Bankman-Fried’s Guilty Convictions Complete His Fall From Grace

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

Bankman-Fried has now completed a narrative arc from whiz-kid founder of a crypto empire to fraudster who stole billions in customer funds. It is a tale that humbled Silicon Valley titans and A-list celebrities. And it leaves unclear the future of an industry for 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 hair long since shorn of 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 over. The 31-year-old nodded at his parents as he was led back to jail.

From the start of the trial, Bankman-Fried faced long odds. Prosecutors moved to paint the FTX founder — who appeared on magazine covers and hobnobbed with former world leaders — as a scammer who repeatedly lied about his business and profited from illegal use of investor and customer funds. “This was a fraud that occurred on a massive scale,” Nicolas Roos, a prosecutor, said in closing arguments.

Three of Bankman-Fried’s top lieutenants, including his on- and off-again girlfriend Caroline Ellison, testified that he had ordered them to produce doctored financial statements, create secret back doors in FTX from which he could draw nearly unlimited funds and carry out other chicanery.

Bankman-Fried’s decision to take the stand may have backfired. It was a long-shot bid to paint himself as a well-meaning entrepreneur who made mistakes, but he stumbled under questioning. (By the government’s count, he couldn’t recall incidents about 140 times.)

His trademark disheveled appearance? A branding exercise, prosecutors contended. His public comments about the state of FTX’s affairs? Duplicity, they added. When he struggled under cross-examination, his mother had her head in her hands.

Bankman-Fried faces up to 110 years in prison, with his sentencing scheduled for March. He’s likely to appeal, with his lawyers expected to contest limitations on what they were allowed to argue during the trial. But he also faces a second trial on campaign finance violations and other charges that could compound his legal burden.

Will Silicon Valley and crypto face a reckoning? Alfred Lin of Sequoia Capital, the venture capital firm that had invested in FTX and once publicly lauded Bankman-Fried, wrote after the verdict that “we had been deliberately misled and lied to.” And many crypto founders said that the Wild West era of their industry, which enabled the rise of Bankman-Fried, was over.

Sequoia itself appears to have carried on, landing investments in hot companies like OpenAI. But while crypto prices have recovered from the depths of a year ago, they remain well below their highs. And most tellingly, The Times’s Erin Griffith writes, tech magnates no longer tout crypto concepts like Web3 or NFTs: “They are out of style and therefore irrelevant.”

A reminder: The DealBook Summit is Nov. 29, featuring guests including Bob Iger of Disney, Jay Monahan of the P.G.A. Tour and Jensen Huang of Nvidia. You can apply to attend here.

The F.T.C. accuses Jeff Bezos of pushing Amazon to load search results with junk advertising. Bezos urged his executives to push “defect” ads to increase the total number of ads shown to consumers and pump up revenue, according to newly unsealed portions of the F.T.C.’s antitrust lawsuit against the company. A company spokesman called the claim “grossly misleading.” (In other Bezos news, he is moving to Miami.)

Federal authorities investigate Eric Adams’s 2021 mayoral campaign over foreign donations. F.B.I. agents raided the home of Brianna Suggs, the New York City mayor’s chief fund-raiser, seizing evidence including iPhones and laptops. The Justice Department is examining whether the Adams campaign conspired with the Turkish government to receive illegal donations; there’s no indication that Adams is under investigation.

The parent company of Jeep and Chrysler outlines its deal with the U.A.W. Stellantis said that in addition to raising factory worker salaries by 25 percent over four years — largely similar to concessions that the union won from Ford — it would invest nearly $19 billion in manufacturing plants in the U.S. Meanwhile, Detroit automakers agreed to pay U.A.W. workers for their time on strike.

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

Apple shares are down in premarket trading this morning, after the world’s most valuable public company reported a year-on-year decline in revenue for a fourth straight quarter. Among investors’ concerns: worries about the iPhone maker’s market position in China.

Headwinds in China are building. A broad economic slowdown, rising domestic competition and increased government scrutiny are all weighing on Apple in its third-largest market, after the U.S. and the E.U. Its revenue in greater China, which includes Taiwan and Hong Kong, fell 2.5 percent to $15.1 billion and missed analyst estimates.

A Chinese rival is making gains. Sales of iPhones there fell 10 percent while those of Huawei grew 37 percent year-on-year, according to Counterpoint Research.

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

Apple has sought to shore up its position in China. Cook made a surprise visit last month, meeting government officials and a key supplier. His trip followed reports that state employees were barred from using iPhones for work and the start of an investigation into Foxconn, Apple’s biggest manufacturing partner.

All of that has wiped billions off Apple’s share price.

Two bright spots: Apple’s services division, which includes music and streaming, grew, with revenue up nearly double the previous quarter. And overall iPhone sales rose, after a supply shortage in the first half of the year.

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.

A fight over a new S.E.C. rule exemplifies the dynamic. Six private-fund industry groups have sued the agency, demanding it drop rules passed in August. The regulator wants fund managers catering to wealthy investors to be more transparent, to report more information on quarterly performance and to limit deals that give preferential terms to some clients.

But the groups accuse the S.E.C. of acting beyond its statutory authority. In an opening brief this week, the National Association of Private Fund Managers and other groups cited the “major questions” doctrine, which requires questions of political or economic significance to be explicitly addressed in legislation. The Supreme Court applied the doctrine for the first time to invalidate an Environmental Protection Agency rule last year.

The doctrine has become a crucial plank in legal fights against agency power. The trade groups say that Congress wouldn’t delegate regulation of a “$26 trillion sector of the economy” without explicitly giving the S.E.C. the green light.

“Although not necessary to resolve this case, this doctrine confirms the Commission lacks the authority asserted here,” argued Eugene Scalia, the lawyer representing the groups and who is the son of the late Supreme Court Justice Antonin Scalia.

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

The regulators deny the accusations. They say they are using powers designed to address specific problems in the banking industry and that this year’s crisis in midsize lenders added urgency for stricter rules. But Anne Balcer, chief lobbyist of the Independent Community Bankers of America, said legal action was a last resort in response to “extraordinary” demands.

Casey Bloys, chair of HBO, apologizing for his role in an effort that used fake Twitter accounts to pester TV reviewers who criticized the network’s shows. He called the campaign “a very, very dumb idea to vent my frustration.

The markets have rebounded in recent days. But zoom out, and the last several weeks have been brutal for investors in stocks and bonds. The Israel-Hamas war has added further volatility, pushing many risky assets into the red last month.

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

The answer: West Texas Intermediate. The price of the U.S. benchmark fell 10.8 percent last month, despite fears that Middle East turmoil would send energy prices skyrocketing. On the opposite end, Bitcoin was the leader of the pack, soaring 28 percent last month.


  • Goldman Sachs will elevate 608 executives to managing director, fewer than it did during the previous promotion cycle in 2021. (Reuters)

  • Saudi Arabia is seeking to buy two prominent tennis tournaments, in Madrid and Miami, from the entertainment giant IMG, though it’s not clear the events are for sale. (The Athletic)

  • Sheryl Sandberg, the former C.O.O. of Meta, has set up a venture capital firm with her husband, the investor Tom Bernthal. (The Information)


  • The drug maker Novo Nordisk said that its blockbuster weight-loss treatment Wegovy could win F.D.A. approval for expanded uses within six months. (CNBC)

  • A political action committee backed by Reid Hoffman, the LinkedIn founder and venture capital investor, may finance primary-campaign opponents of the progressive Democratic lawmakers Rashida Tlaib and Cori Bush. (CNBC)

Best of the rest

  • SpaceX’s Starlink satellite-based internet service has hit cash flow break-even, a critical financial milestone, according to Elon Musk. (Bloomberg)

  • TikTok is pushing back against claims that it has allowed antisemitic content to fester on its platform. (NYT)

  • Shares in Starbucks soared nearly 10 percent yesterday after the coffee giant beat earnings expectations — thanks in large part to Pumpkin Spice Lattes. (Reuters)

  • “No Tip for Your Delivery Driver? Then Be Prepared to Wait, DoorDash Says.” (NYT)

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