Current:Home > ScamsThe trial of 'crypto king' SBF is the Enron scandal for millennials-Angel Dreamer Wealth Society D1 Reviews & Insights
The trial of 'crypto king' SBF is the Enron scandal for millennials
View Date:2024-12-23 22:40:59
Over the past 20 years, according to authors Gretchen Morgenson and Joshua Rosner, the number of federal white-collar prosecutions fell by half. Think of the limited prosecutions following the 2008 financial crisis as proof. The question now is whether the high-profile trial of cryptocurrency magnate Sam Bankman-Fried is about to change that.
First, some history. In the 1980s after the savings and loan crisis, the Department of Justice convicted more than 1,000 bankers. This aggressive approach reached its apex with 2006’s Enron trial.
Since then, though, the number of white-collar prosecutions has dwindled. One reason may be that the financial machinations at the center of white-collar schemes became so complex that prosecutors hesitated to try to explain them to juries.
Whatever the reason, frustration is mounting. Populist movements have blossomed on the right and left, sharing a distrust of the rich. Faith in institutions has plummeted. For my generation (I’m a millennial who graduated college in 2008), we have never known a world where these sorts of cases were the top priority for authorities.
SBF trial will set mold for white-collar prosecutions
But now Sam Bankman-Fried, known as SBF, and his cryptocurrency exchange (FTX) have entered the chat. If SBF is convicted, it will be Enron for millennials − a generational case that could resuscitate the practice of white-collar convictions. Here’s why.
Set aside the complexity of margin loans, digital currency and cross-border regulations. The question facing SBF’s jury is simple: Did he lie to − did he intend to trick − his customers and use their money as his own?
Proving intent is hard. We cannot crawl inside the mind of a defendant.
Prosecutors instead use circumstantial evidence, such as altered financial statements, to connect the dots.
Crypto's former golden boy is tarnished.What investors can learn from FTX's failure.
SBF prosecutors will be challenged to prove intent
I’ve seen plenty of white-collar investigative files, and proving intent will be particularly challenging here. SBF’s defense is that he was an absent-minded professor who lost track of how much money was going in and out of a booming crypto exchange.
Showing intent is even harder when words such as “blockchain” also have to be explained to the jury.
And the stakes for winning are high. Forbes once called SBF the “richest self-made newcomer in Forbes 400 history.” For my parents, I’ve explained it as the equivalent of indicting Warren Buffett.
Will Trump go to prison?Why jail time is unlikely for the former president.
For those of us who work in white-collar law enforcement, we’re watching closely. Prosecutors make decisions about what they think a jury will believe based on what they think society will accept. Will a jury of 12 folks − a teacher, a physician assistant, a train conductor − be able to wade through abstruse finance terms and find SBF guilty?
If so, it may imbue other prosecutors with confidence to take on similar cases.
Or have prosecutors emerged from their post-2006 hidy-hole only to get kicked in the teeth? Was this the wrong case for such a gamble?
If so, law enforcement will have another piece of evidence that financial fraud trials in the age of crypto (and collateralized debt obligations and every other complex instrument) may not be worth trying.
Shad White is the state auditor of Mississippi.
veryGood! (48328)
Related
- Sister Wives’ Meri Brown Shares Hysterical Farmers Only Dating Profile Video After Kody Split
- Minnesota is poised to give school resource officers clearer authority to use force
- The latest shake-up in Ohio’s topsy-turvy congressional primary eases minds within the GOP
- Judge upholds Tennessee law to stop crossover voting in primaries. Critics say the law is too vague.
- Atlanta man dies in shootout after police chase that also kills police dog
- Inside Zoey Deutch's Bleach Blonde Pixie Cut, According to Her Hair Colorist Tracey Cunningham
- Mining company can’t tap water needed for Okefenokee wildlife refuge, US says
- Haiti orders a curfew after gangs overrun its two largest prisons. Thousands have escaped
- Kim Kardashian and Kourtney Kardashian Team Up for SKIMS Collab With Dolce & Gabbana After Feud
- New Mexico governor signs bill that bans some guns at polls and extends waiting period to 7 days
Ranking
- Tua Tagovailoa playing with confidence as Miami Dolphins hope MNF win can spark run
- Emma Hemming Willis shares video about Bruce Willis' life after diagnosis: It's filled with joy.
- Powerball winning numbers for March 2 drawing: Jackpot rises to over $440 million
- Here's how to negotiate a lower commission fee from your real estate agent
- Inflation ticked up in October, CPI report shows. What happens next with interest rates?
- Venus flytrap poachers arrested in taking of hundreds of rare plant
- Pennsylvania court rules electronic voting data is not subject to release under public records law
- Congressional candidates jump onto ballot as qualifying begins for 2024 Georgia races
Recommendation
-
NASCAR Hall of Fame driver Bobby Allison dies at 86
-
Lisa Vanderpump Has the Perfect Response to Raquel Leviss' Podcast Shade
-
Kate Winslet was told to sing worse in 'The Regime,' recalls pop career that never was
-
Richard Lewis remembered in 'Curb Your Enthusiasm' tribute, appears in scene with Larry David
-
MLS playoff teams set: Road to MLS Cup continues with conference semifinals
-
Jonathan Majors and Meagan Good Make Red Carpet Debut in First Appearance After His Assault Trial
-
Kate Middleton Spotted Out for First Time Since Abdominal Surgery
-
Just How Much Money Do CO2 Pipeline Companies Stand to Make From the Inflation Reduction Act?