SBF: Here's my honest application.
Bank: Sorry, we'll have to decline your application.
SBF: Wait, here's my updated (dishonest) application.
Bank: Ah, looks much better. Approved.
And now they're arguing that because the bank declined the application at step 2, he should have gotten some executive and deep due diligence special treatment, which likely would have resulted in him getting the application approved?
But because he didn't, he had to lie on the next application. But said lying should be considered void, because there's a likelihood that he would have gotten the original application approved, had they just gone the extra mile for him?
Sounds like his lawyers are grasping at straws. I've worked in a regulatory arm myself, and this feels even more flimsy than the people/companies that have prematurely started doing stuff, because they assumed that they'd get a green light, or win some type of appeal.
He exposed the bank to risk, by providing a dishonest application. Seems pretty clear cut.