FTX Sues Sam Bankman-Fried's Parents (cnbc.com) 42
Bankrupt crypto exchange FTX is looking to claw back luxury property and "millions of dollars in fraudulently transferred and misappropriated funds" from the parents of Sam Bankman-Fried, the exchange's disgraced ex-CEO and founder. CNBC reports: In a Monday court filing, lawyers representing the bankruptcy estate of the failed exchange alleged that Allan Joseph Bankman and his wife, Barbara Fried, "exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars." The lawsuit, which was filed in the U.S. Bankruptcy Court for the District of Delaware, goes on to claim that "despite knowing or blatantly ignoring that the FTX Group was insolvent or on the brink of insolvency," Bankman and Fried discussed with their son the transfer of a $10 million cash gift and a $16.4 million luxury property in The Bahamas.
The suit alleges that as early as 2019, Sam's father also directly participated in efforts to cover up a whistleblower complaint which threatened to "expose the FTX Group as a house of cards." The filing also details emails written by Bankman in which he complained to the FTX US Head of Administration that his annual salary was $200,000, when he was "supposed to be getting $1M/yr." That grievance was ultimately elevated to his son in an email, according to the lawsuit: "Gee, Sam I don't know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this."
The filing characterizes the correspondence as Bankman lobbying his son to "massively increase his own salary." Within two weeks, the suit claims that Bankman-Fried had collectively gifted his parents $10 million in funds coming from Alameda, and within three months, the couple was deeded the $16.4 million property in The Bahamas. According to the partially-redacted filing, Bankman-Fried's parents also "pushed for tens of millions of dollars in political and charitable contributions, including to Stanford University, which were seemingly designed to boost Bankman's and Fried's professional and social status." Fried is also accused of encouraging her son and others within the company 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 suit alleges that as early as 2019, Sam's father also directly participated in efforts to cover up a whistleblower complaint which threatened to "expose the FTX Group as a house of cards." The filing also details emails written by Bankman in which he complained to the FTX US Head of Administration that his annual salary was $200,000, when he was "supposed to be getting $1M/yr." That grievance was ultimately elevated to his son in an email, according to the lawsuit: "Gee, Sam I don't know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this."
The filing characterizes the correspondence as Bankman lobbying his son to "massively increase his own salary." Within two weeks, the suit claims that Bankman-Fried had collectively gifted his parents $10 million in funds coming from Alameda, and within three months, the couple was deeded the $16.4 million property in The Bahamas. According to the partially-redacted filing, Bankman-Fried's parents also "pushed for tens of millions of dollars in political and charitable contributions, including to Stanford University, which were seemingly designed to boost Bankman's and Fried's professional and social status." Fried is also accused of encouraging her son and others within the company 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."
Good. (Score:2)
That is all. His dad seems complicit in some ways, as an advisor who should have seen things through a legal lens. And accepting foreign property as a gift.
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There's nothing good about it. It's FTX suing the parents, not we-the-people remember? That means it's dogs eating their own kinds - which is abhorrent enough but it's their world, not mine... - people who got defrauded by FTX won't see a dime of that money, and the FTX scammers will get money back if they win.
Re:Good. (Score:5, Insightful)
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Money earned is not grift. (Score:2)
Skilled legal representation is necessary and well worth paying for, Those who imagine lawyers don't earn their keep are free to become one. It's done all the time, even in prisons.
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Those who imagine lawyers don't earn their keep are free to become one.
No imagination is necessary. Lawyers become lawmakers and make shitty laws that keep lawyers employed.
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Re:Good. (Score:4, Interesting)
I wouldn't be surprised if there were some additional charges for other parties in this situation. Dad being one of them if I were to guess.
Of course maybe, as a lawyer, he covered himself well enough... I'd be surprised if he didn't.
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Re:Good. (Score:5, Informative)
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FTX is a bankrupt company. That means it's been taken over by appointed management who's purpose is to recover whatever assets they can so they can be returned to creditors.
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I was kinda hoping (Score:2)
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Where did a couple of academics get the millions [forbes.com] to pay SBF's legal fees?
Re: I was kinda hoping (Score:2)
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Re:I was kinda hoping (Score:4, Interesting)
The parents weren’t involved
Doesn't matter. If Fried bought property and then transferred property to his parents, that's fair game legally to go after. Same reason why retirement spend-downs are also required for everyday people. Property transfers are always fair game for any and all kinds of debt no matter who the debtee is in question.
If the parents were actual party to the fraud that's criminal. But since they're just wanting the property, sounds like it's all civil matter of asset transfer law. Heck, the parents may even use the sell of the property to be indemnified from FTX. Long story short, if some major illegal shit has gone down and all that's being asked is to sell the property in reasonable matter, you get promises that that's all they want and sell. Lot better than what their son is looking at.
Re: lol (Score:2)
Re: I was kinda hoping (Score:4, Interesting)
Bankman-Friedâ(TM)s parents are legal scholars who taught at Stanford Law School. His mother is an expert on ethics, while his father specializes in taxes.
Both parents are lawyers, both teach (or taught) at Stanford, and her specialty is legal ethics, while dad specialuzes in taxes and specifically held a lecture on tax evasion.
You can't make this stuff up.
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X-D
Freaking incredible. It never ceases to amaze me that some people who are so successful in life and are very well off, easily in the top 0.1%, are willing to take the risk of criminal prosecution to enrich themselves even further. It's just never enough.
Re: I was kinda hoping (Score:3)
Only a terrible cynic would infer that they only became successful and well off _because_ they routinely broke the law.
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Only a terrible cynic would infer that they only became successful and well off _because_ they routinely broke the law.
You say cynic, I say realist.
Also, lawyers write the laws. Mostly lawyers working for corporations, these days, but also ones that grew up to become lawmakers.
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Both parents are lawyers, both teach (or taught) at Stanford, and her specialty is legal ethics, while dad specialuzes in taxes and specifically held a lecture on tax evasion.
You can't make this stuff up.
Have you ever been to one of those sorts of lectures? They don't go 'taxes fund essential services, nobody likes paying taxes, but if we don't pay them society falls apart - thanks everyone see you next week'. They tend to go 'what is morality?'. Who is to judge whether your morals are better than anyone else? etc etc. And, if anything, lawyers tend to get to the point where they don't make moral judgements outside the scope of what the law defines. This is how they justify things like defending a murderer they know is guilty (I accept the principle, but would struggle to do it myself).
Similarly, most people don't need to go to a lecture about tax evasion. They might be annoyed about wasted tax money, but almost everyone begrudgingly accepts the need for taxes, and ultimately pays up each year. If you are asking about the ethics of exploiting loopholes etc, then you've already decided you want to screw over everyone else to get ahead. Most people are not like that.
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Participation trophies (Score:2)
when he was "supposed to be getting $1M/yr.
For what? Participation.
Fucking Boomers blaming everyone else, except themselves and their participation trophies.
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For what? Participation.
Fucking Boomers blaming everyone else, except themselves and their participation trophies.
I'm afraid you got that wrong. Boomers didn't get participation trophipes for showing up.
Boomers gave their kids participation trophies for just showing up. This is why the Boomers' kids -- the younger X'ers, and the Millennials -- expect to get an award just for showing up.
Instead of coddling Junior and Juniorette, Boomers' shoudl've taught their kids that losing sucks. If you're in it, you're in it to win it. If you don't want to go through the hassle, do not compete. Simple as that.
But this guy, thi
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I'm afraid you got that wrong. Boomers didn't get participation trophipes for showing up.
They're getting them NOW. That $1m is their participation trophy. For doing absolutely nothing.
By default it falls to Gen X
You're doing a shit job of it.
Just like social media told you to. Go ahead, blame the Boomers s'more!
Boomers got shit for cheap, that once they got theirs, they said "fuck you, I ain't giving you my hard earned money the same way we got it from our parents' generation."
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"Boomers got shit for cheap"
I'm not a boomer... I'm very gen-x. Born in 70.
I don't disagree. But... while I think it's true the Millennials and Gen-Z don't get all the same opportunities and perks that the boomers enjoyed, they (and most especially Gen-Z) aren't exactly doing their best to make themselves successful in world they find themselves inhabiting. The idea that work is an evil to be tolerated and avoided if possible, and the desire to work to minimal contribution and not one red cent more, make y
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"fuck you, I ain't giving you my hard earned money the same way we got it from our parents' generation."
Boomers didn't generally get their wealth from their parents. They got lucky and were born into the period of amazing economic growth following WWII. They also got amazingly affordable housing. It's a major leg up... but it wasn't inherited. On average, boomers also worked longer hours than any generation since. While the surrounding circumstances were favorable for them, they weren't "handed" anything.
I
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I'm afraid you got that wrong. Boomers didn't get participation trophipes for showing up.
Sure they did. For starters, the military has always handed out medals just for showing up. It's called a campaign medal. If you were involved in a particular campaign, you get a medal for it, even if your contribution was filling out paperwork in a warehouse. In youth sports, various tokens for participation have been handed out regularly in tournaments for ages. Sometimes a patch, for example. Boomers most certainly did get mementos of participation. Olympic athletes have been getting participation medals
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I'm afraid you got that wrong. Boomers didn't get participation trophipes for showing up.
Subsidized college? Subsidized home loans? A strong dollar brought on by letting all of our "allies" get bombed to shit before we entered WWII? Yes, they absolutely fucking did.
Re:Participation trophies (Score:4, Insightful)
It's not about one generation over another, it's about the ultra-rich against everyone else. The accumulation of wealth at the top is staggering [statista.com].
The top 1% own 18.5 percent of everything. In terms even you should be able to grasp, that means $1.85 out of every $10 is controlled by around 34 million people out of a total of 340 million in 2023 [worldometers.info].
If you feel economically disenfranchised you are right, but your are blaming the wrong group. The rich have gobbled up most of the economic growth of the country since the 1970's. We have system that redistributes wealth upwards, and you're the victim.
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Sam no longer has control of the company. John Ray III is currently the CEO, after being appointed by the brankruptcy court. Currently he is responsible for identifying what FTX's assets and liabilities are, determining where funds were misused/unlawfully disbursed, getting them back, and using them to pay back FTX's creditors.
It should be noted that some of those misused/unlawfully disbursed funds include a payout to SBF's father that is now being used to pay for Sam's legal costs.
No wonder (Score:2)