Bankman-Fried’s guilty verdict completes his downfall

From crypto wunderkind to criminal

It took jurors just four and a half hours yesterday to reach a verdict in the months-long fraud trial of Sam Bankman-Fried, founder of collapsed cryptocurrency exchange FTX. The result was unanimous: guilty on all counts.

Bankman-Fried has now completed his story from whiz-kid founder of a crypto empire to fraudster who stole billions in customer funds. It’s a story that humbled Silicon Valley giants and A-list celebrities. And it obscures the future of the industry of which he was the poster child and chief promoter.

Bankman-Fried showed little emotion as the verdict was read, Standing in court in a gray suit and purple tie, his long hair cut into the curly mop that was his signature look. His parents, Stanford law professors, displayed more: His mother put her head in her hands and sobbed; His father doubled up. When the 31-year-old man was taken back to jail he nodded towards his parents.

From the beginning of the trial, Bankman-Fried faced long odds. Prosecutors portrayed the FTX founder – who appeared on magazine covers and had close ties to former world leaders – as a scammer who repeatedly lied about his business and illegally used investor and client funds. Benefitted. “This was a fraud on a massive scale,” prosecutor Nicholas Ross said in closing arguments.

Three of Bankman-Fried’s top lieutenants, including his on-again, off-again girlfriend Caroline Ellison, testified that he ordered them to prepare fraudulent financial statements, creating secret backdoors into FTX from which he could withdraw virtually unlimited amounts of money. Could and could do other things. Cleverness.

Bankman-Fried’s decision to take a stand may have backfired. It was a long-shot attempt to portray himself as a well-intentioned entrepreneur who made mistakes but came under question. (According to government calculations, he could not recall the incidents about 140 times.)

His trademark disheveled look? Prosecutors argued it was a branding exercise. His public comments regarding the state of affairs at FTX? He said, Duplicity. When he struggled under cross-examination, his mother’s head was in her hands,

Bankman-Fried faces up to 110 years in prison, His sentencing is scheduled for March. He is likely to appeal, with his lawyers expected to protest limits on what they are allowed to argue during the trial. But he also faces a second trial on campaign finance violations and other charges that could add to his legal burden.

Will Silicon Valley and Crypto Face Retaliation? Alfred Lin of Sequoia CapitalThe venture capital firm, which had invested in FTX and once publicly praised Bankman-Fried, wrote after the decision that “we were deliberately misled and lied to.” And many crypto founders said that the Wild West era of their industry, which had enabled the rise of Bankman-Fried, was over.

Sequoia itself appears to have continued investing in popular companies like OpenAI. But while crypto prices have recovered from the depths of a year ago, they remain well below their all-time highs. And most tellingly, The Times’s Erin Griffith writes, tech giants no longer promote crypto concepts like Web3 or NFTs: “They’re out of style and therefore irrelevant.”

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What’s going on over here

The FTC has accused Jeff Bezos of pressuring Amazon to load search results with junk advertising. Bezos urged his executives Press “defective” ads To increase the total number of ads shown to consumers and increase revenue, according to newly unsealed parts of the FTC’s antitrust lawsuit against the company. A company spokesperson described the claim as “extremely misleading”. (In other Bezos news, he’s moving to Miami.)

Federal authorities are investigating Eric Adams’s 2021 mayoral campaign over foreign donations. FBI agents raided the home of Brianna Suggs, the New York City mayor’s chief fundraiser, and seized evidence including an iPhone and laptop. The Justice Department is investigating whether the Adams campaign conspired with the Turkish government to receive illegal donations; There is no indication that Adams is under investigation.

Jeep and Chrysler’s parent company outlines its agreement with the UAW Stellantis said that in addition to a 25 percent wage increase for factory workers over four years – largely identical to the concessions the union won from Ford – it Invest approximately $19 billion Meanwhile, at manufacturing plants in the US, Detroit automakers agreed to pay UAW workers for their time on strike,

The CEO of the National Association of Realtors resigns. Bob Goldberg stepped down a few days later after a jury found that the organization had inflated broker commissions, and NAR and two large brokerages were ordered to pay at least $1.8 billion in damages. She has faced calls to resign since August, when The Times reported on widespread complaints of harassment and discrimination against women at the group.

Apple’s unresolved China challenge

Shares of Apple fell in premarket trading this morning, after the world’s most valuable public company reported its fourth consecutive quarter of year-over-year decline in revenue. Among investors’ concerns: iPhone maker’s concerns market situation in china,

Adverse circumstances are developing in China. The broader economic slowdown, rising domestic competition and increasing government scrutiny are putting pressure on Apple on its revenues in China, its third-largest market after the US and EU. That includes Taiwan and Hong Kong, falling 2.5 percent to $15.1 billion and missing analyst estimates.

A Chinese rival is making profits. According to Counterpoint Research, iPhone sales there declined 10 percent, while Huawei’s sales rose 37 percent year-on-year.

Apple said the iPhones were the four best-selling phones in urban China and the company’s CEO Tim Cook told analysts that its market share had actually grown in the country. But tech watchers still see Huawei’s September release of new premium phones, which use home-grown technology, as a new threat.

Apple has tried to strengthen its position in China. Cook made a surprise visit last month and met with government officials and a major supplier. His visit followed reports that state employees were barred from using iPhones for work and the launch of an investigation into Foxconn, Apple’s biggest manufacturing partner.

All of this has shaved billions of dollars off Apple’s stock price.

Two bright spots: Apple’s Services division, which includes music and streaming, grew and revenue nearly doubled from the previous quarter. And overall iPhone sales increased after supply shortages in the first half of the year.

Financial industry takes regulatory battle to court

Groups representing private funds and the banking sector are increasingly challenging regulators in court, accusing Democratic appointees of putting the financial industry in the middle of a dispute with conservatives about the power of federal agencies.

The fight over the new SEC rule exemplifies the dynamics. Six privately-funded industry groups have sued the agency, demanding its removal Rule Passed in August. The regulator wants fund managers serving wealthy investors to be more transparent, provide more information on quarterly performance and limit deals that give preferential terms to some clients.

But the groups accuse the SEC of acting beyond its statutory authority. In an opening brief this week, the National Association of Private Fund Managers and other groups cited the “key question” doctrine, which requires legislation to explicitly address questions of political or economic importance. The Supreme Court first applied this doctrine last year to invalidate an Environmental Protection Agency rule.

This doctrine has become an important issue in the legal battle against agency power. Business groups say Congress will not hand over regulation of a “$26 trillion sector of the economy” without the SEC explicitly giving it the green light.

Eugene Scalia, the lawyer representing the groups and son of the late Supreme Court Justice Antonin Scalia, argued, “Although not necessary to resolve this case, this principle confirms that the Commission has the authority described here.” There is a shortage.”

Banking groups are also adding legal threats to their usual lobbying strategiesThe Times’s Emily Flitter writes. Industry associations including the American Bankers Association and the Bank Policy Institute have in recent months accused regulators including the Consumer Financial Protection Bureau and the Fed of overreach.

Regulators deny the allegations. They say they are using powers designed to address specific problems in the banking industry and that the need for tougher rules has increased due to the crisis at medium-sized lenders this year. But Anne Balser, chief lobbyist for the Independent Community Bankers of America, said legal action was a last resort in response to “extraordinary” demands.

“Think about 2020 and 2021, I’m working from home, spending an unhealthy amount of time scrolling Twitter.”

, casey bloeysThe president of HBO apologized for his role in an effort that used fake Twitter accounts to harass TV critics who criticized the network’s shows. He called the campaign “a very stupid idea to express my frustration”.,

A Red October Market Quiz

There has been a rise in the markets in recent times. But zoom out, and the past several weeks have been brutal for investors in stocks and bonds. The Israel-Hamas war has added further volatility over the past month, putting many risky assets at risk.

That said, which of the following was the worst performing financial asset of October?

Answer: West Texas Intermediate. The US benchmark fell 10.8 percent in price last month, despite fears that Middle East turmoil would send energy prices skyrocketing. In contrast, Bitcoin was the leader in this group, rising 28 percent in the past month.

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deal

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• Saudi Arabia wants Buy two major tennis tournaments, in Madrid and Miami, on behalf of entertainment giant IMG, although it is unclear whether the programs are for sale. (athletic)

• Sheryl SandbergThe former COO of Meta has founded a venture capital firm with her husband, investor Tom Bernthal. (Information)

Policy

• Drugmaker Novo Nordisk says its blockbuster weight loss treatment Vegovy could win FDA approval for expanded use Within six months. (CNBC)

• a political action committee Supported by Reid HoffmanThe LinkedIn founder and venture capital investor may be funding primary-campaign opponents of progressive Democratic lawmakers Rashida Tlaib and Cori Bush. (CNBC)

best among the rest

• SpaceX’s Starlink satellite-based internet service has been affected cash flow balanceAccording to Elon Musk, an important financial milestone. (Bloomberg)

• TikTok is refuting claims that it has allowed anti-Semitic content to flourish on its platform. (NYT)

• Starbucks shares rose nearly 10 percent yesterday after the coffee giant beat earnings expectations – thanks largely to Pumpkin Spice Latte, (Reuters)

• “No tip for your delivery driver? Then be prepared to wait, DoorDash says. (NYT)

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