I consider your attempt at a quantified expected cost analysis a helping hand, not pushback, and I appreciate it. 

Thank you! I am glad. 

Some further thoughts in response: 

Your comment only addresses the self-interest angle, which was a relatively small part of my post. It (understandably) ignores the impacts on others and the systemic impacts that I tried to highlight, which I don't think can be disentangled from the self-interest analysis so easily. I’m not sure those additional impacts are amenable to quantified expectation analysis (though I’d be happy to be proven wrong on that), but we shouldn't just ignore them.

I do admit to failing to understand your case that the impact on others and the systemic impacts are expected to be negative, not positive.

It seems that our prior should be strongly that making the courts have more relevant information will overall cause them to make better decisions, and while you list some plausible scenarios of negative impact, the scenario of "someone says something true publicly that then gets used in the lawsuit to help identify the circumstances and details of the crimes that appear to have been committed in a way that both makes justice more likely to be achieved and saves everyone time" seems by far the more likely outcome. 

My guess is that if you had a class action lawsuit by the FTX credits or people who deposited their money into FTX that they would pretty strongly prefer more people go give more information on FTX publicly, since that will likely make their job easier, not harder, and as such I think the sign of the secondary effects here points strongly in a positive, not negative, direction.

I think your numbers are low at the outset, but I don’t think any tweaking I’d do would cause us to be off by an OOM. That said, I think you’ve established a floor, and one that only applies to a witness with no potential liability. Accepting your numbers for the sake of discussion, the time estimates sit at the bottom of towering error bars. And that’s assuming we’re talking about an individual and not an organization that might have orders of magnitude more documents to review than an individual would, attorney-client privilege and other concerns that complicate things greatly and require a great deal more attorney time, and potentially many individuals involved as witnesses, with all the associated costs for each one.

I agree that if you have potential liability the costs might be higher, though it's a bit unclear what our moral imperative in that case should be (like, depends on whether your liability here is the result of kind of crazy laws or not). 

I think there are definitely some individuals who have more at stake here, and where it probably makes sense to be more quiet, though I would be quite surprised if this includes most of the EA leadership. 

I feel a bit confused about how much organizations could get involved in this situation, and would appreciate more datapoints on what it means for an organization to get involved in this at a level higher than individual witnesses. I understand the obligations that individuals are under if they are called in for testimony, but don't understand the obligations that organizations could be under in a case like this. 

The expectation analysis also (again, understandably) only addresses time and money and does not address mental and emotional impacts. Such things are obviously difficult to quantify, but they are worth taking seriously. The legal system fails to address these issues at basically every turn, and causes a great deal of suffering as a result.   

I agree that there are substantial costs here, but I also want to talk about the symmetric costs on the other side that strike me as substantially greater. My sense is most people will suffer a good amount more stress from trying to be quiet about this topic for many years, and will incur much greater costs from there being a lot of latent concern and anxiety for many years as people stay quiet, and that the mental and emotional impacts of that will be much greater than the impact of being involved in the proceedings itself, at least in the aggregate (I do think some individuals will have a pretty bad time with the court system, but I think approximately everyone in EA will have a pretty bad time if discussion around this topic stays guarded for many years).

For the non-lawyers, I'd add that two of the factors you may not be thinking about are (A) the cost of the attorney gathering enough information to make even a semi-reliable estimate of expected costs; and (B) the risk of client error from various sources. 

As a general matter: Client officials are not lawyers and may not understand what information is relevant to bring to the lawyer, even with some guidance they will need to err on the side of overproduction. So the lawyer often needs to review a lot of irrelevant information to better ascertain the actual risks involved, which raises costs. 

Second, client officials have their own motivations which may run at cross purposes to the lawyer making an accurate risk assessment. Let's say -- hypothetically -- that an employee did something that is in retrospect really inadvisible and that exposed the organization (and possibly themselves) to significant liability. That the attorney represents the corporation and not the employee, and should be explaining that to employees if there is any risk of a conflict of interest between the employee and the corporation. How likely is it that the employee is going to 'fess up with minimal prompting?

The main Enron trial was much more cooperative and provided full lists of witnesses, with profiles. 

Wall Street Journal profiles of prosecution witnesses:

• Enron Employees and contractors: 20
• Arthur Andersen Employes: 2
• Criminal Investigators: 1
• Other: 2
  • Rob Barone, managing director at S&P who previously oversaw an assessment of Enron
  • Glenn Ray, a stockbroker who managed a defendent’s sale of Enron stock

Wall Street Journal profiles of defense witnesses: 

• Enron employees: 15
  • 11 material
  • 3 character witnesses (which is presumably voluntary)
  • 1 contractor
• Defendants: 2
• Expert Witnesses: 3
• Non-enron character witnesses: 11

The prosecution also shared its  prospective witness list. It has 31 names, of which 23 testified, plus another 2 who weren’t on the original list. Of those two, one was an FBI agent for whom this was part of his job, and another was an Enron employee brought in as a rebuttal witness. 

Enron produced a lot of trials, of which this is only one. There were so many trials Wikipedia didn't even bother to list all of them (example), plus the senate hearings, extradition trials, appeals, etc. This is a very narrow slice of who had to testify about Enron.

But all of the witnesses either opted in (as character or expert witnesses, or investigators), worked for the company or person that committed crimes, or worked for the auditing firm that missed the crimes.  None of these seem equivalent to the people I imagine you are talking to or about here. Could you give some specific examples of witnesses in positions similar to those people, in cases similar to FTX's likely case? I'm happy with a very broad definition of similar, and I would absolutely believe they exist and I missed them. I'm a non-expert who has looked at two cases so far and both are missing crucial aspects of EA's relationship to FTX.  But I'm clearly not going to find them very fast.

Full disclosure: habryka is paying me for this research. He didn't review either comment before publication but I did talk to him about my findings as I was working. I meant to include this in the first comment but the "(paid)" in "At Oliver's (paid) request" got lost in an edit somewhere.

I'm not sure what conclusion this would support.

The scope of what the prosecution has to prove in a criminal prosecution can be surprisingly narrow. Specifically, the prosecution needs to prove the elements of the charged offenses -- not the entire scope of the criminal enterprise.  Assuming there is a conviction, other information can come in at sentencing where the proof is much simpler. In contrast, in civil litigation, you need a much more complete picture to establish who the bankruptcy estate might be able to get money from.

As this article notes, the Madoff trustee's firm ran up $1.4B in legal fees as of last year on civil litigation. You note that they filed about 1,000 civil lawsuits -- I suspect there were significantly more targets than that because the trustee viewed litigation as a last resort when settlement negotiations failed. I have no way of knowing how many different individuals and entities got hit with depositions and discovery demands in those 1,000+ cases . . . but I would suspect the average number of depositions and discovery demands in a filed civil case is greater than one each. The trustee had to be doing something substantial to justify the court approving all those fees . . . 

I suspect there was less civil litigation around Enron, but for reasons that aren't helpful here. Enron was a publicly-traded corporation, and IIRC the bulk of the losses were equity (people who held Enron stock that was overvalued due to fraudulent financial reports). Neither Enron nor those who lost money on Enron stock would be expected to have a claim against people who traded in its stock without knowledge of the fraud. Among other reasons, Enron itself wasn't a party to those transactions, so its bankruptcy estate would have no clawback claims against third parties who sold Enron stock to other third parties for more than it was ultimately worth. 

Very off-the-cuff here, so forgive any sloppiness. 2 and 3 seem like empirical questions about which I don't have enough information to even hazard a guess. I'd at best be stoking a similar kind of confusion my original post attempts to warn about. 

Re 1, if we're talking in the abstract about criminal or civil liability, then I think the answer is probably yes (with potential exceptions for situations where after-the-fact actions might give rise to liability for things like perjury and witness tampering, etc.). 

But if we're talking about cost in time, treasure and mental well-being associated with being a witness, or the knock-on effects for others and the system more generally, I think the answer is a strong no. Loose talk after a dispute has arisen can easily take a near-0% chance of someone being significantly involved (looking exclusively at pre-dispute facts) and make it a near certainty. And this would not necessarily be just for the individual or organization doing the talking. A simple but hopefully clear example would be where a central figure in the pre-dispute facts speaks post-dispute and identifies someone else as being significantly involved. The identified person would suddenly be on everyone's radar even if they were on nobody's radar before the statement, and that would be true even they weren't actually involved (i.e., the post-dispute statement was false), and even if the false statement was an innocent mistake (a few examples of which I try to outline in the post--e.g., confusing post-dispute involvement with pre-dispute involvement, etc.). 

Hope this is useful.

I am not Tyler but am a lawyer. Based on limited information, I think it likely that over 90% of legal exposure would be based on actions that happened on or before November 11 (let's use the date of the bankruptcy filing). However, that is not equivalent to saying that what potential targets do from November 11 onward will affect the ultimate financial pain they end up bearing (damages, clawbacks, legal fees, intangible negatives) by no more than 10%. I think the latter statement is likely false, and is the question one has to consider when deciding on speech vs. silence.

The answer to #2 depends in part of your definitions of "prominent EA figures" or "involved in the litigation process."

I would think less of Sullivan & Cromwell's litigation team if EV and CEA are not involved in litigation in some capacity. I have zero inside knowledge, but way too much money went from FTX-affiliated entities and persons to EV and CEA not to make an attempt to clawback and to see what else might be there.

[Edited: "on or before November 11," "November 11 onward." Thanks to the person who messaged me to note those typos!]

Great questions! More succinct than what I said.

It is really difficult to assess from the outside, because we don't know the facts that the involved individuals (and their lawyers) do.

I am confident that the community can still do good work to mitigate risks of future situations. I'm just skeptical about the extent to which people/organizations who have significant legal exposure to the FTX situation should be involved in making those decisions. I suppose whatever decisions were made could be revised 5-7 years down the road when everyone could speak freely.

That raises the question of how to get buy-in from the affected people/organizations. Although I'm generally skeptical of funders using their power too heavily, this may be the sort of thing that should be coming in part from major funders. Most grants come with strings, including strings relating to risk management and governance issues. 

I'm not opposed to funders dictating appropriate risk management and governance conditions on their grants, although they should consult with non-conflicted members of the community before establishing such a practice. Although I'm a small-potatoes donor, it is really important to me that my donations go to the intended purposes rather than paying for consequences of bad governance. (Not saying that will happen in this case, but it is a risk.) I think it's reasonable for other donors to have that expectation as well.

Interesting, thanks. Re litigation, what would be an example of a possible litigation against an EA org (or an individual working for them)? I can't really think of anything much that would be potential for litigation. I mean, I don't think "x warned that SBF was a bad character because he screwed over y; z didn't take any significant action re SBF's role in EA" (to paraphrase what might've happened around 2018 re Alameda, based on public claims), would be anything more than bad for PR/reputation for those involved (and by extension EA), but correct me if I'm wrong.