If you like courtroom dramas, you won’t find anything on TV to rival what is expected to take place in Manhattan today. That’s the setting for FTX founder Sam Bankman-Fried’s ongoing fraud trial, where his onetime girlfriend is expected to take the stand and testify that he oversaw the raiding of billions of dollars in customer funds.
If you’re unfamiliar with Caroline Ellison, a recent Fortune profile reported she found talking to other people “unpleasant” and, in the words of one acquaintance, is someone “who would marry her math homework.” She also ran Bankman-Fried’s hedge fund, Alameda Research, which enjoyed an unlimited line of credit from FTX—credit that consisted of customer money that was spent on crypto trades, real estate, and political donations, and that has since gone missing.
As the trial got underway last week, the jury heard from Bankman-Fried’s longtime friends and lieutenants at FTX, who testified that he signed off on a “back door” in the exchange’s computer code to allow Alameda to trade without losses. Their testimony was damning, and Ellison’s is likely to prove even worse.
A journalist, Tiffany Fong, who was a confidant of Bankman-Fried in the days prior to his arrest, has published a video recounting what she says is Ellison’s allocution—the speech she gave while submitting her guilty plea—that will likely also form part of her testimony. Ellison’s words describe financial chicanery carried out by Bankman-Fried and on his behalf, including a series of shifty loans made by the hedge fund to FTX executives in order to disguise the raiding of customer funds.
The accuracy of Fong’s account can’t be proved as it has yet to surface in court documents, but it’s likely reliable given her previous access to Bankman-Fried. It also would be in keeping with the FTX founder, who previously gave Ellison’s private diary to the New York Times to publish—a stunt that the judge took as an attempt to intimidate a witness, and led him to revoke Bankman-Fried’s bail.
It’s likely that Bankman-Fried’s lawyers will seek to cast doubt on Ellison by saying her testimony is informed by spite over her onetime partner. And indeed there is evidence the relationship wasn’t a happy one for her, including pages from author Michael Lewis’s new book that reprint memos she wrote to Bankman-Fried, outlining her frustration that he did not want to take their relationship public.
It’s all a lot to take in. The jury is likely to hear Ellison share complex details of a massive corporate fraud, but also hear sordid details of a crummy boyfriend who wouldn’t commit and took the caddish steps of publishing her private heartbreak to the entire internet. As I said, it really is the stuff of courtroom drama.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
