Former SEC attorney John Reed Stark took to social media Monday to make an insightful prediction about how Sam Bankman-Fried’s (SBF) criminal case will play out. Here are the details…
SEC lawyer made SBF comment
The disgraced former boss of defunct crypto exchange FTX is facing sweeping fraud charges that could collectively earn him life in prison. Although he will go to trial soon, Stark says the founder’s chances of being acquitted are slim. “Rarely in the history of financial fraud prosecutions has a Justice Department team had this level of unfettered access to such an extraordinary trove of witnesses and evidence,” the former attorney wrote on Twitter Monday.
Stark noted that several high-profile executives close to Bankman-Fried pleaded guilty to reduce their sentences. They include FTX co-founder Gary Wang, director of engineering Nisha Singh, FTX Digital Markets CEO Ryan Salame, and Alameda Research CEO Caroline Ellison. Ellison, who is also SBF’s on-and-off girlfriend, admitted in her publicly leaked diary that she felt ill-equipped to run SBF’s crypto trading desk Alameda, which was deeply linked to fraud. After the SBF leaked the girl’s diary to the media, she saw her bail revoked for witness tampering.
‘SBF refused to remain silent’
With such a strong roster of cooperating witnesses, Stark believes the prosecution’s stock of documented evidence of Bankman-Fried’s illicit dealings is “likely unprecedented for a financial fraud case.” John Ray III’s handling of the stock market’s collapse would also likely work against its founder, he said. A month after taking control of the exchange, Ray testified before Congress that FTX was an “unprecedented” corporate failure due to a “total absence of reliable financial information.” Stark believes Ray gave most of his findings to the government and gained access to a mountain of incriminating evidence against the SBF.
Finally, Bankman-Fried has likely already incriminated himself with his post-FTX “public relations campaign” in which he conducted numerous interviews with independent journalists, legacy media, and Twitter domains in an attempt to clear his name. “SBF refused to remain silent,” Stark wrote. “Whether SBF is crazy as a fox or whether he can control his obsessive desire to bare his soul is a matter that should be discussed not only by lawyers, but also by psychological experts.” According to Stark, SBF’s hours of on-the-record statements and responses provide evidence that reveals inconsistencies and inaccuracies in a person’s statements over time, presenting significant possibilities for impeachment.