[HN Gopher] FTX founder Sam Bankman-Fried's two bond guarantors ...
___________________________________________________________________
FTX founder Sam Bankman-Fried's two bond guarantors unsealed, ties
to Stanford
Author : SirLJ
Score : 86 points
Date : 2023-02-15 20:46 UTC (2 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| thepasswordis wrote:
| It's asked a few places here so I'll answer in the topLevel:
|
| Buying a bond is done by paying a _portion_ of the total bail
| amount.
|
| It's the same as: I have $1M liability insurance or something,
| but it only costs me $100/mo.
| tptacek wrote:
| Right: bail itself is refundable, but a bond payment isn't.
| caminante wrote:
| Are SBF's bond guarantors posting collateral or are they
| actually paying a non-recoverable expense?
|
| I thought it was closer to the former.
| jojobas wrote:
| Bail is refundable, bond usually means you pay an
| unrecoverable fraction of the bail for someone to pay the
| bail for you.
| bogomipz wrote:
| From the WSJ:
|
| Mr. Kramer served as a professor and dean at Stanford Law School
| from 2004 to 2012, according to an online biography. He is
| currently president of the William and Flora Hewlett Foundation,
| which, according to its website, makes efforts to respond to
| "pressing and timely problems, such as challenges related to
| democracy and cybersecurity."[1]
|
| This individual and his companies defrauded people and then used
| their stolen money to make donations to politicians in order to
| buy influence. Doesn't that exactly describe "pressing and timely
| problems related to democracy"?
|
| [1] https://archive.is/ZbwwS
| 99_00 wrote:
| This is what actual privilege looks like. And it's based on class
| and social networks, not the color of your skin. But often the
| two are correlated.
| SpaceManNabs wrote:
| > And it's based on class and social networks, not the color of
| your skin
|
| People within your socioeconomic class can be racist towards
| you and upper social mobility can be more difficult based on
| the color of your skin.
|
| This statement is laughably false. Yes as you get richer, skin
| color matters less, but it still does. You can just look at the
| games that rich black republicans have to play to stay in the
| club.
|
| The following is a bit of a rant so go ahead and ignore it if
| you wish: It is a bit wild to me how common sentiments like
| this are on hacker news, when so many people claim to be
| rationalist types. Then again, a group of mostly white people
| claiming systematic racism is gone in their so-called merit-
| based hierarchy should be expected.
| arandomhuman wrote:
| > You can just look at the games that rich black republicans
| have to play to stay in the club.
|
| Not refuting what you are saying, but could you elaborate on
| this statement?
| Pet_Ant wrote:
| Also you can find classism within any race. I wonder what the
| relevant strength between the two is. I'm sure it's difficult
| to measure as they correlate, compound and reinforce each
| other.
| mistrial9 wrote:
| you have not visited Stanford lately.. they specifically have
| every skin color on Earth.. because of criticism like that. Is
| the nepotism real? yes, but you cannot claim racial bias.. it
| is your own prejuidice showing
| [deleted]
| [deleted]
| shrubble wrote:
| How exactly does a total of $750K even come close to being
| acceptable against a $250 million bond?
| SilasX wrote:
| And note, this is not, "give the court $750k, and you get $750k
| back once the trial is over".
|
| This is not even, "put a $750k lien on a brokerage account
| (with more than that in it) until the trial is over".
|
| This is, "We will owe you $750k if the defendant flees, which
| you can then try to collect."
| ergocoder wrote:
| SBF has obtained the highest leverage loan in the history. 1m
| for 250m
| stevenwoo wrote:
| It's not clear to me how his parents could even raise the
| amount of their home since it is Stanford faculty housing
| stock.
| yieldcrv wrote:
| pretty fitting given how FTX let people trade
| dragonwriter wrote:
| > How exactly does a total of $750K even come close to being
| acceptable against a $250 million bond?
|
| They are secondary, partial value sureties, his parents are
| full-value sureties.
|
| (The relation between bond amounts, sureties, and security
| interests in the federal system is often radically different
| than state systems, for a variety of reasons, not least among
| them that bail bonds firms aren't as politically powerful in
| the federal government as they are in state governments.)
| eddsh1994 wrote:
| Kramer's reason why seems very honest and reasonable. I don't
| know why people are attacking him or bring up things like race -
| a family friend is supporting someone they've known for decades
| after they received their own support from them over the last few
| years.
| tptacek wrote:
| The sole purpose of bail is to ensure that the defendant shows up
| to trial. SBF is under electronically monitored house arrest.
| Given how high-profile the case is, it's likely that law
| enforcement is posted to monitor him directly. He's not going to
| flee the country in a shipping crate like Carlos Ghosn. In fact:
| to hear Ken White talk about it on Serious Trouble, given his
| recent conduct, it's much more likely that he's going to end up
| preparing his defense from inside an NYC jail cell.
|
| We're all obsessed with the details of SBF's bail because we're
| too bored, and looking for fun stories. The bail situation with
| SBF is the least interesting thing about the case.
|
| By all means, dunk on the people making insurance payments to
| cover his bail! It's a weird thing to decide to do! But none of
| it has much to do with anything fundamental about the case.
| hartator wrote:
| > He's not going to flee the country in a shipping crate like
| Carlos Ghosn.
|
| Why is he using a VPN then?
| ceejayoz wrote:
| To tamper with witnesses.
|
| He already got caught once:
| https://www.cnn.com/2023/02/01/business/sbf-bail-witness-
| tam...
| stefan_ wrote:
| You always try to read the law and tick the boxes, and I'm here
| to tell you its a profoundly uninteresting thing to do when not
| in the company of lawyers. Nobody here cares about the formal
| requirements or motivation behind bail. We care about how this
| fraudster came to sit at home playing video games and chatting
| up witnesses all day, while many many others sit in jail as
| their cases drawl out, and many indeed die there.
| tptacek wrote:
| He got there the same way most white collar defendants do.
| There is less special stuff going on with SBF than people
| think there is.
| Arainach wrote:
| Most white collar defendants do not have other people
| posting their bail for them.
| moralestapia wrote:
| >We're all obsessed with the details of SBF's bail because
| we're too bored [...]
|
| Nah. There was some news recently of a guy that died of
| dehydration while in jail [1] for I don't recall how long.
| During this time he was forced to drink his pee and eat his own
| feces routinely. He was in jail because he couldn't pay a $100
| bail in time. SBF was rescued (that's the correct term) from a
| Bahamas prison and taken home in a private jet. He now has to
| wear an ankle monitor, so boo hoo :'( I guess?
|
| "We" are obsessed with this situation because of how blatantly
| shows the extreme hypocrisy and double standards of the
| prevailing system of justice. It's a whole different world for
| priviliged, well-connected classes.
|
| Edit: Found the news article for [1], quite a distressing read
| so you're warned. https://www.newsweek.com/2023/01/20/starved-
| death-american-j...
| tptacek wrote:
| That is the most banal conversation you can possibly start.
| Obviously, the bail system is unfair. There was absolutely no
| reason to believe the SBF case would be the one where we
| finally decided to hold white collar defendants to same
| dismal standard as we do other defendants.
|
| If we want to get an amen chorus going about how we should
| fix bail for blue collar defendants, I'm right there with
| you. But there is a longstanding HN fantasy --- it comes up a
| lot! --- that the DOJ should be expected to deliberately
| treat white collar defendants poorly, despite the near
| certainty of their appearance for trial, just to equalize
| things with blue collar defendants. That's simply never going
| to happen.
|
| (There's a lot of hope that the opposite, and far more
| productive reform, of not randomly putting nonviolent blue
| collar defendants in jail because they can't pay bail, will
| happen --- especially in states like my own [Illinois]).
|
| _The latter two paragraphs I added after some responses;
| also, I dialed back my first sentence; sorry, was just
| collecting /clarifying my thoughts._
| willcipriano wrote:
| I think it's worth noting that they aren't even bothering
| to give the appearance of seriousness, even in this high
| profile case against a fairly unimportant guy. A disgraced
| former billionaires opinion is still more valuable than
| that of the public at large.
| chowells wrote:
| So when injustice is banal, we should just ignore it?
| moralestapia wrote:
| It may be but I didn't start it though, you did. :^)
| braingenious wrote:
| tptacek is here to educate us how how he is Factually
| Correct about what things are and are not worthy of your
| time or attention. In order to explain how things outside
| of his objective framework of Wrongness have arrived in
| that section of information, he must spend much time and
| attention explaining Boring Things.
| JumpCrisscross wrote:
| > _he must spend much time and attention explaining
| Boring Things_
|
| Thank goodness? Since when did HN go sour grapes on
| someone with domain expertise sharing their knowledge and
| correcting misinformation?
| darth_avocado wrote:
| Exactly. It's also absurd to call it a $250M bail if you're
| only depositing around a 100k to get out. I bet a lot of poor
| people cannot get out of their 10k bail by paying 10 bucks.
| dragonwriter wrote:
| > It's also absurd to call it a $250M bail if you're only
| depositing around a 100k to get out.
|
| Bail amount is the penalty _for you_ if you fail to comply.
|
| The amount you deposit (or other property which you give,
| either physically or as an interest via a lien) is
| _security_.
|
| _Surety_ is other people accepting a penalty (which may be
| equal or less than the full bail amount) if _you_ fail to
| comply.
|
| Lots of states have formulaic relations between these that
| are designed to (1) keep people, especially poor people, in
| jail, and (2) support the bail bonds industry, but they are
| conceptually and historically _separate_ levers for
| achieving compliance.
| dragonwriter wrote:
| > "We" are obsessed with this situation because of how
| blatantly shows the extreme hypocrisy and double standards of
| the prevailing system of justice.
|
| I would take people more seriously if they were advocating
| for just treatment of others, rather than for unjust
| treatment of SBF, just because his treatment by the (on this
| point more just) federal system is better than the experience
| of many people in the (far more unjust) systems used by most
| US states.
|
| Equal injustice is not the same thing as justice.
| yieldcrv wrote:
| Norway's top court has declined to even extradite to the US
| because of stories like this.
|
| I know of developed nations accepting asylum requests from
| Americans facing no specific threat due to stories like this,
| I know the individuals that got it.
| SilasX wrote:
| >By all means, dunk on the people making insurance payments to
| cover his bail!
|
| They made no payments of any kind:
|
| >>Kramer signed a $500,000 unsecured bond, while Paepcke signed
| the same type of bond for $250,000.
|
| And his bail isn't being "covered", except by a lien on an
| asset worth 1-2% of the amount and promises to pay the rest
| (that no one thinks the primary guarantors can actually honor).
| tptacek wrote:
| See downthread. The two non-parental guarantors haven't paid
| anything, but his parents will be zeroed out if he jumps
| bail. The point of the bail arrangement is to guarantee his
| appearance, not to extract money or repay his offenses, so
| this concern with how the government recovers this "asset"
| seems misplaced.
| SilasX wrote:
| >See downthread. The two non-parental guarantors haven't
| paid anything, but his parents will be zeroed out if he
| jumps bail.
|
| You lost me -- how does that justify you falsely referring
| to (some of) the guarantors as "people making insurance
| payments to cover his bail"?
|
| If you really want to look downthread, you can see where I
| correctly described the current state of affairs that
| you're now informing me of:
|
| https://news.ycombinator.com/item?id=34810830
|
| https://news.ycombinator.com/item?id=34811063
|
| There's no one "making insurance payments to cover his
| bail". If you wanted to make a witty remark that has a
| factual basis, you should have said, "By all means, dunk on
| the people _exposing themselves to a loss if the defendant
| flees_. "
|
| >The point of the bail arrangement is to guarantee his
| appearance, not to extract money or repay his offenses, so
| this concern with how the government recovers this "asset"
| seems misplaced.
|
| I don't have a concern with the government recovering this
| asset. I have a concern with people spreading
| misinformation and then changing the topic when corrected
| -- like you did when falsely saying that Kramer and Paepcke
| were making (something correctly describable as) insurance
| payments, or referring to the $250 million as "covered".
|
| I also have a concern with bail figures being treating as
| meaningless (the first link).
| elif wrote:
| One of the _many_ purposes of pretrial detention is to prevent
| perjury /collusion/deception in the court room.
|
| That goes for bail-bonded pretrial detention as well.
|
| Just because you aren't behind bars doesn't mean you have
| freedom to communicate however you like.
| birdymcbird wrote:
| >>> We're all obsessed with the details of SBF's bail because
| we're too bored, and looking for fun stories.
|
| this not true and feels disingenuous comment.
|
| in every country including the free and fair "democracies" it
| obvious there one set of rules if you ordinary and different
| rule for elite.
|
| SBF cut from elite cloth with friendship..partnership..$
| contribution to other elites. This group include
| celebrity..politicians..academia.
|
| It interesting because many still hold hope that elite can be
| held to same standard and same law as ordinary people.
|
| People in america may be beaten at average traffic stop. SBF
| and cronies scam billions. But we talk about so we obviously
| bored, yes?
|
| Tell us, do you work for NYTimes?
| hokumguru wrote:
| It's a shame that only a small handful of people will be going to
| prison for this, if at all. There are probably dozens of corrupt
| attorneys, professors, accountants, and bankers associated with
| this fraud that should be spending their life behind bars.
| primitivesuave wrote:
| From FTX chief regulatory officer Daniel Friedberg's objection
| [1], FTX head of counsel Ryne Miller manipulated the bankruptcy
| proceedings and channeled its exorbitantly expensive legal work
| to Sullivan & Cromwell, ostensibly so he can return as a
| partner after this fiasco is over.
|
| > Mr. Miller told me that the bankruptcy filings of FTX
| International Group, the Alameda Group, and the FTX.US Group
| had to be in the United States because otherwise S&C couldn't
| do the job. (35, p. 8)
|
| > Mr. Miller stated that he needed to include FTX.US as part of
| the bankruptcy because FTX.US had the cash to pay S&C its
| retainer. Without this retainer from FTX.US, S&C wouldn't file.
| I told him that it wasn't proper for FTX.US to pay for the
| expenses of the bankruptcy of FTX International Group or the
| Alameda Group.
|
| [1] johnreedstark.com/wp-
| content/uploads/sites/180/2023/01/FriedbergObjection.pdf
| primitivesuave wrote:
| Generally, someone indicted by the US government of a nonviolent
| federal crime will spend little time in a jail cell if they have
| non-indictable assets to put up, and have no demonstrable flight
| risk. The arbitrary initial bail amount, and the acceptance of
| these collateral assets, was determined by the same judge - the
| intended effect is that SBF shows up in court.
|
| Obviously, this plays out much differently if you and your family
| are poor.
| ARandomerDude wrote:
| "Ties" is putting it mildly. $500k from
|
| > Larry Kramer, who is president of the William and Flora Hewlett
| Foundation and dean emeritus at Stanford Law School
| SilasX wrote:
| >Kramer signed a $500,000 unsecured bond, while Paepcke signed
| the same type of bond for $250,000.
|
| Sigh ... to echo my earlier comment[1], this (further) makes the
| bail/bond process feel like something of a farce. It's "bail is
| set at -- zomg! -- $250 million!!" ... and then the accused walks
| out because his parents accepted a lien on a property worth 1-2%
| of that, and two people said "trust me bro" for another 0.3%.
|
| Sure, they will "come after" the parents for the full $250
| million if SBF flees. But everyone involved knows they're not
| getting anywhere close to that, even at the most optimistic.
|
| Stop it. Just friggin stop it. Lower the bail, or require
| meaningful assurance of it, keeping in mind just how slippery of
| a defendant you're dealing with.
|
| Wittgenstein: "A wheel that turns, though nothing turns with it,
| is not part of the mechanism."
|
| A bail that is set, but will never be collected, is not part of
| the assurance to appear at trial.
|
| [1] https://news.ycombinator.com/item?id=34599868
| cl0ckt0wer wrote:
| So the court doesn't collect the entire amount? What's the
| point?
| ceejayoz wrote:
| Get rid of cash bail entirely.
|
| You're either a flight risk / threat to the community, or
| you're not. The ability to part with a couple grand doesn't
| change those facts. No one _presumed innocent_ should sit in
| jail for months /years awaiting trial just because of their
| bank balance or lack thereof.
| mr_00ff00 wrote:
| This is a confusing solution to the above problem because
| without bail he would still just walk.
|
| Unless I am missing something, the original commenter seems
| mad that the bail is easily met and he walks. How would
| letting him walk anyway fix it?
| nadermx wrote:
| It does have a point though. I believe what they where
| trying to say is presumed innocence and ability to walk, or
| sufficent evidence to hold.
| mr_00ff00 wrote:
| So really the issue is that it should be easier to hold
| people.
| ceejayoz wrote:
| It should be _harder_ to hold people as a thoughtless
| default, and _easier_ to revoke (non-cash) bail when they
| breach that trust.
| vuln wrote:
| When the bail is revoked you have to send resources to
| detain the person. Putting not only the person wanted,
| but the resources and everyone around the wanted person
| in danger.
| ceejayoz wrote:
| When cash bail is imposed on someone who can't afford it,
| we spend _substantially more_ resources keeping them in
| jail pending trial. Rikers Island costs _half a million a
| year per detainee_.
|
| https://queenseagle.com/all/detained-until-proven-guilty
|
| > Bryson's son, whose name is being withheld for fear of
| reprisal, is one of 306 people incarcerated on Rikers
| Island whose pre-trial detention has lasted three years
| or longer. There are an additional 441 detainees who have
| been held for two to three years and nearly 1,000 who
| have been held for one to two years, according to the New
| York City Department of Correction.
|
| Pretrial detention also puts the presumed-innocent person
| at near-certain risk of job loss and other negative
| consequences.
| maxfurman wrote:
| This is another set of parallel rules for the rich and
| poor. SBF can walk for less than 1% of his bail amount, but
| someone stuck in jail on a $1000 bail can't make a similar
| deal for $5.
| dragonwriter wrote:
| > SBF can walk for less than 1% of his bail amount,
|
| Because the main purpose of the bail amount in his case
| is because bail secomes a virtually automatic default
| judgement, and its not as easy to keep a person out of
| reach of criminal process _and_ all their assets out of
| reach of a default judgement in favor of the US
| government as to do just the former, so him and his
| parents being on the hook for the full value is a
| significant additional cost to attempting flight.
| 7e wrote:
| Find me a bail bondsman who is willing to track down a
| fugitive for $5. That's what this money pays for: bounty
| hunters. And they have a minimum wage.
| SketchySeaBeast wrote:
| I feel like the existence of bounty hunters is a problem
| in and of itself.
| mr_00ff00 wrote:
| Ahh okay, I actually missed this detail. That is a big
| problem.
| ceejayoz wrote:
| Most people should get released pending trial.
|
| Those who are flight risks or ongoing threats to the
| community should not.
|
| Their bank balance is irrelevant to the decision, and
| making it part of the decision winds up with precisely
| these sorts of goofy scenarios.
|
| Is SBF a flight risk? Yes. Handle that via monitoring (as
| they're doing, clearly) and if he keeps wriggling around
| his release conditions, revoke his bail.
| jimbob45 wrote:
| Jailing people costs money. If they can be trusted to take
| care of themselves with some added motivation in the form of
| bail, then you can save the city/state money that can be used
| in more important ways.
| ceejayoz wrote:
| Getting rid of _cash_ bail doesn 't get rid of _bail_.
|
| People show up in court at roughly the same rate whether
| there's cash bail or just plain bail; there's little
| evidence it moves the needle.
| CSMastermind wrote:
| Wouldn't the argument on the other side be that there are in
| fact gray areas when it comes to flight risk?
|
| That no one is 100% a flight risk or not a flight risk but
| rather there is a spectrum and the question is to what a
| degree they are a flight risk.
|
| In that world knowing that your parents will lose their home
| and you'll be directly responsible for powerful people losing
| significant sums of money if you run decreases (though can
| never totally eliminate) the odds of someone fleeing.
|
| Alternatively you could argue that discerning if someone is a
| flight risk or not is prohibitively difficult so their
| willingness to have their parents / acquaintances indebt
| themselves on their behalf is a good enough proxy for their
| intent?
| ceejayoz wrote:
| If someone's enough of a flight risk to earn $250M bail,
| their position on said spectrum seems pretty clear.
|
| There's little evidence cash bail changes the calculus.
|
| https://www.americanprogress.org/article/cash-bail-reform-
| is... (motivated, but well cited)
|
| > In places that have implemented cash bail reform, rates
| of pretrial re-arrest remain unchanged.
|
| > At the same time, numerous studies show pretrial
| incarceration has a "criminogenic effect," meaning that it
| increases rather than decreases crime. One study found that
| cash bail assignment was associated with a 6 percent to 9
| percent increase in recidivism. After 23 hours in pretrial
| incarceration, any additional time in detention has been
| "associated with a consistent and statistically significant
| increase in the likelihood of rearrest."
|
| https://www.thecity.nyc/2022/2/21/22944871/new-york-bail-
| ref...
|
| > Garden State voters enacted their own bail reform laws in
| 2014 after a special committee studied the issue for nine
| months with a group of prosecutors, lawmakers and
| reformers. The law took full effect in 2017 and after 5
| years of implementation, it has apparently achieved its
| purpose. The number of people imprisoned pre-trial on bail
| of $2,500 or less fell from more than 1,500 before the bail
| reform laws to just 14 people last year, according to the
| New Jersey court system. At the same time, the rate of
| people awaiting trial who commit additional "indictable
| offenses" has remained flat at 13.8%. And the appearance
| rate -- how often people awaiting trial come back to court
| -- increased slightly last year, from 90% in 2019 to 90.9%
| in 2020.
| CSMastermind wrote:
| I don't think I'm informed enough to have a strong
| opinion on this topic, if anything I'd probably lean
| generally in the direction of reducing bail requirements
| but I do think it's important to point out:
|
| > If someone's enough of a flight risk to earn $250M
| bail, their position on said spectrum seems pretty clear.
|
| My understanding is that money was only one of many
| conditions of SBF's bail. Others included 24/7 onsite
| monitoring conducted by a third party at his expense.
|
| So at least in this specific case there's more to the
| story than just other guaranteeing the money for the cash
| portion of his bail.
| eastbound wrote:
| If the alternative is life in prison, why would you care
| about the house of someone else? Why would you surrender
| and accept life in prison?
| localplume wrote:
| I guess the burden of proof for being a flight risk is
| reasonbly high? Which makes sense? As long as the bail amount
| is reasonable for the individual (its not too much that they
| cannot afford, but its enough of an incentive for them to
| reappear in court), it seems fine? I think at the level of
| wealth of SBF/the level of wealth of his network, declaring
| him a flight risk kinda makes more sense and denying bail. I
| dunno law though.
| blobbers wrote:
| Can someone clarify exactly why his bond is 250M, but this claims
| two former law professors posted 750K. Where did the other...
| 249.25M come from?
| [deleted]
| bragr wrote:
| It's an unsecured bond. If he fails to show up, the government
| goes after him and his parents for the $250 million, basically
| making them destitute for the rest of their lives. Basically
| his bail is secured by the threat of his parents being ruined.
| tptacek wrote:
| As I understand it, an unsecured bond is simply one where you
| don't pay unless the defendant doesn't show up. That would
| mean the two non-parental guarantors haven't ponied up cash,
| but will each be out 6 figures in the (very unlikely) event
| SBF doesn't make it to trial.
|
| His parents are a different story, and my understanding is
| that they'd be zeroed out if SBF jumped bail.
| blobbers wrote:
| Or they'd escape with him, and some stolen amount of money
| to a country where there is no means for recourse?
| tptacek wrote:
| Then none of this matters anyways.
| [deleted]
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