Sam Bankman-Fried’s defense team faced a crucial ruling from Federal Judge Lewis Kaplan, the overseer of his case. The judge said that, at least in the beginning, Sam and his legal team couldn’t blame the fact that lawyers from FTX company approved his decisions as the CEO.
But there’s still a chance for Sam to use an “advice-of-counsel” defense later on. Sam is now facing a trial because of severe charges like wire fraud, money laundering, and illegal political donations. The judge’s recent decision has complicated things for Sam and his defense.
Federal Judge Lewis Kaplan Court’s Decision
Federal Judge Lewis Kaplan has ruled in a 10-page memo that during his opening statement, SBF’s defense team can’t make a big deal about lawyers from the law firm Fenwick & West. This decision comes after SBF’s defense team signaled their intention to argue that lawyers from both FTX and Fenwick & West had supported the decisions made by the CEO.
The judge was concerned that making such an argument without giving specific details might confuse or unfairly influence the jury. So, for now, the defense team can’t talk about outside lawyers during the opening statement.
However, they can bring it up later in the trial, but only if they inform both the judge and the Department of Justice in advance and ensure no jurors are around when they discuss it.
DOJ Raises Doubts on SBF’s Claim of Attorney’s Involvement in FTX
SBF’s defense team had previously shared their strategy, saying they would argue that lawyers were involved in various aspects of FTX’s operation. These included decisions like using auto-deleting messaging apps like Signal, creating something called the “North Dimension,” FTX’s banking relationship with Silvergate Bank, loans given to FTX and Alameda Research executives, business agreements within the company, and FTX’s terms of service.
However, the Department of Justice didn’t buy the defense’s argument. They said it didn’t have enough detail to back it up and suggested it should be left out of the trial.
Judge’s Questions and Trial Details
In his decision, Judge Kaplan asked important questions, like how much SBF’s defense could talk about lawyers during the trial. He also wanted to know when it might be wrong to suggest that lawyers approve specific actions and what rules apply when presenting evidence on these matters.
Meanwhile, the trial is all set to begin on October 3 with the jury’s selection. If SBF is found guilty, he could face serious consequences, like spending many years in prison.