Sam Bankman-Fried appeals fraud conviction tied to FTX collapse
Victor J. Blue/Bloomberg via Getty Images
(NEW YORK) — Sam Bankman-Fried, the founder of bankrupt crypto exchange FTX, was convicted because of a “false narrative” told by federal prosecutors at a trial “tainted” by errors, his attorneys argued in a new court filing Friday to a federal appeals court.
“Fair trial principles were swept away in a ‘Sentence first-verdict afterwards’ tsunami, as everyone rushed to judgment following FTX’s collapse,” defense attorneys wrote in the appeal. “Sam Bankman-Fried was never presumed innocent. He was presumed guilty—before he was even charged.”
Bankman-Fried was found guilty of fraud, conspiracy and money laundering last November after federal prosecutors in New York accused him of orchestrating a scheme that collapsed the crypto-exchange he founded, FTX, and stole $8 billion in customer funds.
He is serving a 25-year prison sentence, which his attorneys called “draconian.”
In Friday’s appeal, defense attorney Alexandra Shapiro attacked the trial judge, Lewis Kaplan, and the U.S. Attorney’s Office for the Southern District of New York, accusing them of lacking objectivity or even-handedness.
“He was presumed guilty by the media. He was presumed guilty by the FTX debtor estate and its lawyers. He was presumed guilty by federal prosecutors eager for quick headlines. And he was presumed guilty by the judge who presided over his trial,” the appeal said.
The U.S. Attorney’s Office declined to comment, but will submit a written reply brief.
The defense asked for a reversal of Bankman-Fried’s conviction and a new trial before a different judge.
Former Alameda Research CEO Caroline Ellison, Bankman-Fried’s ex-girlfriend and a blockbuster witness for the prosecution, is set to be sentenced for her role in the fraud later this month.
(NEW YORK) — CosMc’s, a new small-format beverage-led concept from McDonald’s, has officially opened in San Antonio, Texas.
Starting Thursday, patrons in the Alamo City will be among the first to try the new “out-of-this-world beverage experience” from the McDonad’s universe.
“The extraterrestrial experience will continue August 10-11 for the CosMc’s San Antonio official grand opening from 10 am – 4 pm where fans will have the opportunity to try free samples of menu items and receive exclusive merch for the first 100 customers each day,” the company said in a press release.
The first CosMc’s restaurant features “an outdoor patio with eye-catching elements that come alive at dusk.”
There will be a CosMc’s drive thru, kiosks, counter service, walk-up and in-app ordering available to customers at the new location.
With four locations open at launch — in Bolingbrook, Illinois, and Arlington, Dallas and Watauga, Texas — another six are set to open across the Dallas and San Antonio metro areas in the coming months, according to the company.
The expansive menu of drink offerings, all of which can be personalized, includes the Sprite Moonsplash, a sparkling Sprite plus citrus and sweet vanilla flavors that’s served with dried blueberries and a lemon wheel over ice, as well as other items like the Sour Cherry Energy Burst and Churro Cold Brew Frappé.
Customers can opt for add-ons like fruity popping boba or energy shots to an array of menu items.
Other fan favorite options available at CosMc’s include Hazelnut Mocha Cold Brew, Popping Pear Slush, Sour Tango Lemonade and small bites.
(WASHINGTON) — Borrowers eager for the Federal Reserve to abandon high interest rates could not have scripted a better four-word declaration than the one on Friday from Fed Chair Jerome Powell: “The time has come.”
Powell indicated that the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.
The pace and scale of rate cuts remains unknown, however. A cautious approach could leave borrowers saddled with high costs for the next several years while an aggressive reset could ease loan rates substantially within months.
“The question now is how far and how fast should the Fed cut rates?” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X on Sunday.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.
Over the remainder of the year, the most likely scenario is a quarter-point rate cut at each of the Fed’s three scheduled meetings in September, November and December, the CME FedWatch Tool shows.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.
Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said Friday.
“A cooldown in the labor market is unmistakable,” Powell said, adding that he would let economic performance dictate the course of rate cuts.
“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” Powell said.
Gregory Daco, chief economist at accounting firm EY, said in a statement to ABC News that he expects a quarter-point rate cut at each of the Fed’s next three meetings in an effort to soften the ongoing economic slowdown. However, worries about an imminent recession are overstated, Daco added.
The Fed aims to “buffer the economic downshift,” Daco said.
Deutsche Bank, which also projects three quarter-point rate cuts before the end of the year, said in a note to clients on Friday that a weak jobs report early in September could push the Fed to opt for a larger half-point cut at its meeting later that month.
“The softer-than-expected July jobs report and recent bouts of market volatility have shifted risks towards the Fed cutting more aggressively upfront,” Deutsche Bank said.
Analysts differ widely over the course of interest rate cuts in the next year or two. Zandi said the Fed should bring interest rates down significantly from the current target rate of between 5.25% and 5.5%. By the end of next year, interest rates should stand at 3%, he added.
By contrast, former Treasury Secretary Larry Summers cautioned against an aggressive approach to interest rate cuts. “We need to be rather more cautious about the medium term outlook for monetary policy,” Summers said in a post on X on Saturday.
Still, Summers added, the need for some rate cutting is beyond question.
“Inflation is coming down. The economy is slowing. On current facts, absolutely the next move should be towards monetary policy easing,” Summers said.
(NEW YORK) — Two major Canadian freight rail companies locked out thousands of workers on Thursday, shutting down cross-border shipping routes and risking serious damage for the U.S. economy, industry experts told ABC News.
The rail lines carry everything from chemical inputs to auto parts, holding the potential to cause shortages for a range of products American consumers and businesses depend on. While the damage is minimal so far, a prolonged shutdown of weeks or months could slow U.S. economic growth, rekindle inflation and put some workers out of a job, the experts said.
“Right now, I do not think the sky is falling,” Joseph Schofer, a professor emeritus of civil and environmental engineering at Northwestern University, told ABC News. “In a week or two, effects will begin to develop.”
The shutdown will cost the Canadian economy about $250 million per day, according to Brendan La Cerdaa, director of economic research at Moody’s Analytics. If the strike continues for a week or two, the U.S. economy could start suffering costs of about $70 million per day, La Cerda said.
More than 9,000 Teamsters workers are off their jobs after Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked them out when they failed to reach a deal on a new contract. It’s the first time both railways have been simultaneously halted.
“Throughout this process, CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck. The railroads don’t care about farmers, small businesses, supply chains, or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy,” Teamsters Canada Rail Conference President Paul Boucher said in a statement on Thursday.
In a statement, CN said it had negotiated with workers in good faith for nine months, offering better wages and shorter hours.
“Without an agreement or binding arbitration, CN had no choice but to finalize a safe and orderly shutdown and proceed with a lockout,” the company said on Thursday.
Similarly, CPKC said the lockout came about after months of unsuccessful negotiations.
“We fully understand and appreciate what this work stoppage means for Canadians and our economy. CPKC is acting to protect Canada’s supply chains, and all stakeholders, from further uncertainty and the more widespread disruption that would be created should this dispute drag out further resulting in a potential work stoppage occurring during the fall peak shipping period,” the statement said.
What does the Canadian rail shutdown mean for the U.S. economy?
A brief shutdown of the top two Canadian freight rail companies would not meaningfully impact the U.S. economy, experts told ABC News. However, they added, a prolonged lockout would damage the nation’s economic performance and risk accelerating inflation.
Many companies rely on Canadian rail lines to deliver raw goods that play a vital role in the supply chain. Affected industries include auto companies, chipmakers and fertilizer manufacturers, experts said. Perishable goods also reach U.S. consumers on trains from Canada.
As a smaller-scale version of the supply blockage incurred during the COVID-19 pandemic, a Canadian freight rail shutdown could hinder economic activity of businesses that import raw materials, rising prices for consumers who encounter shortages for some products.
“The producers will probably absorb some of those price increases in the short term, but eventually they could get passed on to consumers,” Kyle Handley, a professor of economics at the University of California, San Diego, told ABC News.
Over the coming weeks, a shutdown could slow gross domestic product growth and cause layoffs at directly impacted firms, such as auto factories, Jeff Macher, a professor of strategy and economics at Georgetown University’s Center for Business and Public Policy, told ABC News.
“A prolonged stoppage could lead to a certain amount of job losses,” Macher said.
The potential supply disruption could arrive at a vulnerable period for the U.S. economy. Growth is cooling but remains solid. Price increases have slowed dramatically but remain higher than the Federal Reserve’s target level.
For now, questions remain over the duration and scale of the U.S. economic fallout, experts said.
“If the stoppage ends within a week or so, it’ll have no effect on U.S. GDP,” Macher said. “If it extends beyond that, then it could bleed into and impact the U.S.”
ABC News’ Aaron Katersky and Zunaira Zaki contributed reporting.
