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SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

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Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#221

Post by freedude »

skybrian wrote: post #215
sifar wrote: post #178

Earlier quoted context omitted.

>> When I read what journalists were actually saying, they were quite negative about Bankman-Fried I think the issue was there was no pressing follow up to his evasive replies. e.g Sorkin's interview. He was basically allowed to get away with "I didn't knowingly do it."

Sometimes they don't follow up because the statement is obviously evasive nonsense and readers will see it. Just letting them say damning things on the record is a win. And if you don't confront them, maybe they'll say even more? It's like the military quote: "never interrupt your enemy when he's making a mistake."

Well lets be completely honest then...

And sometimes they don't confront them because the media are shills.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#222

Post by AmericanChopper »

SilverBirch wrote: post #78
blululu wrote: post #74

Earlier quoted context omitted.

Honest question: are low income users viable for an ad supported platform? As it is I think only North American online ads actually make decent money, though perhaps European and Asian ad markets also deliver value close to break even. It is all an investment in the future. The last 15 years have had a belief that more users means more money but this might be thinking that all users are the same when some are much mo…

Meta makes revenues of about $15Bn in US & Canada, $8Bn in the EU and $10Boutside of EU & US/Canada each year. So it's clearly not nothing, and it's not like Twitter can afford to be picky about where it makes money.

> it's not like Twitter can afford to be picky about where it makes money.

Being picky about where you make your money is absolutely essential for most businesses. Every dollar in revenue costs some amount of money to generate, and choosing the right market segments to invest that money in is a foundational part of a business plan.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#223

Post by dang »

perihelions wrote: post #19

Note that the SEC's is merely a civil action. The federal criminal indictment hasn't been unsealed yet (but should be soon, today [0]). [0] https://apnews.com/article/technology-business-bahamas-unite... ( "We expect to move to unseal the indictment in the morning and will have more to say at that time" )

It's now being discussed here:

The United States of America vs. Samuel Bankman-Fried Indictment [pdf] - https://news.ycombinator.com/item?id=33969896

I suppose we could merge these threads since it's not as if they're partitioned along the lines of "this thread for the civil complaint, that one for the criminal charges".

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#224

Post by dang »

c0m wrote: post #23

The SEC's complaint. It's a brutal read if you're Sam: https://www.sec.gov/litigation/complaints/2022/comp-pr2022-2...

Thanks - we've changed the URL from https://www.sec.gov/news/press-release/2022-219 to the actual complaint, which has more information.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#225

Post by gergov »

el_nahual wrote: post #118
boplicity wrote: post #51

Earlier quoted context omitted.

Frankly, it seems to me that VCs should be liable for money FTX owes its customers. These are professional investors who didn't insist on very basic things, such as proper financial sheets from a finance company. Frankly, that's gross negligence. Professional investors should have legal responsibility to do at least some due diligence. In addition, they're becoming owners of a company. As owners, why shouldn't they b…

Often VCs will have a seat on the company's board--in which case they might be liable. However, it doesn't seem that Sequoia et al had seats on the board, at least from this early 2022 press release [1]. Holding shareholders that are not directors accountable is extremely difficult. This is called "piercing the corporate veil" (worth a google) and is done only vary rarely and in cases of clear and outrageous miscondu…

Which makes it even more interesting. One of the most head scratching pieces of this puzzle that SBF got truckloads of VC money with laughable fundraising rounds + no board seats.

It didn't make any rational sense.

Unless the logical conclusion is that it means 'zero liability'.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#226

Post by notahacker »

slibhb wrote: post #102
cs702 wrote: post #82

The most interest aspect in the FTX saga, for me, is that SBF was treated very gently by major news outlets (and maybe by government regulators too)... until regular individuals in social media started asking: Why is SBF being treated so kindly? Why would journalists (and regulators) assume that SBF meant well? A possible answer that no one ever mentions is that SBF possesses many qualities that are valued and admire…

A lot of people have made this argument -- that he was treated gently -- but to me that looks like good old-fashioned journalism. People have become so acclimated to the decline of objective journalism that when they see it, something seems off.

Yeah. People seem to be bizarrely fixated on the bits of stories where they mention what SBF was famous for and quote his excuses and don't state that he's definitely guilty of this crime that we were waiting to see if he'd be charged with, and miss the point that the headline is that the guy is accused of a serious crime and articles on famous people accused of crimes usually mention what they're famous for even if that's good, quote a denial/excuse if there is one and don't announce what they're guilty of before they've even been charged with anything.

Sure, he did more full-blown interviews than most people accused of serious crimes, but that's mainly because most of them listen to their lawyers.

If media outlets actually felt particularly kindly disposed towards SBF, they'd be deploying the rhetorical tricks used to defend their favourite politicians (can we trust the investigators? aren't the big losers in FX the sort of financial institutions that were taking calculated risks anyway? and how many of them go to jail when they lose their customers' money? aren't other crypto institutions much worse and what's their role in Alameda's collapse? maybe he actually he could win all that money back, he's made billions before?) not talking about how a one time darling of the Effective Altruism movement and former billionaire is under investigation after his brokerage collapsed after he allegedly transferred its customers' funds to prop up his other failing company. No matter how much biographical detail gets included beforehand, that's not a rosy picture.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#227

Post by 323 »

robocat wrote: post #158
323 wrote: post #72

Earlier quoted context omitted.

> If I were a retail investor who lost my savings in FTX, I might be feeling upset that the government is rushing to action in defense The customers will be paid before investors with whatever money is there. This is well established by previous case precedents, including in places like unregulated poker betting sites. Anybody can have a claim, including the SEC, but the courts decide allocation order.

> The customers will be paid before investors with whatever money is there. That really depends whether the investment is structured as a secured loan (senior debt) or not. Secured loans get paid out in full, before the unsecured creditors such as customers. > but the courts decide allocation order Mostly that is defined by the laws of the jurisdiction, not the individual court. In the Bahamas, the ranking of credito…

You can claim customer money is secured claims.

Like I said, IANAL, but in all the cases I'm aware of customers went first.

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#228

Post by jack_pp »

jacquesm wrote: post #85
jack_pp wrote: post #46

Earlier quoted context omitted.

Maybe financial companies not founded in the US shouldn't be allowed to advertise to US companies at all.

I don't see how that would work in practice, nor would the US want it that way because it would almost certainly be mirrored in the other direction.

Then ban companies in jurisdictions that protect criminals

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#229

Post by slim »

cs702 wrote: post #82

The most interest aspect in the FTX saga, for me, is that SBF was treated very gently by major news outlets (and maybe by government regulators too)... until regular individuals in social media started asking: Why is SBF being treated so kindly? Why would journalists (and regulators) assume that SBF meant well? A possible answer that no one ever mentions is that SBF possesses many qualities that are valued and admire…

* His last name is Bankman which suggests he descends from a bloodline of bankers -- bankers are trusted, valued and admired in elite circles

Re: SEC Charges Samuel Bankman-Fried with Defrauding Investors in FTX [pdf]

#230

Post by tiahura »

pavlov wrote: post #38
fredgrott wrote: post #18

Earlier quoted context omitted.

You seem to forget the debate between the SEC and the other org that want to regulate crypto. The reason SEC moved this fast was to add to their counter-point argument that they should be allowed to fully regulate crypto as securities.

No, this case is not about crypto at all. It’s about FTX shares and that’s unequivocally the SEC’s jurisdiction.

Here’s Harvey Pitt - the former SEC Chairman explaining this morning why the SEC doesn’t have jurisdiction.

https://www.cnbc.com/video/2022/12/13/regulating-cryptocurre...

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