Sam Bankman-Fried gambled on a trial and his parents lost

It took the jury just over four hours to reach a verdict. When Joseph Bankman and Barbara Fried, the defendant’s parents, entered the courtroom, they looked scared. Bankman put his arm around Fried as they sat on the wooden benches. Fried put his hands on his head.

Sam Bankman-Fried stood to hear the jury’s verdict. After the first “guilty” (for wire fraud) was read aloud, his father doubled down. His mother’s hands rose to cover much of his face, either to stifle her tears or to hide them. As the judge thanked the jury for her service, Barbara Fried recovered enough to gently rub Joseph Bankman’s back.

The jury retired and the court adjourned. Joseph Bankman and Barbara Fried were hugging each other as if they were holding each other. As the judge dealt with some administrative matters (appeal dates, upcoming trial, sentencing), Fried looked up at the ceiling.

As the judge left the bench, Bankman and Fried approached their son, still separated by a wooden barrier in the courtroom. They were surrounded by a half-moon of journalists, all silent, all holding pens over notebooks.

Bankman-Fried had her back to her parents. He was speaking with his attorneys, Mark Cohen and Chris Everdell. He seemed to be shaking. He didn’t look back to see his parents until they escorted him outside. When she looked back, she collapsed and her husband held her up.

There is some questions about how much Bankman and Fried knew about the schemes in FTX. But I have no doubt that they really suffered during the month of testing. Whatever the delusions they may have had about his son’s innocence dissipated throughout the trial. In the end, I think they knew how it was going to be. I think Bankman-Fried did it too.

Since the opening statements I have been wondering why Bankman-Fried didn’t simply plead guilty. Sure, he might not get a deal like his accomplices Caroline Ellison, Gary Wang and Nishad Singh. But pleading guilty, appearing remorseful, and throwing yourself on the mercy of a sentencing judge… well, it might have worked. At the very least, it would have spared his friends and family the humiliation of this trial.

I suppose it’s possible that Bankman-Fried is deluded enough to believe himself innocent, think he did nothing wrong, and think a jury would agree with him. But given what I know about him, I don’t think that’s what happened.

Sam Bankman-Fried loved risk and he loved to gamble. He knew that if he went to trial, there was a chance, no matter how slim, that he would walk free. Pleading guilty meant guaranteed punishment and probably a prison sentence. And that’s why he chose to risk, not only with his own life, but with that of his parents.

Bankman and Fried were respected law professors at Stanford. Bankman worked on the United States tax code, on behalf of low-income people. Fried is known for her work on legal ethics and led a network of donors, Watch the gap, for democratic causes. His entanglement with FTX has certainly marred his reputation at the end of their lives: that $26 million in cash and real estate in 2022 seems very different now. This is not to mention the lawsuit from the FTX bankruptcy estate, which seeks to recover millions.

Bankman-Fried’s failed defense did not come cheap; lawyers never are. And there will be more bills, as his lawyers try to appeal the verdict. There may also be a second trial, scheduled for next March, on some other charges that were separated from this case.

But it’s not just the money. This trial revealed Bankman-Fried’s father was in 17 Signal group chats associated with FTX, including the “small group chat” that attempted to prevent the imminent collapse of FTX. Joseph Bankman was mentioned in witness testimony about Bankman-Fried’s meetings with Bahamian regulators. If the second trial takes place, there is the possibility of further embarrassment.

Bankman and Fried have openly defended their son, as I suppose any loving father would. I suppose it would be easy to demonize them, but what parent wants to believe that their child is involved in a large-scale fraud? You probably still remember him when he was a little boy.

I don’t know what Bankman-Fried’s sentence will be, but I doubt it made Judge Lewis Kaplan, who will handle her sentencing, appear especially sympathetic during her testimony. Bankman-Fried gave evasive answers, was repeatedly instructed to answer lawyers’ questions, and generally behaved poorly. He didn’t seem remorseful or honest.

Depending on how the sentencing goes (it’s scheduled for March), it’s possible that both Fried and Bankman could die while their son is in jail; They are certainly in the autumn of their lives. There was more to that courtroom than Bankman-Fried’s freedom.

He postulated a hypothesis in which a coin could be tossed: heads would annihilate the world and tails would make it twice as good. Bankman-Fried said he would take that bet. For Joseph Bankman and Barbara Fried, I think this is no longer a hypothesis. Bankman-Fried’s loving parents endured a trial in which his closest friends testified against him, and his every move was closely watched by a gallery of reporters.

There’s a reason most people don’t flip that coin: they’re not selfish enough to play with other people’s lives.