The Sam Bankman-Fried trial opened this week with jury selection.
I have been fascinated by the case, not just because of the size of the losses of the investors or because some of the people he had paid were sports celebrities like Tom Brady and Steph Curry.
The heart of the case, which makes me feel like I want to sit in a box seat, revolves around Bankman-Fried and his occasional girlfriend, Caroline Ellison, who has decided to become a witness for the prosecution. Has Ellison come down with a case of guilty conscience or is she trying to soften her eventual sentence? Both?
The couple grew up in the academic world. Bankman-Fried’s parents were law professors at Stanford University. His mother was also prominent in Democrat Party fundraising.
In an interesting coincidence, former president Donald Trump’s trial for fraud began the same day as SBF’s, also in New York City. Sam, in his heyday, had given prodigious amounts of money to Democratic Party candidates and was the second biggest contributor to the Biden campaign in 2020 behind Michael Bloomberg. Allegedly, Bankman-Fried approached Donald Trump, offering him $1 billion for him not to run in 2024. Trump supposedly told him it would take $5 billion. That’s negotiating!
Sam went to MIT as an undergrad student. Caroline Ellison’s parents were both professors at the esteemed university at that time. Caroline’s story of growing up is fascinating in its parallel elements. She was a very bright young child who grew up on Harry Potter books. Her parents read her the first Harry book when she was three years old. She read the next book herself when she was five. She had an early interest in mathematics but also starred in linguistics study at hyper-competitive Newton High School, which is loaded with the kids of Harvard and MIT academics.
Ellison and Bankman-Fried both went to work at Jane Street trading firm. They met shortly before Sam became intensely interested in trading cryptocurrencies. He was taking advantage of discrepancies in their values in different countries. It was a great game at that time, particularly when trading with other people’s money.
Sam then decided to start his own firm. He moved to the Bahamas where regulation was lax, and he used his connections from his time at Jane to raise money. Caroline Ellison joined him, as well as other colleagues from Jane.
The rest of the story may come at the trial. If convicted of all counts, Sam could get 110 years in jail.
What I keep wondering about, however, is what Sam and Caroline said and heard at home growing up? What was dinner conversation about? Did they see ethical behavior from their parents or their friends? Was the academic world a nasty place, intolerant of differing opinions?
Both Sam and Caroline supposedly believed in the notion of making money in order to give it to good causes. Yet billions of dollars of clients’ money vanished. Sam’s explanation is “I screwed up but didn’t ever try to commit fraud.” Caroline’s explanation is that they were messy at keeping records.
In a week or two, Caroline will testify as a State’s witness, but I keep thinking about Sam’s and Caroline’s families. They were given what was supposed to be the best education that could be had. But did their parents teach them kindness and caring and the value of connection and love? Were Sam and Caroline children you would be proud of as your own?
Questions: What were the most important things you taught your children?
What was the most valuable lesson you learned from your parents?