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Crime The Courts

Alameda's Caroline Ellison, FTX's Gary Wang Plead Guilty To DOJ Fraud Charges (coindesk.com) 21

Posted by BeauHD from the Christmas-came-early-this-year dept.
Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to charges tied to FTX's collapse, U.S. Attorney Damian Williams announced Wednesday night. CoinDesk reports: The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also announced (PDF) charges against the two, saying Ellison manipulated the price of FTT, an exchange token issued by FTX, at exchange founder Sam Bankman-Fried's direction. The duo are cooperating with investigators, Williams announced. The U.S. Attorney for the Southern District of New York (SDNY) did not specify what they were being charged with.

In a statement, SEC Deputy Enforcement Director Sanjay Wadhwa said the three "were active participants in a scheme to conceal material information from FTX investors, including through the efforts of Mr. Bankman-Fried and Ms. Ellison to artificially prop up the value of FTT, which served as collateral for undisclosed loans that Alameda took out from FTX pursuant to its undisclosed, and virtually unlimited, line of credit." Highlighted in the complaint are multiple times when Bankman-Fried made public statements, and provided investors with documentation via audited financial statements, that Alameda received no preferential treatment from FTX.

Ellison was a close confidant of Bankman-Fried's, and has been targeted by prosecutors for her role in manipulating FTX's exchange token FTT, which Alameda had used as collateral for investments. In early December Ellison, who is thought to reside in Hong Kong or Nassau, was spotted in Manhattan at a coffee shop leading many to suspect she was working with authorities. Shortly after, Ellison retained the law firm WilmerHale to represent herself. WilmerHale counts Stephanie Avakian, a former director of the SEC's Division of Enforcement, as one of its top attorneys. Further reading: FTX Founder Bankman-Fried To Be Released on a $250 Million Bond Package While He Awaits Trial
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Alameda's Caroline Ellison, FTX's Gary Wang Plead Guilty To DOJ Fraud Charges More

Alameda's Caroline Ellison, FTX's Gary Wang Plead Guilty To DOJ Fraud Charges

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  • It looks like they knew what they were doing and thought they could get away with it because the numbers kept going up, and they could make the numbers go up because they were cooking the books. That activity doesn't last forever.

    • Re:Party is over (Score:4, Funny)

      by Tokolosh ( 1256448 ) on Thursday December 22, 2022 @06:54PM (#63151624)

      Scam Bankrun-Fraud was just trying the same grift as the rest of Wall Street and the finance industry. It blew up in his face, just the the others do from time to time.

      • Re: (Score:3)

        by Arethan ( 223197 )

        Scam Bankrun-Fraud

        I found this inventive and funny. You brought a smile to my day -- hat tip to you, sir.

        • Holy shit this made me go check his actual name and it is actually "Bankman", amazing. I guess I always just mentally converted ti to SBF without noticing that.

          • Re:Party is over but here's how it went... (Score:1, Informative)

            by Anonymous Coward
            This. Normies can’t understand the thrill of pinning the weasel. Night spent chasing an over amphetamined Caroline around the bean bag forts. Her squealing and gibbering, pouring sweat and on the verge of seizing. Your friends build up an intoxicating, delerious state with Talmudic chantings at the sidelines, hitting the Caroline-toy with brooms if she tries to escape. Sam would be giggling and laughing as the waves of methamphetamine pleasure seem to harmonize with the droning herbrew verses. He runs

        • A slightly more mixed-up and mangled version gets you to:
          Sam Bank-Fraud-Man.

  • That doesn't sound too bad does it?
    *dorky evil laugh*

    • Re:Ratting out SBF in return for a plea deal. (Score:5, Insightful)

      by Mspangler ( 770054 ) on Thursday December 22, 2022 @09:09PM (#63151844)

      She understood Prisoners Dilemma.

      SBF did not.

      The best case is that both prisoners keep quiet. Since SBF is clearly incapable of silence, she did the only sensible thing, and she did it quickly.

      • Re: (Score:1, Informative)

        by Anonymous Coward
        This. Normies can’t understand the thrill of pinning the weasel. Night spent chasing an over amphetamined Caroline around the bean bag forts. Her squealing and gibbering, pouring sweat and on the verge of seizing. Your friends build up an intoxicating, delerious state with Talmudic chantings at the sidelines, hitting the Caroline-toy with brooms if she tries to escape. Sam would be giggling and laughing as the waves of methamphetamine pleasure seem to harmonize with the droning herbrew verses. He runs

      • Re: (Score:2)

        by DrXym ( 126579 )
        The classic dilemma is that if they both keep their mouths shut they'll receive a lesser charge. I doubt it would have worked here even if they played that game since the evidence is likely damning.

        They must all know it, and these 2 raced to get the deal and cooperate. But yeah SBF is an idiot either way, opening his mouth and making unforced statements even when he is in severe legal peril.

  • Part of me wants to say (Score:4, Interesting)

    by rsilvergun ( 571051 ) on Thursday December 22, 2022 @07:16PM (#63151670)
    That if you're dumb enough to be taken in by Price manipulation on a completely made up and utterly worthless product you deserve what you got and it probably shouldn't be a crime.

    But that's my lizard brain speaking and I know that I live in the same country and the same society is all those incredibly stupid and greedy people and that their mistakes impact me too such that it's within my best interests to prevent them from making those mistakes. Especially because a large number of those incredibly stupid and greedy people are also incredibly wealthy thanks to a combination of family ties and dumb luck. With that wealth comes power and the ability to really mock up the whole economy.

    I suppose what pisses me off the most is that we let these idiots run the scam to this level. This shouldn't have even been a crime that was possible. As soon as these idiots started hinting at this kind of a dumb scam somebody should have come around tapped him lightly on the back with a nightstick and told him to knock at the fuck off.

    • So, everywhere in these crypto blowups is a mass of people crying to the authorities about fraud, manipulation, and pleading for their money back.

      Yeah the very same fools who championed deregulation, anonymity, and lack of government accountability for aforementioned crypto.

  • Kids managing money (Score:3)

    by RUs1729 ( 10049396 ) on Thursday December 22, 2022 @08:07PM (#63151778)
    Anybody surprised it is ending in tears?

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