In The Shadow Of Mt Hollywood

Let's look at some dots and see if we can connect them. Dot one: as we saw yesterday, there was a contentious sitdown that lasted into the early hours on November 11, during which prominent stakeholders at FTX induced Sam Bankman-Fried to resign as CEO. The only individual mentioned specifically among them was Sam's dad, Prof Bankman. White-shoe firm Paul, Weiss had somehow been induced to represent Sam, but they dropped him after a week due to "conflicts". I speculated that only Prof Bankman would be at a level to engage Paul, Weiss for this job at all. Once they dropped Sam, Prof Bankman induced a Stanford Law colleague to represent him. As far as I can see, both these moves were intended to keep Sam's legal defense under Dad's control. Meanwhile, after being pushed out as CEO, Sam has been anything but under control. Both new CEO Ray and Paul, Weiss have variously denounced his "incessant and disruptive tweeting" and "erratic and mislead...

I'll preface this with my usual caveat, I'm not an attorney, and all I really know of business is what I learned from reading people in my career in tech. However, I pointed out yesterday that although most commentators, if they mention new FTX CEO John Ray at all, seem to see him as some sort of corporate Dudley Do-Right of the Mounties who fixed Enron and will now fix FTX. Little as I know, I do know that Mr Ray is a lawyer (and a highly capable one), but lawyers work for clients and are obligated to promote their clients' interests. So who are Mr Ray's clients? This sent me to the FTX bankruptcy filing , available on line, readable, and as far as these things go, informative. Mr Ray identifies himself at the start: I am the Chief Executive Officer of the above-captioned debtors-in-possession (Collectively, the "Debtors"), having accepted this position in the early morning hours of November 11, 2022. I am administering the interests and affairs of the...

The narrative of Sam Bankman-Fried and the Alameda-FTX bankruptcies has been settling into consensus, but as I've said here all along, I'm an Aristotelian as well as a contrarian, which means in this case that I look for causes, and I'm likely not to be satisfied with conventional answers. I think the conventional version boils down to this: Bankman-Fried and his enablers were quirky geniuses who had brilliant ideas but maybe got themselves in too deep. But they were effective altruists, so maybe their hearts were in the right place. Anyhow, crooks or not, the Establishment has come to the rescue, and John H Ray, III , who solved Enron, is on the case: John H. Ray, III is the principal of Ray & Counsel, P.C. He is an experienced Harvard Law School graduate and Harvard Law Review editor with over 20 years of complex business and class action litigation, as well as appellate experience, with special expertise in securities litigation, officer and director liability, ...

At this point, there's a lot that isn't adding up in the current FTX-Bankman-Fried narrative, even among the more skeptical commentators. Let's just start with John Ray III, the new CEO of FTX who is to supervise its liquidation, whom I quoted yesterday as saying, “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.” More succintly, he's saying the Bankman-Fried-Ellison clique who putatively ran the company couldn't organize a two-car funeral. So let's ask a very basic question. The evidence we have is that they suffered from serious cases of ADHD, which simple research shows renders its victims incapable of planning complex tasks, conducting sustained research, or even sitting still for fairly minimal periods. Sixty years ago, I went through five years of the Ivy ...

There have been persistent stories that Sam Bankman-Fried, Caroline Ellison, and other key people at FTX were being treated for Attention-deficit/hyperactivity disorder (ADHD), and they were apparently being prescribed amphetamines to treat it. The tweet above from Caroline Ellison at least suggests this. On the other hand, this is difficult to confirm for several reasons. Diagnosis of ADHD must be done by a medical or mental health professional, and nobody can diagnose it from a distance in any case. Medical records are highly confidential (unless they relate to COVID vaccination, in which case they are completely public). In addition, statements from John Ray III, FTX's new CEO, indicate that company records are so poor that nobody is quite sure who even worked there. My own interest in the question stems from my research into public information on the minimal job histories of those key people, Caroline Ellison and the Bankman-Fried brothers, and their vapid public personas. If...

The photo above is Gabe Bankman-Fried, Sam's younger brother, who appears to have been involved in Sam's various enterprises in one way or another since their start. According to his Linkedin profile , he graduated from Brown University in 2017. Brown, an Ivy, has a reputation for accepting more than the usual number of offspring of celebrities, royalty, and wealthy donors, including John-John Kennedy and assorted other Kennedys, the son and daughter of Sunny von Bülow, Amy Carter, and John Kerry's daughter Alexandra. Immediately after Brown, he worked as a trader at Jane Street Capital alongside his brother Sam and Sam's sometime girlfriend Caroline Ellison. However, Sam left Jane Street only months after Gabe's arrival, and Gabe didn't last there much longer. After a period of unemployment, he worked six months as a data consultant for Civis Analytics, a political data analysis firm tied to Democrats. Civis Analytics also has ties to the Bankman-Fried fami...

Yesterday we took a closer look at Caroline Ellison's parents, both faculty members at elite-university MIT. This link provides an introduction to Sam Bankman-Fried's parents ; in an odd mirror-image reflection, both are husband-and-wife faculty members at elite Stanford Law School, ranked Number 2 on the US News list , although Stanford recently withdrew from the US News rankings. Both of Sam's parents, Barbara Fried and Joseph Bankman , hold endowed chairs at Stanford Law, which places them somewhat higher in David Brooks's new meritocratic American upper class than even the Ellisons, of whom only one holds an endowed chair. This places the family income, I would imagine, at something well north of $250,000 per year. This would be consistent with the private school to which they sent Sam befoere he went to MIT, the main building of which is shown in the photo at the top of this post. According to the first link, [H]e attended local elite private school Cr...