Sam Bankman-Fried, the former CEO and founder of cryptocurrency exchange FTX, is currently on trial for criminal fraud and conspiracy. Bankman-Fried is accused of bilking investors out of billions of dollars when his company spectacularly collapsed.
The trial is not going well for SBF. His former lover, Caroline Ellison, provided damning testimony against him two weeks ago. Ellison — who has already pleaded guilty to several counts of financial fraud — told the court that Bankman-Fried thought rules like “don’t lie” on balance sheets and “don’t steal” from customers didn’t apply to him. In Bankman-Fried’s own emails, he dismisses financial regulations and the officials who enforce them in the most vulgar terms.
If Bankman-Fried is convicted, he faces decades in prison.
Bankman-Fried is just the latest entrepreneurial wunderkind who thought he was above the law. Elizabeth Holmes, disgraced founder of Silicon Valley blood-testing startup Theranos, was convicted last year of defrauding investors to the tune of hundreds of millions of dollars and sentenced to 11 years in prison.
WeWork, yet another Silicon Valley startup that was once hailed as le hot thing, will likely file for bankruptcy, according to several reports. Once valued (on paper) at $47 billion, the company is now estimated to be worth only $64 million. While WeWork’s founder, Adam Neumann, isn’t looking at doing time in Club Fed, he became notorious for his wretched excesses — multimillion-dollar spending sprees, acquisition of luxury properties, private jets, alcohol and drug abuse and abysmal treatment of employees. Meanwhile, billions of dollars in third-party investments were squandered.
One of the most striking things about the FTX, Theranos and WeWork case studies is not just the hubris of the founders, but the utter lack of inquiry by those who should have been asking hard questions. With few notable exceptions (like the Wall Street Journal’s John Carreyrou, who broke the Theranos story), the media’s relationship with these young founders was one of worshipful adoration. (A New York Post article from April mercilessly mocks Forbes magazine, which put Holmes, Bankman-Fried and Neumann on the magazine’s cover, and has honored other entrepreneurial luminaries who ended up charged and/or convicted of fraud and other crimes.)
The second thing one notices when studying these stories is that the fraudsters all use the same shtick. They’ve figured out that the surest way to have the press — and everyone else — fawn all over you is to announce that you’re going to “change the world.”
Holmes tried to use this dodge when “Mad Money”‘s Jim Cramer asked about the allegations in John Carreyrou’s pivotal expose. “This is what happens when you work to change things,” she purred. “First they think you’re crazy, then they fight you, and then all of a sudden you change the world.”
According to a 30-plus page puff piece of sycophantic drivel commissioned by Sequoia Capital (which sunk $150 million into FTX), Bankman-Fried, too, was going to save the world with his philosophy of “effective altruism” that justified the acquisition of staggering wealth so that the acquisitor can then give it all away: “SBF’s purpose in life was set,” the article’s author gushed. “He was going to get filthy rich, for charity’s sake.”
Behind the lofty sentiments is an ugly reality. It’s not that these self-appointed world-changers don’t believe their own hype; it’s that they are so convinced of their own importance that they see themselves as exempt from society’s rules.
Sam Bankman-Fried’s emails and conversations with Caroline Ellison reveal it. So did Elizabeth Holmes’ hiring of high-powered lawyer David Boies, who threatened WSJ owner Rupert Murdoch with a defamation lawsuit and demanded that he pull reporter Carreyrou off the Theranos story. (To his credit, Murdoch — who had $125 million of his own money invested in Theranos — refused.)
It would be bad enough if these behaviors and attitudes were limited to the relative handful of aspiring billionaires among us.
But they aren’t.
The same dangerous hubris pervades multiple generations of Americans — particularly those from the hallowed halls of higher education. We have watched, for years, as intolerance of differing viewpoints exploded on college campuses, often violently. Now, in the wake of the brutal attacks in Israel on Oct. 7, Americans are shocked to see campus mobs harassing Jewish students and cheering for the Hamas terrorists who perpetrated the kidnappings, torture and murder of 1,400 innocent people and who demand the utter annihilation of an entire country.
What is missing in our young people is humility. And we have brought this on ourselves.
As with the fawning press coverage of Silicon Valley entrepreneurs, America’s college-bound youth have been told so often that they are the “best and the brightest,” the “creme de la creme,” that it doesn’t occur to them that they could be wrong. They have been infused with such a warped sense of noblesse oblige that they no longer view the rest of the world as equals entitled to autonomy, but lesser beings whose value lies largely in the grateful acceptance of the elites’ brilliance and largesse.
Worst of all, multiple generations of our best-educated have been indoctrinated to believe that their moral superiority puts them above laws, above knowledge of history, even above principles.
We are so important, our goals so lofty and our views so unquestionably correct, that the rules do not apply to us.
We can see the effects of this attitude not only in the brazen fraud of high-tech startup founders and the nonchalant violence of university antisemites, but in the Justice Department’s weaponization of law enforcement, Homeland Security’s blase disregard for the security of our borders, the FBI’s willingness to pursue factually baseless investigations, the legacy media’s refusal to print facts that run counter to their own preferred narratives, and the government’s attempts to censor factually accurate but politically inconvenient information.
We are breeding generations of tyrants.
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