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0:56

Welcome to Judging Sam. I'm Jacob Goldstein

0:58

and we're recording this on Thursday, October

1:01

nineteenth. The third week

1:04

of the trial of Sam Bankman Freed wrapped

1:06

up today and the prosecution is all

1:08

but done presenting their case. Their

1:10

last big star witness

1:12

was this week. You know this if you've been listening to the

1:14

show. It was Nishad Singh,

1:16

one of the three main FTX

1:19

executives who has pleaded guilty. Earlier

1:21

this week, our court reporter Lydia Jenkott

1:24

talked with Michael Lewis about the beginning

1:26

of Nishad's testimony today, she

1:28

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

1:31

So you told me that out of the three top

1:33

FTX executives we've heard from in

1:35

this trial, you spent in the most time with Nishad.

1:38

What's he like?

1:39

He was the most kid like in a lot of ways

1:42

and also the most earnest. He was it

1:44

accuse twenty one. When he joined Alimea

1:47

Research, he had basically one

1:49

very short stint in the workforce after

1:51

college. He knew nothing about finance,

1:53

like zero when he started.

1:56

So everything he learns about the world of money

1:58

he learns through the lens of first

2:00

Alometer Research and then FTX, which

2:02

is a very peculiar way to learn about

2:05

finance. He

2:07

was she talked to my element

2:10

and was very bright and kind of free

2:12

associated when he talked, and

2:14

would take all kinds of stuff that in

2:16

retrospect, you know, it's kind

2:18

of interesting. Like there's a line in the book where

2:21

he says, you know, in the course of

2:23

doing their trading at al I mean research, where they

2:25

had they did some stuff to kind of get around

2:27

laws to trade. This shot has this

2:29

line where I learned what the law

2:31

is. It's not what's written, it's what people care

2:34

to enforce, and that he

2:36

got very cynical about the

2:39

laws around money and

2:41

was very open about it. This is when things were good. He

2:44

was also very open, extremely

2:46

open about Sam's lack

2:50

of any kind of emotional intelligence and

2:52

how hard it had been on everybody

2:54

for the previous four years to

2:57

have this guy sitting at the top of the company

2:59

who did not care at all about

3:01

people's feelings and was uninterested in

3:03

dealing with him, and that all those

3:05

feelings, especially the negative ones,

3:08

found their way to the Shot, and the Shot ended up

3:10

being kind of, you know, emotional

3:12

intelligence officer in chief. And

3:14

the Shot was also, in

3:17

addition to being kind of the translator

3:19

of FAM's emotional

3:23

states or a translator of Sam

3:25

period to everybody else, he

3:27

was a translator of Gary's code

3:30

to everybody else. That he was this

3:32

kind of like this machine to that

3:34

acted as a buffer between these

3:36

two incomprehensible people, Gary

3:38

and Sam and the rest of

3:41

the of the firm. But there's

3:43

all kinds of stuff that, you know, he was.

3:45

Just how I got to know him was we just

3:47

spent endless hours talking it

3:49

rings true to me that he wasn't

3:52

alive to the risks

3:54

they were running with customer money

3:57

until September. He didn't really have a

3:59

filter and he would

4:01

he would he. I think if the shot

4:04

had known, like he might have blurted it out

4:06

to me in an interview. He was that he

4:08

was that on a naive about

4:10

things that it w'd be a very poor liar.

4:13

Well, maybe that's why he didn't know until

4:16

so late. The other thing I was wondering about

4:18

is in court they showed us these signal messages

4:20

between Sam Makman and Freed and a shad and

4:23

in one of them he says something like this

4:26

is wildly selfish of me, And then he asked

4:28

Sam Mankman Freed to publicly explain

4:30

that there weren't a ton of people orchestrating what

4:32

happened, and Sam responded,

4:35

Yeah, I don't think that's super selfish. I think

4:37

that's correct.

4:38

It's funny. Can I just tell you what I found interesting about

4:40

that whole exchange? Yes?

4:41

Please.

4:42

This is a new wrinkle in the financial markets. It's

4:44

like, once they've become automated and they

4:47

become driven by code,

4:49

people actually doing the code sometimes

4:51

are capable of doing things that

4:53

are writing code without understanding

4:56

the consequences of the code, without understanding

4:58

that this line might just lift money from somebody

5:01

it's really bad to lift money from. And

5:04

the kind of myopia of the coder is

5:06

which struck me about that exchange and the shot

5:09

of saying, Sam Christ, now that I know

5:11

what this was used for, I'm implicated

5:13

because I wrote that code, but I had no

5:16

idea that that code was going to do that. And

5:18

that's interesting. Like old time fans,

5:20

you wouldn't have that old times and finance, there

5:23

wasn't this level of an abstraction. And

5:25

I think people end up doing stuff

5:28

when when it's being automated that

5:30

they might not do if it was face to

5:32

face, normal human interaction.

5:34

Yeah, yeah, that makes sense. But Sam's response,

5:38

Yep, I don't think that's super selfish. I think that's correct.

5:40

That implies that he did

5:43

know what was happening. Now to me, it seems pretty

5:45

damning. It kind of implies that there

5:47

were people orchestrating it and that was

5:50

Sam impossible.

5:51

Don't you think that? Don't

5:53

you think the damning thing is that Nashad tells

5:55

Sam tell people that you orchestrated

5:58

it and I didn't.

5:58

And Sam says.

6:00

Yes, that's not a selfish request.

6:03

Well, yeah, I thought this was very dad that he

6:05

doesn't say what orchestrate what? Yeah,

6:08

but amshoes. He may

6:10

be just saying that, oh, I know

6:12

that, I know you didn't know anything.

6:14

But he's not saying that I know I

6:16

did, right, you know, just the facts

6:19

of the thing are so clear. It's like so clear

6:21

that the money was in the wrong place, and that in

6:24

and of itself is enough to

6:26

put him in jail. And nobody even disagrees

6:28

with that. But there's this argument

6:30

of there is this subtle argument about like

6:33

what's going on inside these people's heads,

6:35

and we're

6:39

getting a little more clarity on it, but I

6:41

don't feel like we've had complete clarity. And I

6:43

really really want to hear what Sam has to

6:45

say. I hope he testifies, because

6:47

that at the end of that, I think we can have

6:49

the full conversation about what seems

6:52

most plausible. You know, what

6:54

is the timeline on this, It feels most plausible.

6:57

Yeah, I can't wait for that.

7:01

We'll be back in a minute to talk about the many things

7:03

that have happened in the trial. Since

7:05

Nashad finished testifying earlier

7:07

this week. Lidiagen,

7:14

Welcome back to judging, Sam. Thank you.

7:17

Is it true that you got in trouble in court today?

7:20

I did get in trouble in court today.

7:23

What did you do?

7:25

I turned around and asked

7:28

someone a question when

7:31

the judge and the lawyers were having a

7:33

side panel conversation, and

7:36

a marshal came up to me and said that if

7:38

I did that again, he's gonna throw me out of the courtroom

7:41

drama.

7:42

This is courtroom drama.

7:44

Yeah. The marshals have been increasingly angry

7:47

at the reporters for talking, chewing

7:49

gum, having snacks. They

7:51

said that this judge is the strictest

7:53

judge in the courthouse and that he

7:55

can see all the way from

7:58

across the courtroom on his little podium

8:00

if someone is chewing gum and then will

8:02

yell at the marshals afterwards. So that's

8:05

why they have to be so strict.

8:07

Wow. So they're like, it's not

8:09

my fault, it's the judge. Sorry,

8:12

I'm just the middleman.

8:13

And there's been there's been a crackdown. They took someone's

8:15

newspaper away today. So the

8:17

early days of chatting doing crossroad puzzles

8:20

are over now. It kind of feels like when

8:22

the teachers like tells everyone to put their

8:24

heads on the desk. That's where

8:26

we're at.

8:27

Well, and there is a break now right

8:29

as of today, there's going to be what a week long break?

8:31

Is that? Right? Yes? Which I think

8:33

is sorely needed by everyone. The judge has definitely

8:36

been getting antsy. He's been getting up and kind of leaning

8:38

over during testimony. He

8:40

yelled at also both of the lawyers for taking

8:42

too much time. So I think people are

8:44

running out of ink in their pens. I think we all need a

8:46

break.

8:47

Why, I mean, apart from

8:50

letting everybody chill out for a few days, why is

8:52

there a week long break right now?

8:53

The judge is going to a conference.

8:56

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

8:58

you were a judge'd be like, sorry, world,

9:00

I'm going to a conference for a week.

9:02

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

9:05

his rules.

9:06

So legitien. There have been several witnesses

9:09

since Nishad finished testifying earlier

9:11

this week, and you were telling me earlier

9:13

on Slack that of all of them, the one who

9:15

was most striking to you was can

9:18

Son, the lawyer, the general

9:20

counsel of FTX, tell

9:22

me about him. What do you say, Why was it interesting to you?

9:25

Yeah? So, first off, out

9:27

of all of the FTX executives,

9:29

he seemed like the most comfortable in a suit.

9:32

He's like, lawyers might be keeping

9:34

the suit industry in business at this point, right.

9:36

Yes, exactly, And

9:38

he was pretty self spoken, and

9:41

he started off by saying that

9:44

he had no idea that

9:47

Alameda was using FTX customer

9:49

funds. He said that he

9:51

would have never approved that, and

9:54

he was told over and over again by Sam

9:56

that these customer funds were safe and

9:58

separated. And that's what he told

10:00

other people when they asked, that's what he told customers,

10:03

that's what he told investors. And

10:05

the prosecutors really spent a

10:07

good ten maybe even thirty

10:09

minutes, it felt, underlining that point and

10:12

all the different iterations of he

10:14

did not know that this was happening. He would

10:16

have never authorized this in his

10:18

position as a general counsel.

10:20

Okay, so he didn't know what was happening.

10:23

What's in it for the prosecution to call him, like,

10:25

why do we care that he didn't know what was happening?

10:27

Well, that's where the dramatic moment came in

10:30

when he talked about when FTX imploded

10:34

and when customers were trying to withdraw their money

10:36

and they realized that it wasn't there. And he talked

10:38

about how at that point he was kind of in a

10:40

sort of war room with Sam,

10:43

maikman Fried and Nishad. A bunch of other

10:45

people were in that room as well, and

10:47

he described what it was like. He talked about how

10:50

Sam was on his computer typing away and

10:53

Nishad he was very poetic, and how he described

10:55

Nashad. He said something like how Nishad

10:57

was really pale and looked like his

11:00

soul had been tugged out of him.

11:02

Huh.

11:03

And he said that it was at this point that he

11:05

was shown a balance sheet, and

11:07

the balance sheet showed that Alameda

11:10

was billions of dollars in the red, that

11:12

they owed this money to FTX, and he was really

11:15

shocked to see this. And

11:17

at this point Sam was still looking for someone

11:19

who could save FTX, and

11:22

they were trying to figure out, you know, what to

11:24

do, how to share this balance sheet, what

11:26

to say about it. And Ken

11:28

Sun said that Sam asked him

11:31

if there was any legal explanation that

11:33

he could give for this deficit,

11:36

for this.

11:36

Whole meaning, is there any

11:38

story that you could make up, any

11:41

fiction you could create that would

11:43

make this not a crime?

11:45

Yes, I think that's the only way to interpret

11:48

that.

11:48

Yes.

11:49

And Can Sun said that they

11:51

ended up that evening going on a walk, and

11:53

Ken Sun said he had done some digging and he thought

11:55

about it, and he told Sam

11:58

that while there are some legal theories

12:00

he could offer up, there is no

12:02

legal explanation that's supported by the facts.

12:05

Wow, So that seems

12:07

kind of damning. Did he get us examined?

12:09

Did the defense have a chance to ask him questions?

12:12

Yes, they brought up how he testified as part of

12:14

a non prosecution agreement, So

12:17

okay. Can Sun said that, you

12:20

know, he didn't know that this was happening, but still,

12:23

as part of his job as general counsel,

12:25

he did approve certain

12:27

things that were without his knowledge, certain

12:30

transactions that we're using customer funds.

12:32

So he said that out of an abundance of caution,

12:35

he is testifying under this non

12:37

prosecution agreement. But the

12:40

defense lawyers pointed out that

12:42

this non prosecution agreement only

12:44

stands as long as he's saying

12:47

the truth, and it's the government

12:49

who gets to decide whether or not he's saying

12:51

the truth. And that's just a way of casting

12:54

doubt on his testimony and saying that he has

12:56

an incentive to say what the government wants him

12:58

to say, uh.

12:59

Huh, which is also true obviously for

13:01

all the people who made plea deals. And that has

13:03

been the sort of key thing the defense

13:05

keeps saying about all these other senior executives

13:07

who pleaded guilty and don't

13:10

want to go to prison, basically right.

13:12

Exactly, and it lines up with the role of the

13:14

defense and what the defense has been doing in this case

13:16

on cross which is really just casting

13:19

doubts or poking little holes in

13:21

what the witnesses are saying, which makes

13:23

sense because at the end of the day, the jury

13:25

has to decide that Sam is guilty beyond

13:28

a reasonable doubt, So they're just pointing out

13:30

why one might have a reasonable doubt about what these witnesses

13:32

are saying.

13:34

So, okay, lydia Jeen, you've

13:36

been going to court all day,

13:38

every day for three weeks. You've seen

13:41

every minute of the trial. The

13:43

prosecution is basically done. What

13:47

do you make of things?

13:47

At this point, I think that

13:49

the prosecution has

13:52

done a really good job of giving

13:54

us a very clear story. And

13:57

I've read that in every trial there's certain themes

13:59

that come up, and on the side

14:02

for the prosecution, the theme is very clear.

14:04

The theme is that Sam is a liar. It's

14:06

that Sam said that FTX was safe for Becusstomers

14:09

and it actually wasn't. And he lied about this over

14:12

and over and over again. He lied about it

14:14

to the people who are close to him, he lied about

14:16

it to customers, he lied about it to investors,

14:19

and they've just been pounding that home

14:21

over and over and over again. The

14:23

defense on their cross they

14:25

haven't really told us a story

14:28

the same way about what happened, which

14:30

of course they don't have to. All they have to

14:32

do is poke holes in the story of the prosecution.

14:35

But I am curious as we approach

14:38

the time for the defense to present

14:40

their case, if they are going to give us

14:42

a narrative and explain from their side what

14:44

happened and how FTX imploded.

14:47

Well, and from their side, you mean, when

14:49

Sam takes the stand right, the big

14:51

dramatic conclusion to this to

14:53

this.

14:54

Trial exactly, and when Michael Lewis

14:56

comes in when we get to go to court together, which I can't

14:58

wait for.

14:59

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

15:02

Twitter has been coming up a lot in this

15:04

trial. We've been seeing lots of tweets from say

15:06

Magmond Freed. It kind of is

15:09

a great reminder about why it's not

15:11

good to tweet through it.

15:12

Never tweet the story.

15:15

Exactly, especially if you're potentially being

15:17

accused of a massive fraud.

15:19

Whatever you tweet, never tweet. All

15:21

customer accounts are segregated. One

15:23

thing, never to tweet.

15:25

Do not say FTX is fine, assets are

15:27

fine. The other day there was an SD

15:29

and Y investigator. He was kind of like a Twitter

15:32

expert who showed us

15:34

how Twitter works, what retweets are, what gms

15:36

are. He showed us a whole ton

15:38

of tweets from Sam mcmanfreed, and they all came up

15:41

on the screen so fast it honestly felt like

15:43

a clockwork orange you know when you're limoly

15:46

are your eyes open exactly

15:48

like you couldn't read them, but you just got this sense,

15:51

this overwhelming sense of to

15:53

the prosecution's point of Sam tweeting things that

15:55

aren't true. But there was one particular

15:58

moment that stood out, which is when we

16:00

were shown private messages

16:02

dms between Sam Maikmanfreed

16:04

and a reporter at Vox named Kelsey Piper.

16:07

This reporter, Kelsey Piper, actually publish

16:09

these dms on box when it happened right, This was

16:12

like big news last November, like right

16:14

when FTX was blowing up.

16:15

This happened exactly, and I think I had

16:17

a big influence on how people thought about Sam

16:19

agmn Freed, which is why the lawyers

16:22

put up a strenuous objection to have these dms

16:25

not be shown. But in the end the judge ruled that

16:27

they could be.

16:28

Okay, Lidia, to tell you what we're basically done,

16:30

I'm going to get out of here, say goabye, But why don't

16:32

you just play us out with some of the greatest hits from

16:34

those dms.

16:37

Kelsey Piper. I was just re listening

16:40

to that conversation we had this summer about whether

16:42

you should do an ethical shit for the greater good

16:44

sam Agmin Freed. What did I say,

16:47

Kelsey Piper? You were like, Nah,

16:50

don't do an ethical shit, Like if you're

16:52

running Philip Morris, no one's going to want to work

16:54

with you on philanthropy. Sam Mankman

16:56

Freed. Heh Kelsey

16:58

Piper, And there's a risk of doing

17:00

more harm than good. But even if you subtract

17:03

that out, pretty not worth it. Sam

17:05

Mankman Freed, Yeah, Kelsey

17:07

Piper. I was trying to figure out, like if

17:10

that was kind of the pr off the cuff answer.

17:13

Sam Megman Freed, Man

17:15

all the dumb shit, I said, It's not true,

17:18

not really, Kelsey Piper. Yeah,

17:21

I thought it might not be. Sam Megmanfreed.

17:24

Everyone goes around pretending that perception reflects

17:27

reality. It doesn't. Some

17:29

of this decade's greatest heroes will never be known,

17:31

and some of the most beloved people are basically

17:34

shams.

17:38

This episode of Judging Sam was hosted by

17:40

Jacob Goldstein. Lydia

17:46

Jencott is our court reporter. Katherine

17:48

Girardeau and Nisha Venken produced this

17:50

show. Sophie Crane is our editor.

17:52

Our music was composed by Matthias Bossi

17:55

and John Evans of stell Wagon's Symphinette.

17:58

Judging Sam is a production of Pushkin Industries.

18:01

Got a Question or Comment for Me is a website

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