9 ms·

Can you explain what makes this so clear?

favflam 4y ago
1. Someone took a picture of her in a coffee shop down the street from the Manhattan FBI/US attorney office a few weeks ago (last week?). She is supposed to be in Hong Kong as that is where she was based. 2. BBG news article recently speculated some hot-shot lawyers have begun representing Caroline.
- dmix 4y ago
  She was spotted in NYC with another Alameda employee too. Maybe the Alameda execs are trying to say they just made irresponsible gambles (like a shitty Wall St investor) but SBF is the one who secretly covered the massive losses with FTX customer assets without telling the public and was responsible for the "dual accounting" issue where deposits were counted twice. Among all the other things that they did wrong. Or maybe there was a more direct/overt conspiracy at play they both took part in and she snitched first. The good news is we'll probably find out sooner than expected if the extradition gets challenged in court. We'll see exactly how altruistic SBF really is soon.
  - DonHopkins 4y ago
    "Unctuous Altruism"
  - iudqnolq 4y ago
    What you've described is also consistent with her asking the DOJ for a deal and then being laughed out of the room.
    - mbreese 4y ago
      But DOJ would have needed someone who had the receipts (who could also explain it all) to be able to act this quickly. So, in this case, I think it's a reasonable theory (but not the only viable one). Maybe part of the urgency was also the planned congressional testimony.
      - iudqnolq 4y ago
        > But DOJ would have needed someone who had the receipts (who could also explain it all) to be able to act this quickly. Citation needed? I'm not a lawyer, but it seems plausible to me that SBF's public admissions of crimes, plus the full records of his company, are sufficient.
        mbreese 4y ago
        Where would they have gotten the full records? Or been able to know where to look in the records? Forensic accounting takes time (even if the records are as bad as alleged). To me, this suggests someone on the inside helping to build a case. Federal cases can take years to build because they are usually very thorough. Going from collapse of the company to extradition request in the course of weeks seems really fast to me from a historical perspective (but IANAL either). But this, like most of the thread, is all speculation. We’ll find out more in due course.
        vgatherps 4y ago
        It appears that many FTX/Alameda employees were in the dark as well and had huge losses. There's probably no shortage of angry employees interested in sending him to jail (and probably ensuring SBF gets blamed and not them). Add SBF bloviating endlessly on the internet and admitting crimes and you have an easy case?
        deleted 4y ago
        [deleted]
        iudqnolq 4y ago
        > Where would they have gotten the full records? Or been able to know where to look in the records? Bankruptcy procedings. Subpoenas. The standard ways the FBI gets records from regular companies run by people who aren't criminals and don't want to become one (the current CEO is a regular business person).
        mbreese 4y ago
  - RC_ITR 4y ago
    > Maybe the Alameda execs are trying to say they just made irresponsible gambles (like a shitty Wall St investor) but SBF is the one who secretly covered the massive losses with FTX customer assets without telling the public and was responsible for the "dual accounting" issue where deposits were counted twice. Among all the other things that they did wrong. Here’s the crazy thing. Maybe they pierce the veil and say the two companies acted as one, but hedge funds fail all the time. The fraud was SBF using FTX to prop up Alameda…
    - dmix 4y ago
      Yes that was basically the point CoffeeZilla made during his notorious SBF interview https://youtu.be/4o_jPzBZSIo https://youtu.be/4o_jPzBZSIo
    - dragonwriter 4y ago
      > Maybe they pierce the veil and say the two companies acted as one, but hedge funds fail all the time. “Piercing the veil” is a term of art for holding shareholders accountable for corporate liabilities notwithstanding the civil liability shield usually provided by the corporate form. Holding coconspirators accountable for their role in a criminal conspiracy doesn’t have a special name because it is routine rather than exceptional.
      - RC_ITR 4y ago
        Sigh. Why is HN always like this? (don’t answer, I know) Piercing the veil broadly refers to removing limited liability protections because the individuals behaved in such a way (criminally) that they have forfeited their protections. The most common people held to limited liability protections are shareholders in limited liability corporations (LLCs) A different sort of limited liability is the idea that customers/partners of a fraudulent business are not liable for that fraud, unless they committed gross negligence in allowing the fraud to continue. To your point, there is not a snappy term for that specific phenomenon, because it is so rare, but piercing the veil 100% applies here because it refers to the “veil of limited liability”.
        4y ago
  - carlmr 4y ago
    >responsible for the "dual accounting" issue where deposits were counted twice. You're supposed to count everything twice in corresponding accounts. That's double-entry accounting.
    - ben_w 4y ago
      While it's possible someone just misunderstood colossally in the reporting (happens all the time), one of the allegations is that he had two different sets of documents to hide stuff and get things past auditors, not just double every as is standard.
      - carlmr 4y ago
        I know it was just a jab because dual/double entry accounting is the standard, so in a sense he did quadruple accounting.
  - rightbyte 4y ago
    > "dual accounting" issue The badly labeled @fiat account ... ? I am still in awe over that 11yo's soda stand spreadsheet.
throw_m239339 4y ago
It's purely my opinion: She was staying completely silent since the moment FTX collapsed while he was spilling the beans everywhere. She obviously cut a deal while he was parading on social media for god knows what reason instead of shutting his mouth. SBF is a complete moron who didn't understand how the party was already over for him, I put it on his upbringing given the kind of ideology his scholar parents preach at university, especially the bits about personal responsibility...
- bagels 4y ago
  Yes, any lawyer would have told him to shut up. It means his hubris was so great that he thought he didn't need one, or chose to ignore their advice.
  - wsc981 4y ago
    Somewhat relevant, always good to keep in mind: https://m.youtube.com/watch?v=d-7o9xYp7eE https://m.youtube.com/watch?v=d-7o9xYp7eE
- bambax 4y ago
  > while he was parading on social media for god knows what reason instead of shutting his mouth Matt Levine: > “Sam Bankman-Fried Should Shut Up, Bernie Madoff’s Lawyer Says,” (...) perhaps it is one more case of us watching in real time as crypto re-learns the lessons of traditional finance. Maybe in six months all the busted crypto leaders will be saying “oh wow we should not have given all those interviews.”
- wmil 4y ago
  I think the cocktail of designer stimulants he took every day had some effect on it.
  - shapefrog 4y ago
    Half (probably 3/4) of silicon valley is on the same cocktail... also popular in schools, college campus, law, banking, politics and even recent presidents had the same cocktail of pills ...
jmyeet 4y ago
As others have mentioned, there is circumstantial evidence in that she was photoographed recently at a Lower Manhattan Starbucks quite close to the Southern District of New York (who would handle any Federal prosectuion like this as it realtes to securities fraud). But you have to look at the larger picture: The Federal prosectuion conviction rate is 95%. The Federal government is very good at getting prosectuions in cases they choose to prosecute. They tend to plea out cases that are riskier. A key tactic in doing this is they get one or more cooperating witnesses. That witness gets a better deal in exchange for their testimony that pretty much turns the case into a lock. It's classic Prisoner's Dilemma. The first to take the deal is always the best off. Lawyers know it so if their clients are at risk, they'll tend to push their clients to be the one to take it. Ellison will most likely have direct knowlege of the situation and will be able to produce evidence such as emails and texts. Importantly, she's not the main guy. It's SBF who opened up custodial assets to be used in that way (or so it seems). That's the primary offence here. It's a bit like how in a murder case the cooperating witness might be a driver or a witness but unlikely to be the actual shooter. They may get embroiled in a felony murder conviction otherwise thanks to the US-specific pecularity (and some, including myself, would call a miscarriage of justice) of felony murder but that's another story. So Ellison fits the profile of an ideal cooperating witness, there's supporting circumstancial evidence and the fact that Federal prosecutors indicted SBF so quickly further suggests a cooperating witness with firsthand khowledge or they'd otherwise be mired in subpoenas for communications, conducting interviews and otherwise building a case. A criminal indictment represents the end of the investigation, not the beginning. SDNY has already built their case to their satisfaction. People seem to think an arrest happens and the investigation continues. That's not how Federal prosecutions works.
- thelogicguy 4y ago
  A necessary conceit of the prisoner's dilemma is that they can't communicate, and therefore can't strategize together so that doesn't exactly apply here. It's just self preservation.
  - jmyeet 4y ago
    The prisoner's dilemma isn't predicated on the inability to communicate. It's predicated on (the lack of) trust. Put it this way: if you could lock in your decisions in an atomic fashion there would be no dilemma.
deleted 4y ago
[deleted]
3327 4y ago

1. Someone took a picture of her in a coffee shop down the street from the Manhattan FBI/US attorney office a few weeks ago (last week?). She is supposed to be in Hong Kong as that is where she was based. 2. BBG news article recently speculated some hot-shot lawyers have begun representing Caroline.

dmix 4y ago
She was spotted in NYC with another Alameda employee too. Maybe the Alameda execs are trying to say they just made irresponsible gambles (like a shitty Wall St investor) but SBF is the one who secretly covered the massive losses with FTX customer assets without telling the public and was responsible for the "dual accounting" issue where deposits were counted twice. Among all the other things that they did wrong. Or maybe there was a more direct/overt conspiracy at play they both took part in and she snitched first. The good news is we'll probably find out sooner than expected if the extradition gets challenged in court. We'll see exactly how altruistic SBF really is soon.
- DonHopkins 4y ago
  "Unctuous Altruism"
- iudqnolq 4y ago
  What you've described is also consistent with her asking the DOJ for a deal and then being laughed out of the room.
  - mbreese 4y ago
    But DOJ would have needed someone who had the receipts (who could also explain it all) to be able to act this quickly. So, in this case, I think it's a reasonable theory (but not the only viable one). Maybe part of the urgency was also the planned congressional testimony.
    - iudqnolq 4y ago
      > But DOJ would have needed someone who had the receipts (who could also explain it all) to be able to act this quickly. Citation needed? I'm not a lawyer, but it seems plausible to me that SBF's public admissions of crimes, plus the full records of his company, are sufficient.
      - mbreese 4y ago
        Where would they have gotten the full records? Or been able to know where to look in the records? Forensic accounting takes time (even if the records are as bad as alleged). To me, this suggests someone on the inside helping to build a case. Federal cases can take years to build because they are usually very thorough. Going from collapse of the company to extradition request in the course of weeks seems really fast to me from a historical perspective (but IANAL either). But this, like most of the thread, is all speculation. We’ll find out more in due course.
        vgatherps 4y ago
        It appears that many FTX/Alameda employees were in the dark as well and had huge losses. There's probably no shortage of angry employees interested in sending him to jail (and probably ensuring SBF gets blamed and not them). Add SBF bloviating endlessly on the internet and admitting crimes and you have an easy case?
        deleted 4y ago
        [deleted]
        iudqnolq 4y ago
        > Where would they have gotten the full records? Or been able to know where to look in the records? Bankruptcy procedings. Subpoenas. The standard ways the FBI gets records from regular companies run by people who aren't criminals and don't want to become one (the current CEO is a regular business person).
        mbreese 4y ago
- RC_ITR 4y ago
  > Maybe the Alameda execs are trying to say they just made irresponsible gambles (like a shitty Wall St investor) but SBF is the one who secretly covered the massive losses with FTX customer assets without telling the public and was responsible for the "dual accounting" issue where deposits were counted twice. Among all the other things that they did wrong. Here’s the crazy thing. Maybe they pierce the veil and say the two companies acted as one, but hedge funds fail all the time. The fraud was SBF using FTX to prop up Alameda…
  - dmix 4y ago
    Yes that was basically the point CoffeeZilla made during his notorious SBF interview https://youtu.be/4o_jPzBZSIo https://youtu.be/4o_jPzBZSIo
  - dragonwriter 4y ago
    > Maybe they pierce the veil and say the two companies acted as one, but hedge funds fail all the time. “Piercing the veil” is a term of art for holding shareholders accountable for corporate liabilities notwithstanding the civil liability shield usually provided by the corporate form. Holding coconspirators accountable for their role in a criminal conspiracy doesn’t have a special name because it is routine rather than exceptional.
    - RC_ITR 4y ago
      Sigh. Why is HN always like this? (don’t answer, I know) Piercing the veil broadly refers to removing limited liability protections because the individuals behaved in such a way (criminally) that they have forfeited their protections. The most common people held to limited liability protections are shareholders in limited liability corporations (LLCs) A different sort of limited liability is the idea that customers/partners of a fraudulent business are not liable for that fraud, unless they committed gross negligence in allowing the fraud to continue. To your point, there is not a snappy term for that specific phenomenon, because it is so rare, but piercing the veil 100% applies here because it refers to the “veil of limited liability”.
      - 4y ago
- carlmr 4y ago
  >responsible for the "dual accounting" issue where deposits were counted twice. You're supposed to count everything twice in corresponding accounts. That's double-entry accounting.
  - ben_w 4y ago
    While it's possible someone just misunderstood colossally in the reporting (happens all the time), one of the allegations is that he had two different sets of documents to hide stuff and get things past auditors, not just double every as is standard.
    - carlmr 4y ago
      I know it was just a jab because dual/double entry accounting is the standard, so in a sense he did quadruple accounting.
- rightbyte 4y ago
  > "dual accounting" issue The badly labeled @fiat account ... ? I am still in awe over that 11yo's soda stand spreadsheet.

throw_m239339 4y ago

It's purely my opinion: She was staying completely silent since the moment FTX collapsed while he was spilling the beans everywhere. She obviously cut a deal while he was parading on social media for god knows what reason instead of shutting his mouth. SBF is a complete moron who didn't understand how the party was already over for him, I put it on his upbringing given the kind of ideology his scholar parents preach at university, especially the bits about personal responsibility...

bagels 4y ago
Yes, any lawyer would have told him to shut up. It means his hubris was so great that he thought he didn't need one, or chose to ignore their advice.
- wsc981 4y ago
  Somewhat relevant, always good to keep in mind: https://m.youtube.com/watch?v=d-7o9xYp7eE https://m.youtube.com/watch?v=d-7o9xYp7eE
bambax 4y ago
> while he was parading on social media for god knows what reason instead of shutting his mouth Matt Levine: > “Sam Bankman-Fried Should Shut Up, Bernie Madoff’s Lawyer Says,” (...) perhaps it is one more case of us watching in real time as crypto re-learns the lessons of traditional finance. Maybe in six months all the busted crypto leaders will be saying “oh wow we should not have given all those interviews.”
wmil 4y ago
I think the cocktail of designer stimulants he took every day had some effect on it.
- shapefrog 4y ago
  Half (probably 3/4) of silicon valley is on the same cocktail... also popular in schools, college campus, law, banking, politics and even recent presidents had the same cocktail of pills ...

jmyeet 4y ago

As others have mentioned, there is circumstantial evidence in that she was photoographed recently at a Lower Manhattan Starbucks quite close to the Southern District of New York (who would handle any Federal prosectuion like this as it realtes to securities fraud). But you have to look at the larger picture: The Federal prosectuion conviction rate is 95%. The Federal government is very good at getting prosectuions in cases they choose to prosecute. They tend to plea out cases that are riskier. A key tactic in doing this is they get one or more cooperating witnesses. That witness gets a better deal in exchange for their testimony that pretty much turns the case into a lock. It's classic Prisoner's Dilemma. The first to take the deal is always the best off. Lawyers know it so if their clients are at risk, they'll tend to push their clients to be the one to take it. Ellison will most likely have direct knowlege of the situation and will be able to produce evidence such as emails and texts. Importantly, she's not the main guy. It's SBF who opened up custodial assets to be used in that way (or so it seems). That's the primary offence here. It's a bit like how in a murder case the cooperating witness might be a driver or a witness but unlikely to be the actual shooter. They may get embroiled in a felony murder conviction otherwise thanks to the US-specific pecularity (and some, including myself, would call a miscarriage of justice) of felony murder but that's another story. So Ellison fits the profile of an ideal cooperating witness, there's supporting circumstancial evidence and the fact that Federal prosecutors indicted SBF so quickly further suggests a cooperating witness with firsthand khowledge or they'd otherwise be mired in subpoenas for communications, conducting interviews and otherwise building a case. A criminal indictment represents the end of the investigation, not the beginning. SDNY has already built their case to their satisfaction. People seem to think an arrest happens and the investigation continues. That's not how Federal prosecutions works.

thelogicguy 4y ago
A necessary conceit of the prisoner's dilemma is that they can't communicate, and therefore can't strategize together so that doesn't exactly apply here. It's just self preservation.
- jmyeet 4y ago
  The prisoner's dilemma isn't predicated on the inability to communicate. It's predicated on (the lack of) trust. Put it this way: if you could lock in your decisions in an atomic fashion there would be no dilemma.

deleted 4y ago

[deleted]

3327 4y ago