WEBVTT - Instant Reaction: Caroline Ellison Sentenced in FTX Case

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Caroline Ellison sentenced to two years in jail in the

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<v Speaker 2>FTX case. She if you remember, pledged guilty to seven

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<v Speaker 2>felony accounts, a fraud and conspiracy in the wake of

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<v Speaker 2>basically the undoing of Samuel bank Binfried and his FTX company,

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<v Speaker 2>which really made everybody in the world, as we know

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<v Speaker 2>we covered it day to day, but just really rethink

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<v Speaker 2>kind of what was going when it comes to digital

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<v Speaker 2>assets in crypto in particular.

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<v Speaker 3>Yeah, indeed, the Tea Life blog running on the terminal

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<v Speaker 3>as well with the details of the sense thing hearing

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<v Speaker 3>Carl Allison addressing the core talking about how sorry she

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<v Speaker 3>was as well that she'd agreed to give up all

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<v Speaker 3>the money that she gained from FTX according to her lawyer,

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<v Speaker 3>and according to her lawyer, she'll never profit in the

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<v Speaker 3>future for her role in this crime. As well. In

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<v Speaker 3>her statement she talked about apologizing to lenders, investors, victims

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<v Speaker 3>who lost money as a result of her actions, and

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<v Speaker 3>everyone in her words that she lied to in the

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<v Speaker 3>process of the FTX issues. One interesting quote, the human

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<v Speaker 3>brains really bought at understanding big numbers, she said, and

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<v Speaker 3>a day goes by, I don't think about all of

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<v Speaker 3>the people that I heard that is Caroline Ellison being

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<v Speaker 3>sentenced in New York described as being a cornerstone in

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<v Speaker 3>the prosecution case against Sam Bankman freed and prosecutors have

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<v Speaker 3>asked the judge to spare carl and Ellison from prison in.

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<v Speaker 1>That as well.

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<v Speaker 2>Yeah, she'll also have to forfeit about eleven billion dollars

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<v Speaker 2>as a result of this, So we're getting more details.

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<v Speaker 2>She is sentenced to as we said the twenty four

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<v Speaker 2>months and talking about her cooperation specifically, the judge did

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<v Speaker 2>say that she was by no means free of culpability,

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<v Speaker 2>So again something we covered from day to day for

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<v Speaker 2>a long time, but just seeing certainly as a result

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<v Speaker 2>some of the sentences.

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<v Speaker 3>And look, they'll also be looking more closely now the

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<v Speaker 3>sensing of other cooperators in this case as well, Gary

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<v Speaker 3>Wang and Nishad Singing as well. Perhaps this may indicate

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<v Speaker 3>that they may also get jail time. We know if

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<v Speaker 3>the prosecutes have asked her to spare from a prison sentence,

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<v Speaker 3>but she is now being sentenced to two years at

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<v Speaker 3>a minimum security facility as well, and the judge did

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<v Speaker 3>praise Allison profusely said that in this case, this series,

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<v Speaker 3>there cannot be a get out of jail free card.

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<v Speaker 3>So we are talking about Carl and Alison being sentenced

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<v Speaker 3>over the collapse of FTX, and that hearing happening right now.

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<v Speaker 3>We're just showing you some pictures of her leaving course

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<v Speaker 3>of course during the trial, as we have been covering

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<v Speaker 3>in detail of the collapse of that company and the

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<v Speaker 3>consequences that have been for sam Banguin Freed and for others.

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<v Speaker 2>Well, we should remind everybody right she was the former

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<v Speaker 2>CEO of Alimeter Research and that was the trading from

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<v Speaker 2>that was affiliated with FTX, specifically the cryptocurrency exchange, which

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<v Speaker 2>was founded by Samuel Makmin Freed, and then of course

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<v Speaker 2>we know came to its undoing in twenty twenty two,

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<v Speaker 2>so we're also talking about two years ago, or roughly

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<v Speaker 2>two years ago, she pled guilty to fraud, money laundering,

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<v Speaker 2>conspiracy charges related to her role specifically at Alameda Research.

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<v Speaker 2>So again we know FTX Alamedia they off out for

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<v Speaker 2>bankruptcy and it was really that case that undoing. Here

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<v Speaker 2>was an individual who was seen as the JP Morgan,

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<v Speaker 2>if you will, of the crypto world, and so many

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<v Speaker 2>people followed him, respected him. He was the go to

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<v Speaker 2>when it comes or when it came to cryptocurrencies, and

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<v Speaker 2>of course the undoing made everybody look very differently at

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<v Speaker 2>the crypto world, and we think about what kind of

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<v Speaker 2>oversight was necessary.

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<v Speaker 3>Indeed, and look, I mean, this issue for getting jail

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<v Speaker 3>time is something that keep coming back to as well,

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<v Speaker 3>because the expectation had been that she wouldn't receive jail time,

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<v Speaker 3>and our colleagues pointing to the fact that the judge

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<v Speaker 3>made a comment that he couldn't remember when Caroline Nelson

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<v Speaker 3>had been even slightly inconsistent in her testimony during this trial,

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<v Speaker 3>think about how that contrast was sort of commentary that

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<v Speaker 3>we heard around testimony from SBF as well from San

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<v Speaker 3>Bankment Freed as well during his trial as well, which

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<v Speaker 3>there had been frequent criticism from the judge obviously inconsistencies

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<v Speaker 3>in his testimony and at one point that that was

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<v Speaker 3>something where they had to be extensive hearings without the

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<v Speaker 3>presence of the jury because of the issues with the

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<v Speaker 3>testimony from sein Brand bin Fried and the fact that

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<v Speaker 3>there was such a big contrast and how the judge

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<v Speaker 3>of described carlais and makes the sentencing here very noteworthy.

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<v Speaker 2>All Right, just to rehash, Caroline Ellison sentenced to twenty

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<v Speaker 2>four months prison ordered to forfeit eleven billion dollars by

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<v Speaker 2>a federal judge for her role in the FTX collapse.

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<v Speaker 2>And this was despite helping prosecutors in the conviction of

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<v Speaker 2>Sam Bankman Freed, which of course was her former boss

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<v Speaker 2>but also her former boyfriend. So let's get to Bloomberg News.

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<v Speaker 2>Bloomberg News. Excuse me, Legal Alliston, host of Bloomberg Law

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<v Speaker 2>on Bloomberg Radio. Jim Rosso is with us back at

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<v Speaker 2>New York headquarters for Bloomberg. So June two years. First

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<v Speaker 2>of all, fair sentence. Where was this in terms of

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<v Speaker 2>what she was facing.

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<v Speaker 1>Well, it's very low compared to what she was facing.

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<v Speaker 1>And you know, the judge kept comparing her cooperation to

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<v Speaker 1>what happened with Sam Bankman Freed. He said he's never

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<v Speaker 1>seen a cooperating witness like this. There wasn't any inconsistencies

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<v Speaker 1>in her testimony, but that still she commit a crime

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<v Speaker 1>here and that you know, there has to be some

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<v Speaker 1>kind of punishment. You know. What's unusual is the Probation

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<v Speaker 1>Department did not ask for any time, and the prosecutors

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<v Speaker 1>didn't ask for any time, So the judge has to

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<v Speaker 1>balance that and the fact that you want to encourage

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<v Speaker 1>people to come forward even if they're guilty, to later testify,

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<v Speaker 1>and that she exposed this whole thing, so he brought

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<v Speaker 1>that out a lot, but he still wanted to send

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<v Speaker 1>a message that you know, you can't get away with this,

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<v Speaker 1>so he balanced that out. Now, Sam Beckman free got

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<v Speaker 1>twenty five years, so compared to that, she only got

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<v Speaker 1>two years. It seems I would consider it pretty lenient,

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<v Speaker 1>although there was a possibility that she would get no time.

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<v Speaker 3>What should we be thinking about them when think about

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<v Speaker 3>the other sentencing that we're still waiting for over the

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<v Speaker 3>collapse of FTX. What could that mean then for their prospects?

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<v Speaker 1>Well, I think it probably means that they're going to

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<v Speaker 1>get some kind of a minimal sentence. She was the

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<v Speaker 1>star witness and she was the one who came forward

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<v Speaker 1>for and, you know, help the prosecutors to unveil the conspiracy,

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<v Speaker 1>and the judge even took out some spreadsheets that had

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<v Speaker 1>helped the prosecutors in the case. So they will probably

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<v Speaker 1>get I probably a light sentence, but I don't know

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<v Speaker 1>if it'll be as light as two years. So we'll

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<v Speaker 1>have to see that. There are two more cooperators, but

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<v Speaker 1>none of them she was the star witness. It was

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<v Speaker 1>obvious that she was the star witness. So I don't

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<v Speaker 1>know if they're going to get as you know, as

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<v Speaker 1>low a sentence as she did. And I say as

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<v Speaker 1>low a sentence because you know, she really was facing

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<v Speaker 1>you know, ten twenty years if you'd gone by the guidelines.

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<v Speaker 1>So as Sam bankmin Freed was sentenced to twenty five years,

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<v Speaker 1>and you know, the judge took account of her cooperation,

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<v Speaker 1>and the prosecutors also mentioned. It seemed like everybody was

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<v Speaker 1>talking about the same thing, how she helped the prosecution

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<v Speaker 1>so much by cooperating, but so that it was a

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<v Speaker 1>little bit of a surprise because the judge was talking

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<v Speaker 1>about her cooper then all of a sudden bam. But

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<v Speaker 1>you know, he said you did commit a crime, and

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<v Speaker 1>then he said that you have to serve time for that.

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<v Speaker 1>I had thought it maybe he might even let her

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<v Speaker 1>off without any sentence from the way he was going,

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<v Speaker 1>but he was just laying a foundation, I think, so

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<v Speaker 1>he could explain himself.

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<v Speaker 2>Hey, jan one last question that eleven billion dollars that

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<v Speaker 2>she has to forfeit. How do we explain that or

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<v Speaker 2>what specifically does that denote.

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<v Speaker 1>It seems awfully high to me, and that's something that

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<v Speaker 1>I was just talking to someone about. I have to

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<v Speaker 1>go and look into it because it seems an awfully

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<v Speaker 1>high number. I didn't think that she had gotten eleven

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<v Speaker 1>billion dollars from this, because I know some of the

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<v Speaker 1>other cooperators who had you know, had homes and things.

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<v Speaker 1>It was in the millions, not the billions. So that

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<v Speaker 1>seems high. I really have to look into it. I

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<v Speaker 1>think it's it's rather high. She has to of course,

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<v Speaker 1>she has to disgorge it. It's you know, you would

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<v Speaker 1>expect that the judge ruled it, but you would expect

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<v Speaker 1>that if she didn't, the prosecution would come after her.

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<v Speaker 1>That should go back to the victim. So that's not surprising.

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<v Speaker 1>But the number is surprising to me, and I have

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<v Speaker 1>to really look into where it came from.

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<v Speaker 2>Yeah, that number kind of struck me as well. And

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<v Speaker 2>I know it was a red headline certainly on the Bloomberg.

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<v Speaker 2>All right, we're going to leave it on that note. Hey, June,

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<v Speaker 2>thank you so much. Of course, our legal analyst here

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<v Speaker 2>at Bloomberg News and a host of Bloomberg Law on Bloomberg Radius,

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<v Speaker 2>so should be sure to catch her a little bit

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<v Speaker 2>later on today on the latest really of the FTX saga.

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<v Speaker 3>Yeah, fascinating that headline. Carlon Alison Salad sentenced for two

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<v Speaker 3>years in her role of the collapse of FTX.