Case 1:22-cr-00673-LAK Document 287 Filed 09/21/23 Page1of5
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`Be x
`UNITED STATES OF AMERICA,
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`USDC SDNY
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`DOCUMENT
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`ELECTRONICALLYFILED
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`DOC#:
`|DATEPILED:
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`-against-
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`S6 22-cr-0673 (LAK)
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`SAMUEL BANKMAN-FRIED,
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`Defendant.
`oe eee ee ee eee eee eee eee eee x
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`ORDER ON MOTIONSTO EXCLUDE
`PROPOSED EXPERT TESTIMONY
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`LEWIS A. KAPLAN, District Judge.
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`The following are the Court’s rulings on the parties’ in limine motions to exclude
`proposed expert testimony and opinions.
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`Government's Motions tn Limine to Exclude Proposed Expert Testimony
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`Defendant’s expert notices for both ofMessrs. ThomasE. Bishop and Brian Kim
`1.
`completely fail to satisfy the requirements of Fed. R. Crim. P. 16(b)(1)(C) because neither disclosure
`contains a “statement of all opinions that the defendant will elicit from the witness in the defendant’s
`case-in-chief” nor does it contain “the bases and reasons for them.”! Defendant claims that the
`testimony of Messrs. Bishop and Kim “would principally be in the nature of rebuttal testimony, which
`would necessarily depend on the evidence the Governmentpresentsat trial through its own fact and
`expert witnesses,”” whom the defendantidentifies as Mr. Easton and an FBI Special Agent. In these
`circumstances, the government’s motion to preclude these two witnesses (Dkt 236) is GRANTED, This
`ruling, however,
`is without prejudice to the defendant seeking to call Mr. Bishop to respond to
`Mr. Easton and Mr. Kim in response to the FBI Agent, in each case on the assumption that the particular
`anticipated governmentwitness hastestified. Should defendantseek to call either or both ofMr. Bishop
`or Mr. Kim for that purpose, he may do so only if he has filed a complete Rule 16 disclosure for his
`proposed witness or witnesses at least three days prior to the date of the relevant defense witness or
`witnesses. The governmentshall retain the right to object to the testimony of both of these witnesses.
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`Fed, R. Crim. P. 16(b)(1)(C)(iid).
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`Dkt 275, at 6.
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`Case 1:22-cr-00673-LAK Document 287 Filed 09/21/23 Page 2 of 5
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`The government’s motion to exclude testimony from Mr. Bradley A. Smith
`2.
`(Dkt 236) is GRANTED, Mr. Smith’s proposed testimony,to the rather limited extent thatits substance
`can be determined from the defendant’s disclosure statement, is inadmissible on several bases. First,
`defendant’s expert notice for Mr. Smith, under the heading “Scope and Summary of Opinions,”actually
`contains no opinions. Ratherit states that he “maytestify to the following topics.” All of the proposed
`topics are introduced with the phrase “General Background on”various subjects. Thus, while it is clear
`that Mr. Smith proposes to discourse on various topics, the substance ofwhat he proposes to say is not
`at all clear. Nor has he articulated the bases and reasons for whatever that might be. Second,
`Mr.Smith’s testimony is improper becausehe secksto instruct the jury on issues of law.’ Finally, the
`majority of Mr. Smith’s proposed testimony would beirrelevant to the issuesat trial and, to the limited
`extent it would be relevant, its probative value would be substantially outweighed by the risk of
`confusing the issues or misleading the jury.
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`The government’s motion to exclude testimony from Mr. Lawrence Akka (Dkt
`3.
`236) is GRANTED. Mr. Akka intends to testify regarding the meaning of FTX’s terms of service and
`FTX’s obligations thereunder, Such testimonyplainly is inadmissible under Rule 702 as it invades the
`province of the Court to instruct the jury on the law and the province of the jury to apply the facts to
`that law. Experts maynotoffer their “legal opinions as to the meaning ofthe contract termsat issue.”
`“(T]he rule prohibiting experts from providingtheir legal opinions or conclusionsis ‘so well-established
`thatit is often deemed a basic premise or assumption ofevidence law —a kind ofaxiomatic principle.’”
`Moreover, it makes no difference that Mr. Akka is an English barrister and that the FTX Terms of
`Service that he proposesto construe has an English governing law clause. Fed. R. Crim. P. 26.1, which
`is substantially the same as Fed. R. Civ. P. 44.1, provides in relevant part that “[i]ssues of foreign law
`[in federal criminal cases] are questions oflaw.” This makes clear that any questions of foreign law that
`are relevant and material to a federal criminal case are to be determined bythetrial judge. The opinion
`of an English barrister as to the meaning or legal effect of contractual language, even language in a
`contract governed by English law, simply is not a proper subject of a jury’s attention. Accordingly,
`Mr. Akka’s proposed testimony is excluded in its entirety from the jury’s consideration.
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`See United States v. Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991).
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`See Marx & Co. v. Diners’ Club Inc., 550 F.2d 505, 509-10 (2d Cir. 1977).
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`In re Initial Pub. Offering Sec. Litig., 174 F. Supp. 2d 61, 64 (S.D.N.Y. 2001) (citations
`omitted); see also AUNew Haven, LCC v. YKK Corp., No. 15 Civ. 3411 (GHW), 2019 WL
`1254763, at *10 (S.D.N.Y. Mar. 19, 2019) (excluding foreign law expert testimony, noting
`“for the same reasons that [the expert] cannot instruct the jury on domestic patent law, he
`may also not instruct the jury on foreign patent law, ... because it would improperly infringe
`on the Court’s role of instructing the jury”).
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`Defendant requests, “[s]hould the Court [] grant the Government’s motion in whole or
`material part, .. . an opportunity to submit a proposed jury charge to instruct the jury on the
`legal relationship between FTX and its customers.” Dkt 275, at 42. The Court would
`entertain such a proposed jury charge were it submitted.
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`Case 1:22-cr-00673-LAK Document 287 Filed 09/21/23 Page 3of5
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`Defendant’s expert notice for Dr. Pimbley fails to satisfy the requirements of
`4,
`Fed. R. Crim. P. 16(b)(1})(C) because it does not set forth sufficiently the “bases and reasons” for his
`anticipated opinions.’
`In all events, none of Dr. Pimbley’s vague opinions would be relevant to the
`issues at this trial and, to the extent they would have any relevance, they would be barred under
`Rule 704 as “semantic camouflage” intended to suggest to the jury that the defendant did not know
`about the purported “deficiencies in the software infrastructure.” Accordingly, the government’s
`motion to preclude the testimony of this witness (Dkt 236) is GRANTED. This ruling, however, is
`without prejudice to the defendant seeking to call Dr. Pimbley to respond to a government witness.
`Should defendantseek to call Dr. Pimbley for that purpose, he may do so only ifhe hasfiled a complete
`Rule 16 disclosure for Dr. Pimbley at least three days prior to the date of his proposed testimony. The
`governmentshall retain the right to object to the testimony of this witness.
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`The government’s motion to exclude testimony from Dr. Peter U. Vinella
`5.
`(Dkt 236) is GRANTED. Sections A-C of Dr. Vinella’s proposed testimony consist of background
`testimony on “innovation in the financial services industry, the development of the cryptocurrency
`markets, and FTX combining aspects of both traditional and decentralized finance in its services.”"”
`Such extensive background testimony would have “limited or no bearing onthe issues in this case” and
`any probative value would be “substantially outweighed by the dangers of confusing or misleading the
`jury.”"' For example, whether or not FTX was innovative or combined aspects of traditional and
`decentralized finance in its services is not at issue in this case. Furthermore, much of Dr. Vinella’s
`proposed testimony regarding FTX’s history and place in the market — to the extent it were relevantat
`all — more appropriately would be introduced by fact witnesses capable of testifying on that subject
`matter.”
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`Sections D-H of Dr. Vinella’s proposed testimony address “the absence of a clearlegal
`and regulatory framework governing the cryptocurrency industry, especially outside the United States,”
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`See Fed. R. Crim. P. 16(b)(1)(C)Gid.
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`United States v. DiDomenico, 985 F.2d L159, 1165 (2d Cir. 1993); see also id. at 1164
`(experts may not state an “inference as to a defendant’s actual mental state at the time of a
`crime” as “expert testimony concerning a defendant’s mental state poses a uniquely
`heightened danger ofintruding on the jury’s function”).
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`Dkt 236, Ex. D, at 2.
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`Dkt 275, at 29.
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`See United States v. Chastain, No. 22 Cr. 305 (IMF), 2023 WL 2966643, at *9 (S.D.NLY.
`Apr. 17, 2023).
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`See United States vy. Newkirk, 684 F. App’x 95, 97 (2d Cir. 2017); United States v.
`Mendlowitz, No. 17 Cr. 248 (VSB), 2019 WL 6977120, at *7 (S.D.N-Y. Dec. 20, 2019).
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`Case 1:22-cr-00673-LAK Document 287 Filed 09/21/23 Page4of5
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`“operational challenges this uncertainty posed to FTX,” “the general purview of senior executives at
`fintech startups who are not software engineers,” “commercially reasonable steps taken by FTX,” and
`“FTX’s use of widely-accepted practices in the financial services industry.”"? Such testimony is
`inadmissible under Rules 702, 704, 402, and 403. Most of Dr. Vinella’s proposed testimony is
`irrelevant to the issuesattrial and any relevant portion appropriately is excluded under Rule 403, as any
`probative value would be outweighed substantially by the risk of confusing the jury and waste of time.
`Additionally, certain of Dr. Vinella’s opinions — e.g., that “many of FTX’s operational problems were,
`in fact, predictable” and that “FTX never intended to give suchalarge credit line to Alameda Research”
`—are not the product of any scientific, technical, or specialized knowledge and thus are improper expert
`testimony under Rule 702. Other opinions, such as Mr. Vinella’s opinion that “senior executives who
`are not software engineers typically do not know ordirect the inner workings of their company’s
`software,” are improper under Rules 702 and 704 as thinly veiled attempts to state an inference
`regarding the defendant’s mental state at the time of the alleged crimes." Accordingly, Dr. Vinella’s
`proposed testimony is excludedin its entirety."
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`Defendant’s expert notice for Mr. Wu says that he would testify primarily to give
`6.
`“background testimony”thatis irrelevantto the issues ontrial." Much ofMr. Wu’s proposed testimony
`is “mere narration,” which “fails to fulfill Daubert’s most basic requirements.”*” Furthermore, to the
`extent that any of Mr. Wu’s proposed testimony would be relevant to the issuesattrial, it is not proper
`expert testimony and is excluded under Rule 403, due to the substantialrisk of confusing the issues and
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`Dkt 275, at 32.
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`See DiPomenico, 985 F.2d at 1164-65,
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`The Court harbors serious doubts regarding Dr. Vinella’s qualifications as an expert in the
`subject matter of his proffered testimony. Fed. R. Evid. 702; see also United States v. Tin
`Yat Chin, 371 F.3d 31, 40 (2d Cir. 2004). However, the Court need not, and does not, decide
`that issue because the Court excludes the entirety of Dr. Vinella’s testimony on other bases.
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`See Newkirk, 684 F. App’x at 97; see also United States vy. Sanders, No. 12 Cr. 0574 (LAK),
`2013 WL 1421487, at *2 (S.D.N.Y. Mar. 27, 2013) (precluding proposed expert testimony
`as to “custom and usage in the insurance industry” as irrelevant to the question of whether
`“inaccurate information allegedly supplied by the defendant was not material
`to the
`insurance carriers” and unhelpful to the jury “given the abundant evidence thus far offered
`by percipient witnesses”); Mendlowitz, 2019 WL 6977120, at *5 (precluding expert
`testimony on the “general industry practices in the payment processing industry” as not
`relevant to whether the defendant violated the wire fraud statute).
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`United States v. Kaufman, No. 19 Cr. 504 (LAK), 2021 WL 4084523, at *21 0.226
`(S.D.N.Y. Sept. 8,2021) (quoting S.C. v. Tourre, 950 F. Supp. 2d 666, 675 (S.D.N.Y.
`2013)); see also id, “Acting simply as a narrator ofthe facts does not convey opinions based
`on an expert’s knowledge and expertise, nor is such a narration traceable to a reliable
`methodology.”).
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`Case 1:22-cr-00673-LAK Document 287 Filed 09/21/23 Page5of5
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`misleading the jury. Accordingly, the government’s motion to preclude the testimony of this witness
`(Dkt 236) is GRANTED. This ruling, however, is without prejudice to the defendant seeking to cali
`Mr. Wu to respond to Dr. Van der Merwe, on the assumption that the anticipated government witness
`hastestified. Should defendant seek to call Mr. Wu for that purpose, he may do so onlyif he hasfiled
`a complete Rule 16 disclosure for Mr. Wu at least three days prior to the date of the defense witness’s
`proposed testimony. The governmentshall retain the right to object to the testimonyof this witness.
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`Defendant’s Motion in Limine to Exclude Proposed Expert Testimony
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`Defendant’s motion to exclude testimony from Mr. Peter Easton (Dkt 232) is
`1,
`DENIED. Although defendant’s motion seeks the total exclusion of Mr. Easton’s testimony, his
`objections,all of which are meritless or moot, are significantly more narrow. Mr. Easton appropriately
`may testify about customer fiat deposits as described in his Rule 16 disclosure and the government’s
`papers.'* Mr. Easton’s anticipated testimony is the product of specialized knowledgeandreliable
`methodology and does not constitute improper narration.’? Finally, Mr. Easton is permitted to “rely on
`data that [he] did not personally collect.””” Defendant’s motionis denied inits entirety.
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`Conclusion
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`Accordingly, the government’s motions in imine (Dkt 236) are GRANTEDto the extent
`set forth above and otherwise DENIED. The defendant’s motion in limine to exclude the testimony of
`Mr.Easton (Dkt 232) is DENIED.
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`SO ORDERED.
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`Dated:
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`September 21, 2023
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`United States District Judge
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`See Dkt 272, at 4-6.
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`See In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig,, 638 F. Supp. 3d
`227,299 (E.D.N.Y, 2022).
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`Gussack Realty Co. v. Xerox Corp., 224 F.3d 85, 94-95 (2d Cir, 2000); see also Wantanabe
`Realty Corp. v. City of New York, No. 01 Civ. 10137 (LAK), 2004 WL 188088, at *2
`(S.D.N.Y. Feb. 2, 2004) (“Rule 703 allows an expert to rely upon information supplied by
`another in forming an opinion where the material relied uponis of a type reasonably relied
`upon by experts in the field.”).
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