Famed author Michael Lewis did not stick around for the verdict in the criminal trial of Sam Bankman-Fried, the onetime crypto kingpin who last week was convicted on seven counts of fraud and conspiracy by a Manhattan federal jury after deliberations that lasted just over four hours.
But Lewis was in the courtroom for several days. His book “Going Infinite” — about the rise and fall of Sam Bankman-Fried and his FTX crypto empire — has been criticized for its flattering portrait of the fraudster. He even pontificated about the events on a podcast he hosted called “Judging Sam,” where he continued to praise the 31-year-old former multibillionaire.
The facts of the case revolved around what the prosecution called the theft of customer funds deposited at FTX, Bankman-Fried’s crypto exchange, which were then funneled to its sister company, Alameda Research, where they were used to place bets on crypto as well as to buy luxury real estate and private jets, pay celebrities to promote FTX, and donate to U.S. politicians in an effort to gain favorable regulation on crypto. After crypto crashed during the summer of 2022, Alameda’s bets went south and FTX went bankrupt, losing some $8 billion of other people’s money in the biggest financial scandal since the collapse of Bernie Madoff’s ponzi scheme.
But despite a mountain of evidence against Bankman-Fried that was presented in court, through written documents and the oral testimony of three former FTX executives who pled guilty, Lewis was still enamored with his protagonist. On his podcast, he said that Bankman-Fried had a “superpower” in avoiding questions and was a “wonderful explainer” who was “very smart, very persuasive.”
Lewis argued on the podcast that the onetime multibillionaire was not really a thief, as the prosecution alleged, but merely a gambler who simply borrowed customers’ money and then lost it in a lapse of risk management.
“Their insistent line is that he stole the money,” Lewis said, who argued that instead Bankman-Fried borrowed it and put it at risk without asking anybody’s permission.” He suggested that a juror would likely have more sympathy for a gambler than a crook.
Lewis did not return a request for further comment.
“The frustration of the courtroom is that neither side is actually operating in the spirit of honesty,” Lewis said. “Both are trying to make a case, taking stuff out of context, blowing things up and making things mean something different than it actually meant back when it was happening.”
Lewis has been a star financial journalist since he wrote “Liar’s Poker” about the time he spent on the rough and tumble Salomon Brother’s trading floor in the 1980s. He later gained a reputation for crafting narratives about unsung heroes in the financial world, like those in “The Big Short” — guys who called the housing market bust ahead of time and made a fortune shorting mortgage-backed securities. None of the hedge fund managers lionized in that book, however, have gone on to repeat that stunning performance.
More recently, Lewis came under scrutiny over his book “Blind Side” after its main character Michael Oher — whose unlikely NFL football career inspired both the book and a movie — said the Tuohy family that adopted him (and who are friends of Lewis) cheated him out of money.
Lewis’ reputation has taken another hit for defending Bankman-Fried even after he was indicted — and before Lewis’ book was finished. To write “Going Infinite,” Lewis said he spent more than 100 hours with Bankman-Fried, hanging out in his luxurious Bahamas compound, flying on a private plane with him to the Super Bowl in 2022 and then, after Bankman-Fried’s arrest in the Bahamas in December of 2022, visiting him at his parents’ home in California near Stanford University, where they were esteemed professors. The onetime crypto magnate was under house arrest there until U.S. District Judge Lewis Kaplan revoked the privilege, sending him to Brooklyn’s Metropolitan Detention Center for what prosecutors said was an attempt to intimidate a witness.
While many journalists arrived at the courthouse in the wee hours of the morning to get a seat in the main courtroom, Lewis was able to sail in and sit with the Bankman-Fried family. He arrived just as his book tour ended and Bankman-Fried, in a surprise twist, decided to testify in his defense — a move that appears to have been disastrous.
But Lewis was impressed (at least initially). “He is not conventionally dishonest,” Lewis said on his podcast the day that Bankman-Fried took the stand without the presence of the jury — sort of a trial run for what would happen when jurors were in the courtroom. “What he does is evade questions he doesn’t want to answer.”
It’s hard to imagine that a veteran journalist like Lewis has never encountered a subject in the high-powered world of finance who was skilled at the art of deflection — that is, avoiding answering tough questions.
“He does it very ably,” said Lewis. “It’s a little spellbinding.” Lewis went on to say he was impressed by Bankman-Fried’s “fiber” and found his testimony as “riveting as theater.”
But the time Bankman-Fried was on the stand in front of the jury and being grilled by Assistant U.S. Attorney Danielle Sassoon, that so-called superpower had evaporated. In its stead was a defendant who said he could not recall events at least 140 times, leaving jurors visibly annoyed, according to news reports.
On his podcast, Lewis said the prosecution’s questioning of Bankman-Fried was “not that fun to watch.” Even he had to admit “I’ve never seen anybody not remember so many memorable things. That part of it was kind of unsatisfying.”
Lewis had called his book a “letter to the jury” and just days before the trial had appeared on 60 Minutes to make the case for Bankman-Fried, stopping just short of calling him innocent. The real story, he warned viewers, was in his book — not the courtroom. (Judge Kaplan did not allow an excerpt from “Going Infinite” to be entered as evidence in the trial.)
But the book itself was more damning than Lewis seemed to realize. While many people (including SkyBridge co-founder Anthony Scaramucci, speaking on CNBC after the verdict) have called Bankman-Fried a sociopath, Lewis’s own words were revealing.
“In some deep way, he sensed, he remained cut off from other human beings. He could read them, but they couldn’t read him,” Lewis wrote in his book, then quoted Bankman-Fried: “There were some things I had to teach myself to do,” he said. “One is facial expressions. Like making sure I smile when I’m supposed to smile. Smiling was the biggest thing that I most weirdly couldn’t do.”
Lewis also wrote in the book about why Bankman-Fried was not willing to commit to a relationship with his off-again, on-again girlfriend Caroline Ellison, who was the CEO of Alameda Research and pled guilty and testified for the prosecution. As Bankman-Fried put down his thoughts about a “relationship,” he wrote “In a lot of ways I don’t really have a soul. In the end there’s a pretty decent argument that my empathy is fake, my feelings are fake.”
The author also quoted other former FTX employees calling their boss dishonest and manipulative. But despite what might be viewed as red flags — especially in retrospect — Lewis simply couldn’t believe Bankman-Fried was a criminal.
On his podcast the day that Bankman-Fried was grilled by prosecutors Lewis said: “You get none of the humanity here…You’re getting such a weird abstracted experience and none of the context.”
Some of the jurors had acknowledged that they had watched the 60 Minutes program in which Lewis praised Bankman-Fried just days before the trial started, according to news reports. And Lewis said that at least one juror was a former Salomon Brothers investment banker who worked there at the same time he did. The banker-turned-author seemed to harbor hope that this person would “explain” things to the other jurors, according to his podcast.
Unlike Lewis, however, the jurors saw through Bankman-Fried. As the cross-examination of the accused crypto scammer wore on, even Lewis seemed to realize that. “It seems unlikely that anything is going to happen but a conviction,” he said on the podcast that was titled “The Hail Mary Pass that Wasn’t.” In other words, Bankman-Fried’s desperate decision to save himself by testifying had failed.
Before closing arguments, Lewis said he was leaving New York for his home in California. He did not comment afterwards. But if Lewis was deflated by the trial, he had ample compensation for his angst: The author reportedly nabbed a $5 million movie deal even before he had written one page of “Going Infinite.”
Meanwhile Bankman-Fried, a graduate of MIT, faces more than 100 years in prison. He will be sentenced in March and still faces another federal criminal trial over charges of illegal campaign contributions.
