The mother and father of disgraced FTX founder Sam Bankman-Fried are being accused of misappropriating thousands and thousands in buyer funds from the now-bankrupt cryptocurrency change. The attorneys for Joseph Bankman and Barbara Fried firmly assert that the allegations are “completely false.”
FTX Scandal Widens: Bankman-Fried’s Parents Face Major Lawsuit
In a lawsuit filed on September 18, FTX debtors alleged Joseph Bankman and Barbara Fried exploited their standing as insiders to complement themselves by way of presents, actual property, and donations to their favored causes. The accusations painting the couple as complicit of their son Sam Bankman-Fried’s (SBF) alleged fraud.
“Bankman recognized and took full advantage of his insider status, explaining in February 2021 that he was ‘very involved in the business,’” the court docket submitting says. “Indeed, Bankman proudly touted that he was an early investor in Alameda—the proprietary trading arm of the FTX Group that its Insiders used to misappropriate billions of dollars in customer and investor funds.”
The court docket submitting provides:
Given his background and positions, and the ear of his son Bankman-Fried, Bankman was well-placed to insist on and implement inside controls and lift alarms concerning the misconduct throughout the FTX Group. Bankman, as an alternative, stayed silent and in a minimum of one occasion, helped hush a complainant whose allegations threatened to reveal the fraud throughout the FTX Group.
The lawsuit claims Bankman and Fried collectively acquired a $10 million money “gift” from FTX funds in early 2022. It additionally alleges the couple benefited from the acquisition of a $16.4 million luxurious property within the Bahamas utilizing FTX buyer funds.
“Bankman used his status as an insider to funnel vast sums of FTX Group money to his chosen causes, including his employer, Stanford University,” the lawsuit claims.
The ‘Family Business’
Meanwhile, the lawsuit portrays SBF’s mom, Barbara Fried, as probably the most influential advisor to her son relating to political contributions. It accuses her of allegedly encouraging illegal donations meant to keep away from disclosure legal guidelines.
“Fried, concerned with the optics of her son and his companies donating money to the organization she co-founded and other causes she supported, encouraged Bankman-Fried and others within the FTX Group to avoid (if not violate) federal campaign finance disclosure rules by engaging in straw donations or otherwise concealing the FTX Group as the source of the contributions,” the FTX property alleges.
In whole, FTX alleges Bankman and Fried siphoned “millions of dollars” out of the now-bankrupt change for private acquire. This consists of lavish advantages like non-public jets, $1,200-a-night lodge rooms, and even a Super Bowl industrial look.
The lawsuit brings claims of fraudulent transfers, breach of fiduciary obligation, aiding and abetting fraud, unjust enrichment, and different counts towards the couple. It seeks to recuperate misappropriated funds and deny any chapter claims filed by Bankman or Fried.
Sean Hecker and Michael Tremonte, counsel for Bankman and Fried, vehemently deny the accusations. “This is a harmful try and intimidate Joe and Barbara and undermine the jury course of simply days earlier than their youngster’s trial begins. These claims are utterly false,” Hecker said in an editorial featured by The Block.
The allegations add to the authorized troubles surrounding the FTX collapse, which has spawned investigations and lawsuits focusing on Bankman-Fried, executives, advisors and others linked to the agency. Bankman-Fried himself faces prison costs over the alleged fraud.
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