👁 SBF's Trumpy New Lawyer; Idris Elba Shills Gold
And more fringe finance news for January 15, 2024
Hello and Welcome to Dark Markets, your weekly roundup of brazen fraud, crypto weirdness, and tech-hype fakery.
Here’s what we’ve got for you today:
Tiffany Fong is a Better Journalist Than Michael Lewis
Wells Fargo FA Ran a Movie Scam
SBF’s Appeals Lawyer is a Trump Insider
Tether “Has the Money”
Idris Elba’s Very Creepy Gold Documentary
“The Day Before”: When is a bad video game actually a fraud?
First, two bits of housekeeping.
In case you missed it, here’s the second half of my deep dive into Barbara Fried’s legal and ethical philosophy. I published it a bit late last Thursday, so some readers may have overlooked it.
Second, you’ll notice something new below – sections. These may shift and change, but represent my effort to continue, in the dreaded phrase, *professionalizing* things around here. My aim is for Dark Markets to become more and more useful to you as a reader, from its origins as a niche hobby site.
The recurring sections, for now, include Caravan of Charlatans, a news roundup of creeps and scammers; Book Bytes, a roundup of notable reading in, around, and outside of weird finance; and Meme Lords, a taste of what they call humour.
The Dark Markets Podcast Episode 2 is Here!
Tiffany Fong is a Better Journalist Than Michael Lewis
Tiffany Fong lost six figures in the collapse of crypto lending platform Celsius, and wound up as a victim’s advocate and citizen journalist. We talked about her extensive conversations with FTX scammer Sam Bankman-Fried, and what she learned about getting secrets out of powerful people.
Caravan of Charlatans
A weekly roundup of grifters, clowns, and ghouls from across the economy.
Cantor Fitzgerald says Tether “Has the Money”
Cantor Fitzgerald CEO Howard Lutnick confirmed in December that his firm manages the Treasury bond portfolio backing Tether, the dominant stablecoin in the crypto ecosystem. Now, Lutnick has issued an assurance that “[Tether] have the money they say they have.” That’s at least a bit odd, since CF only manages a large portion of the portfolio, not the entire thing.
OpenAI Admits Copyright Infringement is Key to Its Business Model
In a remarkable mask-off moment, OpenAI last week said in a statement that “it would be impossible to train today’s A.I. models without using copyrighted materials.” Amazingly, this actually affirms the death sentence implied by the New York Times’ lawsuit against OpenAI in December. We already know both OpenAI and Meta (and surely other firms) trained their models on copyrighted material. That implies massive pending damages.
AI models experience various kinds of “drift” and become less effective if not updated on new training data, so the copyright bottleneck also implies major barriers to future development. The major problem is that AI companies will now pressure courts to find in favor of a “fair use” argument for machine learning. Which is patently bullshit.
Wells Fargo Financial Advisor Fleeced Elderly Clients to Fund Fake Movies
Helen Grace Caldwell (aka Helen Grace Corpuz) has been barred from working as a financial advisor after cajoling clients suffering from dementia into investing in her film production studio. The catch, of course, is that the $1.5 million she allegedly misappropriated went into her pocket, not on the screen. Caldwell reported worked as a financial advisor for Wells Fargo and, prior to that, Citi.
SBF Hires Trump lawyer and ex-Giuliani partner Marc Mukasey
On January 9, a filling appeared in the Sam Bankman-Fried case announcing he was hiring Marc Mukasey, seemingly to represent him on appeal. Mukasey has close ties to the Trump administration and to Rudy Giuliani, and has described himself as an “emergency room doctor” for clients in legal trouble. That isn’t too far from how SBF’s trial team, Cohen and Everdell, were depicted in the press. Given Mukasey’s affiliation with Trump, it seems even more likely that this actually translates to ‘vaguely competent lawyer willing to cash checks from utterly loathsome bad guys.’ Another of Mukasey’s past clients was a Medicare fraudster, so at least SBF is a slightly better class of con-man?
Marc is also the adopted son of Mike Mukasey, the Bush-era Attorney General. Mukasey the elder is notable for his vocal defense of the USA Patriot Act, one of the most unAmerican pieces of legislation ever passed; and as a defender of the use of torture in interrogation. Like scumbag, like son.
The Day Before: “Asset Flipping” and Gaming Fraud
“You want to know why we keep getting fake trailers? Because they work.”
I highly recommend this short documentary by the YouTube channel “SkillUp,” on a remarkable scam that just unfolded in the video game world. A mysterious, seemingly Russian “studio” called Fntastic spent months promoting a zombie survival MMO, generated huge hype, and released it in such a broken state it was instantly delisted and about half of buyers requested an immediate refund.
What’s most notable, and highlighted by SkillUp, is that this fake game was *the most wishlisted game on Steam* for months and months. On the day of its release, it had more concurrent players than real games. That’s because the fake trailers and promo materials promised absolutely everything that players wanted, without the constraints of having to actually deliver: an advantage to scammers across every industry.
Nexium, Edgar Bronfman, and the Legend of Gadaffi’s Gold
A new episode of the S-tier podcast TrueAnon delves into the connections between the rationalist sex cult Nexium and a complex tangle of Libyan exiles who sought to capitalize on the chaos in the country after the 2011 assassination of leader Muamar Gaddafi.
(The show’s goal is to cover the real-world versions of the QAnon mythos, primarily Jeffrey Epstein’s human trafficking and influence peddling. Hence the title.)
Idris Elba’s Sketchy Gold Documentary
YouTuber Folding Ideas has published an interesting analysis of a recent documentary, produced by the World Gold Council and starring Idris Elba. The doc is predictably anodyne corporate whitewashing of the gold industry’s environmental and labor practices. More intriguing, Folding Ideas does an excellent job breaking down just how much investor interest in gold is driven by vague sentiment or problematic end users. Folding also points out that the World Gold Council has to market the yellow stuff more aggressively thanks in part to competition from cryptocurrency – particularly Bitcoin. Say what you will about Bitcoin’s environmental impact, but it will never leave behind a “pit lake” that constantly leaches poison into the groundwater.
For Boeing, Subcontracting Opened the Door to Savings
The Wall Street Journal looked at Boeing’s 20-year decline through the lens of subcontracting. When a door blew off an Alaska Airlines 737 last week, it was nominally the failure of a Kansas-based subcontractor named Spirit Aerosystems. But Boeing’s cavalcade of screwups in recent years is a product of its shift to using more subcontractors, who are freer to cut the occasional corner on safety than Boeing proper. That includes Spirit, which was part of Boeing before being spun off in a private equity acquisition.
Book Notes
The Everything Token by Steve Kaczynsky and Scott Duke Kominers (Penguing Portfolio, Jan 23, 2024; Preorder Link) - A general introduction to the utility of NFTs by a Harvard Business School Professor and an Andreessen Horowitz crypto researcher. Don’t hold that against either of them, though – on a brief review, the book seems to cover all the basics of NFT functionality, including loyalty programs, ticketing, and community building. If nothing else, the book should give you a sense of the straightforwardness of the NFT value proposition.
Molly by Blake Butler (Archway Editions, December 5 2023; Order Here) – An incredibly important book for anyone who struggles to understand the profound impacts of childhood trauma. Blake Butler is one of the most important novelists alive - I particularly recommend 300,000,000 and Alice Knott. Butler’s wife, the gifted but disturbed daughter of a bank robber, took her own life in 2020. This memoir is a wrenching attempt to come to terms with a haunting Butler could not exorcise.
Meme Lords
Neurodivergent Ass Jigglers are … An art project? I guess? Either way, don’t scroll any further unless you’re highly resistant to psychic damage.
