Prosecutors Challenge FTX Founder’s Legal Advice Defense Ahead of Fraud Trial

Sam Bankman-Fried’s authorized staff claimed final week that the FTX founder acquired assurances from attorneys his actions have been lawful. However, federal prosecutors are actually contesting the validity of Bankman-Fried’s protection technique forward of trial.

Bankman-Fried’s Legal Defense in Question After DOJ Objection

In a court filing revealed Tuesday, federal prosecutors questioned Bankman-Fried’s means to depend on authorized recommendation as part of his defense. They argued he has not supplied adequate particulars concerning the nature and scope of the authorized assurances he allegedly acquired.

“The defendant’s August 23, 2023, letter does not provide sufficient notice of any contemplated reliance on counsel defense, and the defendant has not produced any discovery relating to such a defense,” the submitting acknowledged. Prosecutors contend Bankman-Fried must make clear which attorneys supplied recommendation, what they suggested, and when that recommendation was given.

The Department of Justice (DOJ) additionally advised Bankman-Fried’s attorneys might have been unaware of key particulars about his administration of FTX and Alameda Research. If so, their authorized recommendation wouldn’t absolve the founding father of wrongdoing. “Without proof that the defendant advised the legal professional that the cash being loaned was buyer cash, focusing the jury on the legal professional’s involvement to make the loans appear benign could be deceptive,” the submitting learn.

In their very own submitting final week, Bankman-Fried’s attorneys mentioned he acquired authorized approval on points like firm knowledge insurance policies, financial institution accounts, and buyer phrases of service. However, prosecutors take into account these claims too imprecise with out specifics on what attorneys knew and beneficial.

The DOJ has requested written discover from Bankman-Fried about any formal authorized protection he plans to mount. They additionally need all paperwork supporting an “advice of counsel” argument that might doubtlessly undermine attorney-client privilege.

Bankman-Fried has not but supplied the disclosures requested by federal prosecutors. Their submitting suggests his means to quote authorized recommendation at trial could possibly be restricted with out additional particulars.

The FTX founder has pleaded not responsible to fraud costs associated to the alleged misuse of billions of {dollars} in FTX buyer funds earlier than the trade’s chapter. Jury choice for his trial is scheduled to start on October 2nd.

What do you concentrate on the DOJ’s argument in opposition to Bankman-Fried’s newest protection? Share your ideas and opinions about this topic within the feedback part under.