Caroline Ellison, the former CEO of Alameda, took the stand for a second day Wednesday. Producer Rachel Humphreys and WSJ’s Caitlin Ostroff discuss Ellison’s testimony and what it revealed about alleged bribes to Chinese officials, misleading statements to investors, and the final days of FTX.
The most important stories, explained through the lens of business. A podcast about money, business and power. Hosted by Kate Linebaugh and Ryan Knutson. The Journal is a co-production from Spotify and The Wall Street Journal.discuss Ellison’s testimony and what it revealed about alleged bribes to Chinese officials, misleading statements to investors, and the final days of FTX.This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Caitlin Ostroff: Yeah, there was a lot today of her kind of outlining what Bankman-Fried knew about Alameda's financial positions, what he told her to do in terms of loan repayments, him allegedly trying to put blame on her. Rachel Humphreys: And meanwhile, the testimony that Ellison gave us today told quite a different story from inside Alameda. She was having quite a different experience it seemed at the time.
Rachel Humphreys: It happened and added to Ellison's stress that she talked about today. And so Ellison testified that Bankman-Fried directed her to repay Alameda lenders using the only money they had, which was FTX customer funds. And prosecutors asked Ellison how she felt about using customer money at the time. And she said, quote, "I thought it was wrong." And she also talked about how FTX and Alameda kept this under wraps.
Rachel Humphreys: And she often worried about these lies getting out. And she even testified that the longer she worked at Alameda and for Bankman-Fried, the more and more willing she said she became to lie and to steal. And a lot of those alleged lies were huge, and we're going to talk about them after the break.
Rachel Humphreys: And that was so those officials could unfreeze Alameda's money. And in the end, Alameda did make the payments, according to Ellison. Rachel Humphreys: And Ellison testified that the purpose of those statements was to calm things down and of a disaster, but it didn't work. So then prosecutors pointed Ellison to a November 7th chat between her and Bankman-Fried, and that's when everything really started coming apart at the seams, and the sheer magnitude of the collapse was starting to become clear. And you were really getting a sense from her testimony that it was building and she was becoming very stressed.
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