FTX founder convicted of defrauding customers
NEW YORK >> FTX founder Sam Bankman-Fried's spectacular rise and fall in the cryptocurrency industry — a journey that included his testimony before Congress, a Super Bowl advertisement and dreams of a future run for president — hit a new bottom Thursday when a New York jury convicted him of fraud in a scheme that cheated customers and investors of at least $10 billion.
After the monthlong trial, jurors rejected Bankman-Fried's claim during four days on the witness stand in Manhattan federal court that he never committed fraud or meant to cheat customers before FTX, once the world's second-largest crypto exchange, collapsed into bankruptcy a year ago.
“His crimes caught up to him. His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told the jury of the onetime billionaire just before they were read the law by Judge Lewis A. Kaplan and began deliberations. Sassoon said Bankman-Fried turned his customers' accounts into his “personal piggy bank” as up to $14 billion disappeared.
She urged jurors to reject Bankman-Fried's
insistence when he testified over three days that he never committed fraud or plotted to steal from customers, investors and lenders and didn't realize his companies were at least $10 billion in debt until October 2022.
Bankman-Fried was required to stand and face the jury as guilty verdicts on all seven counts were read. He kept his hands clasped tightly in front of him. When he sat down after the reading, he kept his head tilted down for several minutes.
After the judge set a sentencing date of March 28, BankmanFried's parents moved to the front row behind him. His father put his arm around his wife. As BankmanFried was led out of the courtroom, he looked back and nodded toward his mother, who nodded back and then became emotional, wiping her hand across her face after he left the room.
The trial attracted intense interest with its focus on a fraud on a scale not seen since the 2009 prosecution of Bernard Madoff, whose Ponzi scheme over decades cheated thousands of investors out of about $20 billion. Madoff pleaded guilty, was sentenced to 150 years in prison, where he died in 2021.
The prosecution of BankmanFried, 31, put a spotlight on the emerging industry of cryptocurrency and a group of young executives in their 20s who lived together in a $30 million luxury apartment in the Bahamas as they dreamed of becoming the most powerful players in a new financial field.
U.S. Attorney Damian Williams said they engaged in one of the biggest frauds in U.S. history.
Prosecutors made sure jurors knew that the defendant they saw in court with short hair and a suit was not the man with big messy hair and shorts that became his trademark appearance after he started his cryptocurrency hedge fund, Alameda Research, in 2017 and FTX, his cryptocurrency exchange, two years later.
They showed the jury pictures of Bankman-Fried sleeping on a private jet, sitting with a deck of cards and mingling at the Super Bowl with celebrities including the singer Katy Perry. Assistant U.S. Attorney Nicolas Roos called Bankman-Fried someone who liked “celebrity chasing.”
In a closing argument, defense lawyer Mark Cohen said prosecutors were trying to turn “Sam into some sort of villain, some sort of monster.”
“It's both wrong and unfair, and I hope and believe that you have seen that it's simply not true,” he said.
Toyota recalls 1.9M RAV4s over fire risk
Toyota said Wednesday it is recalling nearly 1.9 million RAV4 small SUVs in the U.S. to fix a problem with batteries that can move during forceful turns and potentially cause a fire.
The recall covers certain RAV4s from the 2013 through 2018 model years. Toyota said in a statement that some replacement 12volt batteries used in the SUVs have smaller top dimensions than others. If the hold-down clamp is not tightened properly, the battery could move, allowing the positive terminal to contact the clamp and short circuit, the company said.
Toyota said it is still preparing a fix.
Owners can check to see if their RAV4s are involved by going to nhtsa.gov/recalls and entering their vehicle identification number.
California says EVs now have a fifth of auto sales
One out of every five cars sold in California is now powered by a battery, registration data released Wednesday by the California New Car Dealers Association shows.
In the first nine months of 2023, electric vehicles accounted for 21.5% of cars sold in California, a figure that's more than doubled in the past two years. When combined with hybrid, plug-in hybrid and fuel-cell vehicles, the year-to-date figure is 35.4%.
California has long been a champion of electric cars, and Gov. Gavin Newsom said he'll phase out sales of new, gasoline-powered cars by 2035 as part of the state's fight against climate change. Elon Musk's Tesla Inc. was founded in the state, and the EV adoption curve has accelerated faster in California than in other parts of the country.
Battery-powered cars make up only 7.4% of the overall US auto market, the California report said.
That's helped the state defy some of the gloom now facing the broader EV market. Both Tesla and conventional automakers have said they'll slow their investments in battery-powered cars for now, warning that high interest rates and prices are affecting demand.
Tesla's lead in the California electric-vehicle market has slipped this year, according to state data. Its overall market share fell to 62.9% in the first nine months of 2023, compared with its 71.8% share the year before.
Gasoline- and dieselpowered vehicles known as ICE, for their internal combustion engines, made up 62.3% of new vehicle registrations in California during the period. That's a drop from 71.6% in 2022. Realtors group names new CEO amid scandal
The National Association of Realtors said Thursday that it is replacing its chief executive officer, effective Nov. 20.
In a statement Thursday, NAR said Nykia Wright would be interim CEO, starting Nov. 20, replacing Bob Goldberg who is retiring.
The news comes just two days after a federal jury ruled the organization and several other real estate companies had colluded to maintain high brokerage commissions.
NAR and some of the nation's biggest real estate brokerages were ordered to pay almost $1.8 billion in damages after a Missouri jury found they artificially inflated commissions paid to real estate agents.
The class-action lawsuit was filed in 2019 on behalf of 500,000 home sellers in Missouri and some border towns. The verdict stated that the defendants “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law.”
The executive switch comes just two months after NAR's president was ousted following a New York Times story that exposed allegations of sexual misconduct and harassment by Kenny Parcell.
NAR has 1.5 million dues-paying members and more than $1 billion in assets.
Compiled from Bloomberg, Associated Press and staff reports.