Sam Bankman-Fried, founder of the now-bankrupt cryptocurrency exchange FTX, testified in his fraud trial on Thursday without the jury present so the judge overseeing the case can first decide what portions of his testimony are admissible.
U.S. District Judge Lewis Kaplan’s decision to hear the 31-year-old former billionaire outside the jury’s presence came after prosecutors finished presenting their case accusing Bankman-Fried of stealing billions of dollars from customers, and the defence presented its first two witnesses.
The judge released the jurors for the rest of the day following a lunch break and instructed them to return on Friday morning. The unusual move came after Bankman-Fried’s lawyers said they planned to elicit testimony about the involvement of FTX lawyers in key company decisions, such as document retention and in crafting loans to executives that prosecutors have said was one way Bankman-Fried stole funds.
Defence lawyers said the involvement of these lawyers showed that Bankman-Fried was acting in good faith, but Kaplan said he needed more information before deciding whether the testimony could be given to jurors.
Bankman-Fried began by testifying about FTX’s use of encrypted messaging platforms like Signal and Slack. He said he said he believed the use of such platforms was in line with FTX’s policies, which were crafted by lawyers. Prosecutors have argued that Bankman-Fried encouraged employees to use such platforms to hide their tracks.
Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy. If convicted, he could face decades in prison. Prosecutors have said he used the misappropriated funds to prop up his crypto-focused hedge fund, Alameda Research, make speculative venture investments and donate more than $100 million to U.S. political campaigns.
Prosecution rests case
The prosecution rested its case after presenting 12 days of testimony in federal court in Manhattan in which former close FTX colleagues told the jury that Bankman-Fried directed them to divert customer funds to his hedge fund and lie to investors and lenders. His risky decision to testify gives prosecutors the chance to cross-examine him about those claims that he told colleagues to commit crimes.
His lawyers have said three of his former colleagues, who have pleaded guilty and agreed to co-operate with prosecutors, tailored their testimony to implicate Bankman-Fried in the hopes of receiving lenient sent
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Defence lawyer Mark Cohen said Bankman-Fried’s direct testimony could last close to five hours, before prosecutors get a chance to cross-examine him.
After the prosecution rested its case, the judge denied a defence request to acquit Bankman-Fried before the case goes to the jury. Cohen argued that prosecutors had not set forth “viable legal theories” of wire fraud, which prosecutor Nicolas Roos disputed.
The final prosecution witness, FBI agent Marc Troiano, testified about Bankman-Fried’s use of the encrpyted messaging application Signal when the trial resumed on Thursday morning after a week-long break.
Troiano said Signal groups that Bankman-Fried was in with colleagues were often set to delete messages automatically, as jurors saw screenshots from a phone belonging to Caroline Ellison, the former chief executive of Bankman-Fried’s Alameda Research hedge fund and his on-and-off girlfriend.
Much of the case against Bankman-Fried has been built on the testimony of his former employees, including Caroline Ellison, shown leaving court on Oct. 11. (Stephanie Keith/Bloomberg)
Bankman-Fried has maintained that while he made mistakes running FTX, he never intended to steal funds.
Legal experts have said Bankman-Fried has little to lose by bucking conventional wisdom and testifying, given weeks of testimony against him by insiders that painted an unflattering portrait of his character.
Bankman-Fried took the stand after the defence presented its first two witnesses: Krystal Rolle, Bankman-Fried’s lawyer in the Bahamas; and database expert Joseph Pimbley.
Rolle, the first defence witness, testified that the day after FTX declared bankruptcy on Nov. 11, 2022, authorities in the Bahamas — where FTX was based — directed Bankman-Fried to hand over remaining assets to regulators in the Caribbean country.
The defence could argue that Rolle’s account undercuts prosecution testimony from Gary Wang, FTX’s former chief technology officer, that Bankman-Fried told him he transferred assets to the Bahamas because “they seemed more likely to let him stay in control of the company, compared to the U.S.”
Pimbley, the second defence witness, testified that most FTX customers had a type of account that allowed their funds to be loaned to other users. Bankman-Fried’s lawyers could argue that shows that Alameda’s use of FTX customer funds was not improper.
That would include any testimony about the involvement of FTX lawyers in structuring loans from Alameda to FTX executives, which prosecutors have said was a key way the defendant and others took funds from unwitting customers.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
