FTX bankruptcy examiner's report [pdf]
restructuring.ra.kroll.com
restructuring.ra.kroll.com
Given the high cost of investigation and the limited potential return,
it would not be accretive to the estates for the Debtors’ counsel or the Examiner
to investigate the circumstances surrounding each of the hundreds
of small and medium-sized Venture Book investments
To claw back individual investments (some as low as $1,000, which can't justify much DD) you'll need more evidence than "this was made without sufficient diligence".
I just think the Quinn Emanuel law firm just charge a too high hourly rate to justify investigating each investment that was less than $5M. I wonder if they open sourced the data (with a bounty) someone would find some returns.
"Finally, Quinn Emanuel worked with Alvarez & Marsal to summarize basic information regarding the remaining, smaller Venture Book investments, i.e., those under $5 million. Quinn Emanuel did not investigate each of these investments, reasoning that the cost of such investigations relative to their limited value would not be accretive to the bankruptcy estates. These investments totaled approximately $286 million, making up approximately 4.8% of the Venture Book’s total value."
Also interesting that they apparently loaned money to Deltec bank to help shore up its balance sheet. Deltec being Tether's bank at the time.
If I recall Michael Lewis' book right:
- FTX (international) was a somewhat separate company from FTX US; SBF was convinced to fold them both into the bankruptcy proceedings.
- It was never clear that this would be under US jurisdiction at all; SBF was convinced to come to the US from the Bahamas.
- (my favorite part) After the Bahamas seized the passports of FTX employees, US officials smuggled in a new passport for at least one FTX employee in order to get them back to the US, presumably to give evidence against SBF. Who can pull those kinds of strings?
The Monroe Doctrine has to do with preventing powers outside the western hemisphere interfering in Latin America, not the US imposing legal jurisdiction over the region which it obviously doesn’t especially given that Ecuador, Cuba, Bolivia, Nicaragua, and Venezuela refuse to extradite despite having extradition treaties with the US. If you mean the US has outright hegemony in Latin America then that is easily falsified simply by pointing to the recent history of Cuba and Venezuela. Certainly the CIA has enormous reach and may have been involved but not necessarily, getting around passport confiscation could probably be handled by the State Department without too much hassle.
Because he thought he could stay out of jail there.
> US officials smuggled in a new passport for at least one FTX employee in order to get them back to the US, presumably to give evidence against SBF. Who can pull those kinds of strings?
Source?
"Smuggled" implies it was done without the consent or knowledge of the Bahamas government. Otherwise, it's standard U.S. Marshals stuff.
> Gary never said when he would leave, or how he would leave—which was an issue, as the Bahamas had taken his passport. On Sunday night, without a further word to anyone, he just slipped, unnoticed, out of the Orchid penthouse. The lawyer who spirited him off arranged with US authorities to supply him with a second passport, so that they might smuggle him back to the United States before the government of the Bahamas knew what had happened.
Lewis was where? With the Bahamas authorities and the lawyer who got the passport and the U.S. authorities who provided it to them? And the supposed fugitive while he left?
He makes a complex allegation that seems to have been strung together from observations, which I trust him to be relaying honestly, and suppositions given things he didn't see, e.g. that this wasn't coordinated with Nassau, which I'm sceptical of.
Page 177:
Joseph Bankman, Bankman-Fried’s father, is a tenured Stanford Law School professor who served as an officer, director, manager and/or pro bono counsel to a number of FTX Group entities. Barbara Fried, Bankman-Fried’s mother, is a Professor Emerita of Stanford Law School. She served as a member of the Board of Advisors of Stanford University’s Ethics.
Or this part about this dad on page 183:
And the Debtors allege that Joseph Bankman directed “donations of more than $5.5 million” to Stanford University in an attempt to “curry favor with and enrich his employer at the FTX Group’s expense.”
Your sentence was cut off? She is a member of the Board of Advisors to the Stanford Ethics in Society Program. That means she helps direct an academic program researching ethics, not that she enforces ethical rules within Stanford.
Professional ethicists and moral philosophers do not, and generally do not claim to, act morally better than others. Their profession is about researching the consistency and implications of moral rules.
Judges are generally held to a higher standard than the general public, so I guess there is irony/hypocrisy when they commit a crime they have convicted others of. But that’s not what Fried was doing.
Effective altruism seems like a weaponization of morals to support wealth hoarding.
If I assume that she authored the piece sincerely rather than as some navel gazing intellectual and virtue signaling exercise, then it isn't a shock that her child has a defective comprehension of right and wrong (or at least was atypically vulnerable to having one installed by others-- e.g. utilitarian consequentialism and 'effective altruism').
It's also not surprising that such a person would strive to get themselves placed in a position of authority on the subject-- not in spite of a psychopathic, ethically defective, or just overly rationalized worldview but specifically because of it.
That is a little like saying people who teach music don't claim to play an instrument very well. Universities are full of professors who can't do the thing they teach about very well. But I think we should be skeptical of people who study a thing they can't practice.
Teaching in itself - understanding a complex topic and communicating to newbies - is a skill that is independent of the ability to do the thing.
You can be skeptical all you want of ethics/morality as a field of academic research! I think there are some good reasons to be. That doesn’t mean the researchers are hypocritical when they sometimes act immorally (as all inevitably will on account of being humans), or that it’s ironic or whatever.
If you showed the same obviously unethical act to both a layperson and an ethicist and asked them, purely as a thought exercise, to present a collection of ethical justifications for what they saw the ethicist would almost certainly have an easier time doing so and would produce arguments which were more convincing (at least to ethicists) due to their familiarity with accepted frameworks.
It might be reasonable to guess that as a consequence ethicists overall may have a greater capacity for unethical conduct than arbitrarily selected members of the public (controlling for other factors).
The bar here is so much lower.
They do however claim a better understanding of ethics. So unless she's been saying, "Gosh, I knew it was wrong but did it anyway," then it looks like the contrast between her professional expertise and her behavior would still qualify as ironic. As would her role teaching law and ethics when contrasted with both SBF's behavior and his many, many shady statements.
The "ethics expert = more ethical" connection has never held up and mainly serves as a gotcha.
It's true that, as you say, she could use her knowledge of ethics to be less ethical. But that would just be a different kind of irony for somebody who teaches on law and ethics.
The issue is that when you start studying ethics you'll learn pretty quickly that what's right or wrong isn't exactly that obvious. You don't go to a philosophical ethics class and get taught what's good and bad like in church, you get taught how to think about the many ethical systems that exist.
That means you're going to enounter the ethics of Max Stirner, who was so radically Egoist he makes Ayn Rand look like a puppy loving communitarian, and you're going to encounter Jesus Christ. That people who study ethics for a living often have views that seem so unethical to most people isn't really surprising simply because they're exposed to such a broad range of views.
People who have are perceived as ethical are usually the people least exposed to ethics as a field of study, because they're exactly the people most likely to adopt the beliefs of people around them.
In practice, ethics usually means "how an organization justifies its monstrous behavior, especially to outsiders." Ethicists are the people who do said justification.
Better call Saul.
Oh it's worse than that. She wrote people should learn to go "beyond blame".
They enriched themselves (the parents), buying properties worth $15m in the Bahamas.
Same as for the "effective altruist" guru of SBF: he got a $15m donation and bought a mansion in the UK for the "effective thieves" movement. Last I checked that guru tweeted that he needed some time to reflect on what happened and, last I checked, he didn't offer to give back the property acquired with stolen money. Thankfully that property may be clawed back at some point: decades (already) after the Enron scam, ill-acquired money is still being clawed back. So there's hope.
To me these people are despicable worms. That's why I cannot get along with people who want to pardon everyone... I'm loyal. I respect the law. But I've got zero compassion for the complete, total and utter scum of this earth.
I was briefly involved with her in a nascent startup (I was leading the engineering side) until she just openly suggested to screw a business partner up, taking up its money and committing fraud, all that without the slightest hint of remorse in her body language. As if I just told you, "oh, it's sunny outside". gg and left that "project" immediately.
Later heard she had to move to Montreal because she had screwed so much people in our hometown that she couldn't find anyone even willing to sit down with her; she was stealing money from everyone she could, pretty much. I wonder what's the endgame for these people or if it's some sort of compulsive disorder, like people who literally can't resist to steal small things from stores.
Traits like: lack of empathy, lack of remorse, bloated self-image, need for admiration, deceiving others
I've also personally dealt with a couple of people like this, people that ran small charities, and volunteered in community projects.
They are attracted to the perceived moral virtue that these institutions bestow.
Not to disparage that majority of people in these institutions that are trying to do good work.
Once you get close enough to these people to hurt you, you become highly attuned to it.
For example, I know several people who work for the government, not so much because they want to help the people, but because it is a stable steady job.
Power does not corrupt. The corrupt seek power.
FTX’s fate was sealed long before its collapse, an extra 6 months would not have changed the outcome.