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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.

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Speaker 2: or Pushkin, dot Fm, Slash Plus.

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Speaker 1: Welcome to Judging Sam. I'm Jacob Goldstein and we're recording

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Speaker 1: this on Thursday, October nineteenth. The third week of the

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Speaker 1: trial of Sam Bankman Freed wrapped up today and the

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Speaker 1: prosecution is all but done presenting their case. Their last

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Speaker 1: big star witness was this week. You know this if

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Speaker 1: you've been listening to the show. It was Nishad Singh,

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Speaker 1: one of the three main FTX executives who has pleaded guilty.

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Speaker 1: Earlier this week, our court reporter Lydia Jenkott talked with

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Speaker 1: Michael Lewis about the beginning of Nishad's testimony today, she

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Speaker 1: gave him a call to talk about the rest of it.

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Speaker 3: So you told me that out of the three top

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Speaker 3: FTX executives we've heard from in this trial, you spent

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Speaker 3: in the most time with Nishad. What's he like?

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Speaker 4: He was the most kid like in a lot of

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Speaker 4: ways and also the most earnest. He was it accuse

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Speaker 4: twenty one. When he joined Alimea Research, he had basically

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Speaker 4: one very short stint in the workforce after college. He

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Speaker 4: knew nothing about finance, like zero when he started. So

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Speaker 4: everything he learns about the world of money he learns

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Speaker 4: through the lens of first Alometer Research and then FTX,

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Speaker 4: which is a very peculiar way to learn about finance.

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Speaker 4: He was she talked to my element and was very

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Speaker 4: bright and kind of free associated when he talked, and

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Speaker 4: would take all kinds of stuff that in retrospect, you know,

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Speaker 4: it's kind of interesting. Like there's a line in the

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Speaker 4: book where he says, you know, in the course of

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Speaker 4: doing their trading at al I mean research, where they

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Speaker 4: had they did some stuff to kind of get around

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Speaker 4: laws to trade. This shot has this line where I

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Speaker 4: learned what the law is. It's not what's written, it's

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Speaker 4: what people care to enforce, and that he got very

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Speaker 4: cynical about the laws around money and was very open

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Speaker 4: about it. This is when things were good. He was

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Speaker 4: also very open, extremely open about Sam's lack of any

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Speaker 4: kind of emotional intelligence and how hard it had been

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Speaker 4: on everybody for the previous four years to have this

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Speaker 4: guy sitting at the top of the company who did

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Speaker 4: not care at all about people's feelings and was uninterested

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Speaker 4: in dealing with him, and that all those feelings, especially

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Speaker 4: the negative ones, found their way to the Shot, and

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Speaker 4: the Shot ended up being kind of, you know, emotional

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Speaker 4: intelligence officer in chief. And the Shot was also, in

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Speaker 4: addition to being kind of the translator of FAM's emotional

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Speaker 4: states or a translator of Sam period to everybody else,

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Speaker 4: he was a translator of Gary's code to everybody else.

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Speaker 4: That he was this kind of like this machine to

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Speaker 4: that acted as a buffer between these two incomprehensible people,

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Speaker 4: Gary and Sam and the rest of the of the firm.

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Speaker 4: But there's all kinds of stuff that, you know, he was.

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Speaker 4: Just how I got to know him was we just

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Speaker 4: spent endless hours talking it rings true to me that

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Speaker 4: he wasn't alive to the risks they were running with

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Speaker 4: customer money until September. He didn't really have a filter

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Speaker 4: and he would he would he. I think if the

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Speaker 4: shot had known, like he might have blurted it out

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Speaker 4: to me in an interview. He was that he was

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Speaker 4: that on a naive about things that it w'd be

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Speaker 4: a very poor liar.

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Speaker 3: Well, maybe that's why he didn't know until so late.

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Speaker 3: The other thing I was wondering about is in court

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Speaker 3: they showed us these signal messages between Sam Makman and

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Speaker 3: Freed and a shad and in one of them he

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Speaker 3: says something like this is wildly selfish of me, And

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Speaker 3: then he asked Sam Mankman Freed to publicly explain that

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Speaker 3: there weren't a ton of people orchestrating what happened, and

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Speaker 3: Sam responded, Yeah, I don't think that's super selfish. I

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Speaker 3: think that's correct.

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Speaker 4: It's funny. Can I just tell you what I found

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Speaker 4: interesting about that whole exchange? Yes?

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Speaker 3: Please.

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Speaker 4: This is a new wrinkle in the financial markets. It's like,

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Speaker 4: once they've become automated and they become driven by code,

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Speaker 4: people actually doing the code sometimes are capable of doing

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Speaker 4: things that are writing code without understanding the consequences of

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Speaker 4: the code, without understanding that this line might just lift

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Speaker 4: money from somebody it's really bad to lift money from.

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Speaker 4: And the kind of myopia of the coder is which

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Speaker 4: struck me about that exchange and the shot of saying,

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Speaker 4: Sam Christ, now that I know what this was used for,

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Speaker 4: I'm implicated because I wrote that code, but I had

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Speaker 4: no idea that that code was going to do that.

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Speaker 4: And that's interesting. Like old time fans, you wouldn't have

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Speaker 4: that old times and finance, there wasn't this level of

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Speaker 4: an abstraction. And I think people end up doing stuff

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Speaker 4: when when it's being automated that they might not do

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Speaker 4: if it was face to face, normal human interaction.

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Speaker 3: Yeah, yeah, that makes sense. But Sam's response, Yep, I

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Speaker 3: don't think that's super selfish. I think that's correct. That

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Speaker 3: implies that he did know what was happening. Now to me,

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Speaker 3: it seems pretty damning. It kind of implies that there

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Speaker 3: were people orchestrating it and that was Sam impossible.

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Speaker 4: Don't you think that? Don't you think the damning thing

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Speaker 4: is that Nashad tells Sam tell people that you orchestrated

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Speaker 4: it and I didn't.

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Speaker 1: And Sam says.

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Speaker 3: Yes, that's not a selfish request.

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Speaker 4: Well, yeah, I thought this was very dad that he

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Speaker 4: doesn't say what orchestrate what? Yeah, but amshoes. He may

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Speaker 4: be just saying that, oh, I know that, I know

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Speaker 4: you didn't know anything. But he's not saying that I

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Speaker 4: know I did, right, you know, just the facts of

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Speaker 4: the thing are so clear. It's like so clear that

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Speaker 4: the money was in the wrong place, and that in

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Speaker 4: and of itself is enough to put him in jail.

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Speaker 4: And nobody even disagrees with that. But there's this argument

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Speaker 4: of there is this subtle argument about like what's going

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Speaker 4: on inside these people's heads, and we're getting a little

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Speaker 4: more clarity on it, but I don't feel like we've

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Speaker 4: had complete clarity. And I really really want to hear

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Speaker 4: what Sam has to say. I hope he testifies, because

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Speaker 4: that at the end of that, I think we can

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Speaker 4: have the full conversation about what seems most plausible. You know,

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Speaker 4: what is the timeline on this, It feels most plausible.

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Speaker 3: Yeah, I can't wait for that.

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Speaker 1: We'll be back in a minute to talk about the

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Speaker 1: many things that have happened in the trial. Since Nashad

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Speaker 1: finished testifying earlier this week. Lidiagen, Welcome back to judging, Sam.

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Speaker 1: Thank you. Is it true that you got in trouble

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Speaker 1: in court today?

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Speaker 3: I did get in trouble in court today.

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Speaker 1: What did you do?

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Speaker 3: I turned around and asked someone a question when the

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Speaker 3: judge and the lawyers were having a side panel conversation,

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Speaker 3: and a marshal came up to me and said that

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Speaker 3: if I did that again, he's gonna throw me out

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Speaker 3: of the courtroom drama.

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Speaker 1: This is courtroom drama.

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Speaker 3: Yeah. The marshals have been increasingly angry at the reporters

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Speaker 3: for talking, chewing gum, having snacks. They said that this

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Speaker 3: judge is the strictest judge in the courthouse and that

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Speaker 3: he can see all the way from across the courtroom

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Speaker 3: on his little podium if someone is chewing gum and

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Speaker 3: then will yell at the marshals afterwards. So that's why

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Speaker 3: they have to be so strict.

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Speaker 1: Wow. So they're like, it's not my fault, it's the judge. Sorry,

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Speaker 1: I'm just the middleman.

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Speaker 3: And there's been there's been a crackdown. They took someone's

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Speaker 3: newspaper away today. So the early days of chatting doing

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Speaker 3: crossroad puzzles are over now. It kind of feels like

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Speaker 3: when the teachers like tells everyone to put their heads

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Speaker 3: on the desk. That's where we're at.

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Speaker 1: Well, and there is a break now right as of today,

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Speaker 1: there's going to be what a week long break?

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Speaker 3: Is that? Right? Yes? Which I think is sorely needed

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Speaker 3: by everyone. The judge has definitely been getting antsy. He's

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Speaker 3: been getting up and kind of leaning over during testimony.

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Speaker 3: He yelled at also both of the lawyers for taking

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Speaker 3: too much time. So I think people are running out

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Speaker 3: of ink in their pens. I think we all need

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Speaker 3: a break.

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Speaker 1: Why, I mean, apart from letting everybody chill out for

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Speaker 1: a few days, why is there a week long break

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Speaker 1: right now?

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Speaker 3: The judge is going to a conference.

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Speaker 1: Wow, I didn't know you could do that. If you

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Speaker 1: were a judge'd be like, sorry, world, I'm going to

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Speaker 1: a conference for a week.

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Speaker 3: I think you make the rules. It's his courtroom, his rules.

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Speaker 1: So legitien. There have been several witnesses since Nishad finished

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Speaker 1: testifying earlier this week, and you were telling me earlier

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Speaker 1: on Slack that of all of them, the one who

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Speaker 1: was most striking to you was can Son, the lawyer,

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Speaker 1: the general counsel of FTX, tell me about him. What

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Speaker 1: do you say, Why was it interesting to you?

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Speaker 3: Yeah? So, first off, out of all of the FTX executives,

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Speaker 3: he seemed like the most comfortable in a suit.

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Speaker 1: He's like, lawyers might be keeping the suit industry in

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Speaker 1: business at this point, right.

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Speaker 3: Yes, exactly, And he was pretty self spoken, and he

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Speaker 3: started off by saying that he had no idea that

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Speaker 3: Alameda was using FTX customer funds. He said that he

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Speaker 3: would have never approved that, and he was told over

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Speaker 3: and over again by Sam that these customer funds were

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Speaker 3: safe and separated. And that's what he told other people

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Speaker 3: when they asked, that's what he told customers, that's what

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Speaker 3: he told investors. And the prosecutors really spent a good

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Speaker 3: ten maybe even thirty minutes, it felt, underlining that point

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Speaker 3: and all the different iterations of he did not know

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Speaker 3: that this was happening. He would have never authorized this

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Speaker 3: in his position as a general counsel.

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Speaker 1: Okay, so he didn't know what was happening. What's in

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Speaker 1: it for the prosecution to call him, like, why do

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Speaker 1: we care that he didn't know what was happening?

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Speaker 3: Well, that's where the dramatic moment came in when he

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Speaker 3: talked about when FTX imploded and when customers were trying

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Speaker 3: to withdraw their money and they realized that it wasn't there.

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Speaker 3: And he talked about how at that point he was

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Speaker 3: kind of in a sort of war room with Sam,

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Speaker 3: maikman Fried and Nishad. A bunch of other people were

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Speaker 3: in that room as well, and he described what it

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Speaker 3: was like. He talked about how Sam was on his

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Speaker 3: computer typing away and Nishad he was very poetic, and

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Speaker 3: how he described Nashad. He said something like how Nishad

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Speaker 3: was really pale and looked like his soul had been

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Speaker 3: tugged out of him.

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Speaker 1: Huh.

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Speaker 3: And he said that it was at this point that

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Speaker 3: he was shown a balance sheet, and the balance sheet

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Speaker 3: showed that Alameda was billions of dollars in the red,

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Speaker 3: that they owed this money to FTX, and he was

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Speaker 3: really shocked to see this. And at this point Sam

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Speaker 3: was still looking for someone who could save FTX, and

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Speaker 3: they were trying to figure out, you know, what to do,

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Speaker 3: how to share this balance sheet, what to say about it.

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Speaker 3: And Ken Sun said that Sam asked him if there

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Speaker 3: was any legal explanation that he could give for this deficit,

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Speaker 3: for this.

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Speaker 1: Whole meaning, is there any story that you could make up,

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Speaker 1: any fiction you could create that would make this not

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Speaker 1: a crime?

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Speaker 3: Yes, I think that's the only way to interpret that.

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Speaker 1: Yes.

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Speaker 3: And Can Sun said that they ended up that evening

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Speaker 3: going on a walk, and Ken Sun said he had

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Speaker 3: done some digging and he thought about it, and he

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Speaker 3: told Sam that while there are some legal theories he

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Speaker 3: could offer up, there is no legal explanation that's supported

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Speaker 3: by the facts.

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Speaker 1: Wow, So that seems kind of damning. Did he get

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Speaker 1: us examined? Did the defense have a chance to ask

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Speaker 1: him questions?

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Speaker 3: Yes, they brought up how he testified as part of

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Speaker 3: a non prosecution agreement, So okay. Can Sun said that,

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Speaker 3: you know, he didn't know that this was happening, but still,

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Speaker 3: as part of his job as general counsel, he did

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Speaker 3: approve certain things that were without his knowledge, certain transactions

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Speaker 3: that we're using customer funds. So he said that out

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Speaker 3: of an abundance of caution, he is testifying under this

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Speaker 3: non prosecution agreement. But the defense lawyers pointed out that

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Speaker 3: this non prosecution agreement only stands as long as he's

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Speaker 3: saying the truth, and it's the government who gets to

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Speaker 3: decide whether or not he's saying the truth. And that's

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Speaker 3: just a way of casting doubt on his testimony and

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Speaker 3: saying that he has an incentive to say what the

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Speaker 3: government wants him to say, uh.

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Speaker 1: Huh, which is also true obviously for all the people

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Speaker 1: who made plea deals. And that has been the sort

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Speaker 1: of key thing the defense keeps saying about all these

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Speaker 1: other senior executives who pleaded guilty and don't want to

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Speaker 1: go to prison, basically right.

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Speaker 3: Exactly, and it lines up with the role of the

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Speaker 3: defense and what the defense has been doing in this

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Speaker 3: case on cross which is really just casting doubts or

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Speaker 3: poking little holes in what the witnesses are saying, which

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Speaker 3: makes sense because at the end of the day, the

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Speaker 3: jury has to decide that Sam is guilty beyond a

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Speaker 3: reasonable doubt, So they're just pointing out why one might

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Speaker 3: have a reasonable doubt about what these witnesses are saying.

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Speaker 1: So, okay, lydia Jeen, you've been going to court all day,

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Speaker 1: every day for three weeks. You've seen every minute of

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Speaker 1: the trial. The prosecution is basically done. What do you

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Speaker 1: make of things?

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Speaker 3: At this point, I think that the prosecution has done

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Speaker 3: a really good job of giving us a very clear story.

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Speaker 3: And I've read that in every trial there's certain themes

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Speaker 3: that come up, and on the side for the prosecution,

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Speaker 3: the theme is very clear. The theme is that Sam

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Speaker 3: is a liar. It's that Sam said that FTX was

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Speaker 3: safe for Becusstomers and it actually wasn't. And he lied

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Speaker 3: about this over and over and over again. He lied

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Speaker 3: about it to the people who are close to him,

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Speaker 3: he lied about it to customers, he lied about it

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Speaker 3: to investors, and they've just been pounding that home over

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Speaker 3: and over and over again. The defense on their cross

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Speaker 3: they haven't really told us a story the same way

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Speaker 3: about what happened, which of course they don't have to.

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Speaker 3: All they have to do is poke holes in the

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Speaker 3: story of the prosecution. But I am curious as we

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Speaker 3: approach the time for the defense to present their case,

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Speaker 3: if they are going to give us a narrative and

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Speaker 3: explain from their side what happened and how FTX imploded.

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Speaker 1: Well, and from their side, you mean, when Sam takes

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Speaker 1: the stand right, the big dramatic conclusion to this to this.

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Speaker 3: Trial exactly, and when Michael Lewis comes in when we

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Speaker 3: get to go to court together, which I can't wait for.

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Speaker 1: Levision cop. For one last thing, let's talk about Twitter.

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Speaker 3: Twitter has been coming up a lot in this trial.

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Speaker 3: We've been seeing lots of tweets from say Magmond Freed.

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Speaker 3: It kind of is a great reminder about why it's

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Speaker 3: not good to tweet through it.

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Speaker 1: Never tweet the story.

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Speaker 3: Exactly, especially if you're potentially being accused of a massive fraud.

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Speaker 1: Whatever you tweet, never tweet. All customer accounts are segregated.

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Speaker 1: One thing, never to tweet.

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Speaker 3: Do not say FTX is fine, assets are fine. The

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Speaker 3: other day there was an SD and Y investigator. He

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Speaker 3: was kind of like a Twitter expert who showed us

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Speaker 3: how Twitter works, what retweets are, what gms are. He

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Speaker 3: showed us a whole ton of tweets from Sam mcmanfreed,

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Speaker 3: and they all came up on the screen so fast

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Speaker 3: it honestly felt like a clockwork orange you know when

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Speaker 3: you're limoly are your eyes open exactly like you couldn't

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Speaker 3: read them, but you just got this sense, this overwhelming

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Speaker 3: sense of to the prosecution's point of Sam tweeting things

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Speaker 3: that aren't true. But there was one particular moment that

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Speaker 3: stood out, which is when we were shown private messages

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Speaker 3: dms between Sam Maikmanfreed and a reporter at Vox named

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Speaker 3: Kelsey Piper.

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Speaker 1: This reporter, Kelsey Piper, actually publish these dms on box

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Speaker 1: when it happened right, This was like big news last November,

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Speaker 1: like right when FTX was blowing up.

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Speaker 3: This happened exactly, and I think I had a big

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Speaker 3: influence on how people thought about Sam agmn Freed, which

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Speaker 3: is why the lawyers put up a strenuous objection to

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Speaker 3: have these dms not be shown. But in the end

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Speaker 3: the judge ruled that they could be.

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Speaker 1: Okay, Lidia, to tell you what we're basically done, I'm

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Speaker 1: going to get out of here, say goabye, But why

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Speaker 1: don't you just play us out with some of the

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Speaker 1: greatest hits from those dms.

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Speaker 3: Kelsey Piper. I was just re listening to that conversation

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Speaker 3: we had this summer about whether you should do an

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Speaker 3: ethical shit for the greater good sam Agmin Freed. What

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Speaker 3: did I say, Kelsey Piper? You were like, Nah, don't

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Speaker 3: do an ethical shit, Like if you're running Philip Morris,

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Speaker 3: no one's going to want to work with you on philanthropy.

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Speaker 3: Sam Mankman Freed. Heh Kelsey Piper, And there's a risk

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Speaker 3: of doing more harm than good. But even if you

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Speaker 3: subtract that out, pretty not worth it. Sam Mankman Freed, Yeah,

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Speaker 3: Kelsey Piper. I was trying to figure out, like if

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Speaker 3: that was kind of the pr off the cuff answer.

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Speaker 3: Sam Megman Freed, Man all the dumb shit, I said,

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Speaker 3: It's not true, not really, Kelsey Piper. Yeah, I thought

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Speaker 3: it might not be. Sam Megmanfreed. Everyone goes around pretending

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Speaker 3: that perception reflects reality. It doesn't. Some of this decade's

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Speaker 3: greatest heroes will never be known, and some of the

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Speaker 3: most beloved people are basically shams.

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Speaker 2: This episode of Judging Sam was hosted by Jacob Goldstein.

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Speaker 2: Lydia Jencott is our court reporter. Katherine Girardeau and Nisha

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Speaker 2: Venken produced this show. Sophie Crane is our editor. Our

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Speaker 2: music was composed by Matthias Bossi and John Evans of

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Speaker 2: stell Wagon's Symphinette. Judging Sam is a production of Pushkin Industries.

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Speaker 2: Got a Question or Comment for Me is a website

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Speaker 2: for that atrpodcast dot com. That's ATR podcast. To find

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Speaker 2: more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts,

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Speaker 2: dot fm, slash plus, or on our Apple show page.