Prosecutors in Bankman-Fried trial compare defense argument to 'Dumb and Dumber'

Former FTX CEO Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, walks outside the Manhattan federal court in New York City on March 30, 2023.

Amanda Perobelli | Reuters

Prosecutors in the criminal trial against FTX founder Sam Bankman-Fried compared one of the defense’s arguments to a scene in the 1994 film “Dumb and Dumber,” in which actor Jim Carrey says IOUs are “as good as money.”

In a written brief on Thursday to Judge Lewis Kaplan, who’s presiding over the Manhattan trial, assistant U.S. attorneys for the Southern District of New York took issue with several of the jury instructions provided by the defense team.

One specific directive reminded prosecutors of the 29-year-old comedy about two less-than-intelligent friends, played by Carrey and Jeff Daniels, who take a cross-country trip to Colorado to return a briefcase full of money to its owner, though the cash had actually been left as ransom.

“If you find that FTX customers, after depositing funds with FTX, received a credit to transact on the FTX exchange and therefore received the right to withdraw an equivalent amount of funds at a later time upon request, that is insufficient to establish that they were deprived of property,” the jury instruction from the defense says.

Much of the government’s case hinges on billions of dollars that FTX, Bankman-Fried’s crypto exchange, siphoned out of customer accounts and used largely to try and cover up losses at sister hedge fund Alameda Research after cryptocurrency prices plunged. Funds also allegedly went to paying for things such as a $35 million property in the Bahamas and political donations.

Customers were ultimately unable to retrieve much of their money as FTX and Alameda were simultaneously imploding.

The defense, according to prosecutors, is trying to make the claim to the jury that clients still had a credit to the funds they deposited even if the money wasn’t there because it was being used for other things. Prosecutors say the argument is “untethered to the facts of the case” and that a “credit to obtain funds at a later date, if such funds are ultimately available, is clearly not the same, or as valuable, as the money or property itself.”

In a footnote, the prosecution writes, “A popular movie from the 1990s illustrates the point: a briefcase, once filled with money, is not the same as a briefcase later filled with IOUs.” In “Dumb and Dumber,” when the briefcase reaches its owner, it’s filled with paper.

“That’s as good as money, sir,” says Carrey, playing the character Lloyd Christmas.

Actor Jim Carrey.

Filippo Monteforte | AFP | Getty Images

Mark Cohen, Bankman-Fried’s lead defense attorney, didn’t immediately respond to CNBC’s request for comment.

Bankman-Fried, 31, faces seven criminal fraud charges tied to the collapse of his crypto empire late last year. Bankman-Fried, who has pleaded not guilty, could face life in prison if convicted.

The first three weeks of the trial have been highlighted by testimony from Bankman-Fried’s former close friends, who were also top executives at FTX and Alameda and have since turned on him, some through plea deals with the government. The trial is scheduled to resume late next week and extend into November.

On numerous occasions, Judge Kaplan has called sidebar meetings with the lead government attorneys and Bankman-Fried’s lawyers, to discuss their demeanor in the courtroom. Most recently, on Thursday, Kaplan ripped into lawyers from both sides, in particular telling the prosecution that their latest expert witnesses knew nothing specific about important details and yet called Bankman-Fried’s behavior criminal. Both sides were warned to do better and to communicate more with each other.

— CNBC’s Kate Rooney and Dawn Giel contributed to this report.

WATCH: Prosecution in Sam Bankman-Fried trial wrapping up in coming days

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Disney revealing ESPN's financials is a key step in CEO Bob Iger's turnaround

The Disney+ website on a laptop computer in the Brooklyn borough of New York, US, on Monday, July 18, 2022.

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Disney‘s (DIS) first-ever breakout of ESPN’s financials is another key step in CEO Bob Iger’s turnaround for the embattled entertainment giant, displaying a stable top line and plenty of room for growth.


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Retirement Changes Abound

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The maximum benefit for a retired worker who claims at full retirement age will go up to $3,822 per month in 2024, up from $3,627 per month in 2023.

The average benefit for all retired workers will be $1,907 in 2024, up from $1,848 in 2023, according to the Social Security Administration.

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Jack Dorsey’s plan for decentralized social app may be thwarted by Apple’s strict payment rules

Twitter CEO Jack Dorsey addresses students during a town hall at the Indian Institute of Technology (IIT) in New Delhi, India, November 12, 2018.

Anushree Fadnavis | Reuters

A team behind the decentralized social messaging app Damus, which is backed by Twitter co-founder Jack Dorsey, said on Tuesday that Apple could remove the app from its App Store within 14 days.

Damus said in a tweet that Apple is considering the ban because of the messaging app’s integration with the Lightning Network, a payment protocol that lets users exchange bitcoin directly over the network without needing another app. On Nostr — the underlying platform Damus runs on — these types of payments are known as “zaps.”

The move could stall one plan to ease the use of bitcoin and turn it into a more convenient transnational digital currency.

In its tweet, Damus said that Apple is worried that zaps could be used by content creators to sell digital content on its platform.

Damus shared an image of its Apple App Store review warning that said that Apple “noticed that your app allows users to send ‘tips’ associated with receiving content from digital content creators with a mechanism other than in-app purchase.”

Apple has a long history of prohibiting app makers from using in-app payments to sell additional content or add-ons, unless those payments go through Apple, which takes a 30% cut.

But Damus said Apple is misunderstanding the role of zaps.

Dorsey, who is also the CEO of payments company Block (formerly Square), tweeted support for Damus, alleging that the tech giant is misunderstanding “how this feature works and what it’s for,” and called for Apple CEO Tim Cook to reconsider removing Damus from the App Store.

“It’s a critical part of the future of the internet,” Dorsey said. “It has the capacity to bring people around the world into the economy without the traditional gatekeepers.”

Dorsey is a cryptocurrency adherent, and Block has made several big bets on cryptocurrency, including a system to help people “mine” bitcoin — that’s the process of running resource-intensive computer programs to validate bitcoin transactions and create new coins.

In another tweet, Damus said that Apple contacted the team and “scheduled a call to discuss the role of zaps in more detail.”

Apple did not immediately respond to a CNBC request for comment.

Last December, Dorsey donated 14 bitcoins worth roughly $245,000 at the time to the team building Nostr, which is a decentralized social media initiative intended to not be owned by any particular leader or commercial entity. Nostr users can maintain their identities on multiple Nostr-powered apps like Damus and exchange bitcoin with each other via the Lightning network.

Dorsey, one of the co-founders and former CEO of Twitter, has been championing decentralized apps as the next evolution of social media, in which users can speak their minds and not be forced to adhere to policies of social media operators.

A lot of these platforms have no algorithms to recommend particular content — a sore point for some Twitter users who complain they’re seeing less relevant content in the “For You” tab of Twitter since Elon Musk took over. They don’t sell ads, and don’t collect and sell user data, which are the classic ways that social networks make money.

Dorsey is currently also a backer of the Bluesky messaging app, which is built on top of a decentralized networking technology called the AT Protocol. Bluesky, which is still only available to users via invitations, has grown in popularity as users flee Twitter amid a rise of hate speech and bugs, but it still much smaller than the popular messaging app, which Tesla CEO Musk bought last fall.

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Sam Bankman-Fried tried to influence witness through Signal, DOJ alleges

Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court, New York, January 3, 2023. 

Ed Jones | AFP | Getty Images

Federal prosecutors are attempting to bar indicted FTX co-founder Sam Bankman-Fried from using encrypted messaging software, citing efforts that may “constitute witness tampering,” according to a letter filed in Manhattan federal court Friday.

Bankman-Fried reached out to the “current General Counsel of FTX US who may be a witness at trial,” prosecutors said. Ryne Miller, who was not identified by name in the government filing, is the current counsel for FTX US, and a former partner at Kirkland & Ellis.

The government claims that Bankman-Fried wrote to Miller via Signal, an encrypted messaging app, on Jan. 15, days after bankruptcy officials at crypto exchange disclosed the recovery of more than $5 billion in FTX assets.

“I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other,” Bankman-Fried allegedly told Miller.

Bankman-Fried has also been in contact with “other current and former FTX employees,” the filing said. Federal prosecutors allege that Bankman-Fried’s request suggests an effort to influence the witness’s testimony, and that Bankman-Fried’s effort to improve his relationship with Miller “may itself constitute witness tampering.”

Both Miller and a representative for Bankman-Fried declined to comment.

In restricting Bankman-Fried’s access to Signal and other encrypted messaging platforms, the government cites a need to “prevent obstruction of justice.” Federal prosecutors claim that Bankman-Fried directed Alameda and FTX through Slack and Signal, and ordered his employees set communications to “autodelete after 30 days or less.”

Citing previously undisclosed testimony from ex-Alameda CEO Caroline Ellison, the government claimed that Bankman-Fried indicated “many legal cases turn on documentation and it is more difficult to build a legal case if information is not written down or preserved.” Ellison pled guilty to multiple charges of fraud and has been cooperating with the U.S. Attorney’s efforts to build a case against Bankman-Fried.

Bankman-Fried pled not guilty to eight charges in connection with the collapse of his multibillion-dollar crypto empire, FTX. He is due in federal court in October, after being released on $250 million bond.


Arizona says developers don't have enough groundwater to build in desert west of Phoenix

home is being built in in Rio Verde Foothills, Arizona, U.S. on January 7, 2023.

The Washington Post | Getty Images

Developers planning to build homes in the desert west of Phoenix don’t have enough groundwater supplies to move forward with their plans, a state modeling report found. 

Plans to construct homes west of the White Tank Mountains will require alternative sources of water to proceed as the state grapples with a historic megadrought and water shortages, according to the report.

Water sources are dwindling across the Western United States and mounting restrictions on the Colorado River are affecting all sectors of the economy, including homebuilding. But amid a nationwide housing shortage, developers are bombarding Arizona with plans to build homes even as water shortages worsen.

The Arizona Department of Water Resources reported that the Lower Hassayampa sub-basin that encompasses the far West Valley of Phoenix is projected to have a total unmet demand of 4.4 million acre-feet of water over a 100-year period. The department therefore can’t move to approve the development of subdivisions solely dependent on groundwater.

“We must talk about the challenge of our time: Arizona’s decades-long drought, over usage of the Colorado River, and the combined ramifications on our water supply, our forests, and our communities,” Gov. Katie Hobbs said in a statement last week. 

Developers in the Phoenix area are required to get state certificates proving that they have 100 years’ worth of water supplies in the ground over which they’re building before they’re approved to construct any properties. 

The megadrought has generated the driest two decades in the West in at least 1,200 years, and human-caused climate change has helped to fuel the conditions. Arizona has experienced cuts to its Colorado River water allocation and now must curb 21% of its water usage from the river, or roughly 592,000 acre-feet each year, an amount that would supply more than 2 million Arizona households annually. 

Despite warnings that there isn’t enough water to sustain growth in development, some Arizona developers have argued that they can work around diminishing water supplies, saying new homes will have low flow fixtures, drip irrigation, desert landscaping and other drought-friendly measures. More than two dozen housing developments are in the works around Phoenix.

Rising Risks: Building through the great western drought


Stock futures fall as earnings season continues

A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York, August 3, 2022.

Andrew Kelly | Reuters

U.S. stock futures were lower on Tuesday night.

Futures tied to the Dow Jones Industrial Average fell by 77 points, or 0.23%. S&P 500 and Nasdaq 100 futures dipped 0.23% and 0.26%, respectively.

Shares of United Airlines rose more than 1% in extended trading after the company beat Wall Street’s estimates in the latest quarter, propelled by strong travel demand.

Meanwhile, shares of Moderna jumped more than 6% in extended trading after the pharmaceutical company said its vaccine targeting respiratory syncytial virus can prevent the disease in older adults.

During the regular session Tuesday, the Dow declined about 391 points, or 1.14%. Shares of Goldman Sachs tumbled —and dragged on the 30-stock index — after the bank posted an earnings miss. The S&P 500 dipped 0.20%. Meanwhile, the tech-heavy Nasdaq Composite was the only one among the major averages to buck the trend, rising 0.14%.

Those moves follow earnings results from big banks that suggested diverging paths ahead even for names within the same sector. Goldman Sachs’ shares fell more than 6% following a drop in investment banking and asset management revenues. Meanwhile, Morgan Stanley gained 5.9%, boosted by better-than-expected wealth management revenue.

“This is a really pivotal earnings season to find out whether or not companies can weather the storm and how long they can weather it for,” SoFi’s Liz Young said Tuesday on CNBC’s “Closing Bell: Overtime.”

“I still think we’re in a space where the market tends to rally on bad news. And it’s expecting that that means that the Fed will slow down, the Fed will pause, the Fed will pivot, the Fed stops sooner than they say they will. And I think we’re over indexing at this point to the Fed. It’s no longer just about the Fed,” Young added.

Traders are anticipating a slew of economic reports Wednesday, including the latest data for the producer price index and retail sales.

Economists polled by the Dow Jones are expecting the producer price index to have declined 0.1% in December, compared to a 0.3% rise the previous month.

Meanwhile, retail sales in December are expected to dip 1%, according to consensus estimates. The prior reading showed a decline of 0.6%.

Corporate earnings season will continue with earnings from J.B. Hunt Transport Services, Charles Schwab, PNC Financial Services Group and Discover on deck for Wednesday.


Damar Hamlin honored at first Buffalo Bills game since his cardiac arrest

The Buffalo Bills ran back the opening kickoff for a touchdown 14 seconds into their matchup against the New England Patriots Sunday afternoon in the regular season finale.

It was the team’s first game since the Bills’ safety, Damar Hamlin, collapsed and suffered cardiac arrest in the midst of a Monday night game against the Bengals in Cincinnati — and the team said its stunning success from the very start of the game was in Hamlin’s honor.

As the game began, Hamlin’s Twitter account posted a photo of him watching from his hospital bed, wearing a “Love for Damar” jersey with his hands forming the shape of a heart. Shortly after, Hamlin appeared to react to running back Nyheim Hines’ jaw-dropping play mere seconds into the game, tweeting, “OMFG!!!!!!!!!!!!!”

The NFL and the Bills interpreted the play as a tribute to Hamlin: Following the touchdown, the NFL tweeted, “that was for 3,” and the Bills tweeted, “meant to be,” noting that it had been three years and three months since their last kickoff return for a touchdown.

Other tributes to Hamlin ahead of and at the start of Sunday’s game were plentiful.

In a Sunday morning tweet, the Bills appeared to dedicate the game to Hamlin, 24: “Today is for 3,” the tweet said, alongside a picture of Hamlin’s #3 jersey.

That number was omnipresent from the start of Sunday’s game: The Bills’ quarterback Josh Allen carried a #3 flag out onto the field in Hamlin’s honor prior to kickoff, as cameras panned over the stands at Highmark Stadium in Orchard Park, New York — the Bills’ home turf — where fans waved signs with sayings such as “Do it for Hamlin” and “Hamlin One Team One Family.”

The Bills also planned to wear “3” hats on the sidelines in honor of Hamlin’s number, and a special “3” patch on their jerseys, according to the NFL. And NFL Commissioner Roger Goodell told fans in a statement Saturday that “players and coaches from all 32 teams will wear “Love for Damar 3″ T-shirts during pregame warmups in a league-wide show of support for Damar.”

The “3” in each 30-yard line number on the field was also outlined the Bills’ colors of red or blue, the NFL said.

The Patriots also tweeted a photo of a #3 jersey inside its locker room emblazoned with the phrase, “Love for Damar.”

Read more on NBC News

Before the game got underway, the Bills’ medical and training staff were honored on the field for rushing to Hamlin’s assistance following his mid-game collapse.

Hamlin collapsed after having made a hit in the first quarter of the game against the Bengals. Trainers surrounded Hamlin and he received CPR for several minutes as the Bills knelt to pray on the field. According to a statement from the Bills, “his heartbeat was restored on the field and he was transferred to the UC Medical Center for further testing and treatment,” referring to the University of Cincinnati’s Level 1 trauma center.

That game was suspended and then postponed. The NFL said it will not be made up.

Sunday’s game comes a day after Hamlin made his first public comments since he collapsed, thanking fans for their support and asking them to keep the prayers coming.

“Thankful for everyone who has reached out and prayed,” Hamlin tweeted Saturday. “This will make me stronger on the road to recovery, keep praying for me!”

In a tweet Saturday, the Bill said that according to Hamlin’s physicians, he “is making continued progress in his recovery yet remains in critical condition.”

“He continues to breathe on his own and his neurological function is excellent,” the tweet continued.

Experts who are not involved in Hamlin’s treatment suggested that a rare phenomenon called “commotio cordis” could be to blame, noting that a healthy heart hit with blunt force at a specific time can launch into an abnormal and potentially deadly rhythm.

Bills and NFL fans have rallied around Hamlin since his injury, raising millions of dollars for a charitable donation and toy drive he founded and arriving outside the hospital to express their support, according to NBC affiliate WLWT of Cincinnati.

The NFL said Hamlin will receive his full $825,000 for 2022 despite landing on the injured reserve list.