1 00:00:15,316 --> 00:00:20,716 Speaker 1: Pushkin. Hey there, it's Michael Lewis. Before we get to 2 00:00:20,756 --> 00:00:22,636 Speaker 1: this episode, I want to let you know that you 3 00:00:22,636 --> 00:00:25,916 Speaker 1: can listen to each episode of Judging Sam The Trial 4 00:00:25,956 --> 00:00:29,476 Speaker 1: of Sam Bankman Freed ad free by becoming a Pushkin 5 00:00:29,556 --> 00:00:33,516 Speaker 1: Plus subscriber, and with your subscription you'll also get exclusive 6 00:00:33,516 --> 00:00:37,356 Speaker 1: access to ad free and early bingeable podcasts like Paul 7 00:00:37,436 --> 00:00:42,236 Speaker 1: McCartney's new podcast, McCartney A Life and Lyrics, Malcolm Gladwell's 8 00:00:42,236 --> 00:00:46,156 Speaker 1: Revision Is History, The Happiness Lab from Doctor Lorie Santos, 9 00:00:46,636 --> 00:00:49,876 Speaker 1: and tons of other top shows from Pushkin. Sign up 10 00:00:49,876 --> 00:00:53,516 Speaker 1: an Apple Podcasts or at Pushkin, dot fm, Slash Plus. 11 00:00:55,916 --> 00:00:59,236 Speaker 1: Welcome to the first episode of Judging Sam, The Trial 12 00:00:59,316 --> 00:01:04,236 Speaker 1: of Sam Bankman Freed. I'm Michael Lewis. Sam was worth 13 00:01:04,276 --> 00:01:08,636 Speaker 1: tens of billions of dollars before FTX his cryptocurrency exchange 14 00:01:08,796 --> 00:01:11,676 Speaker 1: came a part at the seams, and now he's being 15 00:01:11,716 --> 00:01:14,236 Speaker 1: tried for financial crimes. They could send him to prison 16 00:01:14,316 --> 00:01:17,556 Speaker 1: for the rest of his life. In this special series, 17 00:01:17,796 --> 00:01:21,516 Speaker 1: we're following the trial that will decide Sam's fate. We'll 18 00:01:21,516 --> 00:01:24,196 Speaker 1: have a reporter in the courtroom each day. We'll have 19 00:01:24,316 --> 00:01:27,796 Speaker 1: expert interviews and I'll be analyzing it all as someone 20 00:01:27,836 --> 00:01:30,476 Speaker 1: who knows this story as well as anyone knows the story. 21 00:01:31,516 --> 00:01:33,556 Speaker 1: I spent a year and a half following Sam while 22 00:01:33,596 --> 00:01:36,076 Speaker 1: I was reporting and writing a book about him. I 23 00:01:36,156 --> 00:01:39,516 Speaker 1: was there for the good days, which were astronomically good, 24 00:01:40,316 --> 00:01:44,116 Speaker 1: and I was there for the catastrophic collapse. While Sam 25 00:01:44,196 --> 00:01:47,356 Speaker 1: was on house arrest, I visited him often. That's all 26 00:01:47,396 --> 00:01:50,476 Speaker 1: in my new book about Sam, going Infinite, The Rise 27 00:01:50,516 --> 00:01:54,516 Speaker 1: and Fall of a New Tycoon. On today's episode, while 28 00:01:54,556 --> 00:01:56,916 Speaker 1: we wait for the trial to begin, I'm talking with 29 00:01:56,996 --> 00:02:00,316 Speaker 1: Pushkins Jacob Weisberg about the book and trying to approach 30 00:02:00,316 --> 00:02:03,996 Speaker 1: some of the questions you might be asking, like who 31 00:02:04,116 --> 00:02:06,956 Speaker 1: was this rumpled guy in cargo shorts and limp white 32 00:02:06,996 --> 00:02:10,836 Speaker 1: socks whose eyes twitch to cross zoom meetings as he 33 00:02:10,876 --> 00:02:14,116 Speaker 1: played video games on the side. When did I start 34 00:02:14,156 --> 00:02:17,996 Speaker 1: sensing that there might be trouble in the penthouse? And 35 00:02:18,076 --> 00:02:19,996 Speaker 1: how and why did he end up where he is 36 00:02:20,076 --> 00:02:23,236 Speaker 1: now as the defendant and what could well be the 37 00:02:23,236 --> 00:02:26,276 Speaker 1: crypto trial of the century. Thanks for joining us. 38 00:02:27,396 --> 00:02:29,076 Speaker 2: Hey, Michael, Welcome to your new show. 39 00:02:29,356 --> 00:02:30,436 Speaker 1: Pleasure to be here, Jacob. 40 00:02:30,436 --> 00:02:31,956 Speaker 2: I've got a lot that I want to ask you 41 00:02:32,036 --> 00:02:35,356 Speaker 2: about this book. It was so fun to read Michael. 42 00:02:35,356 --> 00:02:37,076 Speaker 2: For people who haven't read the book yet, this trial 43 00:02:37,196 --> 00:02:40,916 Speaker 2: is about to start. Tell them who is Sam Bankman Freed. 44 00:02:41,756 --> 00:02:46,516 Speaker 1: Born to Stanford professors, law professors, grew up completely isolated, 45 00:02:46,996 --> 00:02:49,676 Speaker 1: essentially no one could serve as a character reference. Before 46 00:02:49,676 --> 00:02:54,356 Speaker 1: the age of eighteen, finds his calling on Wall Street 47 00:02:54,396 --> 00:02:56,876 Speaker 1: as a high frequency trader, discovers he has these gifts 48 00:02:56,876 --> 00:02:59,076 Speaker 1: that he didn't know he had. At the same time, 49 00:02:59,356 --> 00:03:06,276 Speaker 1: discovers this movement effective altruism, devoted to like earning as 50 00:03:06,356 --> 00:03:08,236 Speaker 1: much money as possible to save as many lives on 51 00:03:08,276 --> 00:03:10,836 Speaker 1: the planet as you can say, and then goes off 52 00:03:10,836 --> 00:03:13,356 Speaker 1: on a jag into crypto to make as much money 53 00:03:13,356 --> 00:03:16,716 Speaker 1: as he can to fulfill this ambition. After he goes 54 00:03:16,716 --> 00:03:19,836 Speaker 1: into crypto, starts first a hedge fund called Alimeter Research, 55 00:03:20,236 --> 00:03:22,636 Speaker 1: and then so he has a place to trade that's 56 00:03:22,676 --> 00:03:26,316 Speaker 1: worthy of his hedge fund, a crypto exchange called FTX. 57 00:03:26,756 --> 00:03:29,836 Speaker 1: In very short order, it goes from being nothing to 58 00:03:30,356 --> 00:03:33,796 Speaker 1: worth forty billion dollars in the eyes of America's venture capitalist, 59 00:03:35,116 --> 00:03:36,076 Speaker 1: and then it explodes. 60 00:03:36,836 --> 00:03:39,436 Speaker 2: I want to ask you a little bit about how 61 00:03:39,476 --> 00:03:42,556 Speaker 2: you found this story. How did you end up writing 62 00:03:42,556 --> 00:03:43,956 Speaker 2: a book about Sam Bang and Free. 63 00:03:43,876 --> 00:03:47,476 Speaker 1: So it was purely accidental. Two years ago, a friend 64 00:03:47,516 --> 00:03:50,116 Speaker 1: of mine calls me and says, I have a problem. 65 00:03:50,356 --> 00:03:53,756 Speaker 1: I'm about to swap three hundred million dollars in shares 66 00:03:53,796 --> 00:03:56,996 Speaker 1: in my company for shares in this company called FTX. 67 00:03:57,556 --> 00:03:59,316 Speaker 1: And he says, I've kind of looked into the company. 68 00:03:59,356 --> 00:04:02,076 Speaker 1: It's fastest growing financial firm I've ever seen. And my 69 00:04:02,156 --> 00:04:04,956 Speaker 1: problem is, I don't know who this guy is who 70 00:04:04,996 --> 00:04:08,076 Speaker 1: created FTX. I don't I don't have a read on him, 71 00:04:08,396 --> 00:04:10,276 Speaker 1: and I've called all Wall Street and no one else 72 00:04:10,316 --> 00:04:12,396 Speaker 1: has a read on him. Forbes has listed his net 73 00:04:12,396 --> 00:04:14,556 Speaker 1: worth of twenty two and a half billion dollars, but 74 00:04:14,636 --> 00:04:16,396 Speaker 1: he didn't exist a year ago. He kind of came 75 00:04:16,436 --> 00:04:19,276 Speaker 1: out of nowhere. He said, could you sit down with 76 00:04:19,356 --> 00:04:21,716 Speaker 1: him and just tell me who he is? You know, 77 00:04:21,796 --> 00:04:24,116 Speaker 1: you do this for a living. And so a couple 78 00:04:24,156 --> 00:04:26,596 Speaker 1: of weeks later, Sam Beckmanfried showed up at my office 79 00:04:26,596 --> 00:04:29,236 Speaker 1: in Berkeley and we went for a long walk. And 80 00:04:29,316 --> 00:04:32,076 Speaker 1: at the end of the long walk I did two things. 81 00:04:32,356 --> 00:04:34,796 Speaker 1: I called my friend and I said, sure, swap the shares. 82 00:04:34,796 --> 00:04:37,756 Speaker 1: What could go wrong? Weo, yeah, pullips. But I turned 83 00:04:37,796 --> 00:04:40,036 Speaker 1: to Sam and I said, I've never heard a story 84 00:04:40,116 --> 00:04:42,116 Speaker 1: like this. I mean, what has happened to you is 85 00:04:42,156 --> 00:04:46,196 Speaker 1: just extraordinary. I want to watch. Can I be a 86 00:04:46,196 --> 00:04:48,636 Speaker 1: fly on the wall? And he said yes, And I 87 00:04:48,716 --> 00:04:53,116 Speaker 1: just moved into his life starting September October of twenty 88 00:04:53,196 --> 00:04:55,596 Speaker 1: twenty one and watched the ride up and watched the 89 00:04:55,676 --> 00:04:59,236 Speaker 1: ride down. But the first year of it really was 90 00:04:58,676 --> 00:05:02,116 Speaker 1: it was Although the material was fantastic, there was no 91 00:05:02,276 --> 00:05:04,396 Speaker 1: question there was like the kind of material one would 92 00:05:04,516 --> 00:05:08,596 Speaker 1: use for a narrative work of narrative nonfiction. I felt 93 00:05:08,636 --> 00:05:12,076 Speaker 1: very uncomfor starting it unless I knew where it ended, 94 00:05:12,276 --> 00:05:15,036 Speaker 1: and it was so volatile, I had no idea like 95 00:05:15,156 --> 00:05:17,276 Speaker 1: where it was going, and so it wasn't until it 96 00:05:17,396 --> 00:05:19,836 Speaker 1: actually collapsed that I realized that I had the shape 97 00:05:19,876 --> 00:05:22,236 Speaker 1: of a book, and didn't start writing it until January 98 00:05:22,316 --> 00:05:22,716 Speaker 1: this year. 99 00:05:23,036 --> 00:05:25,396 Speaker 2: The Michael Lewis I know doesn't like to write about 100 00:05:25,436 --> 00:05:28,036 Speaker 2: people who were that famous, and doesn't like to write 101 00:05:28,036 --> 00:05:31,036 Speaker 2: about the stories that everyone else is writing about. When 102 00:05:31,076 --> 00:05:33,276 Speaker 2: you started on n FTX, it was a lot less 103 00:05:33,276 --> 00:05:35,196 Speaker 2: of a story than it became, but it was still 104 00:05:35,236 --> 00:05:37,476 Speaker 2: he was on the radar screen of everybody in the 105 00:05:37,476 --> 00:05:41,716 Speaker 2: financial world. He was quickly becoming mister crypto. Did you 106 00:05:41,796 --> 00:05:44,436 Speaker 2: just decide what the hell this is too good to miss? 107 00:05:44,596 --> 00:05:48,516 Speaker 1: Yeah? And I also I instantly had such privileged access, 108 00:05:48,836 --> 00:05:51,196 Speaker 1: and I was seeing so much stuff that wasn't out 109 00:05:51,196 --> 00:05:54,236 Speaker 1: there that that didn't worry me that much. And the 110 00:05:54,316 --> 00:05:57,076 Speaker 1: nature of the coverage he was getting was so superficial 111 00:05:57,516 --> 00:06:00,876 Speaker 1: that whatever book I would write was suffering only flesh wounds. 112 00:06:01,156 --> 00:06:04,036 Speaker 1: And I was animated by like the original question my 113 00:06:04,076 --> 00:06:06,076 Speaker 1: friend had asked, like who is this guy? And I 114 00:06:06,116 --> 00:06:07,996 Speaker 1: didn't feel like anybody was kind of getting him on 115 00:06:08,036 --> 00:06:11,636 Speaker 1: the page or on the screen, or that there was 116 00:06:11,676 --> 00:06:14,116 Speaker 1: a thing to do that nobody was doing. But I 117 00:06:14,156 --> 00:06:16,796 Speaker 1: was frustrated because because I did have this sense that 118 00:06:17,396 --> 00:06:20,036 Speaker 1: this is going somewhere, and I don't know where it's going. 119 00:06:20,396 --> 00:06:23,116 Speaker 1: I mean as late as like in early November of 120 00:06:23,196 --> 00:06:27,356 Speaker 1: last year, moments before it all implodes, I sat down 121 00:06:27,356 --> 00:06:28,676 Speaker 1: with a friend who I used as sort of a 122 00:06:29,196 --> 00:06:32,196 Speaker 1: sounding board for story problems, and I laid it out. 123 00:06:32,636 --> 00:06:35,236 Speaker 1: I said, Look, this is the character, this is the 124 00:06:35,316 --> 00:06:38,396 Speaker 1: kind of material that's been incoming. It's an incredible story. 125 00:06:38,876 --> 00:06:41,116 Speaker 1: But I'm frustrated. He said, I can see why you're frustrated. 126 00:06:41,116 --> 00:06:43,076 Speaker 1: You don't have a third act. He said, in a book, 127 00:06:43,316 --> 00:06:45,476 Speaker 1: you can dance your way out of this, that you 128 00:06:45,516 --> 00:06:47,676 Speaker 1: can kind of fool the reader into thinking you have 129 00:06:47,716 --> 00:06:49,836 Speaker 1: an ending. But it's no movie, you know, like you 130 00:06:49,876 --> 00:06:51,636 Speaker 1: would never be a movie. And he said, you ought 131 00:06:51,676 --> 00:06:54,756 Speaker 1: to think about that. And two days later FTX collapsed 132 00:06:54,756 --> 00:06:57,676 Speaker 1: and I said, this is the best movie ever. 133 00:06:58,876 --> 00:07:00,796 Speaker 2: But you didn't know what the story was going to be. 134 00:07:01,036 --> 00:07:03,796 Speaker 2: I mean, with hindsight, I'm sure there's a lot of 135 00:07:03,836 --> 00:07:06,876 Speaker 2: temptation to think I saw the signs. I saw this coming. 136 00:07:07,116 --> 00:07:10,476 Speaker 2: You knew something would happen. But at one point, if 137 00:07:10,556 --> 00:07:13,796 Speaker 2: at any point before the collapse, did you think there's 138 00:07:13,836 --> 00:07:15,916 Speaker 2: a problem here, something bad's going to happen. 139 00:07:16,996 --> 00:07:20,076 Speaker 1: I didn't, you know. Before the collapse, what I could 140 00:07:20,116 --> 00:07:23,316 Speaker 1: see was chaos, like all the order to the organization 141 00:07:23,436 --> 00:07:26,156 Speaker 1: was inside Sam's head. There was no organization chart, there 142 00:07:26,156 --> 00:07:28,236 Speaker 1: was no list of employees. It was just like there 143 00:07:28,236 --> 00:07:32,716 Speaker 1: had been a history in the place of minor crises, 144 00:07:33,276 --> 00:07:36,436 Speaker 1: and they'd been in particular an episode that had occurred 145 00:07:36,716 --> 00:07:38,836 Speaker 1: that I had sort of reported out, and I knew 146 00:07:38,836 --> 00:07:40,636 Speaker 1: it was an important part of the story. When he 147 00:07:40,716 --> 00:07:43,756 Speaker 1: started his hedge fund, it was called Alometer research in 148 00:07:43,796 --> 00:07:46,676 Speaker 1: Berkeley in twenty eighteen, there was nothing but a group 149 00:07:46,716 --> 00:07:49,116 Speaker 1: of effective altruists, you know, its people he had recruited 150 00:07:49,116 --> 00:07:53,036 Speaker 1: who were not money people. Three months in, they've they've 151 00:07:53,156 --> 00:07:56,436 Speaker 1: raised one hundred and seventy five million dollars from effective 152 00:07:56,436 --> 00:08:00,156 Speaker 1: altruists and are wheeling and dealing in the crypto markets. 153 00:08:00,476 --> 00:08:03,476 Speaker 1: And half the people in the firm realize that they've 154 00:08:03,556 --> 00:08:06,796 Speaker 1: lost track of all the money, that it's like missing 155 00:08:07,356 --> 00:08:10,116 Speaker 1: and they don't know where it is is and like 156 00:08:10,236 --> 00:08:12,956 Speaker 1: literally just gone and and so and so and Sam 157 00:08:12,996 --> 00:08:14,476 Speaker 1: all he wants to do is trade all day, and 158 00:08:14,516 --> 00:08:17,196 Speaker 1: he says, and he's saying, let's not let's not waste 159 00:08:17,236 --> 00:08:18,956 Speaker 1: our time trying to track down the money. It's out 160 00:08:18,956 --> 00:08:23,196 Speaker 1: there somewhere. Uh, let's let's keep trading. And this results 161 00:08:23,236 --> 00:08:26,116 Speaker 1: in a collapse basically that they call it the schism. 162 00:08:26,316 --> 00:08:28,316 Speaker 1: Half the firm gets up and leaves because they're afraid 163 00:08:28,356 --> 00:08:31,796 Speaker 1: he's essentially stealing the money and that it's all it's 164 00:08:31,316 --> 00:08:34,636 Speaker 1: And well, it emerges in the back end of it 165 00:08:34,676 --> 00:08:36,196 Speaker 1: that he hadn't stolen money, that was in fact just 166 00:08:36,196 --> 00:08:37,636 Speaker 1: missing and they were able to go find it on 167 00:08:37,636 --> 00:08:40,556 Speaker 1: a kind of easter egg hunt. Uh, but uh so 168 00:08:40,636 --> 00:08:43,636 Speaker 1: there were these sort of things that had happened before 169 00:08:44,396 --> 00:08:47,276 Speaker 1: that you could see that the seeds were there for 170 00:08:47,396 --> 00:08:51,436 Speaker 1: some problem. But did I know that there was like 171 00:08:51,716 --> 00:08:53,596 Speaker 1: this was going to blow up the way it blew up. No, 172 00:08:53,956 --> 00:08:54,916 Speaker 1: and no one else did either. 173 00:08:55,196 --> 00:08:57,276 Speaker 2: And pause for a second, just because it's so important 174 00:08:57,316 --> 00:09:00,636 Speaker 2: to the story, explain what effective at altruism is. 175 00:09:00,636 --> 00:09:01,836 Speaker 1: Because this is a this is a. 176 00:09:01,836 --> 00:09:04,156 Speaker 2: Strange it's a motive for making money. You gonna make 177 00:09:04,196 --> 00:09:05,116 Speaker 2: money to give it away. 178 00:09:05,196 --> 00:09:07,236 Speaker 1: It was a movement. It's a movement that grew out 179 00:09:07,236 --> 00:09:09,636 Speaker 1: of the work of the philosopher Peter Singer, and it 180 00:09:09,756 --> 00:09:13,516 Speaker 1: was started by several young Oxford philosophers and right after 181 00:09:13,556 --> 00:09:16,716 Speaker 1: the financial crisis. Oddly. The premise is that you look 182 00:09:16,716 --> 00:09:19,356 Speaker 1: at philanthropy rather than just willy nilly do good in 183 00:09:19,396 --> 00:09:21,916 Speaker 1: the world. You analyze it. You try to measure the 184 00:09:21,956 --> 00:09:25,436 Speaker 1: effects of what you're doing and quantify it and look 185 00:09:25,436 --> 00:09:28,756 Speaker 1: at it as a mathematical problem. And the mathematical problem 186 00:09:28,796 --> 00:09:31,116 Speaker 1: you're trying to solve is, in the end, how do 187 00:09:31,156 --> 00:09:35,036 Speaker 1: you maximize with your altruism the number of quality life 188 00:09:35,116 --> 00:09:38,476 Speaker 1: years of human beings? Is that's where they end up. 189 00:09:38,796 --> 00:09:40,396 Speaker 1: And so that once it becomes a math problem. It 190 00:09:40,396 --> 00:09:43,756 Speaker 1: attracts lots of Mathew people, but it pretty quickly collides 191 00:09:43,836 --> 00:09:48,636 Speaker 1: with the observation that humanity faces various existential risks and 192 00:09:49,236 --> 00:09:53,956 Speaker 1: artificial intelligence running amock pandemics or climate change or nuclear war, 193 00:09:54,476 --> 00:09:59,036 Speaker 1: and that these risks risk actually wiping out all future 194 00:09:59,116 --> 00:10:02,596 Speaker 1: human beings, and that the trillions of people and if 195 00:10:04,676 --> 00:10:09,836 Speaker 1: there's even a slight probability of that happening, anything you 196 00:10:09,916 --> 00:10:13,316 Speaker 1: do to reduce that risk ends up saving far more 197 00:10:13,396 --> 00:10:15,796 Speaker 1: lives than you could ever save by addressing the problems 198 00:10:15,836 --> 00:10:19,436 Speaker 1: of people living on the planet today. And so by 199 00:10:19,436 --> 00:10:21,596 Speaker 1: the time Sam gets to it, it's already moving in 200 00:10:21,596 --> 00:10:24,996 Speaker 1: that direction, and the effective altruists who gather in Berkeley 201 00:10:25,076 --> 00:10:28,116 Speaker 1: to create a crypto hedge fund are all in their 202 00:10:28,156 --> 00:10:33,596 Speaker 1: minds generating money in order to mitigate existential risk to humanity. Sam, 203 00:10:33,596 --> 00:10:35,636 Speaker 1: who himself has a two or three year background on 204 00:10:35,676 --> 00:10:37,836 Speaker 1: Wall Street and trading, has proposed this to a whole 205 00:10:37,836 --> 00:10:39,636 Speaker 1: bunch of people who have no background in trading, that 206 00:10:39,716 --> 00:10:41,636 Speaker 1: we're going to gather together, we're going to exploit the 207 00:10:41,636 --> 00:10:44,396 Speaker 1: inefficiencies in crypto to make billions of dollars to give 208 00:10:44,436 --> 00:10:46,756 Speaker 1: it away to prevent I don't know the next pandemic 209 00:10:47,556 --> 00:10:49,836 Speaker 1: or a pandemic that would wipe out all people, and 210 00:10:50,156 --> 00:10:50,996 Speaker 1: they're all in on this. 211 00:10:51,476 --> 00:10:55,596 Speaker 2: Yeah, So your character Sam Bankman Freed tells you I 212 00:10:55,676 --> 00:11:00,396 Speaker 2: have a motivation. My motivation is effective altruism. It's to 213 00:11:00,476 --> 00:11:03,076 Speaker 2: make as much money as possible and use it as 214 00:11:03,156 --> 00:11:06,676 Speaker 2: efficiently as possible to better humanity. 215 00:11:06,476 --> 00:11:08,476 Speaker 1: Not to save humanity, to save. 216 00:11:08,356 --> 00:11:12,556 Speaker 2: Humanity even more. Did you buy that? Did you think, Okay, 217 00:11:12,676 --> 00:11:15,276 Speaker 2: that's that's pretty interesting, it's pretty unusual and that's what 218 00:11:15,316 --> 00:11:17,116 Speaker 2: he's trying to do, or did you think there might 219 00:11:17,156 --> 00:11:19,636 Speaker 2: be a different or more complicated motivation. 220 00:11:22,036 --> 00:11:25,556 Speaker 1: Well, in the first place, when he collides with the 221 00:11:25,556 --> 00:11:27,756 Speaker 1: effect of altrue as a movement, when he is a 222 00:11:27,836 --> 00:11:30,516 Speaker 1: junior in college and is swept up in it, it's 223 00:11:30,556 --> 00:11:33,356 Speaker 1: all sincere and he becomes he becomes a proselytizer for 224 00:11:33,436 --> 00:11:36,436 Speaker 1: this movement. His identity is all wrapped up in being 225 00:11:36,476 --> 00:11:39,036 Speaker 1: the most important person in this movement, and he had 226 00:11:39,036 --> 00:11:41,676 Speaker 1: a sense of himself being special because of this movement. 227 00:11:42,116 --> 00:11:44,396 Speaker 1: So when he says I'm doing it for this reason, 228 00:11:44,716 --> 00:11:47,516 Speaker 1: he thinks that's true. He's not. He's not just saying that, 229 00:11:47,556 --> 00:11:50,676 Speaker 1: but to try to trick you. So I bought it 230 00:11:50,716 --> 00:11:54,236 Speaker 1: to that extent, and it was really interesting. I mean, 231 00:11:54,556 --> 00:11:58,716 Speaker 1: I had had in the past collided with some of 232 00:11:58,756 --> 00:12:02,236 Speaker 1: the early people who had who had heard the siren song, 233 00:12:02,676 --> 00:12:04,196 Speaker 1: people who might have ended up being I don't know, 234 00:12:04,236 --> 00:12:08,396 Speaker 1: math teachers in high school are doctors. Had instead thought, well, 235 00:12:08,636 --> 00:12:11,556 Speaker 1: I need to earn to give because I buy this argument, 236 00:12:11,796 --> 00:12:13,356 Speaker 1: and I'm going to go to Wall Street to give 237 00:12:13,396 --> 00:12:15,436 Speaker 1: the money away. So I had met the kind of 238 00:12:15,436 --> 00:12:18,076 Speaker 1: people before, and it was kind of refreshing. Right, There 239 00:12:18,116 --> 00:12:20,156 Speaker 1: is a certain sense to it. If someone's going to 240 00:12:20,196 --> 00:12:22,436 Speaker 1: be earning this money, might as well be someone who's 241 00:12:22,436 --> 00:12:24,036 Speaker 1: going to do something good with it, rather than someone 242 00:12:24,036 --> 00:12:26,276 Speaker 1: who's going to build themselves a bigger swimming pool. And 243 00:12:26,516 --> 00:12:29,636 Speaker 1: I was charmed by his single mindedness. I thought that 244 00:12:29,716 --> 00:12:32,876 Speaker 1: was interesting. But mixed up in it all, of course, 245 00:12:32,956 --> 00:12:35,596 Speaker 1: is a sense of ambition that he wanted to think 246 00:12:35,636 --> 00:12:37,396 Speaker 1: of himself as an important person, and this was a 247 00:12:37,396 --> 00:12:41,436 Speaker 1: mechanism for thinking of himself as an important person. He 248 00:12:41,716 --> 00:12:44,516 Speaker 1: liked sort of like living his life by argument. You 249 00:12:44,516 --> 00:12:47,356 Speaker 1: could change Sam bankman Fried's mind. It didn't happen very often, 250 00:12:47,516 --> 00:12:49,076 Speaker 1: but when it happened to happen by argument, and he 251 00:12:49,116 --> 00:12:50,636 Speaker 1: would just buy. He would do things that were very 252 00:12:50,716 --> 00:12:54,236 Speaker 1: uncomfortable for him simply because he heard an argument that 253 00:12:54,276 --> 00:12:55,956 Speaker 1: persuaded him when he was in college a year the 254 00:12:56,036 --> 00:13:00,236 Speaker 1: argument about animal suffering and veganism. And this guy really 255 00:13:00,276 --> 00:13:03,276 Speaker 1: liked his chicken, you know, and he stopped eating meat 256 00:13:03,796 --> 00:13:06,876 Speaker 1: on a dime because he bought the argument. And it 257 00:13:07,116 --> 00:13:10,836 Speaker 1: was miserable, but he did it, so he was capable 258 00:13:10,876 --> 00:13:12,076 Speaker 1: of that kind of action. 259 00:13:12,596 --> 00:13:14,876 Speaker 2: He still world's most unhealthy looking vegan. 260 00:13:14,996 --> 00:13:18,276 Speaker 1: Right, Oh my god, you think vegan means healthy vegans 261 00:13:18,316 --> 00:13:21,356 Speaker 1: means a truckload of crappy snacks. If you leave him 262 00:13:21,356 --> 00:13:23,796 Speaker 1: in a prison with only a vending machine d from 263 00:13:23,836 --> 00:13:26,436 Speaker 1: he's fine because that's kind of what he eats anyway. 264 00:13:26,916 --> 00:13:31,396 Speaker 2: So how did your view of him evolve during the 265 00:13:31,436 --> 00:13:33,076 Speaker 2: period you were working on the book? And you spent 266 00:13:33,236 --> 00:13:34,916 Speaker 2: all this time with him, You spend all the time 267 00:13:34,916 --> 00:13:37,836 Speaker 2: with his family, You spend time with all these people 268 00:13:37,876 --> 00:13:39,436 Speaker 2: of the company. I mean, this is the cast of 269 00:13:39,516 --> 00:13:42,556 Speaker 2: characters we're going to meet at the trial, and a 270 00:13:42,636 --> 00:13:44,836 Speaker 2: number of these people are now testifying against him on 271 00:13:44,956 --> 00:13:48,436 Speaker 2: behalf of the government. Did your understanding of him change 272 00:13:48,556 --> 00:13:49,916 Speaker 2: while you were working on it? 273 00:13:50,756 --> 00:13:54,316 Speaker 1: What accreed it. Over time was just a sense of 274 00:13:54,356 --> 00:13:57,476 Speaker 1: how peculiar he was. The longer I was there, the 275 00:13:57,516 --> 00:14:01,756 Speaker 1: depth of his oddness just increased. I give you an example. 276 00:14:02,156 --> 00:14:05,036 Speaker 1: In the first trip we took together, I went to 277 00:14:05,036 --> 00:14:06,476 Speaker 1: the Super Bowl with him. I went to Los Angeles 278 00:14:06,516 --> 00:14:08,196 Speaker 1: for a bunch of parties and meetings in the super Bowl, 279 00:14:08,596 --> 00:14:12,396 Speaker 1: and we were in a hotel together, and he went 280 00:14:12,396 --> 00:14:13,796 Speaker 1: into his room and I went in my room, and 281 00:14:13,796 --> 00:14:16,196 Speaker 1: I thought, well, he's just like normal people living in 282 00:14:16,196 --> 00:14:18,196 Speaker 1: his hotel room. It was two trips later when I 283 00:14:18,236 --> 00:14:19,716 Speaker 1: realized that what he would do is check into the 284 00:14:19,716 --> 00:14:22,676 Speaker 1: hotel room and never stay there because he was uncomfortable 285 00:14:22,676 --> 00:14:25,516 Speaker 1: sleeping alone. And he would find someone's sofa that he 286 00:14:25,596 --> 00:14:29,156 Speaker 1: knew to sleep on, or sometimes crawl into some some 287 00:14:29,196 --> 00:14:31,956 Speaker 1: colleagues hotel room to sleep on their sofa rather than 288 00:14:32,196 --> 00:14:34,796 Speaker 1: in his own room. That kind of thing happened over 289 00:14:34,836 --> 00:14:38,196 Speaker 1: and over where like he just Oh my god, I thought, 290 00:14:38,236 --> 00:14:41,396 Speaker 1: I knew how unusual, odd peculiar he was, and he 291 00:14:41,636 --> 00:14:45,156 Speaker 1: just gets there's just there's something. There's another door I 292 00:14:45,196 --> 00:14:49,996 Speaker 1: need to open here. I tell you another thing. This 293 00:14:50,036 --> 00:14:53,436 Speaker 1: is going to sound very peculiar. I became kind of 294 00:14:53,476 --> 00:14:59,236 Speaker 1: awed by how almost incapable he was of lying to me, 295 00:15:00,036 --> 00:15:04,476 Speaker 1: of just that that everything he said would check out. Now, 296 00:15:04,516 --> 00:15:07,836 Speaker 1: what he would do is not answer things I asked 297 00:15:08,156 --> 00:15:10,236 Speaker 1: in very crafty way. Sometimes I would ask something and 298 00:15:10,236 --> 00:15:13,196 Speaker 1: he'd give me answer to a slightly different question. But 299 00:15:13,836 --> 00:15:17,516 Speaker 1: I over time I came to be able to rely 300 00:15:17,836 --> 00:15:20,556 Speaker 1: on him more than I did in the beginning. First, 301 00:15:20,716 --> 00:15:22,636 Speaker 1: with the things he were telling me, I thought were preposterous, 302 00:15:22,676 --> 00:15:25,036 Speaker 1: that this can't be true, that can't be true, And 303 00:15:25,036 --> 00:15:28,036 Speaker 1: it all checked out, and it kept checking out. You know, 304 00:15:28,396 --> 00:15:32,756 Speaker 1: there were things that weren't immediately apparent. That the more 305 00:15:32,796 --> 00:15:35,436 Speaker 1: I was there struck me as just kind of I mean, 306 00:15:35,556 --> 00:15:38,476 Speaker 1: just peculiar and shocking the fact that the way he 307 00:15:38,516 --> 00:15:41,916 Speaker 1: had almost systematically removed anybody over about the age of 308 00:15:41,956 --> 00:15:45,836 Speaker 1: thirty two from his life, that the way he had 309 00:15:45,956 --> 00:15:48,796 Speaker 1: come to kind of disdain any kind of grown up 310 00:15:48,836 --> 00:15:53,836 Speaker 1: supervision and grown up methods that he disdains the wrong word. 311 00:15:54,036 --> 00:15:56,556 Speaker 1: He would start, So, you think you start a company, 312 00:15:56,636 --> 00:15:59,196 Speaker 1: and you've never run a company, you never run anything. Basically, 313 00:15:59,676 --> 00:16:02,276 Speaker 1: you would think you, I don't know, take a management class, 314 00:16:02,356 --> 00:16:05,236 Speaker 1: read a book. And he kind of flipped through a 315 00:16:05,236 --> 00:16:08,436 Speaker 1: few things and decided this is all bullshit, and you're 316 00:16:08,436 --> 00:16:10,356 Speaker 1: just gonna have to make it up as I go along. 317 00:16:10,676 --> 00:16:12,196 Speaker 1: And to get yourself in a position where you have 318 00:16:12,236 --> 00:16:15,196 Speaker 1: an almost five hundred person company and nobody knows where 319 00:16:15,196 --> 00:16:17,116 Speaker 1: they are in the company because there's no org chart 320 00:16:17,196 --> 00:16:18,956 Speaker 1: and he doesn't like titles and there's not even a 321 00:16:18,996 --> 00:16:22,836 Speaker 1: list of employees. That kind of stuff just that you 322 00:16:23,076 --> 00:16:27,156 Speaker 1: stumble upon. That the lack of order, because he didn't 323 00:16:27,196 --> 00:16:30,276 Speaker 1: have much respect for the way people had conventionally ordered 324 00:16:30,316 --> 00:16:35,196 Speaker 1: things that you know, I would run into versions of that. 325 00:16:36,596 --> 00:16:42,036 Speaker 1: One last thing that his attitude towards risk. He had 326 00:16:42,076 --> 00:16:45,836 Speaker 1: an appetite for risk that at first I thought was 327 00:16:45,916 --> 00:16:48,196 Speaker 1: kind of funny. And then you know, he's like you're 328 00:16:48,196 --> 00:16:49,636 Speaker 1: in a game of chicken, and then you realize you 329 00:16:49,636 --> 00:16:51,636 Speaker 1: don't want to be playing chicken against this person because 330 00:16:51,676 --> 00:16:54,636 Speaker 1: he actually will do the things that most people won't do. 331 00:16:55,116 --> 00:16:57,876 Speaker 1: Watch out, because he will actually do it. Like, you know, 332 00:16:57,916 --> 00:16:59,676 Speaker 1: he says he's going to go spend a billion dollars 333 00:16:59,716 --> 00:17:01,876 Speaker 1: to buy that, and you think, no, he's just saying that, No, 334 00:17:02,036 --> 00:17:03,956 Speaker 1: we actually will go do it. But it was just 335 00:17:03,996 --> 00:17:05,676 Speaker 1: this took a while for me to appreciate who he was. 336 00:17:05,996 --> 00:17:08,996 Speaker 2: Yeah, I mean, reading the book Weird doesn't begin to 337 00:17:08,996 --> 00:17:11,516 Speaker 2: do justice to it. This is someone who is a 338 00:17:11,636 --> 00:17:14,556 Speaker 2: very hard time relating to people, said very few friends, 339 00:17:14,716 --> 00:17:17,676 Speaker 2: is much more at home in the world of numbers 340 00:17:17,756 --> 00:17:22,996 Speaker 2: and data. I mean, nothing about him is like anyone 341 00:17:23,036 --> 00:17:26,796 Speaker 2: else we would see in a position running a company 342 00:17:26,796 --> 00:17:29,196 Speaker 2: and dealing with other human beings. Right, So, if he's 343 00:17:29,196 --> 00:17:31,396 Speaker 2: a kind of genius but he's not good at running 344 00:17:31,436 --> 00:17:34,116 Speaker 2: a company because he can't deal with people, why doesn't 345 00:17:34,116 --> 00:17:35,716 Speaker 2: he get someone else to run the company and he 346 00:17:35,716 --> 00:17:36,716 Speaker 2: can do what he's good at. 347 00:17:37,276 --> 00:17:39,396 Speaker 1: So I don't think he knew he wasn't good at 348 00:17:39,476 --> 00:17:42,676 Speaker 1: running a company. I think he thought basically, people shouldn't 349 00:17:42,716 --> 00:17:46,076 Speaker 1: need to be managed, and so it was their problem 350 00:17:47,116 --> 00:17:50,116 Speaker 1: as a practical matter. What ends up happening is the 351 00:17:50,196 --> 00:17:54,156 Speaker 1: messy business of managing people gets subcontracted to people who've 352 00:17:54,156 --> 00:17:57,236 Speaker 1: got a little bit of emotional intelligence, including his own 353 00:17:57,276 --> 00:18:00,396 Speaker 1: psychiatrist who he brings in to be the corporate psychiatrist, 354 00:18:00,476 --> 00:18:02,756 Speaker 1: who ends up dealing with a lot of the messy problems. 355 00:18:02,956 --> 00:18:07,276 Speaker 1: So what happens is his organization. After Sam's insistence that 356 00:18:07,316 --> 00:18:09,996 Speaker 1: he really should be the one in charge, the organization 357 00:18:10,076 --> 00:18:13,236 Speaker 1: adaptsed to it in various bizarre ways. 358 00:18:13,956 --> 00:18:16,076 Speaker 2: They had like a chief mental health officer. 359 00:18:17,156 --> 00:18:20,556 Speaker 1: No titles in the company, but yes, effectively they did. 360 00:18:20,996 --> 00:18:24,076 Speaker 1: You know, I think that in almost any other era 361 00:18:24,716 --> 00:18:26,796 Speaker 1: it would have occurred to no one to put Sam 362 00:18:26,796 --> 00:18:29,836 Speaker 1: bankmanfreed in the financial markets, but would happened in the 363 00:18:29,836 --> 00:18:32,276 Speaker 1: financial markets over the last fifteen years where they become 364 00:18:32,316 --> 00:18:34,836 Speaker 1: automated and run by people who were really good with 365 00:18:34,916 --> 00:18:38,476 Speaker 1: math and computers and who were not being filtered for 366 00:18:38,516 --> 00:18:42,236 Speaker 1: their social skills or lack thereof. And his aptitude with 367 00:18:43,316 --> 00:18:46,676 Speaker 1: a certain aspect of markets led him to be in 368 00:18:46,716 --> 00:18:51,156 Speaker 1: this very odd position of running a company when he's 369 00:18:51,196 --> 00:18:55,236 Speaker 1: almost singularly incapable of running a company, and he could 370 00:18:55,236 --> 00:18:59,316 Speaker 1: at some things, but the whole human thing and quite 371 00:18:59,356 --> 00:19:02,436 Speaker 1: light in my relationship, I dug into his childhood and 372 00:19:02,476 --> 00:19:05,596 Speaker 1: I could not believe how isolated it was, like just know, 373 00:19:05,716 --> 00:19:09,076 Speaker 1: it was beyond I mean, it isn't just he didn't 374 00:19:09,236 --> 00:19:13,276 Speaker 1: have close friends, like he had nobody, and that he 375 00:19:13,316 --> 00:19:16,036 Speaker 1: really just kind of lived on his own and was 376 00:19:16,396 --> 00:19:18,956 Speaker 1: sorting out the world all by himself. How many people 377 00:19:18,996 --> 00:19:20,676 Speaker 1: do you know when you say to them, could you 378 00:19:20,716 --> 00:19:22,476 Speaker 1: give me the names of two or three people who 379 00:19:22,516 --> 00:19:25,116 Speaker 1: could describe for me how you were up to the 380 00:19:25,156 --> 00:19:27,996 Speaker 1: age of eighteen, looks at you and says, there's nobody 381 00:19:28,356 --> 00:19:31,196 Speaker 1: you know. You know, this is had to be somebody, right, 382 00:19:31,236 --> 00:19:33,516 Speaker 1: there are people who had written in college recommendations. He'd 383 00:19:33,516 --> 00:19:35,556 Speaker 1: gone to school with a bunch of people. He'd you know, 384 00:19:35,636 --> 00:19:37,916 Speaker 1: had parents and a brother. There had to be somebody 385 00:19:37,916 --> 00:19:42,196 Speaker 1: who would actually be able to it's some character reference, right, 386 00:19:42,556 --> 00:19:44,996 Speaker 1: There was none. He said that he had all kinds 387 00:19:45,036 --> 00:19:47,036 Speaker 1: of problems and relating to other people and in particularly 388 00:19:47,036 --> 00:19:50,356 Speaker 1: communicating his inner state to other people, like any kind 389 00:19:50,356 --> 00:19:52,956 Speaker 1: of interaction he had had with other people was a 390 00:19:52,996 --> 00:19:55,796 Speaker 1: calculated exercise. It was something he had to had to 391 00:19:55,916 --> 00:19:59,236 Speaker 1: calibrate in order for it to work. The idea that 392 00:19:59,276 --> 00:20:01,476 Speaker 1: such a person was running a four hundred and fifty 393 00:20:01,476 --> 00:20:03,916 Speaker 1: person company, I mean, that was odd. 394 00:20:04,516 --> 00:20:06,556 Speaker 2: After I finished reading, you asked me how I felt 395 00:20:06,596 --> 00:20:08,956 Speaker 2: about him, and I think my reaction was, I feel 396 00:20:08,956 --> 00:20:12,436 Speaker 2: really sorry for this guy because he had such an 397 00:20:12,476 --> 00:20:16,156 Speaker 2: isolated and seemed like fundamentally unhappy childhood, had so much 398 00:20:16,156 --> 00:20:20,876 Speaker 2: trouble dealing with people. And then he constructed this world, 399 00:20:21,396 --> 00:20:23,636 Speaker 2: which is sort of an abstract world that worked for him, 400 00:20:23,956 --> 00:20:27,316 Speaker 2: but it catastrophically and quickly fell apart. 401 00:20:28,196 --> 00:20:31,956 Speaker 1: There is a feeling to him that there was this 402 00:20:32,156 --> 00:20:34,916 Speaker 1: brief moment where he was able to impose on the 403 00:20:34,956 --> 00:20:39,356 Speaker 1: real world an abstract notion of the way the world 404 00:20:39,756 --> 00:20:43,036 Speaker 1: might work or should work, and the real world sort 405 00:20:43,036 --> 00:20:47,436 Speaker 1: of mimicked his mental model for a brief period, and 406 00:20:47,476 --> 00:20:49,996 Speaker 1: it all worked, but the mental model was missing all 407 00:20:50,076 --> 00:20:52,036 Speaker 1: kinds of stuff that actually is in the real world, 408 00:20:52,076 --> 00:20:53,396 Speaker 1: and the real world finally kind of took. 409 00:20:53,276 --> 00:20:56,636 Speaker 2: Over, And both the EA and the crypto contribute to that. 410 00:20:56,716 --> 00:21:00,396 Speaker 2: I mean, crypto is utopianism about money and finance. 411 00:21:00,596 --> 00:21:04,156 Speaker 1: You know, it's Another important part of his story is 412 00:21:04,436 --> 00:21:07,796 Speaker 1: his indifference to sort of crypto religion. That he saw 413 00:21:07,836 --> 00:21:12,076 Speaker 1: crypto purely as a mechanism for making money for effective altruism. 414 00:21:12,276 --> 00:21:14,236 Speaker 1: He wasn't particularly interested in crypto. 415 00:21:14,556 --> 00:21:17,236 Speaker 2: The biggest person in crypto was not a crypto true believer, 416 00:21:17,516 --> 00:21:18,236 Speaker 2: just the opposite. 417 00:21:18,276 --> 00:21:21,796 Speaker 1: He was very wary of the crypto religionists, and he 418 00:21:21,876 --> 00:21:23,956 Speaker 1: knew he couldn't say what he thought because it would 419 00:21:23,956 --> 00:21:26,356 Speaker 1: get him in trouble with his market. But he was 420 00:21:26,476 --> 00:21:28,356 Speaker 1: he was there to use it. He wasn't there because 421 00:21:28,356 --> 00:21:30,196 Speaker 1: he thought it was going to change the world as 422 00:21:30,236 --> 00:21:32,316 Speaker 1: we knew it. He knew that had some capacity to 423 00:21:32,356 --> 00:21:34,276 Speaker 1: do some things, but it wasn't that big a deal. 424 00:21:34,636 --> 00:21:36,716 Speaker 1: There was an inefficient market. That's what drew him into 425 00:21:36,756 --> 00:21:38,996 Speaker 1: it in the first place. Yeah, I asked you what 426 00:21:39,036 --> 00:21:40,276 Speaker 1: you thought of him, because you know, you write a 427 00:21:40,276 --> 00:21:43,676 Speaker 1: book and you never know this is it. I think 428 00:21:43,676 --> 00:21:46,716 Speaker 1: this is a This is maybe the most powerful case 429 00:21:46,756 --> 00:21:50,276 Speaker 1: of this in my literary career. I've always known since 430 00:21:50,316 --> 00:21:52,876 Speaker 1: my first book that you never know what a reader 431 00:21:52,916 --> 00:21:55,396 Speaker 1: is going to read that You write what you write, 432 00:21:55,556 --> 00:21:59,516 Speaker 1: You tell a story. The story inevitably has holes the 433 00:21:59,556 --> 00:22:01,516 Speaker 1: reader walks into and sort of makes it its own 434 00:22:01,756 --> 00:22:05,276 Speaker 1: or interprets it them. It's the way they want to 435 00:22:05,316 --> 00:22:07,436 Speaker 1: interpret it, but you never know what that's going to 436 00:22:07,516 --> 00:22:10,156 Speaker 1: be until the book comes out. I feel more about 437 00:22:10,156 --> 00:22:13,036 Speaker 1: this book that way than I've felt with any book 438 00:22:13,116 --> 00:22:16,476 Speaker 1: that I don't know how people are going to react 439 00:22:16,476 --> 00:22:19,756 Speaker 1: to Sam Bankman Freed when they see who he really is, 440 00:22:20,316 --> 00:22:23,436 Speaker 1: whether they're going to feel sorry for him, whether they're 441 00:22:23,436 --> 00:22:25,476 Speaker 1: going to be rooting for him, whether they're going to 442 00:22:25,516 --> 00:22:29,156 Speaker 1: hate him. I don't have a great sense. Everybody's trying 443 00:22:29,196 --> 00:22:31,196 Speaker 1: to figure out who he is, and they are all 444 00:22:31,236 --> 00:22:33,836 Speaker 1: these kind of snap judgments being rendered on the way 445 00:22:33,916 --> 00:22:36,676 Speaker 1: up and on the way down, and I just felt 446 00:22:36,676 --> 00:22:41,116 Speaker 1: like I did feel that this is a problem just generally, 447 00:22:41,236 --> 00:22:44,636 Speaker 1: that the radical thing to do here was do with 448 00:22:44,636 --> 00:22:49,196 Speaker 1: whole judgment, to not impose whatever judgment I might have 449 00:22:49,716 --> 00:22:52,516 Speaker 1: on the reader. Let the reader make his or her 450 00:22:52,556 --> 00:23:00,996 Speaker 1: own judgment. We'll be right back, Welcome back to judging Sam. 451 00:23:01,436 --> 00:23:03,116 Speaker 1: The trial of Sam bankman Freed. 452 00:23:03,636 --> 00:23:07,356 Speaker 2: As with any financial catastrophe, they're real victims here. How 453 00:23:07,396 --> 00:23:10,756 Speaker 2: bad should we feel for them? Are crypto speculators or 454 00:23:10,796 --> 00:23:13,116 Speaker 2: they're kind of real people who lost their life savings 455 00:23:13,156 --> 00:23:15,836 Speaker 2: who have a really really good reason to be super 456 00:23:15,876 --> 00:23:17,396 Speaker 2: angry at Sam bankmintrude. 457 00:23:17,716 --> 00:23:20,436 Speaker 1: Well, let me give you just my sense of who 458 00:23:20,476 --> 00:23:23,236 Speaker 1: they are. In the first place, most of them are 459 00:23:23,236 --> 00:23:27,036 Speaker 1: not Americans. I mean most of the Americans weren't allowed 460 00:23:27,036 --> 00:23:29,996 Speaker 1: to trade on FTX International, and the vast majority of 461 00:23:29,996 --> 00:23:32,676 Speaker 1: the millions of accounts that they opened were outside of 462 00:23:32,676 --> 00:23:37,716 Speaker 1: the United States. Next, when you look at the list 463 00:23:37,796 --> 00:23:39,996 Speaker 1: I got ahold of the list of the fifty biggest creditors, 464 00:23:41,116 --> 00:23:43,356 Speaker 1: it was a lot of institutional money. So you had 465 00:23:43,476 --> 00:23:46,436 Speaker 1: the top thirty creditors, or most of them are like 466 00:23:46,516 --> 00:23:50,116 Speaker 1: high frequency traders. But no doubt there are lots of 467 00:23:50,116 --> 00:23:54,156 Speaker 1: little people who thought this is the most trustworthy crypto exchange, 468 00:23:54,516 --> 00:23:58,516 Speaker 1: and they put their savings on them. And interestingly, and 469 00:23:58,556 --> 00:24:01,476 Speaker 1: I think this is like a really relevant point, among 470 00:24:01,556 --> 00:24:04,116 Speaker 1: those people were the employees of FTX, the people who 471 00:24:04,116 --> 00:24:06,396 Speaker 1: were most all in. If you want to find the 472 00:24:06,436 --> 00:24:09,636 Speaker 1: person who lost everything, just go down the list employees 473 00:24:09,676 --> 00:24:10,276 Speaker 1: at FTX. 474 00:24:10,356 --> 00:24:12,756 Speaker 2: There's at the trial we're going to see in part 475 00:24:13,076 --> 00:24:16,516 Speaker 2: a classic drama of loyalty and betrayal. The people at 476 00:24:16,556 --> 00:24:19,796 Speaker 2: the company who are closest to him are now betraying 477 00:24:19,836 --> 00:24:23,316 Speaker 2: each other, trying to cop please make deals with the government. 478 00:24:23,676 --> 00:24:27,196 Speaker 2: Caroline Ellison, who ran Alameda, who was romantically involved with him, 479 00:24:28,716 --> 00:24:31,716 Speaker 2: Ryan Salem, and Gary Wang, these people who are the 480 00:24:31,756 --> 00:24:36,676 Speaker 2: closest people to him at FTX are now presumably judging 481 00:24:36,756 --> 00:24:40,756 Speaker 2: him very negatively. What happened to that web of personal relationships. 482 00:24:40,796 --> 00:24:44,396 Speaker 2: Why is everyone who was with him now against him? 483 00:24:44,836 --> 00:24:47,236 Speaker 1: It's a great question. It's unclear to me exactly what 484 00:24:47,396 --> 00:24:50,316 Speaker 1: everybody's going to say. I'm in an odd position, and 485 00:24:50,316 --> 00:24:53,876 Speaker 1: in a position that neither the defense attorneys nor the 486 00:24:53,876 --> 00:24:57,116 Speaker 1: prosecutors are in, and then I've interviewed everybody. Yeah, you know, 487 00:24:57,156 --> 00:24:59,476 Speaker 1: the prosecutors haven't talked to Sam Magunfried, and the defense 488 00:24:59,516 --> 00:25:01,596 Speaker 1: people aren't able to talk to the shot or Gary 489 00:25:01,756 --> 00:25:05,516 Speaker 1: or Caroline or other witnesses. And even after the collapse, 490 00:25:05,556 --> 00:25:08,556 Speaker 1: I've had access to both sides, not everybody on the 491 00:25:08,596 --> 00:25:11,476 Speaker 1: prosecutor side, but people who I know were the prosecutors 492 00:25:11,516 --> 00:25:15,396 Speaker 1: intend to bring and who the prosecutors think are going 493 00:25:15,436 --> 00:25:18,236 Speaker 1: to get up and say X or why. I know. 494 00:25:18,596 --> 00:25:20,876 Speaker 1: I know that even some of those people, if you 495 00:25:20,916 --> 00:25:23,676 Speaker 1: put a gun to their head and said like, did 496 00:25:23,716 --> 00:25:28,236 Speaker 1: he do it? Might say no. However, on the inside 497 00:25:28,436 --> 00:25:31,836 Speaker 1: the Four Principles, Sam and the first three people to 498 00:25:31,876 --> 00:25:36,116 Speaker 1: turn against him, Gary Wang, Mishad Singing, Caroline Ellison. The 499 00:25:36,156 --> 00:25:40,156 Speaker 1: minute it all collapsed, there was a several beat sort 500 00:25:40,156 --> 00:25:44,796 Speaker 1: of drama that unfolded. First was, willis get someone to 501 00:25:44,796 --> 00:25:48,556 Speaker 1: buy us? This is not that big a problem. Second, Oh, 502 00:25:48,556 --> 00:25:50,516 Speaker 1: we got to quickly find all this money that is, 503 00:25:50,596 --> 00:25:53,316 Speaker 1: we don't know where it is, which is reminiscent of 504 00:25:53,316 --> 00:25:57,236 Speaker 1: what had happened three four years earlier at Alameda. And 505 00:25:57,356 --> 00:26:00,396 Speaker 1: third was we can't get the money in time. Flee 506 00:26:00,516 --> 00:26:03,996 Speaker 1: and they all and everybody you know, they're all basically 507 00:26:04,316 --> 00:26:06,996 Speaker 1: twenty nine years old. They all ran to their parents. 508 00:26:07,756 --> 00:26:10,436 Speaker 2: I remember you calling me from the Bahamas and saying, 509 00:26:10,436 --> 00:26:13,836 Speaker 2: it's like there's a hurricane coming. Everyone's left. Sam's still here, 510 00:26:13,836 --> 00:26:15,996 Speaker 2: his parents are here. I'm still here. And it's like 511 00:26:16,396 --> 00:26:18,676 Speaker 2: people like ran out of their hotel rooms and didn't 512 00:26:18,676 --> 00:26:19,596 Speaker 2: close the door. 513 00:26:19,996 --> 00:26:22,796 Speaker 1: They grabbed. There were seventy company cars. They drove them 514 00:26:22,796 --> 00:26:24,156 Speaker 1: to the airport and left him in the parking lot 515 00:26:24,196 --> 00:26:26,076 Speaker 1: with the keys, oh you know, the engine still running 516 00:26:26,116 --> 00:26:28,276 Speaker 1: kind of thing. And everybody's afraid they were going to 517 00:26:28,316 --> 00:26:32,516 Speaker 1: get arrested wherever they were. And I mean, I can't 518 00:26:32,516 --> 00:26:34,996 Speaker 1: remember the last Has there ever been a financial crisis 519 00:26:35,276 --> 00:26:38,156 Speaker 1: where all the perpetrators ran to their Paris home. I 520 00:26:38,196 --> 00:26:40,236 Speaker 1: don't think that's what they do. Did Michael Milkin run 521 00:26:40,236 --> 00:26:43,516 Speaker 1: to his parents home? I don't think so. Right, So 522 00:26:44,036 --> 00:26:46,636 Speaker 1: they all ran to their parents home, and all of 523 00:26:46,676 --> 00:26:49,196 Speaker 1: a sudden, for the first time, the grown ups are involved, 524 00:26:49,436 --> 00:26:51,396 Speaker 1: the parents. They're going turning to their parents. What do 525 00:26:51,436 --> 00:26:52,036 Speaker 1: we do now? 526 00:26:52,276 --> 00:26:54,556 Speaker 2: In this pre trial period, I've wanted to say to 527 00:26:54,876 --> 00:26:58,796 Speaker 2: Sam Bankman, free too. I've never met. Stop digging, keeps 528 00:26:58,836 --> 00:27:01,356 Speaker 2: talking to the press, kept going on social media, kept 529 00:27:01,396 --> 00:27:02,956 Speaker 2: talking to you, which I don't know how much of 530 00:27:02,996 --> 00:27:06,636 Speaker 2: the problem that was, but he somehow couldn't take what 531 00:27:06,676 --> 00:27:09,676 Speaker 2: would seem like the obvious lawyer's advice when you're going 532 00:27:09,756 --> 00:27:15,316 Speaker 2: to go on trial. Why is that? Is he naive? Hubristic? 533 00:27:15,556 --> 00:27:18,116 Speaker 2: Is there a strategy there, like it is going to 534 00:27:18,116 --> 00:27:20,156 Speaker 2: be fought partly in the court of public opinion and 535 00:27:20,196 --> 00:27:22,316 Speaker 2: he has to get his side out. Why did he 536 00:27:22,436 --> 00:27:25,076 Speaker 2: get himself in additional trouble. 537 00:27:25,396 --> 00:27:28,236 Speaker 1: When the Bahamas police came to arrest him. He was 538 00:27:28,276 --> 00:27:31,076 Speaker 1: in Gary Wang's bathroom trying to send in his testimony 539 00:27:31,116 --> 00:27:35,036 Speaker 1: to Congress. He was trying to speak to the American 540 00:27:35,036 --> 00:27:38,036 Speaker 1: people even as they hauled him away in chains. So 541 00:27:38,396 --> 00:27:41,636 Speaker 1: I think there's several things going on at once. I think, 542 00:27:42,116 --> 00:27:45,436 Speaker 1: for a start, if you or I were in this situation, 543 00:27:45,516 --> 00:27:47,476 Speaker 1: we'd be terrified, and we'd be looking for an expert 544 00:27:47,476 --> 00:27:49,396 Speaker 1: to help us. We'd be looking to the lawyer to 545 00:27:49,436 --> 00:27:51,396 Speaker 1: tell us what to do. I think that's what most 546 00:27:51,436 --> 00:27:55,236 Speaker 1: people in this situation would do. Sam's whole life has 547 00:27:55,316 --> 00:27:58,316 Speaker 1: been looking at the experts, finding the morning and trying 548 00:27:58,316 --> 00:28:02,076 Speaker 1: to figure out the expertise for himself, sometimes with great success, 549 00:28:02,156 --> 00:28:05,596 Speaker 1: to not actually trust what some experts saying instead, rethink 550 00:28:05,596 --> 00:28:09,116 Speaker 1: it for yourself. It was really smart to not less 551 00:28:09,316 --> 00:28:11,636 Speaker 1: to his superiors at Jane Street who were telling him 552 00:28:11,636 --> 00:28:12,996 Speaker 1: you're not gonna make as much money and crypto as 553 00:28:13,036 --> 00:28:15,876 Speaker 1: you wouldn't Jane Street. The markets are thinner, whatever they 554 00:28:15,956 --> 00:28:18,556 Speaker 1: were saying, and just ignore that and did it anyway. 555 00:28:18,996 --> 00:28:21,116 Speaker 1: So he starts with like, I don't listen to lawyers, 556 00:28:21,476 --> 00:28:24,116 Speaker 1: which is funny because his parents are both lawyers. 557 00:28:23,836 --> 00:28:25,556 Speaker 2: Right right, Well, they may have something you do it. 558 00:28:25,516 --> 00:28:26,916 Speaker 1: It may have something to do with it. So the 559 00:28:26,956 --> 00:28:31,676 Speaker 1: second thing is add to this total conviction that he 560 00:28:31,756 --> 00:28:34,436 Speaker 1: is innocent. Now you have to imagine he really thinks 561 00:28:34,436 --> 00:28:37,236 Speaker 1: he's innocent. Yeah, all right, you got it. You've got 562 00:28:37,276 --> 00:28:39,436 Speaker 1: to believe that whether you believe he's innocent or not, 563 00:28:39,636 --> 00:28:43,956 Speaker 1: you've got to believe he believes he's innocent. Okay. Third 564 00:28:44,156 --> 00:28:48,876 Speaker 1: is he's aware that what's going on out there is 565 00:28:48,876 --> 00:28:52,276 Speaker 1: a narrative war, and there is one narrative being told, 566 00:28:52,956 --> 00:28:56,996 Speaker 1: and the narratives is relentlessly negative towards him, and then 567 00:28:57,236 --> 00:28:59,836 Speaker 1: that maybe he can change the narrative if he's out 568 00:28:59,836 --> 00:29:02,436 Speaker 1: there and actually speaking. It's a story war. There are 569 00:29:02,436 --> 00:29:04,596 Speaker 1: two stories. Get cold. The defense is going to tell 570 00:29:04,636 --> 00:29:06,756 Speaker 1: one story. The prosecutor is going to tell another story. 571 00:29:07,156 --> 00:29:10,396 Speaker 1: Each side is going to manipulate the facts in certain ways. 572 00:29:10,396 --> 00:29:12,396 Speaker 1: Each side is going to leave stuff out that they 573 00:29:12,436 --> 00:29:14,276 Speaker 1: shouldn't leave out, that you can't leave out if you 574 00:29:14,276 --> 00:29:16,716 Speaker 1: can tell this story honestly. So each side is going 575 00:29:16,756 --> 00:29:20,436 Speaker 1: to be telling essentially a slightly false story, and then 576 00:29:20,436 --> 00:29:25,196 Speaker 1: the jury's going to decide whose story is better judging. 577 00:29:25,276 --> 00:29:32,556 Speaker 1: Sam will be right back. Welcome back. So we're back 578 00:29:32,596 --> 00:29:34,476 Speaker 1: with one last thing. And so, Jacob, you we have 579 00:29:34,676 --> 00:29:37,236 Speaker 1: had this conversation. Is there anything else you'd like to 580 00:29:37,276 --> 00:29:38,236 Speaker 1: ask me? Well? 581 00:29:38,276 --> 00:29:41,036 Speaker 2: Sure, give us the insider's guide to the trial. What's 582 00:29:41,076 --> 00:29:43,836 Speaker 2: the thing people should be looking for that you're looking 583 00:29:43,916 --> 00:29:45,956 Speaker 2: for that they might not know about otherwise. 584 00:29:48,076 --> 00:29:51,516 Speaker 1: One of the three key witnesses, Gary Wang, does not speak. 585 00:29:52,196 --> 00:29:54,156 Speaker 1: He actually, when you actually try to talk to her 586 00:29:54,196 --> 00:29:57,516 Speaker 1: and interview him, he just stares at you. I've never 587 00:29:57,596 --> 00:30:00,756 Speaker 1: had this experience with a potential source. People sat next 588 00:30:00,796 --> 00:30:02,956 Speaker 1: to him for months and gotten out a word out 589 00:30:02,956 --> 00:30:04,996 Speaker 1: of him. I want to see what happens when he's 590 00:30:04,996 --> 00:30:05,996 Speaker 1: put on a witness stand. 591 00:30:06,236 --> 00:30:08,156 Speaker 2: So not a great interview, not a great witness. 592 00:30:08,356 --> 00:30:10,636 Speaker 1: It may be the most unusual moment in a court 593 00:30:10,676 --> 00:30:11,956 Speaker 1: room in American history? 594 00:30:13,036 --> 00:30:16,276 Speaker 2: Can he win a trial? I mean, the baseline is 595 00:30:16,316 --> 00:30:19,876 Speaker 2: the government wins most of the cases it brings. The 596 00:30:19,876 --> 00:30:22,436 Speaker 2: odds are stacked against him, but he's not taking a plea. 597 00:30:22,516 --> 00:30:24,636 Speaker 2: He's taking his chances. But even if there were a 598 00:30:24,756 --> 00:30:27,996 Speaker 2: hung jury in the first trial, they could try them again, 599 00:30:28,156 --> 00:30:30,316 Speaker 2: and they're holding back other charges and it could be 600 00:30:30,356 --> 00:30:34,356 Speaker 2: tried other places. I mean, is there any outcome for 601 00:30:34,476 --> 00:30:38,676 Speaker 2: Sam Bankman freed other than basically spending years and years, 602 00:30:38,676 --> 00:30:40,236 Speaker 2: if not the rest of his life in prison. 603 00:30:42,076 --> 00:30:45,756 Speaker 1: Last year I saw these stats not long ago. Last 604 00:30:45,836 --> 00:30:48,516 Speaker 1: year there were like seventy thousand criminal cases brought by 605 00:30:48,516 --> 00:30:52,556 Speaker 1: the federal government and the rate of acquittal was less 606 00:30:52,596 --> 00:30:53,756 Speaker 1: than half of one percent. 607 00:30:54,436 --> 00:30:56,956 Speaker 2: So there are worse than I thought, worse. 608 00:30:56,756 --> 00:30:59,916 Speaker 1: Than you thought. No, it is the odds are so 609 00:31:00,036 --> 00:31:03,796 Speaker 1: stacked against you if the Feds bring an actual criminal 610 00:31:05,036 --> 00:31:08,036 Speaker 1: case against you. If you're asking what my intuitive judgment 611 00:31:08,116 --> 00:31:12,236 Speaker 1: is about Sam's the likely Sam is acquitted, I think 612 00:31:12,276 --> 00:31:14,356 Speaker 1: the if you went on too the betting markets, you 613 00:31:14,516 --> 00:31:17,956 Speaker 1: probably get if you wanted to bet he's gonna get off. 614 00:31:18,476 --> 00:31:20,996 Speaker 1: I think you get like ninety to one odds. I 615 00:31:20,996 --> 00:31:23,356 Speaker 1: think that's about what the betting markets were the last 616 00:31:23,356 --> 00:31:26,476 Speaker 1: time I looked. I'd certainly take those odds. I might 617 00:31:26,516 --> 00:31:29,796 Speaker 1: even take like thirty to one, but I don't think 618 00:31:29,796 --> 00:31:32,676 Speaker 1: i'd take better than that or worse than that. The 619 00:31:32,716 --> 00:31:35,836 Speaker 1: odds are really stacked against him. I think his chances 620 00:31:35,876 --> 00:31:37,516 Speaker 1: are better than the markets think. 621 00:31:38,076 --> 00:31:38,796 Speaker 2: Huh, I do? 622 00:31:38,956 --> 00:31:41,356 Speaker 1: I do. I think that better than the markets think, 623 00:31:41,836 --> 00:31:42,996 Speaker 1: but I don't think they're great. 624 00:31:43,116 --> 00:31:46,756 Speaker 2: It's a very Sam Bankman freed way to addalyze make 625 00:31:46,796 --> 00:31:48,476 Speaker 2: the bet and ether or bitcoin. 626 00:31:48,796 --> 00:31:51,396 Speaker 1: Yeah. 627 00:31:51,716 --> 00:31:54,196 Speaker 2: Yeah, Michael, it's really fun talking to you, and I'm 628 00:31:54,236 --> 00:31:56,196 Speaker 2: really glad to be able to tee up this podcast 629 00:31:56,596 --> 00:31:58,916 Speaker 2: with you. Can't wait to see what happens next. 630 00:31:59,716 --> 00:32:03,076 Speaker 1: Tomorrow I'll sit down with producer and reporter Lydia Jean Kott, 631 00:32:03,276 --> 00:32:07,516 Speaker 1: and former prosecutor Rebecca Mermelstein, now a defense attorney to 632 00:32:07,556 --> 00:32:10,396 Speaker 1: talk about the charges against Sam and how his lawyers 633 00:32:10,476 --> 00:32:13,796 Speaker 1: might defend him. Then, Lydia, Gene and I will give 634 00:32:13,796 --> 00:32:16,436 Speaker 1: you a first hand report of what happened on trial 635 00:32:16,516 --> 00:32:21,556 Speaker 1: day one. Join us. This episode of Judging Sam was 636 00:32:21,556 --> 00:32:25,636 Speaker 1: hosted by me, Michael Lewis. Lydia Gencott is our court 637 00:32:25,716 --> 00:32:30,196 Speaker 1: reporter Katherine Girardeau and Nisha Venken produced this show. Sophie 638 00:32:30,196 --> 00:32:33,476 Speaker 1: Crane is our editor. Our music was composed by Matthias 639 00:32:33,516 --> 00:32:37,636 Speaker 1: Bossi and John Evans of stell Wagons. Symphonet Judging Sam 640 00:32:37,716 --> 00:32:40,796 Speaker 1: is a production of Pushkin Industries. Got a question or 641 00:32:40,836 --> 00:32:44,436 Speaker 1: comment for me, There's a website for that atr podcast 642 00:32:44,556 --> 00:32:50,316 Speaker 1: dot com. That's atr podcast dot com. To find more 643 00:32:50,356 --> 00:32:54,636 Speaker 1: Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts, or 644 00:32:54,676 --> 00:32:57,676 Speaker 1: wherever you listen to your podcasts. If you'd like to 645 00:32:57,716 --> 00:33:01,556 Speaker 1: access bonus episodes and listen ad free, don't forget to 646 00:33:01,556 --> 00:33:04,996 Speaker 1: sign up for a Pushkin Plus subscription at pushkin dot fm, 647 00:33:05,036 --> 00:33:09,716 Speaker 1: slash plus, or on our Apple show page