With the prospect of a decades-long prison sentence hanging over his head, former FTX CEO Sam Bankman-Fried has a critical decision to make: Should he testify in his own defense at his fraud trial that is currently underway in a Manhattan courtroom?
Former prosecutors who spoke to Fortune said that testifying could help Bankman-Fried explain his intentions to the jury. But he also would be subject to cross-examination by prosecutors, which could, ultimately, prove more harmful.
Putting the defendant on the stand is always a gamble, said Rachel Maimin, a former Assistant U.S. Attorney for the Southern District of New York. Despite the possible downsides, testifying could give Bankman-Fried the opportunity to present a version of himself that's different from the one presented by prosecutors.
“It's incredibly powerful when defendants testify—even if they make admissions that are not so helpful—because it truly humanizes them before the jury, and there is nothing that can replace that,” said Maimin, now a partner in the white-collar criminal defense practice of Lowenstein Sandler.
For an outspoken former media darling like Bankman-Fried, the decision may be simple, said Renatto Mariotti, a former federal prosecutor in the Securities and Commodities Fraud section in the U.S. Attorney’s Office for the Northern District of Illinois. Despite whatever logic backs staying quiet in the face of possible criminal charges, SBF chose to give multiple interviews following the collapse of FTX, including one that was live at the New York Times’ DealBook Summit last November.
It would be out of character for Bankman-Fried not to testify, even as a last-ditch effort if things aren’t going his way, said Mariotti, now a partner at Bryan Cave Leighton Paisner.
“Given SBF’s desire to try to talk his way out of this problem, and his belief that he's the smartest guy in the room, I think he's going to want to take the stand regardless of the advice he receives,” said Mariotti.
If he chooses to testify, prosecutors could use their cross-examination to lure him into contradicting himself or admitting to something he shouldn’t have. If he is found guilty, the judge could conclude that he lied on the stand and could impose a harsher sentence under federal sentencing guidelines. If he's found not guilty, he could theoretically still face a perjury charge, but it's highly unlikely prosecutors would go after him for that, Mariotti explained.
To start, prosecutors may try to get him to admit to something that he couldn’t possibly deny because of the strength of documentary evidence, Maimin said. After he admits to some smaller things, prosecutors could then push him into admitting to things that aren’t as obvious, such as details from conversations he had with others.
“The goal is to essentially get him into a pattern of agreeing with you, such that you ultimately get him to agree with you that he had the state of mind required for him to be found guilty,” she said.
In the first week of his trial, Bankman-Fried has watched several former allies testify against him, including cofounder and former FTX CTO Gary Wang, and former FTX employee and MIT classmate Adam Yedidia. His ex-girlfriend and the former CEO of Alameda Research, Caroline Ellison, is expected to take the stand on Tuesday.
Whether Bankman-Fried chooses to testify or not, the decision likely won't be made until closer to the end of the trial, which is expected to take about six weeks.
