On 4 October 2023, John Reed Stark, a digital regulatory compliance expert with 15 years of experience as an SEC enforcement attorney, appeared on CNBC’s “Squawk Box” program to discuss with co-anchor Andrew Ross Sorkin the ongoing trial of Sam Bankman-Fried (SBF), the former CEO of the now-bankrupt crypto exchange FTX.
Stark began by stating that if he were the defense attorney for SBF, he would have advised him to plead guilty long ago. He mentioned that SBF’s defense strategy of claiming reliance on counsel is a difficult one to prove. Stark also pointed out that many former executives at FTX have already signed plea agreements and have been assisting the prosecution by providing documents, emails, and texts.
When asked about the credibility of these witnesses, Stark argued that every trial involves witnesses with biases. He emphasized that the prosecution has a wealth of resources, including forensic accountants and technology experts, who have been paid over $200 million to provide all the necessary evidence:
“They’re charging somewhere on the average of $1,800 an hour. They’re running over to that office giving them every single document, every single text, every single e-mail, everything they find, and it’s free of charge for the prosecutors.“
Stark criticized SBF for being his “own worst enemy,” citing SBF’s own statements as incriminating evidence against him:
“He’s his own worst enemy. He has diarrhea of the mouth.“
Stark also touched upon the issue of SBF’s parents, who he believes should at least be relief defendants. He questioned how SBF’s father, who was a senior advisor to the company and received a $10 million salary, could claim ignorance about the company’s activities:
“How do you say you’re getting $10 million and you’re a senior advisor to the company and you say, gee, I had no idea at all. They should at least be relief defendants…“
Sorkin then questioned Stark’s explicit accusations against SBF’s parents, asking why they haven’t been charged with a crime. Stark responded that this is the first trial and there may be subsequent trials. He also suggested that the prosecution is likely keeping the case simple for now.
Stark concluded by stating that the outcome of this trial could influence whether additional trials will be held, depending on the number of counts SBF is convicted on. He reiterated that it’s ultimately up to the prosecutor to decide the course of action.