By Three days into Sam Bankman-Fried’s criminal trial in Federal District Court in Manhattan, Judge Lewis A. Kaplan’s warnings to the defense had become unmistakable.
Judge Kaplan, who is presiding over the high-profile white collar fraud case, repeatedly told Mr. Bankman-Fried’s lawyers to stop repeating themselves. Over and over, he directed them to rephrase their questions. And with his frequent interruptions of their cross-examinations, Judge Kaplan kept Mr. Bankman-Fried’s legal team off balance, putting them on the defensive.
“I just want to express my growing concern about the extent of the entirely unnecessary repetition, and I’ve given you a lot of latitude,” Judge Kaplan told one of Mr. Bankman-Fried’s lawyers, Christian Everdell, during a brief break on Thursday when the jury was not in the courtroom. “You’re wearing out the welcome on the repetition.”
Judge Kaplan is a veteran jurist with a history of presiding over prominent trials like that of Mr. Bankman-Fried, 31, who is charged with orchestrating a scheme to misappropriate as much as $10 billion that customers deposited with his crypto exchange, FTX. While he is known for his no-nonsense attitude in the courtroom, legal experts say Judge Kaplan is keeping the defense on an unusually short leash.
Any trial has natural ebbs and flows, and the tenor of the initial stages could change over the six weeks that Judge Kaplan has allotted. But after three days of testimony, the early signs have been ominous for Mr. Bankman-Fried.
“When the jurors see the judge interrupting one of the lawyers and saying, ‘that’s an improper question, or we’ve covered this already, you’re wasting our time,’ that creates a very big problem for the defendant,” said Paul Tuchmann, a former federal prosecutor. “The judge is a figure of immense authority for them.”
Mr. Bankman-Fried’s trial is set to resume on Tuesday with two crucial witnesses. Defense lawyers will continue cross-examining Gary Wang, one of FTX’s top executives, who testified last week that Mr. Bankman-Fried had instructed him to insert a secret backdoor into the company’s code that enabled the theft of customer funds. Prosecutors are then scheduled to call Caroline Ellison, Mr. Bankman-Fried’s former girlfriend, who ran a crypto trading firm that the government says tapped into FTX customer deposits.
Mr. Wang and Ms. Ellison have pleaded guilty and are cooperating with the authorities. Mr. Bankman-Fried has pleaded not guilty to seven counts of wire fraud and conspiracy.
Judge Kaplan’s tight rein on the defense has potentially far-reaching implications. In criminal cases, defendants typically win or lose based on their lawyers’ ability to undermine prosecution witnesses on cross-examination. The lawyers aim to poke holes in the testimony, establishing enough reasonable doubt for a jury to acquit.
Judges often give defense lawyers wide latitude, overlooking issues with the way a lawyer asks questions or permitting a lawyer to delve into areas that a prosecution witness didn’t directly raise in initial testimony.
But so far in Mr. Bankman-Fried’s trial, Judge Kaplan has repeatedly warned defense lawyers to stop asking about facts that a witness discussed under questioning by the prosecutors. He has also upheld objections from the prosecution over the way the defense lawyers have phrased their questions.
The repeated admonitions have disrupted the questioning, making it difficult for Mr. Bankman-Fried’s lawyers to get their points across. Judge Kaplan has also appeared to grow irritated.
“Don’t do that again, Mr. Everdell,” he snapped on Friday, after prosecutors objected to a question that the lawyer asked Mr. Wang.
Judge Kaplan has said that his warnings are intended to keep the trial moving.
“Experienced trial judges are often quite sensitive to repetition that can threaten juror concentration,” said Daniel Richman, a law professor at Columbia University and a former federal prosecutor.
Rachel Maimin, a former prosecutor in Manhattan who has appeared before Judge Kaplan, said he “keeps control of his courtroom in a way that makes life in the end much more efficient for jurors, lawyers and everybody involved.”
The disruptions have compounded the challenges that Mr. Bankman-Fried’s defense lawyers already faced. Before the trial, Judge Kaplan issued several rulings that limited the defense’s ability to raise certain issues at the trial. In one of them, he voiced concerns about arguments that FTX relied on advice from outside lawyers to make many of the business decisions related to the charges against him.
Judge Kaplan has also ruled that Mr. Bankman-Fried can’t argue that the venture investors who sank $2 billion into FTX should have done better due diligence. That had an effect in court on Thursday, when Judge Kaplan short-circuited the defense’s questioning of Matt Huang, a founder of the venture firm Paradigm Capital, one of FTX’s largest backers.
In a private conference that the jury could not hear, Judge Kaplan warned Mr. Bankman-Fried’s lawyers that their questions to Mr. Huang came close to violating the ruling that they could not suggest investors lost money because of “gullibility and negligence,” according to a trial transcript.
Judge Kaplan also hinted that another potentially worrisome ruling could await the defense. On Friday, he told the lawyers to research the “buried facts doctrine,” which states that it’s insufficient to phrase disclosures about the risks of an investment in opaque language or to bury them in a lengthy document filled with legalese.
Judge Kaplan offered no further explanation, but judges have instructed juries they can disregard corporate disclosures buried in long documents. That could potentially prevent Mr. Bankman-Fried from claiming that FTX’s customers and investors should have been aware of risks associated with keeping money with the exchange.
Several lawyers said it was a bit of mystery why Judge Kaplan would raise the issue so early. Discussions about jury instructions tend to occur in the final stages of a trial.
“It sounds like he’s coaching the prosecution on an argument to make,” said Mr. Tuchmann, the former prosecutor. “The fact that he’s mentioning it is an ominous thing for the defense.”
