Michael Lewis isn’t the slightest bit upset at the criticism that’s come his way, in light of his sympathetic portrait, expressed both in his book and in interviews, of FTX founder Sam Bankman-Fried.
“I know what it does — it sells the book,” said Lewis on Wednesday, speaking in London to promote “Going Infinite: The Rise and Fall of a New Tycoon.”
“I sold, in the first week, 100,000 copies of the book. I’ve never done that before,” the prolific author said at an event hosted by the Financial Times. “That sounds mercenary, but it also means you’re going to have 100,000 readers. It’s not going to be choked off. It will have its place in the world.”
Lewis said comparisons made between Bankman-Fried and Ponzi-scheme operators like Bernie Madoff were off base. “It rhymes with [barred financier Michael] Milken in some ways, it rhymes with Long-Term Capital Management, there’s a bit of Bernie Madoff,” before saying FTX itself — without the Alameda hedge fund — was a gold mine.
Granted, it was Alameda’s ability to withdraw unlimited customer funds from FTX, and invest them elsewhere, that caused the problems, and possible jail time, for Bankman-Fried. “I certainly don’t endorse his [defense]. I just don’t deal with it directly. I let other people deal with it.”
More generally, Lewis described the haphazard atmosphere at FTX. “It felt like a comedy. It felt like the beginning of ‘Ferris Bueller’s Day Off,’ ” he said. Bankman-Fried was “catastrophically disorganized,” losing — as in misplacing — money long before the last days of FTX, and then recovering it, he said.
Bankman-Fried thrived on this kind of chaos, much to the chagrin of other FTX employees. The book has something of an Easter egg — an organizational chart on its book flap, put together not by Bankman-Fried or in fact any of its employees, but by a psychiatrist who ended up treating many of them, at FTX’s home base in the Bahamas.
If there’s a villain to Lewis, it’s the players in the bankruptcy process, namely the law firm Sullivan and Cromwell, and John Ray III, who was appointed CEO of FTX. “You can’t let a law firm that was advising Sam Bankman-Fried with his applications to the [Securities and Exchange Commission and the Commodity Futures Trading Commission] before things went bad, to not only talk him into bankruptcy, then running bankruptcy,” the author said.
He said it was “squirrely” to hire Ray to run FTX, and then for Ray to hire the firm to run the bankruptcy, which Lewis said may generate as much as $1 billion in fees.
By contrast, FTX creditors could even be made whole, depending how the company’s stake in the AI startup Anthropic is monetized. Of the $8.6 billion in customer deposits, already $7.3 billion has been recovered, said Lewis.
Lewis said the American public has been whipped into a rage around Bankman-Fried.
“There’s a bloodlust since it all fell apart,” he said. “Just because there’s a mob doesn’t mean the mob has the wrong target, but mobs make me queasy, just generally. They’re not attractive.”
Lewis was asked if he would visit Bankman-Fried if the latter is convicted. “I will,” he said.
Read the full article here