Sam Bankman-Fried got a practice run last week when Judge Lewis Kaplan sent jurors home on Thursday. In a rare hearing, SBF offered his initial testimony with no jurors present—so the judge could determine where there was sufficient cause to argue some of SBF’s planned defense before the jury.
It turns out SBF really needed that trial run, as some of SBF’s responses didn’t go over too well in the courtroom. My colleague Leo Schwartz relayed the details from the courtroom on Thursday:
Bankman-Fried answered in his signature format—a series of misdirections, “yups,” and stammers that previous interviewers have described as a “word salad” approach. While it may have worked in the past on unsuspecting reporters, Sassoon and Kaplan were unamused. At one point, Kaplan instructed Bankman-Fried to be more clear, noting that he had an “interesting way of answering questions.”
And SBF seemed to fall apart under cross-examination from Assistant U.S. Attorney Danielle Sassoon, who drilled into his testimony:
Sassoon seemed to pull loose every thread of the defense’s arguments, even noting that Bankman-Fried’s approach to auto-deleting Signal messages seemed inconsistent with a document retention policy that the defense couldn’t even produce.
Even without the jury present, Sassoon did not hold back. Near the end of her questioning, she asked how Bankman-Fried would define safeguarding customer assets.
“Would that include not embezzling customer assets?” she asked.
Kaplan quickly sustained the defense’s objection, but the point was made to a room packed with journalists, O.C. star Ben McKenzie, and FTX chronicler Michael Lewis, who was sitting in Bankman-Fried’s friends and family section.
The judge ultimately blocked SBF’s defense team from incorporating much of the testimony SBF delivered on Thursday, including whether FTX lawyers had signed off on financial promissory notes and terms of service, as Schwartz wrote on Friday. So when SBF officially took the stand on Friday—this time in front of the jury—he attempted to shift the blame on others, or on all his responsibilities:
Bankman-Fried kept repeating the same excuse: While he was nominally in charge of FTX, he was pulled in too many directions to know what was happening.
“I wish I had a better understanding than I had,” he said, responding to Cohen when asked about tracking assets on the exchange.
He said that he worked anywhere from 12 to 22 hours a day. Even though he was the founder, majority owner, and onetime CEO of Alameda, he put Ellison and Sam Trabucco in charge in mid-2021. They had complementing skills, with Trabucco adept at hedging strategies and Ellison better at managing employees. Trabucco soon “drifted” toward early retirement, said Bankman-Fried, laying all responsibility at the feet of Ellison. Bankman-Fried said he was not involved in the “day-to-day.”
Does being spread too thin absolve someone of responsibility? The jury will have to decide. Bankman-Fried’s direct examination will continue today.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.
VENTURE DEALS
- Abridge, a Pittsburgh, Penn.-based software provider for automating note-taking and clerical work for doctors, raised $30 million in Series B funding. Spark Capital led the round and was joined by Bessemer Venture Partners and others.
- Arteria AI, a Toronto, Canada-based company for automating financial documentation, raised $30 million in Series B funding. GGV Capital U.S. led the round and was joined by existing investors.
- Upfort, a San Francisco-based cyber security and cyber insurance provider, raised $8 million in Series A funding. SYN Ventures led the round and was joined by Eniac Ventures, Fika Ventures, and others.
- 1337, a New York City-based platform using AI to connect people with niche interests, raised $4 million in pre-seed funding from Credo Ventures, GFR Fund, Treble Capital, Roosh Ventures, and others.
- Web3 Pro, a Palo Alto, Calif.-based marketing platform designed for companies to build brand communities, raised $2 million from P101.
PRIVATE EQUITY
- Madison Industries agreed to acquire the healthcare business of CAE, a Sarasota, Fla.-based provider of simulation technology for health care operations, for 311 million Canadian dollars ($224 million).
- BlackRock’s Climate Finance Partnership agreed to acquire a minority stake in Brasol, a São Paulo, Brazil-based solar developer and energy transition company. Financial terms were not disclosed.
- Keswick Partners recapitalized Central Carolina Seeding, a Lexington, N.C.-based erosion and sediment control service provider. Financial terms were not disclosed.
- Performant Capital acquired SquadUP, a Los Angeles, Calif.-based ticketing, event management, and audience engagement platform for food and wine festivals, film festivals, and other events. Financial terms were not disclosed.
- Wind Point Partners acquired Central Moloney, a White Hall, Ark.-based manufacturer of electrical grid infrastructure products. Financial terms were not disclosed.
EXITS
- Spire Healthcare Group acquired Vita Health Group, a Bury St Edmunds, U.K.-based mental and physical health services provider, from ARCHIMED for £74 million ($90 million).
- Nexus Capital Management acquired Dollar Shave Club, a Los Angeles, Calif.-based brand of men’s grooming products, from Unilever. Financial terms were not disclosed.
- Oakley Capital agreed to acquire a minority stake in Webcentral DEH, a Melbourne, Australia-based domains, hosting, and e-mail provider, from Webcentral Limited. Financial terms were not disclosed.
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