Speaker 1: Pushkin. Hey there, it's Michael Lewis. Before we get to
Speaker 1: this episode, I.
Speaker 2: Want to let you know that you can listen to
Speaker 2: each episode of Judging Sam, the Trial of Sam Bankman
Speaker 2: Freed ad free by becoming a Pushkin Plus subscriber, and
Speaker 2: with your subscription you'll also get exclusive access to ad
Speaker 2: free and early bingeable podcasts like Paul McCartney's new podcast
Speaker 2: McCartney A Life in Lyrics, Malcolm Gladwell's Revision Is History,
Speaker 2: The Happiness Lab from Doctor Lorie Santos, and tons of
Speaker 2: other top shows from Pushkin. Sign up an Apple Podcasts
Speaker 2: or Pushkin, dot Fm, Slash Plus.
Speaker 1: Welcome to Judging Sam. I'm Jacob Goldstein and we're recording
Speaker 1: this on Thursday, October nineteenth. The third week of the
Speaker 1: trial of Sam Bankman Freed wrapped up today and the
Speaker 1: prosecution is all but done presenting their case. Their last
Speaker 1: big star witness was this week. You know this if
Speaker 1: you've been listening to the show. It was Nishad Singh,
Speaker 1: one of the three main FTX executives who has pleaded guilty.
Speaker 1: Earlier this week, our court reporter Lydia Jenkott talked with
Speaker 1: Michael Lewis about the beginning of Nishad's testimony today, she
Speaker 1: gave him a call to talk about the rest of it.
Speaker 3: So you told me that out of the three top
Speaker 3: FTX executives we've heard from in this trial, you spent
Speaker 3: in the most time with Nishad. What's he like?
Speaker 4: He was the most kid like in a lot of
Speaker 4: ways and also the most earnest. He was it accuse
Speaker 4: twenty one. When he joined Alimea Research, he had basically
Speaker 4: one very short stint in the workforce after college. He
Speaker 4: knew nothing about finance, like zero when he started. So
Speaker 4: everything he learns about the world of money he learns
Speaker 4: through the lens of first Alometer Research and then FTX,
Speaker 4: which is a very peculiar way to learn about finance.
Speaker 4: He was she talked to my element and was very
Speaker 4: bright and kind of free associated when he talked, and
Speaker 4: would take all kinds of stuff that in retrospect, you know,
Speaker 4: it's kind of interesting. Like there's a line in the
Speaker 4: book where he says, you know, in the course of
Speaker 4: doing their trading at al I mean research, where they
Speaker 4: had they did some stuff to kind of get around
Speaker 4: laws to trade. This shot has this line where I
Speaker 4: learned what the law is. It's not what's written, it's
Speaker 4: what people care to enforce, and that he got very
Speaker 4: cynical about the laws around money and was very open
Speaker 4: about it. This is when things were good. He was
Speaker 4: also very open, extremely open about Sam's lack of any
Speaker 4: kind of emotional intelligence and how hard it had been
Speaker 4: on everybody for the previous four years to have this
Speaker 4: guy sitting at the top of the company who did
Speaker 4: not care at all about people's feelings and was uninterested
Speaker 4: in dealing with him, and that all those feelings, especially
Speaker 4: the negative ones, found their way to the Shot, and
Speaker 4: the Shot ended up being kind of, you know, emotional
Speaker 4: intelligence officer in chief. And the Shot was also, in
Speaker 4: addition to being kind of the translator of FAM's emotional
Speaker 4: states or a translator of Sam period to everybody else,
Speaker 4: he was a translator of Gary's code to everybody else.
Speaker 4: That he was this kind of like this machine to
Speaker 4: that acted as a buffer between these two incomprehensible people,
Speaker 4: Gary and Sam and the rest of the of the firm.
Speaker 4: But there's all kinds of stuff that, you know, he was.
Speaker 4: Just how I got to know him was we just
Speaker 4: spent endless hours talking it rings true to me that
Speaker 4: he wasn't alive to the risks they were running with
Speaker 4: customer money until September. He didn't really have a filter
Speaker 4: and he would he would he. I think if the
Speaker 4: shot had known, like he might have blurted it out
Speaker 4: to me in an interview. He was that he was
Speaker 4: that on a naive about things that it w'd be
Speaker 4: a very poor liar.
Speaker 3: Well, maybe that's why he didn't know until so late.
Speaker 3: The other thing I was wondering about is in court
Speaker 3: they showed us these signal messages between Sam Makman and
Speaker 3: Freed and a shad and in one of them he
Speaker 3: says something like this is wildly selfish of me, And
Speaker 3: then he asked Sam Mankman Freed to publicly explain that
Speaker 3: there weren't a ton of people orchestrating what happened, and
Speaker 3: Sam responded, Yeah, I don't think that's super selfish. I
Speaker 3: think that's correct.
Speaker 4: It's funny. Can I just tell you what I found
Speaker 4: interesting about that whole exchange? Yes?
Speaker 3: Please.
Speaker 4: This is a new wrinkle in the financial markets. It's like,
Speaker 4: once they've become automated and they become driven by code,
Speaker 4: people actually doing the code sometimes are capable of doing
Speaker 4: things that are writing code without understanding the consequences of
Speaker 4: the code, without understanding that this line might just lift
Speaker 4: money from somebody it's really bad to lift money from.
Speaker 4: And the kind of myopia of the coder is which
Speaker 4: struck me about that exchange and the shot of saying,
Speaker 4: Sam Christ, now that I know what this was used for,
Speaker 4: I'm implicated because I wrote that code, but I had
Speaker 4: no idea that that code was going to do that.
Speaker 4: And that's interesting. Like old time fans, you wouldn't have
Speaker 4: that old times and finance, there wasn't this level of
Speaker 4: an abstraction. And I think people end up doing stuff
Speaker 4: when when it's being automated that they might not do
Speaker 4: if it was face to face, normal human interaction.
Speaker 3: Yeah, yeah, that makes sense. But Sam's response, Yep, I
Speaker 3: don't think that's super selfish. I think that's correct. That
Speaker 3: implies that he did know what was happening. Now to me,
Speaker 3: it seems pretty damning. It kind of implies that there
Speaker 3: were people orchestrating it and that was Sam impossible.
Speaker 4: Don't you think that? Don't you think the damning thing
Speaker 4: is that Nashad tells Sam tell people that you orchestrated
Speaker 4: it and I didn't.
Speaker 1: And Sam says.
Speaker 3: Yes, that's not a selfish request.
Speaker 4: Well, yeah, I thought this was very dad that he
Speaker 4: doesn't say what orchestrate what? Yeah, but amshoes. He may
Speaker 4: be just saying that, oh, I know that, I know
Speaker 4: you didn't know anything. But he's not saying that I
Speaker 4: know I did, right, you know, just the facts of
Speaker 4: the thing are so clear. It's like so clear that
Speaker 4: the money was in the wrong place, and that in
Speaker 4: and of itself is enough to put him in jail.
Speaker 4: And nobody even disagrees with that. But there's this argument
Speaker 4: of there is this subtle argument about like what's going
Speaker 4: on inside these people's heads, and we're getting a little
Speaker 4: more clarity on it, but I don't feel like we've
Speaker 4: had complete clarity. And I really really want to hear
Speaker 4: what Sam has to say. I hope he testifies, because
Speaker 4: that at the end of that, I think we can
Speaker 4: have the full conversation about what seems most plausible. You know,
Speaker 4: what is the timeline on this, It feels most plausible.
Speaker 3: Yeah, I can't wait for that.
Speaker 1: We'll be back in a minute to talk about the
Speaker 1: many things that have happened in the trial. Since Nashad
Speaker 1: finished testifying earlier this week. Lidiagen, Welcome back to judging, Sam.
Speaker 1: Thank you. Is it true that you got in trouble
Speaker 1: in court today?
Speaker 3: I did get in trouble in court today.
Speaker 1: What did you do?
Speaker 3: I turned around and asked someone a question when the
Speaker 3: judge and the lawyers were having a side panel conversation,
Speaker 3: and a marshal came up to me and said that
Speaker 3: if I did that again, he's gonna throw me out
Speaker 3: of the courtroom drama.
Speaker 1: This is courtroom drama.
Speaker 3: Yeah. The marshals have been increasingly angry at the reporters
Speaker 3: for talking, chewing gum, having snacks. They said that this
Speaker 3: judge is the strictest judge in the courthouse and that
Speaker 3: he can see all the way from across the courtroom
Speaker 3: on his little podium if someone is chewing gum and
Speaker 3: then will yell at the marshals afterwards. So that's why
Speaker 3: they have to be so strict.
Speaker 1: Wow. So they're like, it's not my fault, it's the judge. Sorry,
Speaker 1: I'm just the middleman.
Speaker 3: And there's been there's been a crackdown. They took someone's
Speaker 3: newspaper away today. So the early days of chatting doing
Speaker 3: crossroad puzzles are over now. It kind of feels like
Speaker 3: when the teachers like tells everyone to put their heads
Speaker 3: on the desk. That's where we're at.
Speaker 1: Well, and there is a break now right as of today,
Speaker 1: there's going to be what a week long break?
Speaker 3: Is that? Right? Yes? Which I think is sorely needed
Speaker 3: by everyone. The judge has definitely been getting antsy. He's
Speaker 3: been getting up and kind of leaning over during testimony.
Speaker 3: He yelled at also both of the lawyers for taking
Speaker 3: too much time. So I think people are running out
Speaker 3: of ink in their pens. I think we all need
Speaker 3: a break.
Speaker 1: Why, I mean, apart from letting everybody chill out for
Speaker 1: a few days, why is there a week long break
Speaker 1: right now?
Speaker 3: The judge is going to a conference.
Speaker 1: Wow, I didn't know you could do that. If you
Speaker 1: were a judge'd be like, sorry, world, I'm going to
Speaker 1: a conference for a week.
Speaker 3: I think you make the rules. It's his courtroom, his rules.
Speaker 1: So legitien. There have been several witnesses since Nishad finished
Speaker 1: testifying earlier this week, and you were telling me earlier
Speaker 1: on Slack that of all of them, the one who
Speaker 1: was most striking to you was can Son, the lawyer,
Speaker 1: the general counsel of FTX, tell me about him. What
Speaker 1: do you say, Why was it interesting to you?
Speaker 3: Yeah? So, first off, out of all of the FTX executives,
Speaker 3: he seemed like the most comfortable in a suit.
Speaker 1: He's like, lawyers might be keeping the suit industry in
Speaker 1: business at this point, right.
Speaker 3: Yes, exactly, And he was pretty self spoken, and he
Speaker 3: started off by saying that he had no idea that
Speaker 3: Alameda was using FTX customer funds. He said that he
Speaker 3: would have never approved that, and he was told over
Speaker 3: and over again by Sam that these customer funds were
Speaker 3: safe and separated. And that's what he told other people
Speaker 3: when they asked, that's what he told customers, that's what
Speaker 3: he told investors. And the prosecutors really spent a good
Speaker 3: ten maybe even thirty minutes, it felt, underlining that point
Speaker 3: and all the different iterations of he did not know
Speaker 3: that this was happening. He would have never authorized this
Speaker 3: in his position as a general counsel.
Speaker 1: Okay, so he didn't know what was happening. What's in
Speaker 1: it for the prosecution to call him, like, why do
Speaker 1: we care that he didn't know what was happening?
Speaker 3: Well, that's where the dramatic moment came in when he
Speaker 3: talked about when FTX imploded and when customers were trying
Speaker 3: to withdraw their money and they realized that it wasn't there.
Speaker 3: And he talked about how at that point he was
Speaker 3: kind of in a sort of war room with Sam,
Speaker 3: maikman Fried and Nishad. A bunch of other people were
Speaker 3: in that room as well, and he described what it
Speaker 3: was like. He talked about how Sam was on his
Speaker 3: computer typing away and Nishad he was very poetic, and
Speaker 3: how he described Nashad. He said something like how Nishad
Speaker 3: was really pale and looked like his soul had been
Speaker 3: tugged out of him.
Speaker 1: Huh.
Speaker 3: And he said that it was at this point that
Speaker 3: he was shown a balance sheet, and the balance sheet
Speaker 3: showed that Alameda was billions of dollars in the red,
Speaker 3: that they owed this money to FTX, and he was
Speaker 3: really shocked to see this. And at this point Sam
Speaker 3: was still looking for someone who could save FTX, and
Speaker 3: they were trying to figure out, you know, what to do,
Speaker 3: how to share this balance sheet, what to say about it.
Speaker 3: And Ken Sun said that Sam asked him if there
Speaker 3: was any legal explanation that he could give for this deficit,
Speaker 3: for this.
Speaker 1: Whole meaning, is there any story that you could make up,
Speaker 1: any fiction you could create that would make this not
Speaker 1: a crime?
Speaker 3: Yes, I think that's the only way to interpret that.
Speaker 1: Yes.
Speaker 3: And Can Sun said that they ended up that evening
Speaker 3: going on a walk, and Ken Sun said he had
Speaker 3: done some digging and he thought about it, and he
Speaker 3: told Sam that while there are some legal theories he
Speaker 3: could offer up, there is no legal explanation that's supported
Speaker 3: by the facts.
Speaker 1: Wow, So that seems kind of damning. Did he get
Speaker 1: us examined? Did the defense have a chance to ask
Speaker 1: him questions?
Speaker 3: Yes, they brought up how he testified as part of
Speaker 3: a non prosecution agreement, So okay. Can Sun said that,
Speaker 3: you know, he didn't know that this was happening, but still,
Speaker 3: as part of his job as general counsel, he did
Speaker 3: approve certain things that were without his knowledge, certain transactions
Speaker 3: that we're using customer funds. So he said that out
Speaker 3: of an abundance of caution, he is testifying under this
Speaker 3: non prosecution agreement. But the defense lawyers pointed out that
Speaker 3: this non prosecution agreement only stands as long as he's
Speaker 3: saying the truth, and it's the government who gets to
Speaker 3: decide whether or not he's saying the truth. And that's
Speaker 3: just a way of casting doubt on his testimony and
Speaker 3: saying that he has an incentive to say what the
Speaker 3: government wants him to say, uh.
Speaker 1: Huh, which is also true obviously for all the people
Speaker 1: who made plea deals. And that has been the sort
Speaker 1: of key thing the defense keeps saying about all these
Speaker 1: other senior executives who pleaded guilty and don't want to
Speaker 1: go to prison, basically right.
Speaker 3: Exactly, and it lines up with the role of the
Speaker 3: defense and what the defense has been doing in this
Speaker 3: case on cross which is really just casting doubts or
Speaker 3: poking little holes in what the witnesses are saying, which
Speaker 3: makes sense because at the end of the day, the
Speaker 3: jury has to decide that Sam is guilty beyond a
Speaker 3: reasonable doubt, So they're just pointing out why one might
Speaker 3: have a reasonable doubt about what these witnesses are saying.
Speaker 1: So, okay, lydia Jeen, you've been going to court all day,
Speaker 1: every day for three weeks. You've seen every minute of
Speaker 1: the trial. The prosecution is basically done. What do you
Speaker 1: make of things?
Speaker 3: At this point, I think that the prosecution has done
Speaker 3: a really good job of giving us a very clear story.
Speaker 3: And I've read that in every trial there's certain themes
Speaker 3: that come up, and on the side for the prosecution,
Speaker 3: the theme is very clear. The theme is that Sam
Speaker 3: is a liar. It's that Sam said that FTX was
Speaker 3: safe for Becusstomers and it actually wasn't. And he lied
Speaker 3: about this over and over and over again. He lied
Speaker 3: about it to the people who are close to him,
Speaker 3: he lied about it to customers, he lied about it
Speaker 3: to investors, and they've just been pounding that home over
Speaker 3: and over and over again. The defense on their cross
Speaker 3: they haven't really told us a story the same way
Speaker 3: about what happened, which of course they don't have to.
Speaker 3: All they have to do is poke holes in the
Speaker 3: story of the prosecution. But I am curious as we
Speaker 3: approach the time for the defense to present their case,
Speaker 3: if they are going to give us a narrative and
Speaker 3: explain from their side what happened and how FTX imploded.
Speaker 1: Well, and from their side, you mean, when Sam takes
Speaker 1: the stand right, the big dramatic conclusion to this to this.
Speaker 3: Trial exactly, and when Michael Lewis comes in when we
Speaker 3: get to go to court together, which I can't wait for.
Speaker 1: Levision cop. For one last thing, let's talk about Twitter.
Speaker 3: Twitter has been coming up a lot in this trial.
Speaker 3: We've been seeing lots of tweets from say Magmond Freed.
Speaker 3: It kind of is a great reminder about why it's
Speaker 3: not good to tweet through it.
Speaker 1: Never tweet the story.
Speaker 3: Exactly, especially if you're potentially being accused of a massive fraud.
Speaker 1: Whatever you tweet, never tweet. All customer accounts are segregated.
Speaker 1: One thing, never to tweet.
Speaker 3: Do not say FTX is fine, assets are fine. The
Speaker 3: other day there was an SD and Y investigator. He
Speaker 3: was kind of like a Twitter expert who showed us
Speaker 3: how Twitter works, what retweets are, what gms are. He
Speaker 3: showed us a whole ton of tweets from Sam mcmanfreed,
Speaker 3: and they all came up on the screen so fast
Speaker 3: it honestly felt like a clockwork orange you know when
Speaker 3: you're limoly are your eyes open exactly like you couldn't
Speaker 3: read them, but you just got this sense, this overwhelming
Speaker 3: sense of to the prosecution's point of Sam tweeting things
Speaker 3: that aren't true. But there was one particular moment that
Speaker 3: stood out, which is when we were shown private messages
Speaker 3: dms between Sam Maikmanfreed and a reporter at Vox named
Speaker 3: Kelsey Piper.
Speaker 1: This reporter, Kelsey Piper, actually publish these dms on box
Speaker 1: when it happened right, This was like big news last November,
Speaker 1: like right when FTX was blowing up.
Speaker 3: This happened exactly, and I think I had a big
Speaker 3: influence on how people thought about Sam agmn Freed, which
Speaker 3: is why the lawyers put up a strenuous objection to
Speaker 3: have these dms not be shown. But in the end
Speaker 3: the judge ruled that they could be.
Speaker 1: Okay, Lidia, to tell you what we're basically done, I'm
Speaker 1: going to get out of here, say goabye, But why
Speaker 1: don't you just play us out with some of the
Speaker 1: greatest hits from those dms.
Speaker 3: Kelsey Piper. I was just re listening to that conversation
Speaker 3: we had this summer about whether you should do an
Speaker 3: ethical shit for the greater good sam Agmin Freed. What
Speaker 3: did I say, Kelsey Piper? You were like, Nah, don't
Speaker 3: do an ethical shit, Like if you're running Philip Morris,
Speaker 3: no one's going to want to work with you on philanthropy.
Speaker 3: Sam Mankman Freed. Heh Kelsey Piper, And there's a risk
Speaker 3: of doing more harm than good. But even if you
Speaker 3: subtract that out, pretty not worth it. Sam Mankman Freed, Yeah,
Speaker 3: Kelsey Piper. I was trying to figure out, like if
Speaker 3: that was kind of the pr off the cuff answer.
Speaker 3: Sam Megman Freed, Man all the dumb shit, I said,
Speaker 3: It's not true, not really, Kelsey Piper. Yeah, I thought
Speaker 3: it might not be. Sam Megmanfreed. Everyone goes around pretending
Speaker 3: that perception reflects reality. It doesn't. Some of this decade's
Speaker 3: greatest heroes will never be known, and some of the
Speaker 3: most beloved people are basically shams.
Speaker 2: This episode of Judging Sam was hosted by Jacob Goldstein.
Speaker 2: Lydia Jencott is our court reporter. Katherine Girardeau and Nisha
Speaker 2: Venken produced this show. Sophie Crane is our editor. Our
Speaker 2: music was composed by Matthias Bossi and John Evans of
Speaker 2: stell Wagon's Symphinette. Judging Sam is a production of Pushkin Industries.
Speaker 2: Got a Question or Comment for Me is a website
Speaker 2: for that atrpodcast dot com. That's ATR podcast. To find
Speaker 2: more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts,
Speaker 2: or wherever you listen to your podcasts. If you'd like
Speaker 2: to access bonus episodes and listen ad free, don't forget
Speaker 2: to sign up for a Pushkin Plus subscription at pushkin
Speaker 2: dot fm, slash plus, or on our Apple show page.