Unchained - SBF Trial, Day 10: Defense Tries But Fails to Undercut Nishad Singh's Credibility

Episode Date: October 18, 2023

On day 10 of the Sam Bankman-Fried trial, SBF’s defense team tried to discredit Nishad Singh, a key witness for the prosecution. Despite their efforts, Singh's testimony about FTX's financial mismanagement and Bankman-Fried's questionable ethics remained largely unchallenged. The defense's line of questioning focused on Singh's memory and inconsistencies in his statements, but prosecutors were quick to counter these points in their redirect. FBI Agent Richard Busick presented an analysis of Bankman-Fried's phone locations, revealing his connections to influential political figures like former U.S. President Bill Clinton and New York City Mayor Eric Adams.  Can this information impact the jury's perception of Bankman-Fried as the trial continues to unfold?  Catch up on Unchained’s previous coverage:  SBF Trial, Day 1: Possible Witnesses Include FTX Insiders, Big Names in Crypto, and SBF’s Family SBF Trial, Day 2: DOJ Says Sam Bankman-Fried ‘Lied’ While Defense Claims His Actions Were ‘Reasonable’ SBF Trial, Day 3: Why a True Believer in FTX Flipped Once He Learned One Fact SBF Trial, Day 4: SBF’s Lawyers Annoy Judge Kaplan, While Wang Reveals Alameda’s Special Privileges SBF Trial, Day 5: SBF's Defense Finally Found Its Legs, But Can It Counter Caroline Ellison? SBF Trial, Day 6: Caroline Ellison Recalls 'The Worst Week of My Life' SBF Trial, Day 7: In SBF Trial, Did the Defense Lose Its Opportunity With the Star Witness? SBF Trial, Day 8: Former BlockFi CEO Adds Credibility to Fraud Charges SBF Trial, Day 9: Nishad Singh Describes Former FTX CEO as a Bully and Big Spender Did Sam Bankman-Fried Have Intent to Defraud FTX Investors? Why These Lawyers Say It's Over for SBF-But His Only Hail Mary Is to Testify Here’s How Sam Bankman-Fried’s High-Stakes Trial Could Play Out SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case The High-Stakes Trial of Sam Bankman-Fried Begins: What to Expect Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone. Thanks for tuning into the Unchained Recap for Day 10 of the Criminal Trial of Sam Pinkin-Fried. Sam Pinkman-Freed's defense team tried yet again to chip away at the credibility and narrative of a star witness. This time, former FTX head engineer Nishad Singh. But while attorneys for the crypto exchange's former CEO cast some doubt about Singh's character, they did little to debunk his seemingly damning testimony from Monday when Singh, the last of the so-called inner circle, depicted an organization in financial chaos and leader willing to defraud customers to prop up his debt-riddled balance sheet. Quote, I knew that in June I had observed Alameda borrowing in large amounts in a way that didn't meet the expectations I had and what I'd been told about how Alameda would use things like

allow negative. Singh responded at one point when Bankman Free lawyer Mark Cohen asked if he'd done anything wrong prior to September 2022. Quote, even in June when I suspected there was wrongdoing there, I took cues from the people around me and didn't pursue it further. In September, I understood not only had there been an enormous amount of borrowing, but that the money wasn't there at all. During one crushing sequence, Singh noted that in September 2022, as FTX's woes mounted,

Singh considered resigning because he felt he was, quote, participating in something heinously criminal. He added, quote, To keep running the business without divulging to others that there was a whole, I would be betraying customers that deposited their money into the hole, betraying my other employees. The scale of wrongdoing was enormous. In the morning cross-examination, Bankman Freed's defense team contested

prosecutor's image of Bankman Freed as a spendthrift. With Cohen getting Singh to admit that, for example, FTX's $135 million sponsorship of the Miami-Dade Arena, the home court of the NBA Miami Heat was spread over 19 years. Cohen also prompted Singh to acknowledge that F-TX's $200 million stake in investment firm K-5 had benefits. Quirited by the penthouse that was a source of tension, Singh admitted that he and his girlfriend had the nicest suite. Singh noted that he had considered moving out many times, but Cohen got him to admit that he hadn't. Cohen also asked Singh, who had previously been a billionaire on paper, whether the $30 million,

purchase of the Orchid penthouse in the Bahamas was expensive for a group of billionaires and millionaires. Singh responded, quote, the expense would be the same no matter the wealth of the people living in it. Moreover, Singh mentioned that he didn't know what was reasonable for billionaires since he didn't know other billionaires. In the overflow room, people laughed. Cohen then homed in on June 2022, when Caroline Ellison, Gary Wong, Adam Yudidia, and Bankman Freed started focusing on a bug in FTCX's software base that overstated FTCS's obligations to customers. Cohen then asked Singh if it was fair to say that he told prosecutors prior to the trial that he'd, quote, had a surprising amount of haziness when trying to recall events in June and July

2022. Singh acknowledged that there was a lot that he didn't remember from that period. Throughout its cross-examination, the defense brought of inconsistencies between the notes on Singh's meetings with prosecutors and what Singh had said in court, aiming to sow doubt about his testimony. But in redirect, attorney Nicholas Ruse asked Singh whether he took those notes himself, whether anyone ever asked him to review the notes for accuracy, and whether he had read the entirety of the notes. Singh answered no to each of the questions, undermining the credibility of the notes as evidence, and combating the defense team's attempts to portray Singh as hazy about details. On Unchained two recent attorneys explained that notes taken during initial meetings with a potential witness are not transcripts and therefore

may be inaccurate, which may explain why Singh often did not recall saying the things mentioned in the notes. Cohen tried to counter Singh's testimony from the previous day about how under the direction of SPF and Ryan Salem, he had violated campaign finance laws. Cohen got Singh to testify that he had been excited about political donations as early as 2018. Cohen asked Singh whether Singh was required to be the face of FTC's political spending, to which he responded no. At one point, Cohen asked Singh about various amounts of money taken out of the exchange, or Alameda, in his name. For the funds he received to make political donations, Singh said they were loans, quote, in a loose sense. Under redirect by the prosecution, Singh explained that while he expected and wanted

to pay back the loans, no formal agreement existed requiring as much. Quote, there wasn't paperwork. There wasn't a discussion of the transfers to me that I was a part of. And when I requested loan sheets, like lists of loans that Alameda had given, when asked from FTC's head of finance, Jayesh, from Caroline and from Kansan, who was the general counsel, he said, quote, they did not include many of these transfers as obligations I had to pay back, so they weren't really loans. After day one of his testimony, Singh had seemed to be the most vocal of all the insiders about Alameda's borrowing of FDX customer funds as wrongdoing.

However, in his cross-examination, Cohen chipped away at Singh's halo by asking about Singh's $3.7 million purchase of a home in Orcus Island in Washington State in October 2022. After he knew that Alameda owed FTC's customers $13 billion, Singh testified that he borrowed from FTCS to purchase the home. However, in the redirect, the prosecution elicited from Singh the fact that he had forfeited that home. Singh explained, quote, I bought it at a time when I understood that it was putting myself ahead of customers by doing so. I was embarrassed and ashamed. Singh said he forfeited

the home because it was one small way to write a massive wrong. The defense spent quite a while asking Singh about something known as auto-de-leveraging, which had to do with a contingency plan that took place at certain times of trading if the exchange's preferred method for dealing with those instances was not possible. After one of these undesirable occurrences, which could be harmful to customers, Singh committed some code and in a comment related to it, wrote, quote, Be careful not to liquidate PMM, which referred to Alameda. While it may have seemed that this could be a justification for how Elameda came to have a $13 billion liability to FTCS in September 2022, in the redirect, the prosecutor asked Singh if the $13 billion

hole was a result of auto-de-leveraging, quote, I fail to see the relationship between them. No, he responded. Cohen, perhaps in an attempt, to discredit Singh's testimony, asked him about his mental state at various times, starting with his evening conversation with SBF on the Orchid's balcony in September 2022. Singh testified that he had been anxious and stressed, saying, quote, I was very nervous, I was waiting an explanation and eventually an apology. I was pacing.

Cohen then asked about how Singh had said that in late November, he was suicidal. Singh responded, and for a few months after, which, due to the severity of the state, statement may have instead underscored how serious FTX's collapse was. At another time, Cohen asked Singh if he had considered resigning from FTX or Alameda prior to the fall of 2022. Singh responded, yes, enumerating multiple previous instances. During its redirect examination, the prosecution asked how his thoughts of resigning in the fall of 2022 differed from those previous moments. Singh responded that the previous times concerned only his own worries, but that this time was different because he knew staying would mean he would participate in, quote, something heinously criminal.

After Singh finished his testimony, Richard Busick, a special agent with the FBI for the past two decades, was questioned about his cell phone analysis of Bankman Freed's mobile, likely to establish the jurisdiction for the Southern District of New York. Comparing times when Bankman Freed's phone was active in Manhattan, against emails regarding work events in Manhattan, prosecutors showed that the dates and locations of those events corresponded to times when SPF's cell phone was in those areas. It also gave a sneak peek into the hobnobbing SPF was doing with the world's elite in the months before FTCS's collapse. On his calendar were people such as his eminence, Yazir al-Rut Mayan,

governor of Saudi Arabia's sovereign wealth fund, New York City Mayor Eric Adams, New York State Governor Kathy Hochel, and former U.S. President Bill Clinton. Thanks for listening and tune in tomorrow for the Day 11 recap of the SPF trial. And again, if you want real-time updates from the courthouse, you can follow me on Twitter where I release videos twice a day about what happened in the courtroom. Thanks again for listening.