FTX trial update

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Ethan Wu (0:36)

Pushkin.

Hey, listeners, it's Ethan. Normally, we record these episodes of Unhedged the morning we release them, but today, we're doing something a little different. It is Wednesday in the afternoon, and the FTX court case that's been going on for several weeks now in New York has wrapped up for today, and we have Joshua Oliver, FT correspondent, who is fresh, less than an hour, I believe, from the courtroom steps to right here in the New York podcasting studio.

Josh Oliver (1:08)

Yes, I walked very fast up from the federal courthouse down by Broken Bridge, and it's great to be here.

Ethan Wu (1:13)

Josh, this has been just one of the most high-profile trials I can remember in the financial world, beyond the financial world. It's being made in the books. I've heard talk of movies on the way in years to come.

It's so big, and I think part of it is all the characters, right, and you've been seeing them firsthand. You've got Sam Bankman-Fried, and the hair everyone talks about, bushy hair, CEO of FTX, and then you have Carolyn Ellison, his girlfriend, Gary Wong, Nishad Singh. I mean, talk us through the cast of characters you're seeing in this courtroom.

Josh Oliver (1:42)

Yeah, I mean, the hair, by the way, is gone.

Ethan Wu (1:45)

He shaved, right?

Josh Oliver (1:46)

He had a haircut, we're told, performed by another inmate in the New York jail where he is spending his days, and it did feel like when he walked into the courtroom, not just because of the haircut, but that his whole kind of vibe had changed, and he was not the kind of buoyant character that I spent far more hours than I care to admit talking to.

He looks skinny, he just looks less confident, and you can kind of feel like finally, the weight of the US Justice Department is starting to actually weigh on someone.

You know, it's been a crazy trial. This is my first federal trial. Everybody told me court is actually really boring. There's gonna be loads of really dull testimony. That has not been my experience. This is like court made for TV. And part of that is, like you said, it's just thinking about the interpersonal tension of these moments. You know, all of these people are basically the roommates from the Bahamas penthouse, which we've heard a lot about. We've seen pictures of it. The prosecutors really love the penthouse because it makes Sam look like he was living the high life.

And basically, they've gone through his list of roommates, his oldest friends, his ex-girlfriend, his childhood and university friends, who have all come into the courtroom, walked within two meters of him up to the witness stand and basically said he committed federal crimes. These are all the people that we at the FT and all the other journalists sitting in the courtroom have been covering relentlessly for a year as we try to figure out what the hell happened to this company. So to kind of have them take the stand, just sit there and sing like a bird is a totally incredible moment.

Ethan Wu (3:13)

Yeah. And you had been talking to Sam Bankman-Fried yourself a year or so ago.

Josh Oliver (3:19)

Yeah, I was in the Bahamas, I met him in the Bahamas and we spoke regularly.

And we were speaking right up until shortly before he was put in jail. His bail was revoked a couple of months before the trial. So it is remarkable to see how different he looks, how different he seems. And then I started to hear from the other people because Sam has told the story many times, many different ways. And we're hearing for the first time from some of the other key actors in the drama.

Ethan Wu (3:44)

Yeah. Let's walk through some of the big moments that have happened so far. The trial's not over, it's underway, but kind of like a midway, midterm progress report on how this trial is going. I mean, the impression I've got from reading the coverage is the basic accusation is FTX used some kind of financial chicanery to effectively, through this system of borrowing and lending, take customer funds and have them end up in political donations, FTX venture capital investments, Miami Stadium naming rights, flats and penthouses and so forth. That seems to be the allegation.