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Sam Bankman-Fried seeks expert to counter testimony from DOJ witnesses

Former FTX CEO Sam Bankman-Fried intends to call on a financial expert to rebuff testimonies from Caroline Ellison, Gary Wang, Nishad Singh and Adam Yedidia.

Sam Bankman-Fried’s lawyers are planning to put forward an expert witness to counter testimony from former Alameda Research CEO Caroline Ellison and other witnesses about the extent of financial ties between FTX and the trading firm.

In an Oct. 23 letter to New York District Judge Lewis Kaplan, Bankman-Fried’s attorneys said Joseph Pimbley from litigation consulting firm PF2 Securities would testify on behalf of the former FTX CEO.

The letter lays out that Pimbley will testify — based on FTX database information — that Alameda’s line of credit with FTX “fluctuated between approximately $1 billion and $3 billion” between October 2021 and September 2022 and decreased in June 2022 which has the goal of establishing a definitive timeline for the line of credit.

Pimbley will also testify that the majority of balances for non-FTX and non-Alameda users are in U.S. dollars, Bitcoin (BTC), Ether (ETH) and Tether (USDT) and over 75% of non-FTX and Alameda user balances “arise from accounts that have spot margin enabled, spot margin lending enabled, or show futures activity” — which could provide context to testimony made by former FTX executives.

Highlighted excerpt of the letter on testimony Pimbley will counter regarding FTX customer trading. Source: CourtListener

The testimony is also set to rebuff a testimony by Ellison, FTX co-founder Gary Wang, former FTX engineering director Nishad Singh and former FTX employee Adam Yedidia regarding Alameda’s line of credit and FTX customer use of margin trading.

Dr. Pimbley is set to counter Ellison’s testimony that Alameda had “an essentially unlimited line of credit on FTX” and Wang’s testimony that the firm had borrowed “around $3 billion” from the credit line.

Related: FTX creditor claims breach the 50c mark as buyers see light at the end of the tunnel

Pimbley’s 54-page disclosure details various charts, spreadsheet excerpts, diagrams, and database queries pulled from FTX’s Amazon Web Services database that relate to FTX’s line of credit with Alameda between October 2021 and November 2022.

Pimbley is being remunerated at a rate of $720 an hour plus expenses for his work but said he has “no financial interest in the outcome of this case.”

He was one of seven expert witnesses earlier put forward by Bankman-Fried’s legal team, which Judge Kaplan barred from testifying but allowed future testimony if they were to respond to government witness testimony and clarify their claims.

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FTX’s Bankman-Fried seeks gag order for all witnesses in criminal case

Lawyers representing SBF have agreed to a gag order preventing him from making comments that could sway his criminal trial but says it should apply to other witnesses too.

Former FTX CEO Sam Bankman-Fried has agreed to a gag order preventing him from making comments to third parties that may interfere with his trial — but argues other potential witnesses should be gagged as well, including current FTX CEO John Ray.

The gag order against Sam Bankman-Fried was initially requested on July 20, when the U.S. government accused the FTX founder of attempting to interfere with a fair trial by publicly discrediting former business partner and witness Caroline Ellison in an interview with the  New York Times.

In a July 22 letter to United States District Court Judge Lewis A. Kaplan of New York, Bankman-Fried’s lawyers Cohen & Gresser LLP denied the accusations but agreed to accept a gag order as requested.

A gag order is a legal order often issued by a court to restrict information or comment from being made public or passed onto any unauthorized third party. In this case, Bankman-Fried will no longer be able to make comments that publicly discredit a government witness by sharing confidential information that may taint the jury pool.

Legal filing by Cohen & Gresser LLP to District Court Judge Lewis Kaplan in New York. Source: Courtlistener.

However, in accepting the relief, Bankman-Fried’s lawyers also want the same gag order to be applied to all parties and witnesses that could be involved in his criminal trial.

“We respectfully request that any such relief, however, should apply not just to Mr. Bankman-Fried, but equally to all ‘parties and witnesses’ — namely, the Government and all potential witnesses in this case.”

This would include the U.S. government, former employees of cryptocurrency exchange FTX, FTX Debtor entities, Alameda Research and other potential witnesses involved in the case, according to the attorneys.

Explaining the request, the lawyers said there has been a “toxic media environment” surrounding their client since the collapse of the exchange, noting that FTX CEO John Ray was one of the bigger culprits.

“Most notably, the current CEO of the FTX Debtor entities, John J. Ray III, who has routinely (and gratuitously) attacked and vilified Mr. Bankman-Fried in his public comments and filings in the FTX bankruptcy proceedings,” they said.

“Mr. Ray’s repeated ad hominem attacks on Mr. Bankman-Fried — which have very little do with his role recovering assets for FTX creditors and seem more directed towards publicly vilifying Mr. Bankman-Fried. [This] has left Mr. Bankman-Fried with little choice but to respond,” the lawyers added.

Related: Sam Bankman-Fried’s brother planned to buy island and prep for apocalypse: court filing

The law firm argued that the U.S. government was applying a double standard by touting several articles that sought to harm SBF’s reputation. This formed the basis of their request for the same gag order for SBF.

SBF pleaded not guilty to a series of fraud charges for the alleged role he played leading to the bankruptcy of FTX. The trial for SBF’s fraud charges begins on October 3.

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