- Judge Lewis Kaplan rules in favor of prosecutors, preventing Sam Bankman-Fried from discussing specific investment values.
- Prosecutors allege that a $500 million investment in AI firm Anthropic was sourced from misappropriated FTX customer funds.
Legal Turnabout: Evidence Restrictions in the Bankman-Fried Lawsuit
In an unfolding legal drama, the United States v. Sam Bankman-Fried, a pivotal decision has been made by federal Judge Lewis A. Kaplan. Acting on the prosecutors’ application, he’s ruled to restrain Sam Bankman-Fried from presenting any evidence or arguments related to the present value of certain investments, notably a $500 million stake in the artificial intelligence enterprise, Anthropic.
Prosecution’s Stance on Investment Disclosures
The court documents, made available on October 16, elucidate the judge’s assent to the prosecutors’ request to curb any mention of current investment valuations in Anthropic by Bankman-Fried. Rooted in suspicion, the prosecution avers that the colossal investment, transacted in 2022, was channeled using misappropriated funds belonging to FTX’s clientele.
The court order states,
“For the reasons stated on the record in open court, the government’s motion to preclude the defendant from introducing evidence or argument about the current value of certain investments made by the defendant is granted.”
Adding layers to the complexity of the case, it’s not just Bankman-Fried who had stakes in Anthropic. FTX co-founder himself, former engineering chief Nishad Singh, and ex-CEO of Alameda Research, Caroline Ellison, were co-investors. Notably, during the proceedings, Ellison was cross-examined regarding her Anthropic investments. Her response hinted at coercion by SBF, suggesting that their mutual investments were intertwined with the alleged mismanagement of customer funds.
Prosecutors contend that such investment details bear no relevance to the case at hand. They argue that bringing them up would only serve to confound the jury, leading to potential bias, prolongation, and a divergence from the core issues.
Defendant’s Medicinal Contention & Witness Revelations
Further complicating the case, Bankman-Fried’s defense has expressed apprehensions regarding his potential testimony. The contention is rooted in his medication regimen. They argue that, without his specific 12-hour extended-release 20 mg dose, Bankman-Fried’s focus wanes, affecting his ability to testify adequately. While these concerns were brought before the Court and the Government, the issue remains unresolved.
Moreover, Nishad Singh, formerly helming the engineering department at FTX, took the stand to concede his knowledge about the company’s illicit use of customer funds. This acknowledgment, though significant, is eyed with suspicion by the prosecutors, concerned it may strategically protract the litigation.