The ongoing fraud trial of FTX founder Sam Bankman-Fried will now see Joseph M. Pimbley testifying in the court in its fourth week. The defence team has chosen the financial services expert and consultant as their sole proposed expert witness in the case.
According to a Monday filing submitted by the defence, Pimbley will aim to counter the testimonies from former Alameda Research CEO Caroline Ellison, developer Adam Yedidia, former FTX Chief Technology Officer Gary Wang and Head of Engineering Nishad Singh.
The expert witness, who is a member of litigation consulting firm PF2, will cover his analysis of data from FTX’s database, focusing on the usage of a line of credit by Alameda Research, which fluctuated between approximately $1billion and $3bn from October 2021 to September 2022, and decreased significantly in June 2022.
This would also include the concentration of balances for non-Alameda, non-FTX users in four main coins ($USD, $BTC, $ETH, and $USDT) compared to hundreds of others in the FTX database. Over 75% of these balances come from accounts with certain features enabled or showing futures activity.
His testimony will specifically try to contradict Caroline Ellison’s claims about Alameda’s “unlimited” credit, borrowing, and repayment activities, address Gary Wang’s statements about Alameda’s borrowing around late 2021, respond to Professor Peter Easton’s comments on Alameda’s borrowing limit and provide context to testimonies by Gary Wang, Nishad Singh, and Adam Yedidia about customer use of spot margin and futures trading features.
Pimbley, who was one of the seven potential experts named in the defence’s original pitch for witnesses earlier this year, was excluded back then from testifying based on his initial disclosure. The court has now allowed the defence to call him in response to a government witness, provided they submit a complete Rule 16 disclosure, giving more details about what they would testify, three days before his testimony.
According to the expert witness disclosure, Pimbley has over 30 years of experience in various financial sectors, including derivatives, securities trading, risk management, credit ratings, and financial litigation. In the court, he will base his opinions on his own professional experience, academic background, and specific review and analysis of the FTX database and associated codebase.
While the defence team has only proposed Pimbley as the sole expert witness, there will also be other witnesses, with direct role or connection with FTX, who may stand in Bankman-Fried’s defence in the coming days. However, there is no clarity on whether Bankman-Fried himself will be heard on the stand.
The trial against the former FTX CEO had started at the beginning of this month. The prosecution has heard multiple witnesses connected to SBF and his now-defunct exchange. The trial, which is scheduled to resume on 26 October, expects the prosecution to call two more witnesses – an FTX customer and an FTX investor.
A possible third witness, a law enforcement official, was also named by the Department of Justice (DOJ). However, the DOJ also told the court that it hoped the official’s testimony would not be needed. The jury also awaits the defence team to present the case, which is potentially expected to start from Thursday onwards.
Recently, they had expressed their concern over Bankman-Fried’s current health conditions, specifically his ADHD, as it could potentially impact his ability to participate meaningfully in the trial. For the same, the defence team requested better access to necessary medication, like Adderall, tagging it as essential for him in order to maintain concentration during the proceedings.