SBF trial imminent, let’s see what legal experts have to say

SBF trial imminent, legal experts to weigh in.

Source: Coindesk

Compilation: LianGuaiBitpushNews Mary Liu

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Sam Bankman-Fried (SBF), the founder and former CEO of FTX, will stand trial in less than two weeks to defend himself. SBF is accused of willfully committing fraud and conspiring to deceive investors and clients of FTX and Alameda Research.

The prosecutor needs the jury to reach a unanimous verdict to convict SBF. The trial, expected to last six weeks, is scheduled to begin on October 3, 2023, Eastern Time in the United States. This is less than 10 months since Bankman-Fried’s initial arrest and less than 11 months since the collapse of FTX.

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In order to better understand the trial process, CoinDesk interviewed several legal experts, some of whom requested anonymity to discuss this high-profile case.

Jury Selection

Although the trial is scheduled to begin next month, it will take some time before actual arguments are presented. The first step may take place next week, namely the final pre-trial conference.

Judge Lewis Kaplan of the Southern District of New York will list the final witness schedule and how long the trial may last, as well as make final pending rulings on any issues. Martin Auerbach, a lawyer at Withersworldwide, said that after the jury is selected, Judge Kaplan may also consider some motions.

The second step is voir dire, which will actually begin on October 3.

During the jury selection process, the judge will ask potential jurors some questions. An attorney with experience in white-collar litigation told CoinDesk that he may first inquire broadly whether any potential jurors have any plans to travel in the next few weeks, as they may not be able to leave their jobs for weeks.

They said that he may also inquire whether any potential jurors have FTX accounts, and these people will be excluded. Once these extensive jury questions are completed, the judge will begin questioning individuals about the questions raised by the prosecution and defense teams.

They said, “The defense and the prosecution may compete for each juror, which will take a long time. It won’t be a yes or no question, but a back-and-forth process, so I think it will take a few days.”

Auerbach said that while lawyers may be able to ask questions to potential jurors at the state court level, this is a federal court, so only the judge will ask questions.

If some potential jurors can prove economic hardship or similar issues, they may be barred from attending. Others may be disqualified through peremptory challenges, where lawyers can strike a limited number of potential jurors for any reason.

Other potential jurors may show obvious bias towards defendant SBF or plaintiff government and may be disqualified without counting towards the peremptory challenge quota.

This process is usually quick. Given the significance of the SBF case, it may take several days to arrange only 10 or 12 jurors, but according to the documents submitted by the Department of Justice on September 19, this would only take “half a day.”

Auerbach said that there will also be some alternate jurors, who may ultimately be ignored unless one of the original jurors has to withdraw from the case.

Both the prosecution and the defense have raised some questions, requesting the judge to inquire each potential juror to exclude anyone who may have serious bias or be unsuitable to serve on the jury, suggesting that Judge Kaplan ask these individuals if they are familiar with the case, if they have any opinions on the case, or if they know (or are familiar with) Bankman-Fried or the involved lawyers.

The SBF team has also raised some questions about effective altruism, political donations and lobbying, and ADHD. The Department of Justice opposes these questions, believing that they seem to be designed to favor the prosecution.

Reasonable doubt

After the trial begins, the jurors, reporters, and members of the public in the gallery will witness opening statements from the Department of Justice and the defense, followed by the presentation of evidence and examination of witnesses by the prosecution. The Department of Justice’s pre-trial documents show that in addition to written documents, prosecutors will also present recordings during the trial.

This will be used to interrogate the witnesses.

An expert told CoinDesk that the first witness summoned by the Department of Justice may help demonstrate the strength of the case, at least in the eyes of the prosecutors. The DOJ may summon FBI agents as the first witnesses, or they could “go for the jugular” and immediately summon members of the FTX inner circle.

Both sides are also attempting to provide certain expert witnesses to describe FTX’s code and other details, and even explain cryptographic fundamentals, although there is still controversy over whether to allow some or all potential witnesses to testify.

Given that this is a criminal trial, the Department of Justice must prove guilt “beyond a reasonable doubt.” In contrast, the standard of “preponderance of evidence” is lower in civil cases.

A legal expert told CoinDesk, “There’s no specific percentage aside from reasonable doubt, but you can think of it as 90% or more, having a deep and lasting belief that the defendant is guilty.”

They said that the U.S. Assistant Prosecutors trying this case may present every element of each charge and explain what evidence they have to support a conviction on each charge.

The experts said, “They are tracking every piece of testimony, every document, to make sure that there is enough in the record that [Bankman-Fried] will inevitably argue — because every defendant does — that there are defects in this or that piece of evidence.”

Once the prosecution rests, the defense will have the opportunity to present more witnesses. One pending question is whether SBF himself will testify for his own defense.

One source told CoinDesk that more white-collar crime defendants are waiving their Fifth Amendment rights and testifying in court. Elizabeth Holmes, the founder of Theranos (who was convicted last year and sentenced to over 11 years in prison), is an example of this.

Experts say, “The current thinking is that the jury is very concerned about the celebrity effect. Even if they don’t know who the defendant is in the trial, almost everyone is likely to be on Twitter and the internet during the trial to research them. The judge will tell them not to do this… But because there is this celebrity culture surrounding these cases, people’s thinking is that if they don’t testify, essentially, it is presumed that they are not testifying because they don’t want to admit their guilt.”

Concerns have already arisen about the jury being influenced in some pre-trial hearings. Bankman-Fried’s defense team argued that there have been over a million negative articles about the founder of FTX, which has sparked media narratives about him.

Unanimous Verdict

A unanimous verdict is required for a federal criminal trial to convict. If the jury consists of 12 people, all 12 must believe SBF is guilty without any reasonable doubt by the end of the trial.

The defense’s job may be (relatively) simple, convincing one juror that there is insufficient evidence or that the prosecutor has not presented arguments for different charges.

Auerbach said the judge will read a series of instructions explaining how they should evaluate what they have heard and seen. Both the US Department of Justice and SBF’s team have submitted their own jury instructions.

He said, “It’s a piece of paper that lists the legal elements they must exclude reasonable doubt to convict, if they fail to exclude reasonable doubt, they must acquit, and if they can’t reach a unanimous decision, they will be hung on that particular legal element.”

The jury can ask questions, but typically these questions are reserved for deliberation. Jurors can send written questions to the judge, who will read them in court and provide answers with the lawyers.

“I have to believe that in such a complex case, the jury will ask one or more questions,” one legal expert said.

Another source told CoinDesk that another complex factor is that most of the core actions of the charges are not actually disputed. The prosecutor’s job is to convince the jury that SBF’s actions conform to the regulations he is charged with.

Extraterritoriality is an example. Neither wire fraud nor anti-fraud rules in securities regulations apply to “defendants primarily engaged in activity outside the United States.” In other words, the prosecutor must prove that SBF’s actions not only meet the definition of wire fraud but also demonstrate that his targets are US citizens or are otherwise implemented in the United States.

Bankman-Fried once lived in the Bahamas, where FTX’s global headquarters is located.

Another source told CoinDesk that if the jury is deadlocked, the judge can use certain tools to tell the deadlocked jurors to “go back and try again.”

“It’s not like in the first round of voting, where a juror says ‘I don’t believe,’ and they’re told to go back and keep working towards a unanimous verdict,” they said.

Auerbach said that if the jury comes back after multiple attempts to agree on a verdict and says they have irreconcilable conflicts on all issues, the judge may declare a mistrial. Otherwise, the jury may agree to convict on all or some of the charges, or acquit on all or some of the charges.

Sentencing

If SBF is convicted on one or more charges he faces, how long he spends in prison will largely depend on Judge Kaplan.

One source told CoinDesk that while sentencing guidelines used to be mandatory decades ago, they are now more often seen as a starting point rather than strict rules, according to Supreme Court rulings.

There are still statutory requirements that judges must adhere to, but they differ from guidelines.

The source said the U.S. Probation and Pretrial Services system will create a report first, which includes a “preliminary calculation of the recommended sentencing range.” The Department of Justice and the defense team can make any objections and argue for longer or shorter sentences.

Then Judge Kaplan will consider the various proposals and take into account many other factors, such as the severity of the crime, to make an actual judgment.

Typically, if there are multiple convictions on similar charges, a judge may choose to distill the charges into “core misconduct.”

Given the progress of the case so far, if SBF is convicted, his team may also file an appeal. Another source said that due to the “double jeopardy” rule, the Department of Justice cannot appeal a “not guilty” verdict. Legal experts said, “Except in the rarest cases, the government won’t appeal in all situations… Once you’re acquitted by the jury, you’re essentially released for life.”

Regardless, this is not SBF’s final criminal trial. Early next year, he will face a series of additional charges brought by the Department of Justice after the initial indictment.

Considering that Monday, October 9th is a U.S. holiday, Columbus Day, Judge Lewis Kaplan approved October 6th, Friday, as the trial date.

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