WEEKEND EDITION- FTX Founder Arrested and Charged, Don’t Expect a Good Raise Next Year, Gen Z Miscommunication at Work

Published Dec 18, 2022, 10:13 PM

This is a compilation of some of the most compelling stories of the week.

Welcome to the Daily Dive Weekend edition. I'm Oscar Ramirez, and every week I explore the top stories making waves in the news and some that are just playing interesting. I'll connect you with the journalists and the people who know the story and bring you news without the noise so you can make an informed decision. You can catch a new episode of The Daily Dive every Monday through Friday. That's ready when you wake up. On the weekend edition, I'll be bringing you some of the best stories from the week. Sam Bankman Freed, the disgrace founder and former CEO of crypto company f t X, has been arrested in the Bahamas and charged by federal officials with eight counts of fraud, conspiracy, campaign finance law violations, and money laundering. He's been accused of funneling customer money into his hedge fund to make investments and loans to himself. There's been about eight billion dollars in client funds that have gone missing, and the difficulty there is that there was no adequate record keeping. For more on what's to know about the ft X fallout, will speak to Dan Primack, business editor at Axios. So you know f t X was in exchange. There's kind of two ft X is. There was FTX Global, which was this company that was based originally in Hong Kong and then in the Bahamas, which is kind of what everyone in the world could use the trade crypto, and then a lot of crypto derivatives and these other kind of more exotic instruments. And then there was called ft X u S which was specific for US investors and they were at least presented as separate companies. And then there was a third company called Alameda Trading, which was basically a crypto hedge fund. Now Sam Bankman Freed owned all three of these. Two of them had some outside investors, but he owned all three of these. And the basic argument is that he kept putting his finger in different pots to help out other parts of this business. And and most specifically, when the hedge fund was starting to have problems and was starting to face a whole he took customer funds from ft X Global, which he was not supposed to do. It was against in terms of service. It was also something he told his investors he didn't do. And he took those customer funds and he used it to fill the whole kind of like what Bernie Madoff did back years ago. He assumed that the crypto hedge fund would start doing better, it would start making profits, and so he could take that money and put it back in and no one would notice that the crypto hedge fund kept losing money and Sam couldn't keep digging, and eventually the whole thing collapsed on So now some of the latest things that had happened. Obviously, federal prosecutors charged him with this stuff, but he was just arrested in the Bahamas, as you mentioned, to the companies based out of there, so they arrested him out there. He was also just going to testify on Capitol Hill, although not in person but remotely. So this is kind of a curious timing of this arrest and all that, when lawmakers were eagerly getting ready to start grilling him on a lot of his stuff. It is what we've learned today from the US Attorney for the District New York, who's the ones who filed the criminal charges. They're also are civil charges from the CFTC and from the SEC. What we learned from him was that they authorized the charges last Wednesday, the indictment was returned from the grand jury last Friday, and it was a matter of time kind of waiting for the Bahamas police to arrest. So, yeah, the timing does look weird. It's you know, he gets arrested the night before he's supposed to testify. However, he could have been arrested on Saturday or Sunday or even on Friday night, so there were several days, you know, as for why they wouldn't want him to testifire, why they would arrest them ahead of time that there's several reasons. They are potential reasons they didn't enumerate. They could have thought there was an exigent issue. For example, maybe he's going to leave the Bahamas, where we have an extradition treaty. Maybe they thought money was being moved. It's also possible they didn't want to testify in front of Congress, that they want to be able to ask their questions without having you know, the jury pool maybe further deluded by all the media coverage that there would have been with his presence today. What do we make about the role that the SEC plays in all of this and their chair Gary Gensler. There's been a lot of buzz about him too. You know, I know for a time said he know he had the tools to regulate cryptocurrency and some of these companies and everything. But then this happens with f t X. What do we make of his role in this? Yeah, it's been a bad day for Gary Gensler. Again, the SEC does file charges, so you have this twenty eight page civil complaints against them. Bankman freed from the SEC. But you know, Gary Gensler was not a witness at this hearing today that Bankman Free was supposed to be at, but he might as well have been. It was almost like he was being kind of a question in absentia because a lot of folks on both sides of the aisle, Democrats and Republicans, say, the SEC and Gary Gensler keep telling us they have all the tools they need to regulate cryptocurrencies. So either they're wrong because FTX collapsed or they fell asleep on the job. One of those two things must be correct. And the argument here is often well, FTX Global, which is the company that really collapsed here, was based on the Bahamas that outside the jurisdiction of of U S regulators. But then the responses, but you didn't notice that the US entity, which was based in the US was essentially part of the same organization. You guys didn't notice it. And when the company goes bankrupt and they bring in this restructuring expert, somebody named John Ray, who worked on end Ron years ago. It took John Ray just a couple of days to figure out what was opening here. Dear sec, where were you for the last several years? And more on John Ray because he was testifying on all this. You know, so there's billions of dollars and client funds that went missing. I think they've been able to track down. I think maybe they said a billion of that, but yeah, there's still so much more going on there. And you know John Ray saying, as you mentioned, it took him, it was very quick that he was able to identify how unprepared these people were that were running FTX. And he's even said that they were using quick books, you know, something that they used for small businesses to manage that stuff, that they were using this to run a multibillion dollar company. And he says, you just can't do that, No, you don't do that. And look, this is an unususual company. This is a company that raised over two billion dollars in venture capital from some of the top venture capital firms in the world, including Sequoia Capital, who is best known for, you know, back years ago backing Apple and what recently companies like Google. They raised all this money, but they never had an independent board of directors or a board of directors. Really, they didn't have a CFO. This was really a company that was run by a few dozen people, and lots of people fell down on the job, and there was not really an organization. No. I met with Sam Bankman Freed in October two one, shortly after the company relocated as the Bahamas, and admittedly he was trying to move the company there, and not everyone was there physically, but it was basically a room with maybe seven or eight desks, a bunch of monitors Bloomberg terminals or whatever sitting there. But it was very small. And when you speak to investors in f t X, one of the things they will say to you is one of the appealing parts was how much it seemed they were able to do with so a little Well, well, it'll be interesting to see how quickly things move on. Sam Bankman Freed himself as far as the company f t X John Ray said, it's going to take a long time to unravel. Months just they even track down some more of that money if they can, So it's going to take a long time to unravel the entirety of all of this. Dan Primac, business editor at Axios, thank you very much for joining us. Thanks for having me for a while now. Employees have been able to call all the shots in the tight labor market that we have. They could job hop and get higher wages too, But now the balance of power shifting back to the employer, and workers with high hopes for raises in the coming year may be disappointed. Companies are adjusting budgets for salaries and it doesn't look like it's keeping up with inflation or expectations. For more on what to know, we'll speak to Matt Boyle, senior reporter at Bloomberg News. It's not just the sort of the layoffs that you've seen in the news, and of course companies sort of, you know, figuring out what what is our budget going to be next year is a lot of uncertainty. There's a certainly a recession on the horizon. We're not sure when it will hit or how long it will last. But The thing, of course in the in the backdrop as well, is extraordinarily high inflation, of know, at a percent, and that's what's really, unfortunately driving a lot of this situation, this disconnect between what employees are looking for in a pay raise and what employers are willing to handover um. And you know, even if companies were not looking towards tougher times and maybe battening down the hatches a bit um, there still would be this pretty wide chasm between what employees are looking for, and that's around you know, six, around six five and a half percent what they were expecting in terms of a raise for next year, and the more modest three or four four and a half percent that employers are looking to pay them. So some of that stems from the fact that people just you know, see the inflation number, or they see that the price of bread or you know, a restaurant meal is going up and they think that, well, you know, my pay is going to go up in in equal measure. And that's unfortunately not how salaries are determined. Salaries are determined by the supply of labor, not the sort of you know, the price of a basket of goods, but compounding at all. As you know, you have people now going on social media and TikTok saying, you know, I'm underpaid, or I need to get an eight percent raise, or I'm leaving, and some of them still can. I mean, that's the thing. If you are, you know, not satisfied with what your employer is bringing you in terms of the pay raise. We are still, you know, in a fairly robust job market, and if you have the skills, you can take those skills down the street and probably get a raise that you know, it could be ten fifteen even at some rival company. But for people you know who are sticking with their employers, and that's more than these days. As the quits rate has declined, people's confidence in their ability to get a new job is kind of ebbing a little bit. So when people sit down with their boss or the head of HR, you know, they're probably going to see a number that they're not totally satisfied with, and what they do from there on is so sort of going to say a lot about the labor market. You hit the point right there. When we're seeing eight percent inflation, it's tough for any company to provide eight and nine and ten percent raises, you know, year over year, especially as we're bringing on more and more employees all that stuff. So, yeah, these companies are budgeting for something a lot lower. You mentioned them, three point five maybe four point five percent. And while throughout the pandemic everybody kind of got a little spoiled right where you can job hop all you wanted make that pay increase, you can still do that, right, but getting job is a little harder, at least getting those more highly coveted jobs. And even in remote work, right, one of these things that we saw, one of these big perks was remote work. A lot of companies are even doing away with that, and they're putting a like a monetary value on that, on being able to work from home. They're saying it equals, you know, as much as a five to ten pay increase exactly. And I don't want to say, I mean it's not. I don't thinking remote work is not going away. I mean, again, you see these headlines of companies that are saying, well, you know, we want more people back to the office. But for by and large, those companies are just saying we want you back to the office, and more often, you know, let's say three days a week rather than one. So it's not like, you know, remote work is disappearing tomorrow. It's not. It's it's firmly embedded in the workplace environment right now for at least for the people who can do it, you know, the white collar workers who can do it. But yes, it's been you mentioned that great research from Nicholas Bloom at Stanford University who's pulled thousands upon thousands of workers since the pandemics started and found that across industry, the ability to work from home, not every day, you know, not fully remote and not being some digital nomad and going off to Tahiti to work for the rest of your life, but just the ability to have some flexibility work from home a couple of days a week. That is tantamount to a five to ten percent pay increase for for a lot of people. So that is something that companies can and should be discussing with employers. Rather than just saying get your butt back to the office. More often it's you know, what can we do if we're not able to give you the rays that you're you think you deserve or that you're happy with, could we do things on the margins whether it's remote work, enhancing benefits. Equity of course, is part of the compensation package at a lot of places, So it's what companies called the total reward. I know that sounds jo agony, but it basically means everything when you put it all together, the salary, the bonus that benefits, you know, even the workplace experience and and the sort of the culture. What does that mean for people? What is it worth for people? Yeah, and it's a pretty fascinating to see how we look at work, how we look at employment changes over the years, right during the pandemic or coming out of the pen make at least, you know, the employees had all the power right that the job hopping we talked about the great resignation, just leaving your jobs. Now some of that power is going back to the employers. But you know, there's still a tight labor market where they need a lot of employees. So it's just an interesting look at how the balance is kind of shifting back a little bit. Exactly. Everyone kind of has reason to dig in their heels a little bit. You know, employees will say, good luck replacing me in this job market, and employers will say, you know, we've got a little bit of leverage back and there's no way we're giving you, you know, seven or eight percent, so you know, here's four percent, like it or lump it. So yeah, when these conversations started occurring into januaries, when we really see the peak sort of season, things really step on the gas a bit in terms of conversations you performance reviews and then those salary discussions. You know, it's certainly going to get it's gonna get interesting. But just another sort of really interesting facet about how this sort of you know, the tectonic plates below us in terms of the work of the world of work are are shifting under us and changing almost every day as we speak. So it's really it's a really interesting time. And in a few months we'll see, you know, who ended up on top, you know where that balance lies, you know, is it a lot more equal? You know, we'll we'll keep an out for all of it. Matt Boyle, Senior reporter at Bloomberg News, Thank you very much for joining us. Thanks for having As we see more of gen Z enter the workplace and communications increasingly happening online and in text formats, something is getting lost in translation. Older colleagues are having a hard time keeping up with gen Z's use of emojis, slang, and even punctuation. For more on how workplace language is changing with younger employees, will speak to Danielle, a brill tech at work writer for The Washington Post. This was a lot of fun to explore, really talking to folks about what's happening in the workplace. And let me make it clear, we have regularly had various generations enter the workplace, and as each generation comes in, they do bring their own style of communicating, their own slang, their own quirks or whatever it may be that the workplace then have to kind of figure out what it means the older workers that are already there. The unique thing about gen Z is they have spent the most time with digital devices. So many of them grew up, you know, using iPads, texting their friends. Their communication wasn't through letters, it was through text messaging. They didn't pass notes, they texted each other. And that changes a lot of their habits and how they read into things, how they perceive punctuation, how they use visual cues like emojis, and how they apply different means to things. So um in a lot of ways, a lot of the way that they speak in the workplace has been sort of molded by their experience growing up, which was heavily digital, definitely, and then the same goes for the older generations as well. One of the experts you spoke to, you know, a lot of it comes from the different starting points with what we have. So older generations adapted a lot of their email writing, their text communications from letter writing, and the younger generation never did that letter writing, that old school letter writing day. To your point, right, they've been on these digital platforms since birth, really, so when it comes to that misscommunication with punctuation, I think that figures a lot there. And then obviously emoji is a much newer thing. There's a lot of miscommunication that happens on that front too. Yeah, I think it's really interesting to think about because a lot of the older generations just see punctuation as a necessary element to any kind of text, whether it's written or an email or even sometimes text messaging depending on the age of the person. The younger generation, you know, they separate their thoughts through separate messages, so the need for a period goes away. So if you're actively including a period in your text message or in your text communication over splack or whatever it may be, it may seem a little harsh, like I mean this period uh sort of an emphasis. And when it comes to emojis, a lot of older workers, we found out, both through the folks we talked to in gen Z and through our experts, tend to read emojis in a very literal sense. When you want to express happiness, you use a smiley face. Sadness you use a sad face. Crying there's a crying emoji, whereas gen Z uses it very ironically and with a lot more nuance. They've had a lot more time using these things. So instead of for laughing you, instead of putting the laughing emoji that we would all expect, maybe the older generations would expect, gen Z might use a skull, and that's like dead of laughter. It's it's sort of maybe a little bit of a more snarky way to say, I'm laughing at you, this is so funny, I died of laughter. So they're a little less literal, a little more nuanced. But in that sense, some of these miscommunications can happen if older generations are getting a skull all of a sudden as a reaction from something they wrote. And they're saying, I have no idea what this generations, the colleague is telling me. And the poor smiley face, right, you just squant and be nice and and maybe, like you said, to your point of the the older generation using it, but the gen Z to zumers, right, they're gonna say that might be passive, aggressive or cold. I think someone said in the regular smiley face emoji, the eyes look dead, you know, so I mean for somebody coming into it. I mean, you know, you wouldn't know that off the bat unless that was the way it's been used for some time as the younger generation has been one of the interesting ones that I use to your point of how a gen Z person might just you know, put a short message, send it, send another message to kind of separate the thoughts. I do use the ellipses a lot, you know, and but but for them, it's almost a moment of dread. It feels like, right, it's like I don't know what's coming next, or this dramatic pause doesn't need to happen, But I'm just using it to separate those thoughts. And we actually heard about that from our experts who are saying, Yeah, a lot of older generations use it for pacing, but they might be thinking as they're writing, they're using an olypsis, and the younger generation does see it as a very like rereadful, anxiety inducing. Are you done? What does that mean? Is it's horrible? Am I doing something awful that I upset somebody? So yeah, even just the elypses can be interpreted differently depending on how old you are. But I love topics like this, conversations like this because, as you mentioned at the very beginning, as new workers come into the workplace younger generations, the language, the way we speak to each other always changes. And to that, and there's even some companies that are dedicating new chat boxes, new new ways to kind of decipher some of that language so that everybody can kind of catch up, or the younger workers are switching it off when they're talking to older colleagues. Yeah, we saw actually with a couple of our sources. In one case, there was a company that actually created a slack channel dedicated to these kind of questions so that if something came up, they didn't have to ask the person directly, they could go to the slack channel and say hey, I saw a younger worker you this. I don't know what it means. They said this phrase. Can somebody informed me and everybody can just chime in it. Oh yeah, this means that. So there's that many questions that this company felt like we need to actually create a space where people to feel comfortable asking those questions and answering them without any kind of embarrassment. Danielle, a brill tech at work writer for The Washington Post, thank you very much for joining us. Absolutely, thank you so much. Don't forget to join us on social media at Daily Dive Pod on Twitter and Daily Dive Podcast on Facebook. Leave us a comment, give us a rating, and tell us the stories that you're interested in. Follow us on I Heart Radio, or subscribe wherever you get your podcast. I'm Oscar Rameiras and this is the Daily Dive Weekend edition.