 1: go and look into it because it seems an awfully
Speaker 1: high number. I didn't think that she had gotten eleven
Speaker 1: billion dollars from this, because I know some of the
Speaker 1: other cooperators who had you know, had homes and things.
Speaker 1: It was in the millions, not the billions. So that
Speaker 1: seems high. I really have to look into it. I
Speaker 1: think it's it's rather high. She has to of course,
Speaker 1: she has to disgorge it. It's you know, you would
Speaker 1: expect that the judge ruled it, but you would expect
Speaker 1: that if she didn't, the prosecution would come after her.
Speaker 1: That should go back to the victim. So that's not surprising.
Speaker 1: But the number is surprising to me, and I have
Speaker 1: to really look into where it came from.
Speaker 2: Yeah, that number kind of struck me as well. And
Speaker 2: I know it was a red headline certainly on the Bloomberg.
Speaker 2: All right, we're going to leave it on that note. Hey, June,
Speaker 2: thank you so much. Of course, our legal analyst here
Speaker 2: at Bloomberg News and a host of Bloomberg Law on Bloomberg Radius,
Speaker 2: so should be sure to catch her a little bit
Speaker 2: later on today on the latest really of the FTX saga.
Speaker 3: Yeah, fascinating that headline. Carlon Alison Salad sentenced for two
Speaker 3: years in her role of the collapse of FTX.