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FTX founder Sam Bankman-Fried’s two bond guarantors unsealed, ties to Stanford
- ARandomerDude 4y ago“Ties” is putting it mildly. $500k from > Larry Kramer, who is president of the William and Flora Hewlett Foundation and dean emeritus at Stanford Law School
- klooney 4y agoOh hey, they sponsor KQED
- red-iron-pine 4y agoAnd other viewers like you
- SilasX 4y ago>Kramer signed a $500,000 unsecured bond, while Paepcke signed the same type of bond for $250,000. Sigh ... to echo my earlier comment[1], this (further) makes the bail/bond process feel like something of a farce. It's "bail is set at -- zomg! -- $250 million!!" ... and then the accused walks out because his parents accepted a lien on a property worth 1-2% of that, and two people said "trust me bro" for another 0.3%. Sure, they will "come after" the parents for the full $250 million if SBF flees. But everyone involved knows they're not getting anywhere close to that, even at the most optimistic. Stop it. Just friggin stop it. Lower the bail, or require meaningful assurance of it, keeping in mind just how slippery of a defendant you're dealing with. Wittgenstein: "A wheel that turns, though nothing turns with it, is not part of the mechanism." A bail that is set, but will never be collected, is not part of the assurance to appear at trial. [1] https://news.ycombinator.com/item?id=34599868 https://news.ycombinator.com/item?id=34599868
- ceejayoz 4y agoGet rid of cash bail entirely. You're either a flight risk / threat to the community, or you're not. The ability to part with a couple grand doesn't change those facts. No one presumed innocent should sit in jail for months/years awaiting trial just because of their bank balance or lack thereof.
- mr_00ff00 4y agoThis is a confusing solution to the above problem because without bail he would still just walk. Unless I am missing something, the original commenter seems mad that the bail is easily met and he walks. How would letting him walk anyway fix it?
- nadermx 4y agoIt does have a point though. I believe what they where trying to say is presumed innocence and ability to walk, or sufficent evidence to hold.
- mr_00ff00 4y agoSo really the issue is that it should be easier to hold people.
- ceejayoz 4y agoIt should be harder to hold people as a thoughtless default, and easier to revoke (non-cash) bail when they breach that trust.
- vuln 4y agoWhen the bail is revoked you have to send resources to detain the person. Putting not only the person wanted, but the resources and everyone around the wanted person in danger.
- 99_00 4y agoThis is what actual privilege looks like. And it's based on class and social networks, not the color of your skin. But often the two are correlated.
- mistrial9 4y agoyou have not visited Stanford lately.. they specifically have every skin color on Earth.. because of criticism like that. Is the nepotism real? yes, but you cannot claim racial bias.. it is your own prejuidice showing
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- SpaceManNabs 4y ago> And it's based on class and social networks, not the color of your skin People within your socioeconomic class can be racist towards you and upper social mobility can be more difficult based on the color of your skin. This statement is laughably false. Yes as you get richer, skin color matters less, but it still does. You can just look at the games that rich black republicans have to play to stay in the club. The following is a bit of a rant so go ahead and ignore it if you wish: It is a bit wild to me how common sentiments like this are on hacker news, when so many people claim to be rationalist types. Then again, a group of mostly white people claiming systematic racism is gone in their so-called merit-based hierarchy should be expected.
- Pet_Ant 4y agoAlso you can find classism within any race. I wonder what the relevant strength between the two is. I'm sure it's difficult to measure as they correlate, compound and reinforce each other.
- 4y ago
- shrubble 4y agoHow exactly does a total of $750K even come close to being acceptable against a $250 million bond?
- SilasX 4y agoAnd note, this is not, "give the court $750k, and you get $750k back once the trial is over". This is not even, "put a $750k lien on a brokerage account (with more than that in it) until the trial is over". This is, "We will owe you $750k if the defendant flees, which you can then try to collect."
- ergocoder 4y agoSBF has obtained the highest leverage loan in the history. 1m for 250m
- stevenwoo 4y agoIt's not clear to me how his parents could even raise the amount of their home since it is Stanford faculty housing stock.
- ksherlock 4y agoAs I understand it, they "own"^1 the house and can encumber it with mortgages but Stanford owns the land and limits who it can be re-sold to 1: "residential ground lease" not "fee simple"
- gnicholas 4y agoThey would sell the house to another eligible faculty member. As long as Stanford is still hiring or tenuring new faculty, there will be a steady stream of potential buyers. In some cases, Stanford will buy on-campus homes and renovate them, and then resell them.
- yieldcrv 4y ago100x US Bond Guarantor Perp now trading on FTX
- blobbers 4y agoCan someone clarify exactly why his bond is 250M, but this claims two former law professors posted 750K. Where did the other... 249.25M come from?
- deleted 4y ago[deleted]
- bragr 4y agoIt's an unsecured bond. If he fails to show up, the government goes after him and his parents for the $250 million, basically making them destitute for the rest of their lives. Basically his bail is secured by the threat of his parents being ruined.
- tptacek 4y agoAs I understand it, an unsecured bond is simply one where you don't pay unless the defendant doesn't show up. That would mean the two non-parental guarantors haven't ponied up cash, but will each be out 6 figures in the (very unlikely) event SBF doesn't make it to trial. His parents are a different story, and my understanding is that they'd be zeroed out if SBF jumped bail.
- deleted 4y ago[deleted]
- blobbers 4y agoOr they'd escape with him, and some stolen amount of money to a country where there is no means for recourse?
- tptacek 4y agoThen none of this matters anyways.
- MagicMoonlight 4y agoBut to which country? There is basically nowhere that the CIA couldn’t get you. Would all these people be willing to get hunted like that for 50 years in order to help a moron escape the law?
- thepasswordis 4y agoIt's asked a few places here so I'll answer in the topLevel: Buying a bond is done by paying a portion of the total bail amount. It's the same as: I have $1M liability insurance or something, but it only costs me $100/mo.
- tptacek 4y agoRight: bail itself is refundable, but a bond payment isn't.
- thepasswordis 4y agoIt's why I think the insurance analogy works. I don't get a refund on my insurance for not using it either.
- caminante 4y agoAre SBF's bond guarantors posting collateral or are they actually paying a non-recoverable expense? I thought it was closer to the former.
- jojobas 4y agoBail is refundable, bond usually means you pay an unrecoverable fraction of the bail for someone to pay the bail for you.
- dragonwriter 4y ago> Bail is refundable Bail becomes due if you fail to comply with the release terms; in some systems, you can pay the amount of bail in advance as security, in which case it is refundable. > bond usually means you pay an unrecoverable fraction of the bail for someone to pay the bail for you. Typically, to stand as surety for you in place of you providing security in the form of bail payment. When this is a bail bondsman, they usually do not actually deposit the amount of bail as security, they have met state-issued guidelines that allow them to stand as sureties without doing so.
- bogomipz 4y agoFrom the WSJ: Mr. Kramer served as a professor and dean at Stanford Law School from 2004 to 2012, according to an online biography. He is currently president of the William and Flora Hewlett Foundation, which, according to its website, makes efforts to respond to “pressing and timely problems, such as challenges related to democracy and cybersecurity.”[1] This individual and his companies defrauded people and then used their stolen money to make donations to politicians in order to buy influence. Doesn't that exactly describe "pressing and timely problems related to democracy"? [1] https://archive.is/ZbwwS https://archive.is/ZbwwS
- yterdy 4y agoWait until you find out what the meme stock people think was going on.
- bogomipz 4y agoCare to elaborate?
- sgammon 4y agoukraine, biden, etc etc etc
- yterdy 4y agoAn abbreviated version of the conspiracy theory is that FTX's tokenized stock, which were assumed to be backed 1:1 with actual share holdings, were used to hide some of the extremely large short positions that caused the the short squeeze in January 2021 - the central thesis of the whole shebang being that those positions were never actually closed, just covered by various means that got them off of investors' books. Watching from the sidelines, I can't decide if it's "scientists warning about climate change" or "homeless guy on the corner holding a 'THE END IS NEAR' sign". It seems impossible that they could be right, but then wacky, Madoff-level stuff like this happens, and I'm like, "Huh, maybe the scale of the brazen criminality that's implied isn't actually too large for reality to abide."
- 4y ago
- tptacek 4y agoThe sole purpose of bail is to ensure that the defendant shows up to trial. SBF is under electronically monitored house arrest. Given how high-profile the case is, it's likely that law enforcement is posted to monitor him directly. He's not going to flee the country in a shipping crate like Carlos Ghosn. In fact: to hear Ken White talk about it on Serious Trouble, given his recent conduct, it's much more likely that he's going to end up preparing his defense from inside an NYC jail cell. We're all obsessed with the details of SBF's bail because we're too bored, and looking for fun stories. The bail situation with SBF is the least interesting thing about the case. By all means, dunk on the people making insurance payments to cover his bail! It's a weird thing to decide to do! But none of it has much to do with anything fundamental about the case.
- SilasX 4y ago>By all means, dunk on the people making insurance payments to cover his bail! They made no payments of any kind: >>Kramer signed a $500,000 unsecured bond, while Paepcke signed the same type of bond for $250,000. And his bail isn't being "covered", except by a lien on an asset worth 1-2% of the amount and promises to pay the rest (that no one thinks the primary guarantors can actually honor).
- tptacek 4y agoSee downthread. The two non-parental guarantors haven't paid anything, but his parents will be zeroed out if he jumps bail. The point of the bail arrangement is to guarantee his appearance, not to extract money or repay his offenses, so this concern with how the government recovers this "asset" seems misplaced.
- SilasX 4y ago>See downthread. The two non-parental guarantors haven't paid anything, but his parents will be zeroed out if he jumps bail. You lost me -- how does that justify you falsely referring to (some of) the guarantors as "people making insurance payments to cover his bail"? If you really want to look downthread, you can see where I correctly described the current state of affairs that you're now informing me of: https://news.ycombinator.com/item?id=34810830 https://news.ycombinator.com/item?id=34810830 https://news.ycombinator.com/item?id=34811063 https://news.ycombinator.com/item?id=34811063 There's no one "making insurance payments to cover his bail". If you wanted to make a witty remark that has a factual basis, you should have said, "By all means, dunk on the people exposing themselves to a loss if the defendant flees." >The point of the bail arrangement is to guarantee his appearance, not to extract money or repay his offenses, so this concern with how the government recovers this "asset" seems misplaced. I don't have a concern with the government recovering this asset. I have a concern with people spreading misinformation and then changing the topic when corrected -- like you did when falsely saying that Kramer and Paepcke were making (something correctly describable as) insurance payments, or referring to the $250 million as "covered". I also have a concern with bail figures being treated as meaningless (the first link).
- hokumguru 4y agoIt’s a shame that only a small handful of people will be going to prison for this, if at all. There are probably dozens of corrupt attorneys, professors, accountants, and bankers associated with this fraud that should be spending their life behind bars.
- primitivesuave 4y agoFrom FTX chief regulatory officer Daniel Friedberg's objection [1], FTX head of counsel Ryne Miller manipulated the bankruptcy proceedings and channeled its exorbitantly expensive legal work to Sullivan & Cromwell, ostensibly so he can return as a partner after this fiasco is over. > Mr. Miller told me that the bankruptcy filings of FTX International Group, the Alameda Group, and the FTX.US Group had to be in the United States because otherwise S&C couldn’t do the job. (35, p. 8) > Mr. Miller stated that he needed to include FTX.US as part of the bankruptcy because FTX.US had the cash to pay S&C its retainer. Without this retainer from FTX.US, S&C wouldn’t file. I told him that it wasn’t proper for FTX.US to pay for the expenses of the bankruptcy of FTX International Group or the Alameda Group. [1] johnreedstark.com/wp-content/uploads/sites/180/2023/01/FriedbergObjection.pdf
- primitivesuave 4y agoGenerally, someone indicted by the US government of a nonviolent federal crime will spend little time in a jail cell if they have non-indictable assets to put up, and have no demonstrable flight risk. The arbitrary initial bail amount, and the acceptance of these collateral assets, was determined by the same judge - the intended effect is that SBF shows up in court. Obviously, this plays out much differently if you and your family are poor.
- eddsh1994 4y agoKramer’s reason why seems very honest and reasonable. I don’t know why people are attacking him or bring up things like race - a family friend is supporting someone they’ve known for decades after they received their own support from them over the last few years.
- yeahwhatever10 4y agoI agree. You support your friends even in bad times, loyalty exists not only in times of convenience.
- kats 4y agoHe didn't even have to pay 2% of the bail. It's a two-tiered justice system.
- dragonwriter 4y ago> He didn’t even have to pay 2% of the bail. He didn’t have to pay anything, but then, that’s not uncommon in federal bail.