The Press Box - Katie Baker on Covering the Sam Bankman-Fried Trial, Courtroom Body Language, and Doing a Close Reading of Michael Lewis

Episode Date: October 19, 2023

Bryan is joined by Ringer senior writer Katie Baker to discuss her reporting of the ongoing Sam Bankman-Fried trial, which can be found here. They delve into the biggest components of the case, what it’s like to be inside the courtroom as a reporter, the testimony of Caroline Ellison, and Michael Lewis’s depiction of Bankman-Fried. Host: Bryan Curtis Guest: Katie Baker Producer: Eduardo Ocampo Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Hello, media and consumers. Welcome to Press Box final edition. Brian Curtis of the Ringer here, along with producer Eduardo Ocampo, who is sitting in for Erica. Our guest today is Katie Baker. You've read her on sports. You've read her on pop culture. Now you can read her from the courthouse. Not since the days of Roger Cossack and Greta Van Sustern in their primes.

Has somebody got that beat lockdown? Katie, welcome to the press box. You know, we all deserve our day in court, Brian. I'm lucky to have had a few weeks of it. So you are covering the Sam Bankman-Fried trial in New York. And before we dive in, I want to get the basics down so that we're all on the same page here. Who is Sam Bankman-Fried and what is he alleged to have done? Sam Bankman-F, otherwise known as SBF, colloquially,

is the founder of, among other things, a crypto exchange called FTX. So kind of the New York Stock Exchange, but for Bitcoin and that sort of thing. He also started, before he started FTX, he had also started his own crypto trading firm called Alameda. And he has alleged to have used FTX customer funds. So, you know, you open an FTCS account because you want to see what this Bitcoin thing is all about. He was taking your money and using it, he was alleged to have done so, and then using it to basically fund various other investments through Alameda. So that ranges from, you know, other kind of direct private investments, but also, you know, a condo in the Bahamas for his parents and that sort of thing. So he has kind of an inner circle, three of whom have agreed to testify against him and have already pled guilty to like seven counts of a combination of fraud and conspiracy to commit fraud.

So they've all testified already in the trial. They make up the government's case against him. Yeah, the majority. And this is $8 billion that is alleged to have vanished? Yeah, that's kind of the, when it all came to light, that was kind of the difference between, you know, what was supposed, what they were supposed to have and what they had. That number was sort of always fluctuating, but that's kind of the headline number, yeah. And he effectively faces life in prison if he were to be convicted on all of these charges. Yeah. And, you know, it's been interesting because he was originally on house arrest and he violated the conditions of that. And so he's been in jail since the summer.

So he's already, you know, coming to the court each day from the, from jail. And that, you know, could continue for quite some time. So you talked about why this case is monetarily interesting and legally interesting. Why is it culturally interesting to you? Well, in promoting FTX, they really were wanted to like include a lot of celebrities. So, for example, today in court, suddenly the prosecutor kind of was switching topics with a witness and said, who is Shaq? And the reason being that they were showing a tweet that Shaq was promoting FTX.

And then they showed a picture of SBF and Shaq. And, you know, there's all kinds of other Tom Brady, Jazeel, President Clinton. Yesterday, we were looking at like cell phone records to place Sam in New York to show why the SD&Y has jurisdiction on the case. And they were showing emails, including meeting with the mayor, meeting with the governor. They had a 19-year 135 million arena naming deal in Miami. The Miami Heat were at one point playing at FTX Arena. So it really has, it really became kind of the the mainstream crypto product in a way, you know, Super Bowl ads with Larry David, all that kind of stuff. I love that Shaq had to be entered into evidence, as it were.

That's been one of the fun things is seeing, you know, they have to kind of create a record and a transcript of all these things. So we have heard questions ranging from who is Shaq to who is Michael Lewis, which I'm sure we'll get to, to, you know, what is a tweet? So it really has covered all the bases, yeah. Make sure we're all following along here. Let me ask you about some of the behind the scenes journalism stuff. How do you get a seat inside the courthouse for this trial? Well, there are a few reporters who, like, cover the SDNY court. And so they have their own kind of press room and they're allowed to have their laptops.

The majority of us, which includes, you know, people from the New York Times, people from the Verge. people from, you know, coin desk, which is a crypto publication. We get in the old-fashioned way, which is we, you know, early bird gets the worm. You line up at the courthouse. Basically, they have room for about 20, 21 people from that line. They have like three, you know, benches that you can sit on. And then after that, there's an overflow room. So, you know, I want to, I always want to try to be in the room and see people.

and look at the jurors and all those things. So I've been, you know, trying to get in line early in the morning. How early are we talking about? It depends on the day. The earliest I've arrived so far was like 445. Wow. 445. I was for Caroline Ellison.

That was a big day. That's one of Sam's inner circle as well as his long time on again, off again, on again, off again, girlfriend. So she was a very hotly anticipated witness. Do you tweet from inside the courthouse? No. So you turn in, you have to turn in all your electronics when you walk in. And it's actually been so wonderful to not have my phone, you know. Because when you don't, if it was there, I'd always be wanting to look at it or to run to the bathroom and, you know, do a quick Twitter scan, something really pathetic like that.

And instead, I just feel so free. I'm just, you know, free to look around the courtroom and stare at jurors' faces and try to imagine what they're thinking. So this is really, in any trial probably you can say this about, this is the ultimate use of the Bill Simmons body language test, where we actually can look at people and draw conclusions about them based in the way they're sitting or slumped in their chairs or whispering to their attorneys. Yeah, I mean, between having Sam's parents in the room, their body language is always interesting to witness, the judge's body language has been a constant, kind of a constant source of entertainment and awe. The judge is actually a really funny character. He reminds me of Mike Francesa, but like, because everyone in some way relates back to Mike Francesa for me. but in like on a very specific like on like a Thursday afternoon in February when there's nothing good going on and it's and Frances is tired and a little cranky, but also a little soft voiced.

And like that's the, that's the judge. He, he's not afraid to sort of dress down, you know, both sides, uh, council. And it's gotten to the point where he kind of acts like a voice of the jury in a way. and the jury, you know, he'll kind of wink at the jury and the jury will laugh. And it's kind of interesting to watch the dynamic there. What about SBF's own body language? So I'm sitting basically behind him as any, you know, if you kind of watch, there's a 60 minutes about him where you can kind of see what he looks like. And I can say this because I'm a big kind of leg shaker myself, but he's kind of always moving.

he is he's been kind of today, for example, he was pretty active in like talking to his lawyers, handing his lawyers papers while they were cross-examining a witness, looking at spreadsheets on, he has a little computer, you know, I think where he can see the evidence. And, you know, he's been, he's been active in his own defense. And by the way, the sports writer in me a few times has been like, the defense. And then I see all the court reporters look at me like, did she just say defense? I never thought about that. Yeah, I didn't either until this assignment.

But yeah, so he's been, you know, and then it's interesting because there's a few reporters who are kind of independent journalists who have like prior relationships with him because he used to be a very media friendly guy. And so sometimes he kind of turns around and like says hi to them. and waves when they walk in. And it's, it's an interesting dynamic. The wrap on him was that he was always too media friendly, even when it was clear that he was in massive legal jeopardy. Yes.

So actually today, they, you know, we've sort of heard about, we've seen different communications between him and his inner circle, him and his friends, where he talks about his PR strategy and the importance of it and how he wants to be connected to all these movers and shakers. And he thinks of things in very probabilistic terms.

So he's always kind of assigning a numerical value to how much this could, you know, boost FTCS. Then today we also saw some DMs that he sent where behind the public image, he was, you know, saying things like fuck the regulators and, you know, and talking about how a lot of the things he says is bullshit. And it was really interesting to watch the jury read some of these messages, which I had seen before, because Some of them were reported at the time. There's one with a box writer named Kelsey Piper where he kind of confessed to all these things thinking that he was just talking to like his friend. And so that all went into the record today. And, you know, I'm watching the jury read it.

And I could see like some of them are wearing, you know, masks. And I could see their eyebrows raising though and like their brows furrowing. So yeah, that's the Bill Simmons body language doctor coming out. You mentioned you can't have electronics or recording. devices. So you're writing out notes longhand like a 1950s court reporter? I've even got, I like forgot to bring a notebook. So I went and bought one before the trial. And it's just one of those like composition, mead composition books. So it's very 1950s. Old school style. Yeah, been breaking pens. I have an ink all over my hands.

You know, I feel so alive. It's great. And then the transcripts and the evidence that's entered into court, that's all publicly available or available to you at the end of the day? Yeah, the transcripts are publicly available, but you have to, you have to pay for the, like, the transcript transcripts. So there's like a consortium of journalists that has all gone in on it. And so we get the transcripts each day. You can get access to the exhibits directly from the government. And, yeah, so, I mean, the one thing that I didn't really realize is that when they have a sidebar,

they turn on like a white noise machine so the jury can't hear what they're saying. But then that sidebar does go in the transcript that the public gets. I don't think it goes in the transcript of the jury gets. So sometimes there's like some saucy things in the sidebar. Like on the day that Caroline Ellison testified, the prosecutor complained that she thought Sam was rolling his eyes and, you know, being demonstrative and that perhaps that would be intimidating to the witness. And then the opposing counsel points, you know, snarkily pointed out that when Caroline walked in the courtroom and was asked to identify Sam, she couldn't even find him in the courtroom. So how could she be intimidated by him if she doesn't even know what he looks like? And it was just like kind of silly.

But yeah, that's been something I had no idea that that's how that worked. So I know from watching LA law as a kid, that is the big moment in a trial. Will you please stand up and identify the person we're talking about? And you said in this case, she could not actually locate him in the courtroom. So I was so excited for that moment. I was even asking the other journalists, like, wait, do they really stand up in point, like on TV? And yeah, she looked around. Sam has a haircut.

You know, he has kind of famously side show Bob style hair. And I wouldn't say he's close shorn by any means, but, you know, you used to be able to scan a crowd and figure out where he was immediately. So the courtroom is also set up in kind of a strange configuration. And so she didn't know where to look for him. She couldn't find him. It was honestly like, it was close to a minute that she was looking around. The prosecutor said, you know, if it helps, you can stand up and look. And just the tension in the, I mean, it was a, you know, obviously she knows who he is.

But it was a very strange beginning to her testimony. But it was kind of, it gave it a little more drama, you know? You had a great line about Ellison and your piece. You said jurors have heard from Bankman Freed's former friends, subordinates, conspirators, and even lovers. Ellison represents all of the above. So what is the prosecution specifically trying to draw out of her? So, you know, she's one of the people that is cooperating with the government. So the very first thing they ask her essentially is, have you committed crimes?

Yes. Did you conspire with anyone? Yes. Who? Sam Bankman freed. to kind of just get that established. And then a lot of it was, you know, a lot of it is they have to show that there was like intent. It's not just that they lost money.

Like, oops, the market crashed. It's like, no, we were actually losing money in part because we had the intent of committing fraud and misrepresentation. And so a lot of it was showing communications between her and him. I mean, they used to basically write back and forth via Google Doc. And that was their love language, I guess. And so a lot of those Google Docs were in evidence, you know, showing the fact that she basically always consulted with him when making a decision, which, you know, the defense is kind of trying to, or at least I thought they were, their cross-examination didn't really do this.

But they are kind of trying to position it as, you know, she should have made better investing decision. She should have put hedges on against market downturns. She didn't do that. You know, this all just happened. This wasn't directed by Sam. But they then showed the fact that she basically never made a decision by herself without Sam's input. So that really couldn't be the case. And so, you know, I thought the prosecution did a really good job of just letting her personality shine through a little bit, which I think just made her an appealing witness for the jury to see. and, you know, it was a very human testimony that she gave. Like, she got emotional a couple of times.

And the way in which she got emotional really resonated with me. Like, she kind of talked about how when it all came crashing down, she actually paradoxically felt a lot of relief. And I think we've all kind of, like, had that feeling in some way or another, whether it's, you know, some dumb fib we've told. but like to see it on that scale. Like it just made you think like, wow, what would what would that feel like? I mean, she'd been keeping this secret for so long and to finally just have that off her chest. It was it was affecting to see that that like her reaction in that way. It just felt like an honest reaction to me.

What did you make of the defenses cross-examination of Ellison? I just kept, I just kept waiting for it to like begin. Like they, you know, she gave this this great direct testimony. They go up to start the cross and they start getting into this weird nitty gritty about the names of different files and bank accounts and to the point where the prosecution stood up and said, you know, your honor, this is just confusing. And then the judge adjourned for the day. He agreed.

And they came back the next day and I thought maybe they'd have their act together. And it was just a very like, they just never got into any, like the prosecution has been so good at presenting this really interesting narrative flow. Like as a writer, I'm kind of like, wow, they put in all these little things early on. And now today a lot of it kind of came to fruition. And I guess that's what lawyers do. But it's been impressive. And the defense just seems, you know, it's not their direct witness. So it's a little different.

But they're just kind of disjointed. They never seem to have any momentum. They kind of abandoned minds of questions right when you think they're maybe getting somewhere. So that was, it was just strange. Like the entire, everyone left after the cross-examination and went to lunch and we were all just like, what was that? I thought it was going to actually be like kind of one of the big, big events. And it sort of was just like a dud. It stands to reason if you don't cast doubt on her testimony, then he's in a lot of trouble because that is a big part of the heart of the process.

prosecution case. Yeah. And I mean, it's her. And then there's, you know, two of their other kind of inner circle people that also had similar testimony. And each of them had very different personalities. But the one commonality was that they were all, you know, very enthralled to Sam. And he's obviously has a magnetism in, in his way that, you know, have had all these people kind of going along with, you know, and like many frauds, I think it started, not necessarily small, because they were, they've always been dealing in pretty big numbers of, pretty big amounts of money. But, you know, it started with one little thing. And then on top of that, you're trying to do one more thing. And then you're trying to fill the hole with,

and take the money from one, from bucket A to put it in bucket B. And next thing you know, it's like, you know, Mickey Mouse Sorcerer's Apprentice. Like, you just are overwhelmed by it. So you can kind of see how they got wrapped up. But the fact that they were kind of keeping the secret for, you know, the better part of a year, if not for some of them longer, has been very powerful against Sam because they all agree on that, you know. To the question raised in court, who is Michael Lewis? The answer is he's the long form king.

And the author most recently of a book called Going Infinite, which is about Sam Bankman-Fried, whom he embedded with for months and months and months. This, as you know, has gotten some of the worst reviews of Michael Lewis's career, including, I think most recently from David Roth. How have you seen Michael Lewis pop up in the evidence presented in this case? He came up during Caroline's testimony when all of a sudden we all perked up when we heard, who was Michael Lewis? because there were some text messages with Sam saying Michael Lewis is coming to the Bahamas on these dates to meet with us.

And Caroline said, I kind of prefer to stay under the radar. And Sam wrote back and said, same, except the exact opposite. And that actually got like a good laugh from the courtroom. It was like the one thing people were like, huh. But he, you know, I'd say Michael Lewis's name comes up more almost like in the ether, like talking to me. people about Sam Beckman-Fried and a lot of people have read his book because like many people, anytime of Michael Lewis book's coming out, you want to read it. This book happened to be, you know, as he was embedded was when everything came crashing down. So there was an opportunity

for there to be an amazing exploration of the rise and fall of someone. And I feel like he did the rise and then sort of hand waved away the fall. So yeah, it's, I mean, the book, it's like, people ask if I recommend the book. There's a lot of really interesting things in the book that no one else, you know, reported. And it's very Michael Lewisy. He got some great details, some good dishy stuff. I just wish he had allowed himself to reckon with the enormity of like the whole situation that he was right there at the center at. And instead, he has chosen a different kind of a different path with how he saw the story. So the rap and the earlier reviews that he hand waved, all that stuff away. You agree with that. That is, that is the way, that is what

you came away with from your reading of the book as well. So like one example is one of the lawyers for FTX was this guy. I'm going to mispronounce his last name, I'm sure, but it's like Dan Friedberg. And he was the, and he was like, and he does mention him in the book in the context of Sam's parents, the adults in the room, supposedly, introduced him to Sam and was like, you need this, you need a better lawyer for the company and whatever. It doesn't say once that this guy's background is that he used to work for an online poker company that was in the, you know, turn of the, turn of the millennium that

was enabling a quote, God mode on customer, you know, poker player account so that they could see what their hands are and then was like making money that way. And all these online poker things were like shut down for a while. And it doesn't, it doesn't mention that once. And that's such a good detail. So like those things that are missing, it just, I don't know, like I almost just feel sad because I just feel like this he could have written like one of the great all-time like part journalism part finance books like just like what does it mean to to be taken with someone you know and maybe they're misrepresenting themselves like at like at what point did I fall for it and that's just not the tacky's taking and you get a sense a book was underbaked in terms

of working out feelings like that and taking things all the way to the end of the case or at least up to his arrest or do you think it was just one of those things where he had to write it quickly to get it out before the trial started? It's probably a little bit of both. I mean, I remember when the bankruptcy was happening, which was about a year, a little less than a year ago, it was like last November. You know, his, one of his agents was already kind of shopping a movie treatment. And in the email, it was like, he hasn't started writing the book yet. But so, you know, I'm sure there was an element of that. And, but yeah, it's also like, why not wait and cover the trial. And so, you know, and it's hard because I have a big, you know, I really enjoy

his work. And so there's definitely stuff in the book that is fun to read. I just, and I know that you shouldn't, as a critic, engage with what you wish something was versus what it is. But I just can't, I just keep thinking this could be like one of the all-time great journalism books in it. And in addition to like being a story about a fascinating guy and he did half of that. So yeah. That rule you mentioned, we don't, we don't acknowledge that rule in the press box. You can, you can grade it on based on what you wish it was any, any time here. That's one of those unwritten rules of journalism I've never totally understood.

Yeah, exactly. Last question for you, Katie. I mentioned you write about sports and pop culture and all kinds of other stuff. Before the world of journalism beckoned to you, you worked in finance. what does it like to return to your roots, as it were, as a reporter for a few days? It's so funny because the hotel I was staying at is down in the financial district, and I really was across the street from the office building where I had my first interview when I was in college, my first finance interview.

So it's been like a real trip down memory lane. I mean, what I've been thinking about a lot is when I did work in finance, it was during like the rise and fall of Bernie Madoff. And I was there when a lot of, you know, people kind of around me had lost money with that. And we had clients who had wanted to invest with him. And I still remember my boss who was kind of this really old conservative guy, like an old school stockbroker type saying, you know, we just don't understand his black box. We don't understand how he makes his money. And the client was like mad that they thought my boss was kind of an old fuddy-duddy.

And sure enough, like he invested, lost all the money. I think honestly months later. So I just keep thinking about that and just the like the poll that that these successful people have, successful, you know, fraudsters kind of have where they really draw people in in a way that it's kind of fascinating to watch. You know, Bernie Madoff kind of famously would tell people that, you know, he didn't have any openings so that they wanted it more. And then they would wear him down and he would let them invest. And I feel like there's like elements of that with Sam and just in terms of, he just really found ways to, you know, like apparently one thing Michael Lewis said that I appreciated that I hadn't heard before was how much Tom Brady was kind of like really liked SBF and thought he was so interesting and cool. So it's just funny, not that Tom Brady is the best, like, example, but you know what I mean?

It's interesting to see how they can like pull it off. All right. Katie Baker's piece on Caroline Ellison up at the ringer right now. More to come, Katie, from the courthouse there in Manhattan. Thanks so much for coming on the press box. You're now adjourned. Thank you. That's the press box. I'm Brian Curtis.

Production Magic by Eduardo Ocampo. Shoemaker and I return Monday. With more lukewarm takes about the media, have a fantastic weekend.