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FTX Latest: SBF Calendar Showed Meetings With Clinton, Hochul
(Bloomberg) -- Nishad Singh, the former director of engineering at FTX, faces cross-examination at the Sam Bankman-Fried trial Tuesday.
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Under questioning by prosecutors on Monday, Singh, 28, said he was intimidated by Bankman-Fried, and at times humiliated by him. He also detailed the FTX co-founder’s spending on a Bahamian penthouse and political donations.
Like previous witnesses, Caroline Ellison and Gary Wang, Singh has pleaded guilty to fraud and conspiracy counts and has agreed to cooperate with prosecutors.
Here are a few stories to catch up on Singh’s testimony and the trial:
FTX Insider Says Work With SBF Left Him in ‘Severe’ Distress
SBF’s Friends Force Him Into ‘Hail Mary’ Choice on Testimony
Group Chats, Tweets and Audio Tape: The Evidence Against SBF
The Key Players at Sam Bankman-Fried’s Historic Fraud Trial
Here’s the latest from court (all times are NY):
SBF Calendar Showed Meetings With Clinton, Hochul (4:30 p.m.)
Bankman-Fried had scheduled meetings in Manhattan with several influential people — from former President Bill Clinton to New York Governor Kathy Hochul — in the months prior to FTX’s collapse, according to evidence presented by the government Tuesday.
According to a calendar invite, he had a meeting scheduled with Clinton at the New York Hilton Midtown in September 2022. A meeting with Hochul was scheduled to take place a month earlier. Emails and calendar invites also showed the former crypto billionaire had dinner scheduled in September 2022 with Yasir Al Rumayyan, the head of Saudi Arabia’s Public Investment Fund, at The Pierre hotel in New York. Another pointed to a March 2022 dinner with New York City Mayor Eric Adams.
The meetings were revealed while the government was questioning FBI agent Richard Busick about an analysis he did on an AT&T phone allegedly used by Bankman-Fried. He testified that the various dinners and meetings from emails and calendar entries corresponded with the phone’s location at those times.
During cross-examination, Bankman-Fried’s lawyers cast doubt on the accuracy of the location data.
Singh Forfeited House He Bought One Month Before FTX Collapse (3:15 p.m.)
Singh said he forfeited the Orcas Island property that he bought in October 2022 using money borrowed from FTX even after learning the company was misusing customer funds.
“My spending on it was egregious, unnecessary and selfish,” Singh said. “I was embarrassed and ashamed, and forfeiting seems to be one of the ways to right the wrong, at least a little.”
Singh finished his testimony and left the courtroom.
Singh Said He Thought FTX Would ‘Last for Years’ (2:30 p.m.)
Singh said under questioning by Bankman-Fried’s lawyer that he took a loan from the company to purchase a vacation home on Orcas Island for the use of himself and his friends even after he learned about the financial issues.
He said the funds were wired to purchase the apartment in mid- to late October of 2022. He has testified that he pushed Bankman-Fried to cut expenses.
Read more: FTX’s Singh Bought Dream House in October. It’s Uncle Sam’s Now.
Mark Cohen asked if Singh remembered telling prosecutors that he thought FTX would last “for years” even after learning about Alameda’s growing deficit in September 2022.
“I did tell prosecutors that I thought FTX would last for years,” Singh said.
Singh Wasn’t ‘Required’ to Be Face of FTX Political Donations (1:15 p.m.)
Singh acknowledged that he wasn’t “required” to be the face of FTX’s political donations and performed the role despite personal reservations.
In a Signal chat group, Singh told Michael Sadowsky, a political consultant, that he was averse to supporting “explicitly woke stuff.”
Still, Singh said that he became “really excited” in 2018 about California Proposition 12, a ballot proposition titled the “Prevention of Cruelty to Farm Animals Act,” which imposed minimum space requirements for egg-laying hens, pigs and veal calves.
Singh said he had money deducted from his floating balance at Alameda to fund political donations on the proposition.
Later, he worked with people including his “dear” friend, Sam Bankman-Fried’s brother Gabe, to make political donations.
Singh has pleaded guilty to conspiring to violate campaign finance laws by acting as an illegal straw donor to funnel donations to political campaigns - mostly to Democrats.
The court is on lunch break until 2:00 p.m.
Singh Says Alameda Special Privilege Initially Intended to Help Customers (12:20 p.m.)
Singh said under questioning that one of Alameda Research’s special privileges — which eventually resulted in a nearly unlimited line of credit — was initially designed to help customers.
Singh recalled an instance in mid-2020 in which an auto-deleveraging event happened on the FTX exchange because no backstop liquidity providers were eligible to step in, resulting in random FTX customers being forced to take on risky positions.
It was “undesirable” for customers to take on these positions without opting in, Singh said.
After the event, Gary Wang concluded that Alameda failed to step in and absorb the trades because the trading firm didn’t have enough free collaterals, due to them being tied up by a large amount of pending trades.
“Ultimately Sam asked me why should it depend at all on free collaterals,” since the pending positions exhausted collaterals, not actual trades, Singh recalls.
Singh testified he later wrote in a code proposal to make auto-deleveraging events less likely, including being “careful not to liquidate” Alameda.
Singh Describes ‘Sense of Relief’ About Alameda Balance Size (11:30 a.m.)
Cohen cross-examined Singh closely on the discovery of a software bug that, by mid-June 2022, had introduced an error in Alameda’s balance in its main account on the FTX exchange totaling about $8 billion.
Singh told jurors that Caroline Ellison produced data showing that the bug explained many discrepancies between the balance of the account and Alameda transactions records.
He testified about a long discussion over Google Meet, lasting possibly an hour, involving Bankman-Fried, Ellison, Wang and himself. Adam Yedidia, who testified against Bankman-Fried earlier in the trial, had inadvertently introduced the bug in 2021.
“The next thing I do recall was sensing from others a palpable sense of relief, even elation,” at discovering the balance was negative $11 billion and not negative 19 billion, Singh testified.
Defense Lawyer’s Questioning Meets Difficulties (10:45 a.m.)
Bankman-Fried’s defense lawyer, Mark Cohen, ran into some early difficulties in his questioning of Singh.
Singh said Cohen misunderstood his comments to prosecutors in January about whether it “felt wrong” to borrow from anywhere as long as you have the assets.
Singh explained that his language was specific to the discussion of bank accounts, not borrowing in general.
At one point, Judge Lewis Kaplan intervened Cohen’s requests for Singh to read out multiple items on a spreadsheet. “We are not performing eye examinations here.”
The spreadsheet “says what it says,” Kaplan said to Cohen.
After that, Cohen changed his approach and read out excerpts of Singh’s testimony directly before asking questions.
Singh Lived in the ‘Nicest Room’ in the Penthouse (10:15 a.m.)
Despite complaining about the cost of the penthouse, Singh volunteered Tuesday that he and his girlfriend, Claire Watanabe, moved into the “nicest room in the house.”
Asked by Cohen if it was excessive for billionaires to live in a $30 million home, Singh replied that the cost is the same no matter the “wealth of the people living in it.”
“I really don’t know what’s reasonable for billionaires to do,” Singh said. “I don’t know other billionaires.”
Watanabe, another former FTX executive, was in court Monday to watch his testimony.
Singh Said There Could Be Benefits to Celebrity Deals (10:00 a.m.)
After testifying Monday about what he believed was FTX’s lavish spending on celebrity endorsements, Singh said under cross Tuesday that it was Bankman-Fried’s job to make those determinations.
“I believe it could be valuable to the business...depending on the circumstances,” Singh said under questioning by Bankman-Fried lawyer Mark Cohen. “I understood it had business benefits and costs.”
After questions about the sponsorship of a Miami arena and other deals, Cohen said that on Monday the court was told that many of these things were “reckless spending” and that his job today is to show “there was way more to it than we were told.”
Singh still pointed to an investment in a tequila brand run by a celebrity as an example of excessive spending.
A previous version of the story was corrected to reflect the location of the property on Orcas Island.
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