1
00:00:02,920 --> 00:00:07,280
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:07,800 --> 00:00:10,520
Speaker 2: Sam Bankman freed sentencing is coming out. He has sent

3
00:00:10,640 --> 00:00:14,120
Speaker 2: us to twenty five years in prison after being convicted

4
00:00:14,160 --> 00:00:17,640
Speaker 2: of fraud over the ft X collapse. Again, he's been

5
00:00:17,680 --> 00:00:20,880
Speaker 2: send us to twenty five years in prison after being

6
00:00:20,920 --> 00:00:24,560
Speaker 2: convicted of fraud over the ft X collapse. Not the

7
00:00:24,560 --> 00:00:27,680
Speaker 2: Bernie made off Nope situation, but then not the ten

8
00:00:27,720 --> 00:00:30,120
Speaker 2: eleven years of sort of the lower white collar crime.

9
00:00:30,200 --> 00:00:33,080
Speaker 1: Yeah, they're the defense was asking for, you know, six

10
00:00:33,080 --> 00:00:35,760
Speaker 1: and a half to seven years. And again the defense

11
00:00:35,960 --> 00:00:37,839
Speaker 1: the prosecution was looking for something in a forty to

12
00:00:37,840 --> 00:00:40,160
Speaker 1: fifty percent range and maybe splitting the difference. Hey, Barry,

13
00:00:40,280 --> 00:00:42,199
Speaker 1: just let you know, we got about a minute left here.

14
00:00:42,320 --> 00:00:44,919
Speaker 1: Just put into context if he can, in the context

15
00:00:44,920 --> 00:00:47,080
Speaker 1: of Bankman freed his sentencing here for twenty five years.

16
00:00:47,280 --> 00:00:48,080
Speaker 2: Yeah, what's your reaction?

17
00:00:48,159 --> 00:00:48,800
Speaker 1: What's your reaction?

18
00:00:49,000 --> 00:00:52,760
Speaker 3: So, you know, I'm more in the Michael Lewis camp

19
00:00:52,880 --> 00:00:57,760
Speaker 3: than than in I love Zeke Fox's book, but the

20
00:00:57,840 --> 00:01:00,440
Speaker 3: you know, when you look at everybody having recovered all

21
00:01:00,480 --> 00:01:04,920
Speaker 3: of their assets, the story perfect example of narrative fallacy.

22
00:01:04,959 --> 00:01:07,720
Speaker 3: The story of this guy is a genius who has

23
00:01:08,240 --> 00:01:12,000
Speaker 3: figured out how to make crypto modernized, and then oh,

24
00:01:12,040 --> 00:01:15,000
Speaker 3: it turns out that they're foamingling funds. Yep, and they're

25
00:01:15,080 --> 00:01:19,080
Speaker 3: kind of running everything on the fly. It's amazing how

26
00:01:19,160 --> 00:01:23,520
Speaker 3: one narrative story failed and was replaced by another. This

27
00:01:23,600 --> 00:01:27,040
Speaker 3: is very similar to Fairhose and what happens there. We

28
00:01:27,120 --> 00:01:29,600
Speaker 3: love these stories and they often deceive us.

29
00:01:29,680 --> 00:01:31,600
Speaker 1: Yep. Absolutely, Hey, Parry, thank you so much for joining us.

30
00:01:31,600 --> 00:01:34,200
Speaker 1: Barry Rodholts, host of Master's in Business on Bloomberg Radio

31
00:01:34,200 --> 00:01:36,680
Speaker 1: and the founder of Rodholts Wealth Management. Again the key

32
00:01:36,800 --> 00:01:41,440
Speaker 1: data point here, as Alex just mentioned, Sam Banking Freed

33
00:01:41,520 --> 00:01:44,760
Speaker 1: sentenced to twenty five years in prison, ordered to four

34
00:01:44,800 --> 00:01:49,480
Speaker 1: foot more than eleven billion dollars. Let's bring in June Grosso,

35
00:01:49,800 --> 00:01:52,360
Speaker 1: Bloomberg's legal analy She joins us here on Bloomberg Interactive

36
00:01:52,360 --> 00:01:54,600
Speaker 1: Broker Studio. Initial reactions juram Well.

37
00:01:54,480 --> 00:01:56,960
Speaker 4: I think it's a very tough sentence, but it was

38
00:01:57,040 --> 00:02:01,440
Speaker 4: expected to Judge Kaplan before the trial said that he

39
00:02:01,560 --> 00:02:05,320
Speaker 4: increased the sentence in guideline range because he found that

40
00:02:05,400 --> 00:02:09,360
Speaker 4: Sam Bankminfried had perjured himself at his trial. He found

41
00:02:09,400 --> 00:02:12,560
Speaker 4: that he committed witness tampering. If you remember, he put

42
00:02:12,639 --> 00:02:16,280
Speaker 4: him into prison before trial, despite this huge bail package,

43
00:02:16,560 --> 00:02:18,840
Speaker 4: because he felt that he was campering with a witness,

44
00:02:19,200 --> 00:02:21,640
Speaker 4: and he said there was a loss to investors of

45
00:02:21,720 --> 00:02:24,720
Speaker 4: one point seven billion dollars, despite the fact that people

46
00:02:24,720 --> 00:02:26,600
Speaker 4: have said that the investors are going to get paid

47
00:02:26,639 --> 00:02:29,600
Speaker 4: back most of them. He said something that I thought

48
00:02:29,639 --> 00:02:33,920
Speaker 4: was kind of it was chilling. So the defense was saying, look,

49
00:02:34,040 --> 00:02:36,639
Speaker 4: let him out early. He could be like a Michael Milket.

50
00:02:36,720 --> 00:02:39,079
Speaker 4: He can come back because he wants to do good

51
00:02:39,120 --> 00:02:41,720
Speaker 4: in the world. He has this ability. And the judge

52
00:02:41,760 --> 00:02:44,880
Speaker 4: said that there's a risk that this man will be

53
00:02:44,919 --> 00:02:47,920
Speaker 4: in a position to do something very bad in the future,

54
00:02:47,960 --> 00:02:51,080
Speaker 4: and it's not a trivial risk. Part of my sentence

55
00:02:51,080 --> 00:02:53,240
Speaker 4: will be for the purpose of disabling him to the

56
00:02:53,280 --> 00:02:55,640
Speaker 4: extent that it can be appropriately done to him for

57
00:02:55,680 --> 00:02:58,919
Speaker 4: a significant period of time. So the judge just didn't

58
00:02:59,040 --> 00:03:02,079
Speaker 4: buy his good in tensions, he said his intentions were

59
00:03:02,120 --> 00:03:02,840
Speaker 4: to gain power.

60
00:03:03,240 --> 00:03:05,160
Speaker 2: But on the flip side, I mean, he wasn't sentenced

61
00:03:05,160 --> 00:03:07,040
Speaker 2: one hundred and fifty years, so like he will still

62
00:03:07,080 --> 00:03:09,440
Speaker 2: have a life when he gets out right. Just if

63
00:03:09,440 --> 00:03:11,320
Speaker 2: you're just joining us now, Sam bankmund free to send

64
00:03:11,400 --> 00:03:14,040
Speaker 2: us twenty five years in prison he will also be

65
00:03:14,320 --> 00:03:18,240
Speaker 2: ordered to forfeit more than eleven billion dollars. So presumably,

66
00:03:18,280 --> 00:03:20,200
Speaker 2: like do you serve that whole twenty five years?

67
00:03:20,240 --> 00:03:22,200
Speaker 4: You serve eighty five percent of the time, and no

68
00:03:22,240 --> 00:03:26,560
Speaker 4: one know the request from the Bureau of Probation for

69
00:03:26,600 --> 00:03:29,520
Speaker 4: one hundred years was ludicrous. No one would be sentenced

70
00:03:29,520 --> 00:03:32,080
Speaker 4: to that. I mean, think about Bernie Madoff. That's like

71
00:03:32,120 --> 00:03:35,960
Speaker 4: a worst scam that you can think of. So he

72
00:03:36,160 --> 00:03:37,960
Speaker 4: was like, he's like the high end of the scale.

73
00:03:38,040 --> 00:03:41,240
Speaker 4: The government was asking for forty to fifty years. That's

74
00:03:41,360 --> 00:03:44,160
Speaker 4: also very high. I mean, you know, think about what

75
00:03:44,360 --> 00:03:46,880
Speaker 4: happened here. But I think the judge is also trying

76
00:03:46,880 --> 00:03:49,520
Speaker 4: to send a message to you know, this has been

77
00:03:49,560 --> 00:03:53,040
Speaker 4: called the greatest financial fraud in the US history by

78
00:03:53,320 --> 00:03:55,600
Speaker 4: the US Attorney for the Southern District of New York.

79
00:03:55,640 --> 00:03:57,360
Speaker 4: So the judge is trying to send a message. But

80
00:03:57,440 --> 00:04:00,720
Speaker 4: this judge has been so tough through the entire trial.

81
00:04:01,040 --> 00:04:04,360
Speaker 4: If you remember, before bankmin Free testified, he had him

82
00:04:04,400 --> 00:04:07,240
Speaker 4: on the stand for three hours outside the presence of

83
00:04:07,280 --> 00:04:11,240
Speaker 4: the jury. He denied almost all of the requests that

84
00:04:11,280 --> 00:04:16,279
Speaker 4: the defense made for motions to introduce different defenses that

85
00:04:16,360 --> 00:04:20,360
Speaker 4: he wanted to present to the jury different expert witnesses.

86
00:04:20,680 --> 00:04:23,640
Speaker 4: So he's been tough on him since the very beginning.

87
00:04:23,680 --> 00:04:26,160
Speaker 4: But I you know, I thought he should get ten years,

88
00:04:26,200 --> 00:04:28,680
Speaker 4: so maybe he'll get twenty years. In point of fact,

89
00:04:28,720 --> 00:04:29,920
Speaker 4: he got twenty five years.

90
00:04:30,000 --> 00:04:32,800
Speaker 1: Interesting, do we know what type of facility he will

91
00:04:32,839 --> 00:04:36,560
Speaker 1: serve this time in? Is this a you know, minimum maximum?

92
00:04:36,800 --> 00:04:37,359
Speaker 5: What did they say?

93
00:04:37,480 --> 00:04:39,880
Speaker 4: I mean, really he's a white collar criminal. There's all

94
00:04:39,960 --> 00:04:42,480
Speaker 4: kinds of evidence that in when he's been in prison,

95
00:04:42,520 --> 00:04:45,440
Speaker 4: and he's been in rikers, that he's been helping to

96
00:04:45,720 --> 00:04:50,360
Speaker 4: teach some of the inmates to help with their gged diplomas,

97
00:04:50,760 --> 00:04:53,960
Speaker 4: and that his one of his roommates show he said

98
00:04:54,120 --> 00:04:58,640
Speaker 4: his salemates is a former police officer, and he said that,

99
00:04:58,680 --> 00:05:02,200
Speaker 4: you know, he really is getting along well in prison

100
00:05:02,279 --> 00:05:04,880
Speaker 4: and he's trying to make you do the best he can.

101
00:05:05,400 --> 00:05:07,680
Speaker 4: I don't this will be up to the Bureau of Prisons.

102
00:05:07,720 --> 00:05:09,400
Speaker 4: It's not gonna be up to the judge where he goes.

103
00:05:09,400 --> 00:05:12,320
Speaker 4: So they're going to do a report after this and determine.

104
00:05:12,360 --> 00:05:14,880
Speaker 4: And also I think he might go to a facility

105
00:05:14,880 --> 00:05:17,360
Speaker 4: in California so he could be near his family.

106
00:05:18,400 --> 00:05:20,560
Speaker 2: And just to reiterate if you're just joining us FTX

107
00:05:20,600 --> 00:05:22,920
Speaker 2: CO finder Sam Beckmanfried has now been sentenced so twenty

108
00:05:22,960 --> 00:05:25,960
Speaker 2: five years in prison for stealing billions of dollars from customers,

109
00:05:26,240 --> 00:05:28,839
Speaker 2: marking the final chapter in this case that has just

110
00:05:28,880 --> 00:05:32,240
Speaker 2: captivated pretty much everybody. He also has been ordered to

111
00:05:32,279 --> 00:05:36,440
Speaker 2: forfeit eleven billion dollars. What happens now? Is there any

112
00:05:36,720 --> 00:05:40,200
Speaker 2: other thing? Appeal convo? What happens next?

113
00:05:40,600 --> 00:05:43,320
Speaker 4: There is an appeal? I mean the defense is going

114
00:05:43,320 --> 00:05:46,200
Speaker 4: to appeal this. Appeals are very hard in criminal cases

115
00:05:46,200 --> 00:05:48,280
Speaker 4: and a lot of the decisions that the judge made

116
00:05:48,880 --> 00:05:52,960
Speaker 4: are considered within a trial judge's discretion, so it's a

117
00:05:53,000 --> 00:05:55,400
Speaker 4: difficult appeal. But yes, they were an appeal. He's hired

118
00:05:55,440 --> 00:05:58,280
Speaker 4: new lawyers. He changed his lawyers from the trial, so

119
00:05:58,400 --> 00:06:00,920
Speaker 4: he has representing him now more Ark muc Casey, who's

120
00:06:00,960 --> 00:06:04,679
Speaker 4: a very well known criminal defense attorney. He represented Trevor

121
00:06:04,720 --> 00:06:08,279
Speaker 4: Milton and got him a sentence of four years when

122
00:06:08,320 --> 00:06:11,560
Speaker 4: the prosecution wanted eleven years, so he.

123
00:06:11,520 --> 00:06:13,960
Speaker 1: Didn't So would he be appealing the verdict or just

124
00:06:14,000 --> 00:06:14,480
Speaker 1: the sentence?

125
00:06:14,520 --> 00:06:16,920
Speaker 4: The verdict? He will be appealing the verdict. What happened

126
00:06:16,920 --> 00:06:20,479
Speaker 4: at trial? You know the charges, the different for example,

127
00:06:20,480 --> 00:06:22,960
Speaker 4: what I just said, the judge didn't allow him all

128
00:06:22,960 --> 00:06:26,599
Speaker 4: these different expert witnesses that he wanted to testify to

129
00:06:26,960 --> 00:06:30,680
Speaker 4: present defenses, and the judge cut all that off. So

130
00:06:31,040 --> 00:06:33,400
Speaker 4: that will be I think the basis of the appeal

131
00:06:33,560 --> 00:06:38,320
Speaker 4: and you know, whatever the defense can can drag up.

132
00:06:38,480 --> 00:06:41,320
Speaker 2: I've also seen things like people are getting their money back,

133
00:06:41,400 --> 00:06:45,040
Speaker 2: the recovery rate is going to be Okay, he has autism,

134
00:06:45,320 --> 00:06:49,600
Speaker 2: he can't like that should be reduced, like does that

135
00:06:49,640 --> 00:06:50,760
Speaker 2: hold water? Like what is that?

136
00:06:50,920 --> 00:06:54,200
Speaker 4: Well, that's what the defense argued. The judge said, he

137
00:06:54,640 --> 00:06:58,039
Speaker 4: is a hot, very high achieving, autistic person, which means

138
00:06:58,080 --> 00:07:01,400
Speaker 4: he's capable of huge accomplishments. But then he turned that

139
00:07:01,480 --> 00:07:03,760
Speaker 4: around and said, wait, we have to be careful of

140
00:07:03,760 --> 00:07:06,719
Speaker 4: those accomplishments. He's a dangerous person. So that was almost

141
00:07:06,880 --> 00:07:09,480
Speaker 4: used against him by the judge. But yeah, there was

142
00:07:09,600 --> 00:07:12,480
Speaker 4: there were There was letters to the judge about his

143
00:07:12,560 --> 00:07:16,240
Speaker 4: autism and how that makes him socially awkward. They had

144
00:07:16,360 --> 00:07:19,360
Speaker 4: experts testifying about it, but the judge didn't buy it.

145
00:07:19,400 --> 00:07:22,440
Speaker 4: The defense also brought up the fact that most of

146
00:07:22,440 --> 00:07:24,720
Speaker 4: the investors, it looks like, are going to be made whole.

147
00:07:25,000 --> 00:07:26,640
Speaker 6: The judge didn't buy that either.

148
00:07:27,000 --> 00:07:31,680
Speaker 7: Despite the judge said that, he said that he's really

149
00:07:31,800 --> 00:07:34,320
Speaker 7: let me see, just that he found that the loss

150
00:07:34,320 --> 00:07:38,320
Speaker 7: to investors was one point seven billion and that the

151
00:07:38,400 --> 00:07:41,000
Speaker 7: fact that they'll be paid in full is misleading, it's

152
00:07:41,040 --> 00:07:42,440
Speaker 7: logically flawed.

153
00:07:42,080 --> 00:07:45,640
Speaker 4: And it's speculative. So everything that the defense put out there,

154
00:07:46,200 --> 00:07:47,400
Speaker 4: the judge just rejected.

155
00:07:48,080 --> 00:07:51,600
Speaker 1: So next steps here think he goes back to this

156
00:07:51,440 --> 00:07:55,160
Speaker 1: this peditentiary, I guess the detention center in Brooklyn.

157
00:07:55,320 --> 00:07:57,320
Speaker 4: I think he will go back there for a bit

158
00:07:57,480 --> 00:08:00,840
Speaker 4: until they decide, you know, where he is going to

159
00:08:01,000 --> 00:08:04,920
Speaker 4: be in prison and where he's going to serve his sentence.

160
00:08:05,240 --> 00:08:07,560
Speaker 4: And in the meantime, you know, it takes a while

161
00:08:07,680 --> 00:08:09,760
Speaker 4: for an appeal to go through. You have to get

162
00:08:09,800 --> 00:08:13,160
Speaker 4: all the documents and the trial transcripts and everything, so

163
00:08:13,200 --> 00:08:14,800
Speaker 4: that's going to be a while. Then the next thing

164
00:08:14,840 --> 00:08:18,160
Speaker 4: we'll hear about probably is where he's going to spend

165
00:08:18,200 --> 00:08:21,600
Speaker 4: his sentence and also you know what the appeal is

166
00:08:21,640 --> 00:08:24,280
Speaker 4: going to be about. That'll probably be you know, months

167
00:08:24,320 --> 00:08:25,720
Speaker 4: and months, maybe a year down the road.

168
00:08:26,840 --> 00:08:29,440
Speaker 1: Hey joining us also in our Bloomberg interarctor broker Stugo

169
00:08:29,440 --> 00:08:33,880
Speaker 1: Peter Jeffrey joined us Bloomberg Legal editor Jeffrey, what's your

170
00:08:33,880 --> 00:08:36,479
Speaker 1: takeaway from the sentence of twenty five years?

171
00:08:37,480 --> 00:08:41,320
Speaker 5: Well, you could tell, as the judge prepared delivered his

172
00:08:41,400 --> 00:08:43,680
Speaker 5: remarks before pronouncing the sentence, that it was going to

173
00:08:43,679 --> 00:08:46,480
Speaker 5: be very stiff, nothing like the six and a half

174
00:08:46,559 --> 00:08:49,880
Speaker 5: that the defense asked for, but not at the range

175
00:08:49,880 --> 00:08:51,720
Speaker 5: of the forty to fifty the government wanted. It was

176
00:08:51,960 --> 00:08:54,360
Speaker 5: sort of right in the middle. The judge hit him

177
00:08:54,360 --> 00:08:56,840
Speaker 5: with three hundred months. We did some quick calculations. It

178
00:08:56,880 --> 00:08:59,400
Speaker 5: was twenty five years, and it is just what the

179
00:08:59,480 --> 00:09:02,560
Speaker 5: judge and had to do. It's a stiff deterrent to

180
00:09:02,600 --> 00:09:07,120
Speaker 5: anybody who plays outside the lines in a sensitive area

181
00:09:07,240 --> 00:09:10,600
Speaker 5: like crypto. And as you were saying, the judge just

182
00:09:10,720 --> 00:09:16,800
Speaker 5: had no patience for the nonetheless excellent defense. A sentencing

183
00:09:16,840 --> 00:09:19,920
Speaker 5: statement that his lawyer mckayzy made it was it was

184
00:09:20,000 --> 00:09:22,640
Speaker 5: one of the best we'd heard. And yet the judge

185
00:09:22,679 --> 00:09:25,520
Speaker 5: thought this won't fly. Look at what he did, and

186
00:09:25,559 --> 00:09:26,600
Speaker 5: he didn't believe.

187
00:09:26,400 --> 00:09:28,520
Speaker 4: He said that he was sorry, but the judge said,

188
00:09:28,800 --> 00:09:31,360
Speaker 4: he has no apparent remorse, so he didn't believe the

189
00:09:31,400 --> 00:09:34,360
Speaker 4: words that were coming out of SBF's mouth that this,

190
00:09:34,440 --> 00:09:37,000
Speaker 4: I mean he made a statement, a twenty minute statement

191
00:09:37,040 --> 00:09:39,520
Speaker 4: in which he said that, you know, he was sorry

192
00:09:39,559 --> 00:09:42,640
Speaker 4: for what happened. I'm sorry about what happened. It haunts

193
00:09:42,679 --> 00:09:45,319
Speaker 4: me every day. I made a series of bad decisions.

194
00:09:45,480 --> 00:09:48,800
Speaker 4: They weren't selfish decisions, they weren't selfless decisions. They were

195
00:09:48,840 --> 00:09:52,560
Speaker 4: bad decisions. And the judge just, yeah, didn't believe anything.

196
00:09:52,760 --> 00:09:56,200
Speaker 5: And maybe most strikingly to me, the judge said, I've

197
00:09:56,240 --> 00:09:58,160
Speaker 5: got to give you a sentence that is going to

198
00:09:58,200 --> 00:10:00,400
Speaker 5: make sure you are not out on the street doing

199
00:10:00,440 --> 00:10:03,959
Speaker 5: this again anytime soon. So we were all sitting around thinking, well,

200
00:10:03,960 --> 00:10:06,520
Speaker 5: he's thirty two. That means he's getting at least twenty

201
00:10:07,000 --> 00:10:09,240
Speaker 5: and you know, it's not a violent crime, but the

202
00:10:09,320 --> 00:10:11,960
Speaker 5: judge was talking in terms almost in terms of the

203
00:10:12,120 --> 00:10:18,800
Speaker 5: violence bankman Free did to investors, customers, employees. Yeah.

204
00:10:18,120 --> 00:10:20,240
Speaker 2: Yeah, if you're just joining us, we just want to

205
00:10:20,280 --> 00:10:22,360
Speaker 2: update you on the news. FTX co founder Sam bank

206
00:10:22,360 --> 00:10:24,480
Speaker 2: And Freed has been sentenced to twenty five years in

207
00:10:24,520 --> 00:10:27,400
Speaker 2: prison for stealing billions of dollars from customers. He's also

208
00:10:27,440 --> 00:10:30,200
Speaker 2: been ordered to remit about eleven billion dollars. As we

209
00:10:30,280 --> 00:10:32,480
Speaker 2: just did some quick math there, he'll be fifty seven now,

210
00:10:32,840 --> 00:10:35,320
Speaker 2: when he gets out of prison. Joining us here is

211
00:10:35,360 --> 00:10:38,640
Speaker 2: Peter Jeffrey, Bloomberg Legal editor joins us in June Grasso,

212
00:10:38,720 --> 00:10:41,000
Speaker 2: a Bloomberg legal analyst. Peter, can you give us some

213
00:10:41,080 --> 00:10:44,679
Speaker 2: just perspective and background here on this kind of sentencing,

214
00:10:44,840 --> 00:10:47,760
Speaker 2: these kind of cases and kind of how we get here?

215
00:10:48,440 --> 00:10:52,000
Speaker 5: Well, just thinking about it, Elizabeth Holmes got a little

216
00:10:52,000 --> 00:10:54,000
Speaker 5: over eleven years for the Pharaohnose froue.

217
00:10:54,080 --> 00:10:56,000
Speaker 2: Peter, gonna need you talking to them mind, Oh, I'm.

218
00:10:55,920 --> 00:10:59,080
Speaker 5: Sorry, Elizabeth Holmes got it. That would help, right, got

219
00:10:59,120 --> 00:11:01,760
Speaker 5: more than eleven years for the Pharohnise fraud. Bernie made

220
00:11:01,760 --> 00:11:06,360
Speaker 5: off one hundred and fifty. And so this one is

221
00:11:06,400 --> 00:11:09,800
Speaker 5: a stiff sentence that, as the judge suggested, I mean,

222
00:11:10,600 --> 00:11:12,480
Speaker 5: you know, we did the math, like like you said,

223
00:11:12,480 --> 00:11:15,600
Speaker 5: he'll be fifty seven when he gets out.

224
00:11:16,160 --> 00:11:20,800
Speaker 7: And yeah, yeah, Paul is a prefect.

225
00:11:22,679 --> 00:11:24,880
Speaker 5: But right, if you're looking for a sentence that will

226
00:11:24,920 --> 00:11:29,079
Speaker 5: stop somebody from pursuing this kind of fraud again, a

227
00:11:29,160 --> 00:11:31,560
Speaker 5: quarter of a century will do it, all.

228
00:11:31,520 --> 00:11:34,320
Speaker 1: Right, So Juna, give us a sense of timing. Just

229
00:11:34,400 --> 00:11:35,160
Speaker 1: as to the.

230
00:11:35,120 --> 00:11:38,439
Speaker 4: Appeal, it's hard to it's hard to say how long

231
00:11:38,440 --> 00:11:41,080
Speaker 4: the appeal will take. Because they have to. It's up

232
00:11:41,120 --> 00:11:44,120
Speaker 4: to the defense to prepare the papers and to But

233
00:11:44,160 --> 00:11:46,200
Speaker 4: I mean, I think it'll be months, maybe, I mean

234
00:11:46,240 --> 00:11:46,559
Speaker 4: even a.

235
00:11:46,520 --> 00:11:46,920
Speaker 7: Year, Peter.

236
00:11:46,960 --> 00:11:47,520
Speaker 5: I think it could be.

237
00:11:47,720 --> 00:11:50,520
Speaker 4: It would be a year. Of course, they'll be trying

238
00:11:50,559 --> 00:11:53,319
Speaker 4: to put it in faster, but and then the prosecution

239
00:11:53,400 --> 00:11:56,520
Speaker 4: gets a chance to respond. It's a long, long process.

240
00:11:56,640 --> 00:11:59,120
Speaker 4: He'll have served years before we hear about what the

241
00:11:59,400 --> 00:12:03,520
Speaker 4: appeal result is. And I mean, I don't think I mean,

242
00:12:03,520 --> 00:12:05,560
Speaker 4: I think it's going to be a hard appeal to make.

243
00:12:05,920 --> 00:12:08,600
Speaker 2: Well, I mean to the eleven billion dollars. Also, June, like,

244
00:12:09,080 --> 00:12:09,719
Speaker 2: where is that?

245
00:12:09,880 --> 00:12:12,000
Speaker 4: Like, I don't know where that is.

246
00:12:12,960 --> 00:12:14,360
Speaker 5: I don't think he has eleven billion.

247
00:12:14,440 --> 00:12:16,440
Speaker 4: He's not supposed to have eleven billion at this point.

248
00:12:16,480 --> 00:12:18,240
Speaker 1: All Right, we're going to continue this conversation, but we're

249
00:12:18,280 --> 00:12:19,880
Speaker 1: going to hand that off to our good friend Joe

250
00:12:19,920 --> 00:12:22,880
Speaker 1: Matthew Balance of power. Joe's down in Washington, DC, and

251
00:12:22,960 --> 00:12:26,880
Speaker 1: we're going to keep June in Peter as well. So Joe,

252
00:12:27,040 --> 00:12:29,600
Speaker 1: big news here coming out of Lower Manhattan.

253
00:12:30,280 --> 00:12:31,360
Speaker 8: That's for sure, Paul.

254
00:12:31,440 --> 00:12:31,760
Speaker 4: Thanks.

255
00:12:32,240 --> 00:12:34,520
Speaker 8: Of course, the story that's resonated here in Washington for

256
00:12:34,559 --> 00:12:36,600
Speaker 8: a lot of different reasons and continues to when we

257
00:12:36,600 --> 00:12:40,040
Speaker 8: talk about crypto on Capitol Hill, the idea of regulating this,

258
00:12:40,200 --> 00:12:44,320
Speaker 8: the stand that lawmakers take on this issue. I'm glad

259
00:12:44,320 --> 00:12:46,600
Speaker 8: to have Kaylee Lines at my side today. Kaylee has

260
00:12:46,600 --> 00:12:49,440
Speaker 8: actually been covering this SBF story from the very beginning,

261
00:12:49,480 --> 00:12:52,360
Speaker 8: remembering she was hosting our Crypto Show when that began,

262
00:12:52,440 --> 00:12:55,600
Speaker 8: and has since come down to Washington to cover financial

263
00:12:55,600 --> 00:12:59,280
Speaker 8: regulations and of course crypto. Kaylee, this this is a

264
00:12:59,440 --> 00:13:01,920
Speaker 8: Washington's in a lot of ways that people might not

265
00:13:01,960 --> 00:13:05,600
Speaker 8: see on the surface, knowing millions of dollars were donated

266
00:13:05,640 --> 00:13:09,240
Speaker 8: to candidates in the way that SBF tried to influence

267
00:13:09,280 --> 00:13:09,960
Speaker 8: a lot of races.

268
00:13:10,120 --> 00:13:13,840
Speaker 6: Yeah, Sam Bankminfreed was incredibly politically active. He made donations

269
00:13:13,840 --> 00:13:15,880
Speaker 6: on a bipartisan basis, but as you say, it was

270
00:13:16,240 --> 00:13:18,160
Speaker 6: a significant amount of money, and he spent a lot

271
00:13:18,160 --> 00:13:21,040
Speaker 6: of time physically here in Washington actually lobbying, not just

272
00:13:21,360 --> 00:13:24,280
Speaker 6: on behalf of FTX, but he really became kind of

273
00:13:24,280 --> 00:13:27,760
Speaker 6: a poster child and spokesperson for the industry, really advocating

274
00:13:27,760 --> 00:13:30,560
Speaker 6: for crypto as a whole legislatively on the Hill, and

275
00:13:30,640 --> 00:13:33,720
Speaker 6: a lot of lawmakers were quite burned ultimately when it

276
00:13:33,800 --> 00:13:37,439
Speaker 6: turned out that FTX ultimately collapsed, and that has certainly

277
00:13:37,480 --> 00:13:39,839
Speaker 6: continued to resonate as we talk about the difficulty of

278
00:13:39,880 --> 00:13:42,880
Speaker 6: actually getting crypto legislation through the industry has had to

279
00:13:42,920 --> 00:13:45,200
Speaker 6: work a lot harder on their lobbying efforts to try

280
00:13:45,240 --> 00:13:49,360
Speaker 6: to delineate FTX from everything else in the industry, considering

281
00:13:49,440 --> 00:13:52,760
Speaker 6: FTX was in many ways a centralized exchange, not necessarily

282
00:13:52,760 --> 00:13:55,480
Speaker 6: the same decentralized model has a lot of this, but

283
00:13:55,679 --> 00:13:59,760
Speaker 6: obviously this to a certain point will bring some closure

284
00:13:59,800 --> 00:14:03,240
Speaker 6: to this. Sam Bankman freed specific case, keeping in mind

285
00:14:03,320 --> 00:14:07,360
Speaker 6: that he was initially charged with violating campaign finance laws.

286
00:14:07,360 --> 00:14:09,680
Speaker 6: They ultimately dropped the charge, so of the seven charges

287
00:14:09,720 --> 00:14:14,120
Speaker 6: he was actually convicted of back in November, including conspiracy

288
00:14:14,200 --> 00:14:18,040
Speaker 6: to commit fraud, et cetera, campaign finance violations were not

289
00:14:18,080 --> 00:14:20,200
Speaker 6: in there. So this sentencing has nothing to do with

290
00:14:20,240 --> 00:14:22,760
Speaker 6: his political activity, even if it's still had it.

291
00:14:22,760 --> 00:14:25,080
Speaker 8: That's a really important point though, certainly for the people

292
00:14:25,120 --> 00:14:27,840
Speaker 8: who are interested in politics and are used to what

293
00:14:27,880 --> 00:14:31,760
Speaker 8: we talk about on this program. Had that charge stayed

294
00:14:31,800 --> 00:14:33,920
Speaker 8: in place, that could have outed a lot of people

295
00:14:33,920 --> 00:14:34,920
Speaker 8: in Washington.

296
00:14:34,520 --> 00:14:38,200
Speaker 6: And certainly, yeah, it could have brought great politically political

297
00:14:38,200 --> 00:14:41,240
Speaker 6: difficulty for many individuals, not just for Sam Bankman Free,

298
00:14:41,240 --> 00:14:44,040
Speaker 6: because theoretically, had that been added, you could be talking

299
00:14:44,040 --> 00:14:47,520
Speaker 6: about a sentence beyond twenty five years today. That said, still,

300
00:14:47,520 --> 00:14:50,840
Speaker 6: this twenty five year sentence is significantly lower than what

301
00:14:50,880 --> 00:14:53,920
Speaker 6: prosecutors were asking for. Obviously, they were pitching for forty

302
00:14:53,960 --> 00:14:56,280
Speaker 6: to fifty years because of the scale of this fraud

303
00:14:56,720 --> 00:14:59,120
Speaker 6: that they were describing, one of the largest and modern

304
00:14:59,120 --> 00:15:02,640
Speaker 6: American financial history, with over a million victims, obviously ten

305
00:15:02,640 --> 00:15:06,480
Speaker 6: billion dollars ultimately in terms of the size of the fraud.

306
00:15:06,960 --> 00:15:08,360
Speaker 6: But we do have to keep in mind here that

307
00:15:08,400 --> 00:15:11,640
Speaker 6: Sam bankman Fried is thirty two years old, as Alex

308
00:15:11,640 --> 00:15:13,840
Speaker 6: and Paul and June were just discussing, So this is

309
00:15:13,880 --> 00:15:16,600
Speaker 6: going to take him well into late middle age ultimately.

310
00:15:16,600 --> 00:15:19,720
Speaker 6: If this sentence stands, obviously there will be an appeal process,

311
00:15:19,720 --> 00:15:21,080
Speaker 6: but who knows how that will shake down.

312
00:15:21,160 --> 00:15:24,240
Speaker 8: It's just amazing when you think about just the way

313
00:15:24,320 --> 00:15:27,920
Speaker 8: human nature is at play in stories like these, Considering

314
00:15:28,040 --> 00:15:30,760
Speaker 8: the paradise he was living in, he had it made.

315
00:15:30,960 --> 00:15:33,640
Speaker 8: He was in the Bahamas living the life he dreamt of.

316
00:15:34,440 --> 00:15:36,680
Speaker 8: He's been since living in Riker's Island.

317
00:15:36,960 --> 00:15:39,040
Speaker 6: Yeah, I mean, he was a billionaire many times over,

318
00:15:39,080 --> 00:15:40,600
Speaker 6: and now of course is part of this. He also

319
00:15:40,640 --> 00:15:42,760
Speaker 6: has not just been sentenced to twenty five years in prison,

320
00:15:42,800 --> 00:15:46,400
Speaker 6: but forfeiting eleven billion dollars and unclear where that eleven

321
00:15:46,400 --> 00:15:49,600
Speaker 6: billion dollars comes from. All of his wealth was tied

322
00:15:49,680 --> 00:15:51,880
Speaker 6: up in FTX, which is now a bankrupt and of

323
00:15:51,880 --> 00:15:54,520
Speaker 6: course everything that can be salvage from that bankruptcy proje

324
00:15:54,560 --> 00:15:57,080
Speaker 6: that process is going to be distributed to the customers

325
00:15:57,120 --> 00:15:59,760
Speaker 6: and users who had money lost in this that, if

326
00:15:59,760 --> 00:16:02,160
Speaker 6: any thing, might be. One of the more redeeming aspects

327
00:16:02,200 --> 00:16:04,440
Speaker 6: of the argument that he and his legal team were

328
00:16:04,480 --> 00:16:06,680
Speaker 6: able to make to Judge Kaplan was that a lot

329
00:16:06,680 --> 00:16:08,960
Speaker 6: of these people will ultimately get most of their money

330
00:16:08,960 --> 00:16:12,680
Speaker 6: back throughout that bankruptcy prodcast process, and so that may

331
00:16:12,720 --> 00:16:15,960
Speaker 6: have helped him here. But yeah, the journey of Sam

332
00:16:16,000 --> 00:16:19,840
Speaker 6: Bankman freed from this meteoric rise to one of the

333
00:16:19,880 --> 00:16:22,640
Speaker 6: most well known individuals hanging out with Jaseel Bunchin and

334
00:16:22,680 --> 00:16:25,760
Speaker 6: Tom Brady and yeah, right, incredibly popular, certainly a well

335
00:16:25,800 --> 00:16:27,880
Speaker 6: known presence here in Washington, to now someone who is

336
00:16:27,920 --> 00:16:30,440
Speaker 6: going to be in prison for a very large chunk

337
00:16:30,880 --> 00:16:33,600
Speaker 6: of his life. It's a remarkable.

338
00:16:33,120 --> 00:16:35,760
Speaker 8: Story spending time with Kaylee Lyons here a little earlier

339
00:16:35,760 --> 00:16:38,480
Speaker 8: than usual on balance of power. If you're just joining

340
00:16:38,480 --> 00:16:41,840
Speaker 8: a sentencing day for SBF and it is twenty five

341
00:16:41,920 --> 00:16:45,400
Speaker 8: years in prison, I think June Grosso was suggesting that

342
00:16:45,400 --> 00:16:47,880
Speaker 8: that could be knocked down. But that's the headline right now.

343
00:16:47,920 --> 00:16:50,960
Speaker 8: And of course, to Kaylee's point, they were asking for

344
00:16:50,960 --> 00:16:53,000
Speaker 8: forty to fifty years. So just for a little bit

345
00:16:53,040 --> 00:16:57,960
Speaker 8: of perspective on this, you've been saying, of course asking questions, Kaylee,

346
00:16:58,000 --> 00:17:01,640
Speaker 8: of lawmakers and regulators about cryptos. You moved to Washington.

347
00:17:01,680 --> 00:17:03,960
Speaker 8: This is colored that debate in a lot of ways,

348
00:17:04,000 --> 00:17:05,960
Speaker 8: where lawmakers feel free to say, you know what, this

349
00:17:06,680 --> 00:17:09,480
Speaker 8: is a home for criminal activity, this is not a

350
00:17:09,640 --> 00:17:15,399
Speaker 8: serious investment. Before this happened, there was more momentum, it seemed,

351
00:17:15,400 --> 00:17:18,240
Speaker 8: on some of these issues. Where's any of this going now?

352
00:17:18,400 --> 00:17:20,439
Speaker 6: Well, it's a great question. Where it's going in the

353
00:17:20,480 --> 00:17:23,240
Speaker 6: House is probably very different than ultimately the question of

354
00:17:23,240 --> 00:17:25,879
Speaker 6: whether it will pass the Senate or become law, because

355
00:17:25,880 --> 00:17:28,359
Speaker 6: in the House you do have much more advocacy for

356
00:17:28,440 --> 00:17:31,080
Speaker 6: the crypto industry in some of those lawmakers, including the chair,

357
00:17:31,400 --> 00:17:34,240
Speaker 6: at least for now, with the Financial Services Committee, Patrick McHenry,

358
00:17:34,320 --> 00:17:38,159
Speaker 6: and that committee has advanced multiple pieces of legislation that

359
00:17:38,200 --> 00:17:41,320
Speaker 6: would in some ways perhaps legitimize the industry more by

360
00:17:41,320 --> 00:17:44,600
Speaker 6: giving them the regulatory clarity they've been asking for, delineating

361
00:17:45,119 --> 00:17:48,640
Speaker 6: what the CFTC or the SEC would have control over,

362
00:17:48,680 --> 00:17:51,120
Speaker 6: including things to stable coins. Not all of this, of course,

363
00:17:51,160 --> 00:17:53,960
Speaker 6: related to the business that FTX was conducting, but it

364
00:17:54,000 --> 00:17:56,520
Speaker 6: has been used as an example for the counter arguments.

365
00:17:56,560 --> 00:18:00,080
Speaker 6: Those who are more cryptoskeptical aren't in the majority in

366
00:18:00,080 --> 00:18:03,320
Speaker 6: the House, but they are in the Senate. Shared Brown Is,

367
00:18:03,520 --> 00:18:05,760
Speaker 6: obviously the head of the Senate Banking Committee, has been

368
00:18:05,880 --> 00:18:08,280
Speaker 6: very reluctant to talk about any of this kind of

369
00:18:08,320 --> 00:18:11,359
Speaker 6: legislation in any way that isn't more critical and skeptical

370
00:18:11,400 --> 00:18:13,760
Speaker 6: of the industry. And he is facing a challenger of

371
00:18:13,800 --> 00:18:18,080
Speaker 6: a pro crypto advocate in his Senate race in Ohio

372
00:18:18,160 --> 00:18:21,760
Speaker 6: in November, Bernie Marino. So you're still seeing the politics

373
00:18:21,800 --> 00:18:24,040
Speaker 6: around this industry playing out, and that goes well beyond

374
00:18:24,119 --> 00:18:26,040
Speaker 6: just the legacy of zam Bankman.

375
00:18:25,800 --> 00:18:29,360
Speaker 8: Freed got you. June Grosso is standing by a host

376
00:18:29,400 --> 00:18:31,960
Speaker 8: of Bloomberg law in New York. Before we moved to

377
00:18:31,960 --> 00:18:35,760
Speaker 8: a conversation with Governor Glegg ned Lamont of Connecticut. I

378
00:18:35,800 --> 00:18:38,639
Speaker 8: just want to bring June in on this specific to

379
00:18:38,720 --> 00:18:41,160
Speaker 8: the sentence. June, what options does he have now you've

380
00:18:41,200 --> 00:18:43,280
Speaker 8: referred to an appeal. What happens next?

381
00:18:43,800 --> 00:18:46,280
Speaker 4: Well, he'll have to serve eighty five percent of that

382
00:18:46,400 --> 00:18:49,800
Speaker 4: sentence unless he wins on appeal, and of course the

383
00:18:49,840 --> 00:18:52,960
Speaker 4: defense is going to appeal. He has changed his lawyers

384
00:18:53,000 --> 00:18:56,760
Speaker 4: since the trial. He's hired Mark Mukasey, very famous, well

385
00:18:56,800 --> 00:19:00,760
Speaker 4: known former pro federal prosecutor in New York. He represented

386
00:19:00,800 --> 00:19:04,000
Speaker 4: Trevor Milton and did much better on the sentence. Treveror

387
00:19:04,040 --> 00:19:07,239
Speaker 4: Milton got four years as opposed to the eleven that

388
00:19:07,320 --> 00:19:10,680
Speaker 4: the prosecution wanted. So the next thing is an appeal

389
00:19:10,840 --> 00:19:14,000
Speaker 4: and they'll go back through the trial there and find

390
00:19:14,200 --> 00:19:17,760
Speaker 4: what they consider to be legal errors, and probably a

391
00:19:17,760 --> 00:19:20,399
Speaker 4: lot of that will be some of the decisions that

392
00:19:20,480 --> 00:19:25,520
Speaker 4: the judge made prior to trial. Even that limited sharply

393
00:19:25,600 --> 00:19:29,560
Speaker 4: limited the defenses that Sam bankmin Freed could assert a trial,

394
00:19:29,640 --> 00:19:33,000
Speaker 4: limited the expert witnesses he wanted to call. He really

395
00:19:33,080 --> 00:19:36,040
Speaker 4: limited his case to a great extent. So I think

396
00:19:36,080 --> 00:19:38,520
Speaker 4: that will be the basis of the appeal. It will

397
00:19:38,520 --> 00:19:41,720
Speaker 4: be probably years before we know what you know how

398
00:19:41,760 --> 00:19:43,919
Speaker 4: that appeal turns out, because it takes quite a bit

399
00:19:43,960 --> 00:19:46,560
Speaker 4: of time to file the papers and have the responses.

400
00:19:47,680 --> 00:19:48,520
Speaker 4: That's where we stand.