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FTX founder Sam-Bankman-Fried convicted of defrauding cryptocurrency customers

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FTX founder Sam Bankman-Fried’s spectacular rise and fall in the cryptocurrency industry — a journey that included his testimony before the U.S. Congress, a Super Bowl advertisement and dreams of a future run for president — hit a new bottom Thursday when a New York jury convicted him of fraud in a scheme that cheated customers and investors of at least $10 billion US.

After the month-long trial, jurors rejected Bankman-Fried’s claim during three days on the witness stand in Manhattan federal court that he never committed fraud or meant to cheat customers before FTX, once the world’s second-largest crypto exchange, collapsed into bankruptcy a year ago.

“His crimes caught up to him. His crimes have been exposed,” assistant U.S. attorney Danielle Sassoon told the jury of the onetime billionaire just before they were read the law by Judge Lewis A. Kaplan and began deliberations. Sassoon said Bankman-Fried turned his customers’ accounts into his “personal piggy bank” as up to $14 billion US disappeared.

She urged jurors to reject Bankman-Fried’s insistence when he testified that he never committed fraud or plotted to steal from customers, investors and lenders and didn’t realize that his companies were at least $10 billion US in debt until October 2022.

The judge set a sentencing date of March 28 for the seven counts of fraud and conspiracy.

FTX founder liked ‘celebrity chasing,’ prosecutors said

The trial attracted intense interest with its focus on a fraud on a scale not seen since the 2009 prosecution of Bernard Madoff, whose Ponzi scheme over decades cheated thousands of investors out of about $20 billion US. Madoff pleaded guilty and was sentenced to 150 years in prison, where he died in 2021.

The prosecution of Bankman-Fried, 31, put a spotlight on the emerging cryptocurrency industry and a group of young executives in their 20s who lived together in a $30-million luxury apartment in the Bahamas as they dreamed of becoming the most powerful players in a new financial field.

WATCH | The Naked Emperor podcast revisits what led to Sam Bankman-Fried’s trial:

The Naked Emperor25:48BONUS: The Trial of Sam Bankman-Fried

Featured VideoToday we bring you a bonus episode of The Naked Emperor. As Sam Bankman-Fried’s criminal trial kicks off in New York, host Jacob Silverman is back to bring you up to speed on the latest. What’s happened at the courthouse in the lead-up to the trial? And what’s expected in the weeks to come? Joining Jacob is Zeke Faux, an investigative reporter at Bloomberg, and the author of “Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall.”

U.S. Attorney Damian Williams said they engaged in one of the biggest frauds in U.S. history.

Prosecutors made sure jurors knew that the defendant they saw in court with short hair and a suit was not the man with big, messy hair and shorts that became his trademark appearance after he started his cryptocurrency hedge fund, Alameda Research, in 2017 and FTX, his cryptocurrency exchange, two years later.

They showed the jury pictures of Bankman-Fried sleeping on a private jet, sitting with a deck of cards and mingling at the Super Bowl with celebrities including the singer Katy Perry. Assistant U.S. attorney Nicolas Roos called Bankman-Fried someone who liked “celebrity chasing.”

In a closing argument, defence lawyer Mark Cohen said prosecutors were trying to turn “Sam into some sort of villain, some sort of monster.”

“It’s both wrong and unfair, and I hope and believe that you have seen that it’s simply not true,” he said. “According to the government, everything Sam ever touched and said was fraudulent.”

Inner circle testified against him

The government relied heavily on the testimony of three former members of Bankman-Fried’s inner circle, his top executives including his former girlfriend, Caroline Ellison, to explain how Bankman-Fried used Alameda Research to siphon billions of dollars from customer accounts at FTX.

With that money, prosecutors said, the Massachusetts Institute of Technology graduate gained influence and power through investments, contributions, tens of millions of dollars in political contributions, congressional testimony and a publicity campaign that enlisted celebrities like comedian Larry David and football quarterback Tom Brady.

Caroline Ellison, former CEO of Alameda Research and Sam Bankman-Fried’s on-and-off girlfriend, is seen after testifying in Manhattan federal court on Oct. 10. (Eduardo Munoz Alvarez/The Associated Press)

Ellison, 28, testified that Bankman-Fried directed her while she was chief executive of Alameda Research to commit fraud as he pursued ambitions to lead huge companies, spend money influentially and even finance a presidential run. She said he thought he had a five per cent chance to be U.S. president someday.

Customers demanded their money back

Becoming tearful as she described the collapse of the cryptocurrency empire last November, Ellison said the revelations that caused customers collectively to demand their money back, exposing the fraud, brought a “relief that I didn’t have to lie anymore.”

FTX co-founder Gary Wang, who was FTX’s chief technology officer, revealed in his testimony that Bankman-Fried directed him to insert code into FTX’s operations so that Alameda Research could make unlimited withdrawals from FTX and have a credit line of up to $65 billion. Wang said the money came from customers.

Nishad Singh, the former head of engineering at FTX, testified that he felt “blindsided and horrified” at the result of the actions of a man he once admired when he saw the extent of the fraud as the collapse last November left him suicidal.

Ellison, Wang and Singh all pleaded guilty to fraud charges and testified against Bankman-Fried in the hopes of leniency at sentencing.

Bankman-Fried was arrested in the Bahamas last December and extradited to the United States, where he was freed on a $250 million personal recognizance bond with electronic monitoring and a requirement that he remain at the home of his parents in Palo Alto, California.

FTX founder Sam Bankman-Fried freed on $250M US bail

 

Featured VideoFTX founder Sam Bankman-Fried will be released on a $250 million US bond package while he awaits trial on fraud charges related to the collapse of the FTX crypto exchange, a federal magistrate judge said on Thursday.

His communications, including hundreds of phone calls with journalists and internet influencers, along with emails and texts, eventually got him in trouble when the judge concluded he was trying to influence prospective trial witnesses and ordered him jailed in August.

During the trial, prosecutors used Bankman-Fried’s public statements, online announcements and his Congressional testimony against him, showing how the entrepreneur repeatedly promised customers that their deposits were safe and secure as late as last Nov. 7, when he tweeted “FTX is fine. Assets are fine” as customers furiously tried to withdraw their money.

He deleted the tweet the next day. FTX filed for bankruptcy four days later.

In his closing, Roos mocked Bankman-Fried’s testimony, saying that under questioning from his lawyer, the defendant’s words were “smooth, like it had been rehearsed a bunch of times?”

But under cross examination, “he was a different person,” the prosecutor said. “Suddenly on cross-examination he couldn’t remember a single detail about his company or what he said publicly. It was uncomfortable to hear. He never said he couldn’t recall during his direct examination, but it happened over 140 times during his cross-examination.”

 

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Natural gas producers await LNG Canada’s start, but will it be the fix for prices?

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CALGARY – Natural gas producers in Western Canada have white-knuckled it through months of depressed prices, with the expectation that their fortunes will improve when LNG Canada comes online in the middle of next year.

But the supply glut plaguing the industry this fall is so large that not everyone is convinced the massive facility’s impact on pricing will be as dramatic or sustained as once hoped.

As the colder temperatures set in and Canadians turn on their furnaces, natural gas producers in Alberta and B.C. are finally starting to see some improvement after months of low prices that prompted some companies to delay their growth plans or shut in production altogether.

“We’ve pretty much been as low as you can go on natural gas prices. There were days when (the Alberta natural gas benchmark AECO price) was essentially pennies,” said Jason Feit, an advisor at Enverus Intelligence Research, in an interview.

“As a producer, it would not be economic to have produced that gas . . . It’s been pretty worthless.”

In the past week, AECO spot prices have hovered between $1.20 and $1.60 per gigajoule, a significant improvement over last month’s bottom-barrel prices but still well below the 2023 average price of $2.74 per gigajoule, according to Alberta Energy Regulator figures.

The bearish prices have come due to a combination of increased production levels — up about six per cent year-over-year so far in 2024 —as well as last year’s mild winter, which resulted in less natural gas consumption for heating purposes. There is now an oversupply of natural gas in Western Canada, so much so that natural gas storage capacity in Alberta is essentially full.

Mike Belenkie, CEO of Calgary-headquartered natural gas producer Advantage Energy Ltd., said companies have been ramping up production in spite of the poor prices in order to get ahead of the opening of LNG Canada. The massive Shell-led project nearing completion near Kitimat, B.C. will be Canada’s first large-scale liquefied natural gas export facility.

It is expected to start operations in mid-2025, giving Western Canada’s natural gas drillers a new market for their product.

“In practical terms everyone’s aware that demand will increase dramatically in the coming year, thanks to LNG Canada . . . and as a result of that line of sight to increased demand, a lot of producers have been growing,” Belenkie said in an interview.

“And so we have this temporary period of time where there’s more gas than there is places to put it.”

In light of the current depressed prices, Advantage has started strategically curtailing its gas production by up to 130 million cubic feet per day, depending on what the spot market is doing.

Other companies, including giants like Canadian Natural Resources Ltd. and Tourmaline Oil Corp., have indicated they will delay gas production growth plans until conditions improve.

“We cut all our gas growth out of 2024, once we’d had that mild winter. We did that back in Q2, because this is not the right year to bring incremental molecules to AECO,” said Mike Rose, CEO of Tourmaline, which is Canada’s largest natural gas producer, in an interview this week.

“We moved all our gas growth out into ’25 and ’26.”

LNG Canada is expected to process up to 2 billion cubic feet (Bcf) of natural gas per day once it reaches full operations. That represents what will be a significant drawdown of the existing oversupply, Rose said, adding that is why he thinks the future for western Canadian natural gas producers is bright.

“That sink of 2 Bcf a day will logically take three-plus years to fill. And then if LNG Canada Phase 2 happens, then obviously that’s even more positive,” Rose said.

While Belenkie said he agrees LNG Canada will lift prices, he’s not as convinced as Rose that the benefits will be sustained for a long period of time.

“Our thinking is that markets will be healthy for six months, a year, 18 months — whatever it is — and then after that 18 months, because prices will be healthy, supply will grow and probably overshoot demand again,” he said, adding he’s frustrated that more companies haven’t done what Advantage has done and curtailed production in an effort to limit the oversupply in the market.

“Frankly, we’ve been very disappointed to see how few other producers have chosen to shut in with gas prices this low. . . you’re basically dumping gas at a loss,” Belenkie said.

Feit, the analyst for Enverus, said there’s no doubt LNG Canada’s opening will be a major milestone that will help to support natural gas pricing in Western Canada. He added there are other Canadian LNG projects in the works that would also provide a boost in the longer-term, such as LNG Canada’s proposed Phase 2, as well as potential increased demand from the proliferation of AI-related data centres and other power-hungry infrastructure.

But Feit added that producers need to be disciplined and allow the market to balance in the near-term, otherwise supply levels could overshoot LNG Canada’s capacity and periods of depressed pricing could reoccur.

“Obviously selling gas at pennies on the dollar is not a sustainable business model,” Feit said.

“But there’s an old industry saying that the cure for low gas prices is low gas prices. You know, eventually companies will have to curtail production, they will have to make adjustments.”

This report by The Canadian Press was first published Oct. 25, 2024.

Companies in this story: (TSX:TOU; TSX:AAV, TSX:CNQ)

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Corus Entertainment reports Q4 loss, signs amended debt deal with banks

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TORONTO – Corus Entertainment Inc. reported a fourth-quarter loss compared with a profit a year ago as its revenue fell 21 per cent.

The broadcaster says its net loss attributable to shareholders amounted to $25.7 million or 13 cents per diluted share for the quarter ended Aug. 31. The result compared with a profit attributable to shareholders of $50.4 million or 25 cents per diluted share in the same quarter last year.

Revenue for the quarter totalled $269.4 million, down from $338.8 million a year ago.

On an adjusted basis, Corus says it lost two cents per share for its latest quarter compared with an adjusted loss of four cents per share a year earlier.

The company also announced that it has signed an deal to amend and restate its existing syndicated, senior secured credit facilities with its bank group.

The restated credit facility was changed to reduce the total limit on the revolving facility to $150 million from $300 million and increase the maximum total debt to cash flow ratio required under the financial covenants.

This report by The Canadian Press was first published Oct. 25, 2024.

Companies in this story: (TSX:CJR.B)

The Canadian Press. All rights reserved.

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Hiring Is a Process of Elimination

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Job seekers owe it to themselves to understand and accept; fundamentally, hiring is a process of elimination. Regardless of how many applications an employer receives, the ratio revolves around several applicants versus one job opening, necessitating elimination.

Essentially, job gatekeepers—recruiters, HR and hiring managers—are paid to find reasons and faults to reject candidates (read: not move forward) to find the candidate most suitable for the job and the company.

Nowadays, employers are inundated with applications, which forces them to double down on reasons to eliminate. It’s no surprise that many job seekers believe that “isms” contribute to their failure to get interviews, let alone get hired. Employers have a large pool of highly qualified candidates to select from. Job seekers attempt to absolve themselves of the consequences of actions and inactions by blaming employers, the government or the economy rather than trying to increase their chances of getting hired by not giving employers reasons to eliminate them because of:

 

  • Typos, grammatical errors, poor writing skills.

 

“Communication, the human connection, is the key to personal and career success.” ― Paul J. Meyer.

The most vital skill you can offer an employer is above-average communication skills. Your resume, LinkedIn profile, cover letters, and social media posts should be well-written and error-free.

 

  • Failure to communicate the results you achieved for your previous employers.

 

If you can’t quantify (e.g. $2.5 million in sales, $300,000 in savings, lowered average delivery time by 6 hours, answered 45-75 calls daily with an average handle time of 3 and a half minutes), then it’s your opinion. Employers care more about your results than your opinion.

 

  • An incomplete LinkedIn profile.

 

Before scheduling an interview, the employer will review your LinkedIn profile to determine if you’re interview-worthy. I eliminate any candidate who doesn’t have a complete LinkedIn profile, including a profile picture, banner, start and end dates, or just a surname initial; anything that suggests the candidate is hiding something.  

 

  • Having a digital footprint that’s a turnoff.

 

If an employer is considering your candidacy, you’ll be Google. If you’re not getting interviews before you assert the unfounded, overused excuse, “The hiring system is broken!” look at your digital footprint. Employers are reading your comments, viewing your pictures, etc. Ask yourself, is your digital behaviour acceptable to employers, or can it be a distraction from their brand image and reputation? On the other hand, not having a robust digital footprint is also a red flag, particularly among Gen Y and Gen Z hiring managers. Not participating on LinkedIn, social media platforms, or having a blog or website can hurt your job search.

 

  • Not appearing confident when interviewing.

 

Confidence = fewer annoying questions and a can-do attitude.

It’s important for employers to feel that their new hire is confident in their abilities. Managing an employee who lacks initiative, is unwilling to try new things, or needs constant reassurance is frustrating.

Job searching is a competition; you’re always up against someone younger, hungrier and more skilled than you.

Besides being a process of elimination, hiring is also about mitigating risk. Therefore, being seen as “a risk” is the most common reason candidates are eliminated, with the list of “too risky” being lengthy, from age (will be hard to manage, won’t be around long) to lengthy employment gaps (raises concerns about your abilities and ambition) to inappropriate social media postings (lack of judgement).

Envision you’re a hiring manager hiring for an inside sales manager role. In the absence of “all things being equal,” who’s the least risky candidate, the one who:

  • offers empirical evidence of their sales results for previous employers, or the candidate who “talks a good talk”?
  • is energetic, or the candidate who’s subdued?
  • asks pointed questions indicating they’re concerned about what they can offer the employer or the candidate who seems only concerned about what the employer can offer them.
  • posts on social media platforms, political opinions, or the candidate who doesn’t share their political views?
  • on LinkedIn and other platforms in criticizes how employers hire or the candidate who offers constructive suggestions?
  • has lengthy employment gaps, short job tenure, or a steadily employed candidate?
  • lives 10 minutes from the office or 45 minutes away?
  • has a resume/LinkedIn profile that shows a relevant linear career or the candidate with a non-linear career?
  • dressed professionally for the interview, or the candidate who dressed “casually”?

An experienced hiring manager (read: has made hiring mistakes) will lean towards candidates they feel pose the least risk. Hence, presenting yourself as a low-risk candidate is crucial to job search success. Worth noting, the employer determines their level of risk tolerance, not the job seeker, who doesn’t own the business—no skin in the game—and has no insight into the challenges they’ve experienced due to bad hires and are trying to avoid similar mistakes.

“Taking a chance” on a candidate isn’t in an employer’s best interest. What’s in an employer’s best interest is to hire candidates who can hit the ground running, fit in culturally, and are easy to manage. You can reduce the odds (no guarantee) of being eliminated by demonstrating you’re such a candidate.

_____________________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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