Even though you were the spokesman and ambassador for this company, what
kind of diligence did you do around this issue of compliance even where we sit?
>> I obviously know all the institutional investors in this deal.
>> Mr. wonderful, Kevin O'Leary is about to say something brutally accurate about
himself and others who promoted FTX.
Let's listen.
>> We all look like idiots.
>> Absolutely correct.
Kevin O'Leary and other celebrities who promoted FTX,
which is now collapsed, look like idiots,
especially considering the fact that they did not do their due diligence and
just shamelessly promoted this scammer who is now facing multiple investigations.
And the scammer I'm referring to ,of course, is Sam Bankman-Fried.
Now, what's amazing is that Kevin O'Leary just testified before the Senate
today about this whole matter and continue to look foolish and I'll make my point and
prove my point on that in just a minute, but first some context, let's back it up.
In august of 2021, it was announced that O'Leary would
take an ownership stake in the parent companies of ftx.com and
ftx.us, as part of his compensation for becoming a spokesperson for FTX.
Now, FTX subsequently went bankrupt due to Sam Bankman-Fried's behavior,
he was secretly using client funds ,allegedly,
to make speculative bets that didn't work out so well.
Now, what ended up happening after that because Kevin O'Leary was supposed
to get paid a ton of money, right?
He's a spokesperson for this crypto exchange, Kevin O'Leary said Thursday,
he's lost all of the $15 million FTX paid him to act as a spokesman for
the now collapsed crypto exchange that some have called fraudulent.
And the people who have called it fraudulent ,by the way,
are prosecutors and we'll get to that in just a moment.
O'leary and other celebrities such as tom Brady and Larry David were sued by
FTX Investors, these are people who deposited money into the exchange,
who say the exchanges ambassadors should have done more due diligence and
exercised a greater level of care before promoting the crypto empire.
Look, the thing about Mr.
wonderful, Kevin O'Leary, is that he has branded himself and positioned himself
as a bit of a financial advisor, a bit of an expert when it comes to investing.
And so when you do that, unfortunately people end up trusting you and
the advice that you give as a public figure.
And all these people ,in some cases, lost their life savings
as a result of FTX and the alleged fraud that was committed here.
And so the lawsuit, I think is an important one.
We'll see how that plays out, the lawsuit against O'Leary and
other celebrities who promoted it.
But O'Leary again really stands out for multiple reasons.
Again, one because of the way that he has branded himself, but also the way that
he has kind of communicated about this as recently as two weeks ago, by the way.
So, he had written on LinkedIn and Twitter, he's deleted his tweets since
then, but on LinkedIn you can still find that a year ago he posted this,
finally solved my compliance concerns with crypto assets,
I'm increasing my allocation on the FTX platform.
So, all of this public messaging made it seem like he had
done his due diligence, made it seem like Sam Bankman-Fried and
FTX was a good place to park your money to invest in crypto, and
it didn't really work out that way as we all know now.
Eventually, Delaware bankruptcy protection filings by new FTX CEO,
John Ray the third, would term FTX risk audit and
compliance procedures, a complete failure of corporate controls.
And just two weeks ago,
O'Leary was asked whether he still believed in Sam Bankman-Fried,
whether he would still invest in something that Sam Bankman-Fried was behind.
What did he say?
>> The SPF knocked on your door again and said, look,
I failed in my last venture, I have a new crypto venture,
I need money, would you back him?
>> That's a great question no one's asked me yet.
I think we can all admit, you can love him or hate him given what's happened,
but he was one of the most brilliant traders in the crypto universe.
He also built one of the most robust platforms.
We used FTX actively, it was a very robust platform that allowed us to get
information on a compliant basis.
So I really like what he built.
>> Would you back him?
>> The answer would be yes.
>> He gives people advice on personal finance.
He has a segment called Millennial Money, which we'll get to in just a moment.
That was two weeks ago, by the way, we had already known
two weeks ago what Sam Bankman-Fried was accused of.
He was accused of taking depositor money from FTX,
the crypto exchange, and gambling with it with Alameda Research,
which was a hedge fund he also founded.
But what was so fascinating about O'Leary's testimony before the Senate
today, was that he seemed to continue being incredibly delusional about
what actually transpired with Sam Bankman-Fried and FTX.
Here's what I mean.
>> Why do you believe FDX failed?
>> I have an opinion, I don't have the records.
Here it is, these two behemoths that own the unregulated market together and
grow these incredible businesses in terms of growth,
we're at war with each other and one put the other out of business intentionally.
Now, maybe there's nothing wrong with that, maybe there's nothing wrong
with love and war, but finance is a massive unregulated global monopoly.
Now, they put FTX Out of business.
>> Okay, so listen, I think there's a huge problem
with the unregulated crypto situation.
I really don't have any specific thoughts on Binance,
other than to say blaming the collapse of FTX on Binance
,intentionally in my opinion,
clears Sam Bankman-Fried of any wrongdoing, right?
It makes it seem as though, poor Sam Bankman-Fried,
he's just part of this insanely competitive crypto market and
the evil guy behind Binance destroyed him.
But that's not what prosecutors are alleging.
In fact, federal prosecutors in the Southern district of New York made very
clear what they're charging Sam Bankman-Fried of.
Let's watch.
>> First we charge that from 2019 until earlier this year, Bankman-Fried and
his co-conspirators stole billions of dollars from FTX Customers.
He used that money for his personal benefit, including to make personal
investments and to cover expenses and debts of his hedge fund, Alameda Research.
Secondly and relatedly, we charge that Bankman-Fried lied to Alameda as lenders
about the source of the money that he was using to pay those debts.
Third, we charged that earlier this year in the midst of the crypto crisis,
Bankman-Fried, lied to investors in FTX about the fact that he had sent billions
of dollars in FTX customer money to Alameda.
And fourth, we charge that Bankman-Fried violated federal campaign finance laws
by causing tens of millions of dollars in illegal campaign contributions to be made
to candidates and committees associated with both Democrats and Republicans.
>> Yeah, it seems like your buddy Sam Bankman-Fried, a little bit of an issue
when it comes to the collapse of FTX, a little bit of an issue when it comes to
accusations of fraud and using depositor money to make risky bets and gamble with.
I mean, look, I respect when people can admit when they're wrong.
So, there was a moment of clarity for O' Leary when he says we look like idiots.
Yeah, that was true.
But instead of looking out for your friend and making it seem like he was the victim
of a super competitive crypto market where his top competitor destroyed him,
acknowledge that there's potentially some serious fraud and serious wrongdoing here.
Again, taking depositor money ,allegedly,
and investing it in risky ways through his hedge fund.
There was a massive conflict of interest there by the way,
having a crypto exchange and a hedge fund was such a conflict of interest that
Sam Bankman-Fried decided to go live in the Bahamas to skirt certain regulations.
And he also made abundantly clear that the reason why he was donating a lot of money
to both Democrats and Republicans, through dark money donations for
Republicans of course, is because he didn't want regulations.
He even said f regulators in the context of one of the recent
interviews he did because he wanted to rob people, in my opinion,
just saying that to cover my my ass legally.
But let's just keep it real, based on what we've seen, that's what it appears to be.
And what concerns me the most, the reason why I'm focusing so much on O'Leary,
who again calls himself Mr. wonderful, is that he positions himself as an expert,
as someone who knows exactly what you need to do to have a healthy financial life,
a healthy financial future.
He comments on a segment for CNBC called Millennial Money.
Here's a little taste of that.
>> We bought this apartment three years ago.
>> In 2017 of May.
>> And it was originally listed at $349,000.
Actually we managed to get it for $338,000.
>> So they bought a condo together.
You know what I don't like about this story right now, I didn't hear they got
married, I heard they were dating and yet they bought this mega asset undoubtedly
have debt together, and there's no legal union, you know what I mean?
I mean I love romance, I'm a romantic, I love dance, dance and
romance or even, you know, it's a fairy tale.
But, what happens if this relationship doesn't work out,
what happens if one wants to stay and the other doesn't?
>> I don't know Kevin or both of their names on the loan and the deed,
because if their names are on it, then they've got legal means to ensure
that they divvy up whatever resources they put into that apartment,
you don't necessarily have to be married.
But anyway, look, whether he gives good advice in that context or not,
doesn't really matter.
What does matter is that you as an individual who might be seeking
financial advice should not rely on some person on television to tell
you what you should do or where you should invest your money.
I think that's a recipe for disaster.
Look specifically for a fiduciary.
Fiduciary is a financial advisor who has to give you
the advice that actually helps you, right?
As opposed to like a broker who makes a commission off selling financial
instruments to people.
A fiduciary has to have your best interest in mind when giving you financial advice.
Our John Oliver did a great segment on that years ago.
But nonetheless, all the people who get paraded around as the financial experts,
turns out not experts, turns out they've lost a lot of money
investing in things that they encourage other people to invest in.
So be smart, don't rely on these folks.
Go to a fiduciary if you genuinely do need financial advice,
don't let these hucksters sell you on garbage investments like FTX.