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FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

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Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#51

Post by epivosism »

Readers may be interested in this link, which is to all the SBF sentence-related markets on manifold.

Caveats: just like twitter follower counts, instagram like counts, hn upvotes, this is "play money", the mana amounts the traders bet here are numbers in a database, not real cash. Also the number of traders is fairly small.

The top markets have settled on these values:

  300 traders, The most likely time served is 20-30y

  270 traders, he'll be sentenced to 20y+, 86% 

  135 traders, he'll be sentenced to 50y+, 27%
https://manifold.markets/browse/sbf-trial-sentence?s=most-po...

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#52

Post by trhway »

JumpCrisscross wrote: post #48
trhway wrote: post #39

Not trying to defend or anything (what I read in those news on SBF doesn't cause any sympathy for him in me), just wondering - as the crimes committed here were committed in the open over some prolonged time, why those crimes weren't stopped by the law enforcement several years/billions (and decades of prison term) before that pretty late point? Kind of like with Madoff or 2008 - everybody knows that the things aren'…

> it looks like the main crime in such cases is the failure/crash itself not the cheating/scamming/etc. before it The stealing caused the crash.

The question is why the stealing is allowed to go for that long and massive and pretty much in the open until it results in the crash.

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#53

Post by JumpCrisscross »

trhway wrote: post #52
JumpCrisscross wrote: post #48

Earlier quoted context omitted.

> it looks like the main crime in such cases is the failure/crash itself not the cheating/scamming/etc. before it The stealing caused the crash.

The question is why the stealing is allowed to go for that long and massive and pretty much in the open until it results in the crash.

> question is why the stealing is allowed to go for that long and massive and pretty much in the open before the crash

FTX was unregulated. The people giving Bankman-Fried never bothered to ask questions, so there was literally nobody looking over his shoulder. Until the problems became apparent, it wasn’t anyone’s concern.

Madoff is more complicated, but it remains that he ran a lightly-regulated private fund. (And the banks that looked the other way paid dearly for it.)

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#54

Post by rvz »

JumpCrisscross wrote: post #50
rvz wrote: post #49

Earlier quoted context omitted.

If anyone attempts to whistleblow on the fraud that the banks have allowed for years as shown in the FinCEN files, then you will find yourself in a prison cell for exposing it. [0] [0] https://www.icij.org/investigations/fincen-files/fincen-file...

She whistleblew on the regulators to the media.

That is even worse that the regulators knew about the fraud that the banks have allowed and by someone reporting about it can land them in a prison cell.

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#55

Post by JumpCrisscross »

rvz wrote: post #54
JumpCrisscross wrote: post #50

Earlier quoted context omitted.

She whistleblew on the regulators to the media.

That is even worse that the regulators knew about the fraud that the banks have allowed and by someone reporting about it can land them in a prison cell.

> even worse that the regulators knew about the fraud

What fraud do you think they were covering up?

SARs are filed when money laundering is suspected. To the extent something was being covered up, it was money laundering. Not fraud.

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#57

Post by trhway »

JumpCrisscross wrote: post #53
trhway wrote: post #52

Earlier quoted context omitted.

The question is why the stealing is allowed to go for that long and massive and pretty much in the open until it results in the crash.

> question is why the stealing is allowed to go for that long and massive and pretty much in the open before the crash FTX was unregulated. The people giving Bankman-Fried never bothered to ask questions, so there was literally nobody looking over his shoulder. Until the problems became apparent, it wasn’t anyone’s concern. Madoff is more complicated, but it remains that he ran a lightly-regulated private fund. (And…

>FTX was unregulated. The people giving Bankman-Fried

They were giving money either as donation - regulated, or as payment for services and goods - regulated, or as deposits - regulated, or as investment - regulated. Probably the only way it could have been unregulated if it were as gift, which it obviously wasn't.

>he ran a lightly-regulated private fund.

and everybody thought that he is "lightly" (if it can be applied to tens of billions of dollars) cheating like front-running or something like this, and they let him that "light cheating" for years and tens of billions of dollars until the crash.

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#58

Post by anigbrowl »

throwaway74432 wrote: post #38
com2kid wrote: post #24

Question here: What is the purpose of a sentence this long? I understand that for this type of crime the goal is deterrence rather than rehabilitation, but let's say we had a habit of locking up corrupt billionaires for 20 years instead of 50. I'd argue that the lost opportunity cost for people that wealthy (or really for anyone) that 20 years is as much a deterrent as 50 years, but at a lower cost to the tax payer.

>20 years is as much a deterrent as 50 years, but at a lower cost to the tax payer. The number of wealthy people getting those kinds of sentences is basically 0, so the cost to the taxpayer is a moot point.

but let's say we had a habit of locking up corrupt billionaires for 20 years

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#59

Post by jcranmer »

dubcanada wrote: post #44
JumpCrisscross wrote: post #41

Earlier quoted context omitted.

> If he had substantial resources outside FTC, do you think he would be in jail? Yes. The brazenness of his fraud would land the most powerful Wall Street tycoon in jail. In case the rose tint is coming on, this was his balance sheet [1][2]. [1] https://www.ft.com/content/f05fe9f8-ca0a-48d5-8ef2-7a4d813af... [2] https://www.bloomberg.com/opinion/articles/2022-11-14/ftx-s-...

Fair! His major issue was certainly not hiding it very well, if he hid it better that would have helped.

No, that wasn't it. As Matt Levine put it, if you have $16 billion in liabilities, and you have $16 billion in T-bonds, you're in a good situation. If it's instead $16 billion in Bitcoin, well, you're a crypto bank, so it's probably fit for your purpose. If it's $16 billion in shitcoins, your risk judgement is questionable.

But FTX was none of those, it was $16 billion in assets FTX made up--it cost FTX $0 to acquire those assets and the valuation was arbitrarily inflatable to $16 billion. So the $16 billion in dollars that FTX acquired that caused it to accrue $16 billion in liabilities went... somewhere in return for $0. That's fundamentally stealing.

In the global financial crisis, the banks largely committed the sins in the first paragraph: they had bad risk management, and fundamentally underestimated risk in certain markets. To a large degree, they didn't even hide their risks at all (indeed, a large part of the cascading nature of the crisis was everyone piecing together who was now most in trouble). What FTX did was something completely different, just pissing away the money while pretending it was still in a vault, and hoping nobody would open the vault to find nothing was in there.

Re: FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

#60

Post by dmoy »

inglor_cz wrote: post #21
dmoy wrote: post #8

Earlier quoted context omitted.

So if he's sentenced to 40 years in federal court ... (this is federal court, right? I forgot) Fed doesn't do parole. Best you can get typically is time for good behavior for like 15% reduction in length. But there's a good chance he doesn't get sentenced to 40 years, that's just what the prosecutor asks for. We dunno yet.

A federal inmate can theoretically get presidential clemency. Obama granted almost 2000 clemencies. Biden, so far, about a dozen + 6500 for simple possession of MJ. Trump was in between with something over 200.

I guess that's a relevant point. He might be able to buy a pardon or clemency.
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