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First Move with Julia Chatterley
Former FTX CEO Sam Bankman-Fried Arrested in Bahamas; Inflation Cools, Index Futures Soar; How Virgin Group Founder Created his Business Empire; Fed Expected to Reduce Size of Rate Hikes Soon; Bankman-Fried Indicted on Eight Criminal Charges; BTS' Jim Begins Mandatory Military Service in South Korea. Aired 9-10a ET
Aired December 13, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move", this hour, as we follow the fast moving developments in the stunning
downfall of one-time crypto King Sam Bankman-Fried call it dramas in the Bahamas in the coming hours. The former FTX CEO is expected to be charged
on various U.S. criminal counts, including wire fraud and money laundering. There are reports the U.S. Department of Justice or the DOJ is expected to
unseal that indictment very soon.
And in what appears to be coordinated action the U.S. Securities and Exchange Commission so the SEC, announcing just hours ago, too, that it has
filed separate civil charges against Bankman-Fried accusing him of defrauding investors in what it calls a "House of Cards scheme". SBF, as
he's better known, was arrested in the Bahamas on Monday night and now is awaiting extradition to the United States. That's according to the
attorneys General's office there and that's not all.
The U.S. Congress begins hearings this Tuesday into the bankruptcy and collapse of FTX. Hearings, where of course SBF was expected to testify.
However, the panel will still hear from the failed firm's current CEO that's John Ray, who was likened FTX to the massive accounting scandal at
Enron. Those hearings expected to begin just one hour from now.
Still so many questions surrounding the story, including where the hundreds of thousands of dollars' worth of customer cash go can they even get their
money back and can SPF continue to use some form of ignorance as his defense? Also, will there be more crypto market contingent giant crypto
exchange Binance, now warning of further customer redemptions.
We are going to discuss that throughout the show today. For now, though also on to another huge market story just released economic data showing a
further easing of U.S. consumer prices last month. The so-called CPI rising at a less than expected annual rate of 7.1 percent and month over month
inflation of a mere 1/10 of a percent higher.
The market reaction as you might imagine, is positive. U.S. futures are significantly higher this morning, with all the major averages set to rise
at least 2 percent. You can see them as though they're leaping some 3.8 percent pre market, Europe on the bottom line.
They're also hired too after a relatively mixed handover from the Asia session. Hong Kong however, rising after city officials there scrapped more
key COVID health restrictions. Wow, there's a lot to get through today, but first to our top story and the arrest of disgraced FTX Head Sam Bankman-
Fried.
And Anna Stewart joins us now. Former Head of course, no longer the CEO Anna I think for most of our audience this morning, their head's about to
explode, quite frankly, with what's coming up just in the coming hours. Yes. Can you just recount what we're looking for in the coming hours and
how we even got here?
ANNA STEWART, CNN REPORTER: Essentially, ever since that arrest news yesterday and the fact that U.S. criminal charges were being filed that has
sparked a huge, very quick chain reaction really, and there was a lot to watch in the next few hours. Number one, Sam Bankman-Fried's extradition
hearing in the Bahamas that's going to happen next hour, we believe.
Secondly, the new CEO of FTX, the man in charge of restructuring the business he is testifying in Congress again, that is happening next hour.
We will also find out today, what the criminal charges against SPF's story actually are.
In terms of this second point, the testimony to Congress, we actually have a little hint of what's to come. We had the written remarks from John Ray,
the new CEO, and they're really quite extraordinary. They do help us understand what went wrong.
It runs through a list really five major points of things that went wrong, including, of course, what we knew the commingling of funds from FTX. The
exchange and Alameda research a separate entity, another SPF entity, and funds being commingled misuse, and essentially customers unwittingly being
exposed to massive losses. But Julia, there was more there are also allegations of loans and other payments to FTX insiders in excess of $1
billion.
And there is so much commentary on the leadership, the root of the problem. This is the statement from the written comments from John Ray. Never in my
career have I seen such an utter failure of corporate controls at every level of an organization from the lack of financial statements to a
complete failure of any internal controls, or governance, what so ever. The implosion of FTX has been incredibly fast, is been dramatic.
[09:05:00]
STEWART: And you have to remember that only a few weeks ago SPF was a poster boy of crypto and now he is an international pariah.
CHATTERLEY: Yes, it's fascinating, isn't it? And there are so many points to make here. There's not enough time to make them, but it is fascinating
that. Anna, I've talked about it seeming coordinated action. We've had the SEC so far, the Department of Justice, expected to unseal that indictment.
We've got to watch the CFTC now to see what they come up with as well and just a day before he was expected to speak in Congress. One wonders why
they didn't just let him continue to talk and perhaps incriminate himself further.
We can discuss that, but Anna, I think this comes to something that you've mentioned frequently in the past, and that is the sheer speed upon which
these charges now are appearing compared to sort of other criminal cases or at least alleged criminal cases in the past. Perhaps he sort of
incriminated himself with talking on Twitter, doing interviews in the last month since the bankruptcy was announced.
STEWART: I think you've nailed it. I think the speed will this and the biggest enemy to SPF is SPF because he has not stopped talking. He has
appeared in interviews of various media outlets. He has tweeted, he has DM journalists, and he's spoken at length, saying that he's you know, made
some mistakes, but essentially saying unwitting mistakes. Take a listen to just some of the comments we've had from him just in the last few days.
(BEGIN VIDEO CLIP)
SAM BANKMAN-FRIED, FORMER CEO, FTX: I don't think that I tried to do anything wrong. I do know of FTX deposits being used to pay off our
immediate creditors. I knowingly commit fraud. I don't think I committed fraud. I didn't want any of this to happen. I was certainly not nearly as
competent as I thought I was.
(END VIDEO CLIP)
STEWART: He had better hope he can make people on various investigations believe that he really wasn't competent and that this was unwitting,
because otherwise of course that's just going to make all of these charges a whole lot worse, Julia.
CHATTERLEY: Yes, he's sort of leaned into that ineptitude angle. It's a good job. He didn't accept the interview request from us and for me. Anna
Stewart, thank you so much for that.
OK, prosecutors for the Southern District of New York expected to unseal criminal charges that led to Bankman-Fried's arrest. Earlier, the
Securities and Exchange Commission charged him with defrauding investors. Kara Scannell joins us now with more. Great to have you with us to help us
actually sort through. Again, what we're expecting, what kind of charges, where they come from in the coming hours, Kara?
KARA SCANNELL, CNN REPORTER: Yes, Julia, I mean, this is such a fast moving story and we are expecting to see these charges this indictment unsealed in
New York sometime in the next few hours. Now that we don't know yet specifically what these charges are but if we look at the civil charges
that were announced by the SEC this morning.
We get a sense of what authorities believe had happened here and what they say is from the inception of FTX, that Bankman-Fried was using customer
funds, and not for the ways that he told them he would use them.
They say that he was defrauding customers in both, are excuse me, investors in both FTX the company as well as customers who use the trading platform.
So according to the SEC complaint, he didn't tell investors that he was going to take money that were customer assets and use them for his hedge
fund Alameda and what authority safe they're from what happened.
It is that the money that was used for Alameda was diverted there it was helped to cover some of their loans in their exposure, but it was also used
by Bankman-Fried and other executives as a personal piggy bank. According to the SEC complaint Bankman-Fried had used some of this money to buy
luxury real estate in the Bahamas for himself, his family. And also for other FTX executives he also used some of this money to make big political
donations.
Of course, you know, the big debate here about whether crypto should be regulated and if so, how, and that he also was using some of this money for
his own personal loans. According to the SEC, he had taken out $1.3 billion in loans from this company. So we're still waiting to see what these
federal criminal charges are going to be, but as you have played, you know, Bankman-Fried has said that he never intended to defraud anyone. We're
going to see, in short order, what the specific details are.
CHATTERLEY: I know, it's tough to predict ahead and obviously, it assumes an element of guilt and whether that can be proven, but what kind of
consequences we are talking about if some of these criminal charges. If he's actually proven guilty of some of these criminal charges and Kara,
just to explain, because we did mention at the top of the show that he's now awaiting extradition to the United States. How does that process even
work?
SCANNELL: Right, so he'll appear in this court in the Bahamas today. At this arrest was at the request of U.S. authorities. Bahaman authorities are
also investigating him and his actions at FTX. An unanswered question will be whether he is going to contest extradition to the U.S.? If he does that
could delay this process, although there is an extradition treaty between the Bahamas and the U.S.
[09:10:00]
SCANNELL: It's not clear that, that will happen as quickly as these charges came. So right, as you say if he ultimately either pleads guilty or is
convicted to some of these charges, he could face quite a lengthy prison term. Now, depending on what is charged, the New York Times is reporting,
it could be wire fraud or money fraud.
Those statutory maximums of 20 plus years so that's a long time and in the U.S., the amount of money that you're accused of stealing can really ramp
up your sentence. And if we're talking billions of dollars here, that is very serious, that is very significant for him.
Most people don't get the statutory maximum, but it really remains to be seen what facts will come out? What evidence will come out? And ultimately,
that will all inform a judge down the road if he is convicted or pleads guilty to what he could face? But we're talking potentially some serious
prison time, Julia.
CHATTERLEY: Kara, you are going to have a busy day. I'm going to let you go. Thank you so much for that update and the information there. Kara
Scannell, there thank you. OK, the futures of bright. Take a look at the green arrows across the U.S. futures board; you can thank what seems to be
some level of cooling inflation for that.
Paul R LA Monica has been poring over the numbers for us. Paul, it's fascinating to see investors truly celebrating inflation when it's still
sitting above 7 percent. That it's the direction of movement here clearly that's key.
PAUL R. LA MONICA, CNN REPORTER: Definitely Julia, it was something - drop in.--
CHATTERLEY: --there because unfortunately, we can only hear every second word. So we're going to try and fix this and come back to you, but for now
I'm going to let you go. We'll try to a quick fix. We allow live TV and hopefully we'll come back to you soon.
All right, let's take a break straight ahead. How to build a business empire that lasts over half a century? So Richard Branson tells us the
secret to Virgin Group success after the break. Plus, a Former Federal Prosecutor weighs in on the Sam Bankman-Fried arrest. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move" and welcome back Paul R LA Monica. I believe just to test this I'm going to make you count from 0 to 7.1
percent which was of course the consumer price inflation headline reading for November. Can you hear me?
[09:15:00]
MONICA: Well played. Yes, it doesn't sound like the echo is there anymore. So that's good apologies to all the viewers for my you know past
performance, which was probably like some sort of on guard Philip Glass musical experiment gone awry.
CHATTERLEY: Getting back to inflation, Paul, we're going to get told off. Talk to me about inflation, as we were saying before the break. The good
news is not the level of inflation, which is still incredibly high, but it's the motion, the movement and the direction that inflation does appear
to be coming down.
MONICA: Yes, definitely. This is what everyone has been waiting for in the financial markets. It's what consumers have been waiting for? And
obviously, it's what Federal Reserve and other central bankers around the globe have been waiting for? As long as the inflation pressures start to
abate and we see these numbers continue to head in the right direction, which is obviously down.
Then that justifies this less hawkish stance by the Federal Reserve and other central bankers, that they can raise rates less aggressively, which
decreases hopefully the chances or a recession. Or if there is going to be one, maybe it's just a mild one. And obviously, consumers can be totally
understandable that they're not necessarily celebrating these numbers because 7.1 percent year over year, price creases are still painfully high
and higher than what wages are going up at. But again, it's good news if this trend continues, which it hopefully will.
CHATTERLEY: Yes, fingers crossed. Parting is such sweet sorrow, Paul, but I have to let you go here. Thank you. - Paul La Monica there thank you. OK,
from records to rocket ships. The life story of buccaneering Virgin Group founders, Sir Richard Branson is filled with Brave endeavors and daring
adventures. He's renowned for pushing boundaries and challenging the status quo.
Today, more than 40 companies make up the Virgin Empire employing over 60,000 people across 35 different countries, but it wasn't always this way,
of course. So Richard began his business career in 1967 from a phone box at school running a student magazine. A few years later, his mother played a
pivotal role in the founding of his music empire Virgin Records. And in recent years, his businesses were also crippled by COVID, like many others,
all of it is now the subject of a four part Docu-series on HBO.
(BEGIN VIDEO CLIP)
RICHARD BRANSON, FOUNDER OF VIRGIN GROUP: My mom tried to get us over our shyness to challenge ourselves,
UNIDENTIFIED FEMALE: We allowed them to do a lot of dangerous things that slid on to a few more daring things. Drives on Jeopardy. It's a
continuation of his childhood.
BRANSON: Having suffered from dyslexia having left school at 15. I had a lot to prove.
UNIDENTIFIED FEMALE: He is a bundle of contradictions.
UNIDENTIFIED MALE: People were seduced into thinking that this was a bumbling good guy, when in fact; Richard always had a very firm eye on the
bottom line.
(END VIDEO CLIP)
CHATTERLEY: Sir Richard has also updated his autobiography called "Finding my Virginity" and I'm excited to say Sir Richard joins us now. Welcome to
the show. You know, it's quite fascinating.
I wanted to choose that clip and I know a lot of people have pulled that out just for some of the punchier comments that were made bumbling
contradictions, air fixation on the bottom line. You didn't my takeaway from conversations with you and watching you is that you're a creative,
you're a dreamer, you're a risk taker some of the ways of describing you in that with jarring to me. How did you feel?
BRANSON: I slightly jarring, too. It was an independent documentary by a very good director called Chris Smith and he very much wanted both sides of
the story. I think that the focus on the bottom line would be the one. I would take the biggest issue and I think what I love doing is creating
things and if I was focused on the bottom line, I would have not have started an airline 38 years ago with one play.
When I had a very successful record company I just loved the idea of creating something. I could be proud of Virgin Atlantic, which is still
going strong. And you know all go into the space builder's spaceship. So my feeling more is that love to create things and hopefully, the bottom line
will work its way out at the end of the year, and you'll be able to pay the bills.
CHATTERLEY: Yes, that's a product of creating something that people want and people need and people use. I think one of the other things that
surprised me as well. Not surprised me but just again, had the same kind of feeling was this idea of thriving on Jeopardy.
[09:20:00]
CHATTERLEY: I've spoken to many and read the books of hugely successful entrepreneurs and I think one thing that connects them is this feeling that
when you're successful in one business you make sure it survives and you grow it and you build it and you don't go back to the beginning because
that experience is so painful at times, that once you've built a strong business, you stick with it. You're the opposite of that you seem to love
building to your point creating and you've done it so many times.
BRANSON: Yes, I love learning. I mean I love learning about things that I know nothing about. I mean, for instance, Virgin, I've never been on a
cruise and we decided, you know, why have I never been on a cruise? Maybe I could try to build the kind of Cruise Company that I would love to go on
and the friends who would never go on cruises would love to go on.
And Virgin voyages, got born out of that the feedback from people who go on Scarlet lady or one of our voyage ships is spectacular, and people come
back for more and more so. So I think, you know, what we love to do is look at a sector that is badly run or not much fun, and, you know, bring some
fun into it and add panache and style. And that's why I think Virgin brand has become well known for.
CHATTERLEY: You know, I asked someone who, and I won't tell you who knows you quite well, what they think. And they said they think on a business
level, actually your threshold for pain and the challenge and your endurance is higher than most. Would you agree with that?
BRANSON: I think that's fair enough. I mean, because remember, I'm honestly not interested in the bottom line. I'm not interested in making another
backwards to what I've what you know, what, all we have in life is our reputation.
And you know, like, in three or four weeks' time, we'll be sending the first rockets into space from European soil with Virgin orbit, and putting
satellites around the Earth. And you know that is enormously satisfying, and rewarding to be able to do something like that and so that is my reason
for being and a lot of my time these days is spent. We're trying to use the fact that I can pick up the phone to anybody in the world and get through
to try to cut through all these issues that are going on in the world and see if we can help nudge to resolve them.
CHATTERLEY: Yes, and I read recently that you said that 80 percent of your time now is spent on nonprofits and seeing what you can do to help those
who need it more and most in the world. It sorts of brings me back to the beginning of the documentary, and it's showing very emotional scenes when
you are sort of writing messages ahead of obviously, going up on the space flight and just the concern that if it didn't work, or if something went
wrong. What you would want your family to know? What you would say to them?
And you are sort of breaking down as you do it, because clearly it's very emotional. And I think it also pulls out something from your book as well
and that's the importance of family. The importance of your mother, who you sadly lost I know in COVID and during the COVID pandemic, but also your
wife I think you've credited with being at least part of and behind some of the best decisions you've made in your life. Talk to me about the
importance of family.
BRANSON: We've been really, really fortunate as a family. I mean, I've been together with Joan for 14 years. We've got two wonderful children, five
wonderful grandchildren. We're very, very, very close knit family. My mum was a formidable force in my life and then in my sister's lives.
And, I think she taught me to run to keep up with her. She taught me to stand on my own two feet and not to watch what other people were doing on
television. She taught me to be bold, take risks, and that you'll get a lot more out of life by doing it and you know, she famously, I think, pushed me
out of the car when I was six or seven and told me to make my own way to Granny's house and you know, things that she would have bought today.
CHATTERLEY: Did you make it?
BRANSON: I sort of lost I think to punish her. - But, I think about most of the adventures I did. I mean, I think you know there's the new documentary
series.
[09:25:00]
BRANSON: The HBO series, which I think there's a leopard. So this just coming up which is about one of my balloon flights across the Pacific and
everything that could have gone wrong went wrong, including, we missed Los Angeles where we were aiming from when we struck took off from Japan. We
missed it by 1000 miles and ended up in the Arctic. So it was quite a gripping - but my mum would definitely swap seats with me, if I'd been
looking the other way, when I got into the capsule.
CHATTERLEY: It's just a geographical rounding error in that game. Just out of interest, what goes through your mind in those moments? Whether it's
that sort of where you end up in the balloon, or, you know, and it goes back to the updated chapter, the thinking the autobiography as well, that
sort of recognition during the COVID pandemic, where you think you've got somewhere, you think you can move on and do other things and then suddenly,
every single business practically that you have is suddenly under threat?
What goes through your mind? Do you panic the same way as I was others? I guess I'm trying to get to the essence of what makes you a great
entrepreneur? What allows you to build what you build and consistently sir?
BRANSON: So in the balloon on the balloon flight, it looked on paper that we had no chance of survival. So it was sort of 50 drawn out as of almost
certain death. And the only thing to do and I think I've learned that prove being an entrepreneur is to fight, fight, fight, fight, to survive and do
everything possible you can to survive.
So I had to fly the balloon right up into 42,000 feet into the core of the jet stream to get the speed. Likewise, with COVID, it was extraordinarily
tough for so many people watching this program. We chose all our industries, cruises, airlines, fitness clubs, hotels et cetera, et cetera.
And again, you know, we just had to, you know, I have fortunately, I have a wonderful team of people around me. We just had to, you know, work day and
night to try to make sure that we protected as many jobs as possible and, the team did magnificently, and somehow the Virgin Group came through and
for about two weeks, I did feel the first. You know, I did understand depression.
I'd never felt I've never understood sometimes when people say they're feeling depressed. I'm very glad actually; I was able to feel it myself so
that I can understand people better in the future. But, you know, when by the time the children arrived, the kids, grandkids arrived, it went away
pretty quickly and, of course having human interaction helps so much.
CHATTERLEY: Yes, but I think, to your point, that's about as extreme low as it gets and coming back from that is, say something about the person. I
like that as a mantra, fight, fight and fight. Something you said, and I've just been thinking about it, while you were talking, you said reputation,
in many ways, is everything.
And I do want to get your perspective on what we're going to spend most of the rest of the show talking about and that's what's taking place in the
crypto sector in the fall of Sam Bankman-Fried and as far as I can see, from all the businesses, you never actually went into crypto or block chain
technology specifically. Do you have a view on this? Can I ask your take?
BRANSON: I am obviously look mortified for all those people that have lost money over it. But I also always feel sorry, for the, you know, the person
who, I mean, just imagine how he's feeling today from being right on top of the world to right on the bottom to be arrested. So I spend a lot of my
life trying to help people who are in prison, you know, for whatever reasons, get back on their feet again, and move forward in a positive way.
And so I think one has to look at it from both sides. It's incredibly sad for all those affected and obviously very sad for him and his family as
well.
CHATTERLEY: Yes, I mean, as far to say, it's difficult to your point of looking at both sides if indeed, this is fraud and, and whatever else
follows. But I guess what you're saying is people can come back from that and people can repent, whatever the circumstances and, I know, that's part
of what you're working on now.
[09:30:00]
BRANSON: Yes. I mean, I've many years ago, somebody sell from - and instead of sacking them, I've sat them down and just said, this is not the thing to
do. And, and they became our best artists and repertoire person at Virgin they signed Culture Club, they signed Genesis. So you know, sometimes if
you give people a second chance they will flourish.
And obviously, you know if somebody does something dastardly, they need to be punished for it. But, you know, I think I'm first crimes, the more one
can give people a second chance and let them have a chance to, to put right what they did wrong, the better.
CHATTERLEY: You know there'll be people who disagree with you there will also be people who agree with you on that. But it is another fascinating
insight into who you are and your life. So Richard Branson, thank you so much for your time and for being so honest with us today. It's great to
have you and hopefully we'll speak again soon. Thank you.
BRANSON: Thank you.
CHATTERLEY: Coming up on "First Move" from crypto king to a criminal suspect more on the stunning - of Sam Bankman-Fried, next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". And U.S. stocks are rallying in early trade after a market friendly read on U.S. inflation. Consumer prices
rising less than expected last month both year-over-year and month-over- month.
Core inflation seeing its slowest monthly rise in over a year too, encouraging news perhaps for the Federal Reserve as it begins its two day
policy meeting in Washington, thanks to today's numbers. There are already those suggesting the Fed will certainly now begin reducing the size of its
rate hikes starting with tomorrow's expected hike.
Christine Romans joins us now. Christine, would you agree with those that are saying this all but guarantees half a percentage point rate hike rather
than one of a larger size?
[09:35:00]
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, it seems like this is exactly what the Fed was, was hoping to see that its medicine is
working. You know, stepping back, Julia, you and I have talked about this for more than a year, these inflation numbers. And imagine this 7.1 percent
consumer inflation is a relief. That's the world we live in.
I mean, so a lot of people out there are still saying, yes, it still feels like there's inflation in the economy. There is no question. But you're
absolutely right, down five months in a row and the smallest inflation gain since the end of since December last year.
So it's the trend here, that's really important. The direction as you were pointing out earlier with Paula Monica and the direction is, the peak seems
to be behind us. And the worst might be behind us. I'm always too nervous to declare, you know, inflation is dead, because it's not it is still in
this economy, but it is cooling and that is the really fair.
CHATTERLEY: I mean, truly, I would have said exactly the same thing to you that I said to Paula Monica earlier, which is it is insane to be
celebrating an inflation rate that's still at what 40 year highs in terms of the movement higher in prices.
The thing that concerns me in this Christine and you can educate me better is the shelter because it's such a huge component of both the core and the
headline inflation. And when I'm saying shelter, I mean rent. And that's sticky. So as much as this is starting to come down, I worry about that,
because that was actually still going in the wrong direction.
ROMANS: Yes, and I've broken these out for you've got food year on year 10.6 percent increase, so the groceries bill is still higher than a year
ago. Gasoline is up 10 percent although it is cooled more recently. So you know, people are noticing its $10 less to fill up, you know, for your SUV,
for example.
But shelter at 7.1 percent and shelter is you know, overrode a month-over- month decline in gasoline here for this number. I also saw in here, airline fares up 36 percent year-over-year. And I wanted to mention that to you
because I know you and I both like to take the occasional trip. And it's interesting how consumer behavior is changing. We're not buying couches; we're buying trips and experiences again. So I think you'll start
to see that reflected in some of these inflation numbers as well.
CHATTERLEY: Yes, watch this space. Christine Romans, great to have you. Thank you.
ROMANS: You're welcome.
CHATTERLEY: OK, back now to our top story and the rest of Sam Bankman- Fried. U.S. prosecutors are expected to announce criminal charges against the former CEO of FTX. Separately a few hours ago, the Securities and
Exchange Commission charged him with defrauding FTX investors and customers.
He was of course arrested on Monday, just a day before he was due to testify in a congressional hearing. Joining us now Defense Attorney Renato
Mariotti, who is a former federal prosecutor, Renato, fantastic to have you on the show.
I think, for most people looking at this for me, certainly the speed at how these charges are appearing is pretty mind blowing. To what extent do you
think the Department of Justice here in particular was helped simply by the fact that he didn't shut up and kept giving interviews and tweeting?
RENATO MARIOTTI, FORMER U.S. FEDERAL PROSECUTOR: You read my mind, in fact, one of the --I had the exact same reaction. I mean this sort of case that's
been put together and what a little over a month, usually would take years to put together and I think they were helped by two things. One was the
brazenness of this fraud.
I mean, if you read the SEC's filing today, they just describe the entire FTX business empire as one massive fraud of both investors and customers.
But the other piece as you point out, most people when they're caught and when they're under criminal investigation, keep their mouths shut.
They hire somebody like me, who is carefully going to issue carefully crafted statements and await for the evidence and said Mr. Bankman-Fried
literally talk to everyone. Every day, when I logged into Twitter, he had a different Twitter space where he was on for hours answering difficult
questions, really, not only incriminated himself, but provided a record that the government can use at trial against him, so very problematic.
CHATTERLEY: I'm going to come back to that because I do think that says something about the person to which may prove to be important. But just to
be clear, because we're now in many ways, overwhelmed with the number of prospective charges and what's set to come in the coming hours.
From a criminal perspective, my understanding is what we need to know is whether he knew that client money was being transferred, and that there was
intent to defraud because while I was scanning what we heard from the Securities and Exchange Commission, they're effectively saying that.
They said that look, he'd already used client money and he was still raising money from investors. Is that what we need to see criminal charges
precede of him to be found guilty?
MARIOTTI: Yes, very smart question. And that is exactly your view of actually honed in on exactly on where the fault line is going to be at
trial. And by the way, the SEC file and as you point out is focused on the same things because the standard for the SEC is the same except a lower
burden of proof.
[09:40:00]
MARIOTTI: In other words, they have to prove those things by 51 percent whereas in the United States, the criminal standard is proof beyond a
reasonable doubt. So the fault line is going to be on did Mr. Bankman-Fried know that he was making false statements to customers, you know, fraud is
where you lie to people to get their money.
Did he know the statements were false, for example, when FTX was telling his customers that their funds were going to remain at FTX? And the way he
would know that, of course, is if he knew about the funds being transferred to Alameda to himself and others and so forth. And then separately, did he
have the intent to defraud.
And of course, you know, the SBF Talk parade, where he was going to talk to everybody, I think was meant, in part, I think he understood that. And he
was trying to portray himself as somebody who was inattentive or not, not focused on the details, as opposed to somebody who was trying to trick his
customers.
CHATTERLEY: It's interesting; he sort of leaned into this idea. And I think the word I would use his ineptitude, to your point, he is blatantly denied
any form of fraud or knowing it. And in many cases, he sort of tried to shift the blame to others, including the head of Alameda Research.
I just wonder, in your experience, again, and it ties to the speed and the fact that he was talking perhaps, too. Do you think someone's talking? Do
you think someone's giving evidence against him, which has also helped speed this up? Perhaps even those that he was using.
MARIOTTI: I would not be surprised. Yes. I'm sorry to interrupt you. Yes. I would not be surprised. It's another good question. Yes, I was reading the
SEC filing this morning. And I was really struck by how they named a lot of names there.
And that really tells me that the SEC, I assume the DOJ, once we see that indictment, we're looking at all of those people that were involved in
Alameda, for example, if I was representing any of those people, I would tell them, they're in very serious trouble.
And we need to be looking for a potential deal with the government. So I would not be surprised if there's co-operators. And don't forget, you know,
this was also a massive operation in which SBF was not only had a various employees and associates, but he was talking to all sorts of people around
the globe as this was occurring. So I'm sure a lot of people have come forward in what appears to be a massive investigation, a massive effort by
the U.S. government.
CHATTERLEY: I mean there's a whole host of potential charges here, as we've discussed, whether they're criminal or civil, as well, as I'm assuming
private lawsuits still to come. We've also got to question what overseas regulators do. What are we looking at here Renato when your experience?
What does this mean for SBF?
MARIOTTI: I think that his life will never be the same. He would be very fortunate not to spend decades of his life in prison. And if I was
representing him, people like SBF, when I represent people who have problems on various different fronts, I always tell them to prioritize the
criminal issues. Lawsuits are just lawsuits.
And ultimately, at the end of the day finds, you know, if he doesn't have any money left, you know, so be it. But his freedom is usually, you know,
for most defendants the ultimate issue, and I just wouldn't be surprised if he was not convicted and didn't face a very significant sentence.
CHATTERLEY: We're just hearing now and it's literally just being alerted. He's being indicted on eight criminal charges, including wire fraud and
conspiracy, your perspective on that?
MARIOTTI: Well, a couple things. I'm not surprised that there's, you know, something wire fraud. I wouldn't be surprised if securities fraud is also
in there. They mere what you just mentioned a moment ago regarding the SEC's charges that he defrauded his customers and investors.
Conspiracy could potentially help the government bring in certain evidence. I mean, I think it could bolster the government's claim, for example, if
they're going to charge others conspiracy requires more than one person. So it'll be interesting to see who else is in that conspiracy charge, for
example, is Former Paramore, who's the Head of Alameda, Co-Head of Alameda Trading that would be one potential co-conspirator for example.
So I think that's interesting. I think it'd be interesting to see whether there's any money laundering charges as well. But you know very serious
crimes. And as a practical matter, you know, a sentence here will be driven by what we call a criminal law, the loss amount, in other words, the total
amount of money involved, which looks to be absolutely massive, you're potentially the biggest fraud case since the party made off.
CHATTERLEY: Yes, you know one of the questions that I have and perhaps it's a sidebar here, the timing feels clearly co-ordinated. Why not let him
speak in front of congress? I mean, there are already conspiracy theories. He was clearly a known to be a big political donor. Why not let him speak
in congress today? Do you have any views on that? What does it really made a difference to do this a day later and let him speak upon.
[09:45:00]
MARIOTTI: It's a great question. Yes, it's very, very good question. We don't know the answer for sure. One thing I will say is I don't think that
this decision was made yesterday or the day before. In other words, I think that this is something that's been in the works now for days because it
takes time to put all of these documents together.
It takes time to co-ordinate with the Bahamian government, for example, regarding potential extradition, which I'm sure they already had those
discussions and had to work that out prior to the indictments and the arrests. So I think that is a practical matter. This has already been
planned.
CHATTERLEY: Oh, I was just going to see if we could finish the answer there, but a brilliant perspective there from Renato Mariotti. Well, thank
him, even though he can't hear me, the former federal prosecutor there. We'll be back right after this, stay with CNN.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move". And to the World Cup now and we're counting down to the first match of the semi-finals today. Croatia,
the most recent runner up goes head-to-head with Argentina at the South American side, looking for their third title and the first of course with
Lionel Messi.
And we already know who's won today's Chatterley Cup, or tournament long look at which country's stock markets come out the winners in head-to-head
to competition. In today's match it's Argentina easily trouncing Croatia, the level up almost 100 percent so far this year, thanks in part, as we've
discussed to the IMF bailout that took place earlier this year.
Compare that to the Croatian stock market 7 percent loss. Let's get more now from CNN's Amanda Davies, who is at the center of the action in Doha
for us. I mean, I know what the stock market say but it has to be about Croatia today. Can they do it? They clearly are the underdog. How is it
looking?
AMANDA DAVIES, CNN WORLD SPORT: They are but they are a team who have become synonymous with the phrase fighting spirit that's really been their
buzzword over not only the last few weeks, but the last couple of years. And there's no doubt on paper, there is a massive Gulf in history, football
in history between these two sides. Just to put it into context the last time Argentina won the World Cup in 1986, Croatia were not even recognized
as a footballing nation by FIFA.
[09:50:00]
DAVIES: That didn't happen until 1992, the year after independence, of course. So whilst this is a Fifth World Cup final as a tournament for
Croatia, Argentina have reached the final five times in their history. That's what we're talking about.
And it's made even more remarkable by the fact they're a country with a population of just less than 4 million people. And here they are on the
brink of reaching a second straight World Cup final. Their coach Zlatko Dalic has been very keen to play down the fact that yes, this is a team
that plays in the same style as four years ago has a lot of the same characteristics.
But essentially, the majority of the team are a new generation, except the mid-field the likes of Luka Modric who we were talking about, of course.
But what they know is that victory this evening for this Croatian side would see them become the first team since Germany in 2014, the only other
team to have knocked out both Brazil and Argentina in a World Cup finals.
And what happened when Germany did it well, they went on to win the title. So that is the reason that Zlatko Dalic is saying victory this evening
would be the greatest moment ever in Croatia's footballing history. Have a listen.
(BEGIN VIDEO CLIP)
ZLATKO DALIC, CROATIA COACH: I tell the players to enjoy football because there is no success, no results if you don't enjoy your job. Each of us who
does our job must enjoy it and must be happy in the job and my players are the players of the Croatian squad are happy. We train with great joy as
well as in all our preparations meetings and matches and tomorrow I will tell them to enjoy football.
(END VIDEO CLIP)
DAVIES: They are happy they've been enjoying it there's an amazing team spirit and they have up to this point defied the odds. But and there is
always about there's so much talk around this Argentinean team about fate, about the fact it's written in the stars because it's seen as Lionel's
Messi's last World Cup in an Argentina --because they've suffered that shock defeat in their opening game to Saudi Arabia yet still have made it
here to the semi-finals.
They got past the Netherlands having been taken right to the brink really against them on Friday; they beat them on a penalty shootout. So people
suggesting you know whatever the paper says ultimately when it comes to a World Cup if you have luck on your side that cannot be underestimated. But
I've got to tell you Julia, it is all set up for what is expected to be a brilliant evening.
CHATTERLEY: I know and then we have to talk about Morocco, but we don't have time. I can't, I don't think I will be able to cope with a Croatia
Morocco fine number leaping around all over the place. Amanda, great to have you with us, we shall see, can't wait for that game, Amanda Davies
there from Doha. OK, we're back after this.
(COMMERCIAL BREAK)
[09:55:00]
CHATTERLEY: Welcome back. K-pop fans are on an 18 month countdown let me explain. The BTS superstars are one member short for now. Jin, the oldest
of the seven is the first to start mandatory military service in South Korea.
The singer revealed a new look online earlier this week, having chopped off his locks for a regulation hairstyle. The group's official Twitter account
posted these pictures of the BTS members sending him off. And he will serve 18 months starting with five weeks of basic training, 18 months to go.
And that's it for the show. If you've missed any of our interviews today, they'll be on my Twitter and Instagram pages. You can search for
@jchatterleycnn. And for now "Connect the World" is up next. And I'll see you tomorrow.
(COMMERCIAL BREAK)
END
