FTX Asks To Subpoena Sam Bankman-Fried, His Family and Top Lieutenants
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FTX Asks To Subpoena Sam Bankman-Fried, His Family and Top Lieutenants

1 year ago

The executives and lawyers seeking to unwind FTX's abysmally recorded assets have complained that they are getting no cooperation.

FTX Asks To Subpoena Sam Bankman-Fried, His Family and Top Lieutenants


It's been impossible to get Sam Bankman-Fried to stop talking about the collapse of his FTX exchange in an alleged $10 billion fraud. He's given high-profile interviews, tweeted and blogged extensively, and claims to have responded to his lawyers' instructions to shut up with profanity.

Which is why the bankruptcy lawyers for FTX's current management, which is trying to find assets to pay off its one million creditors, seems to be so miffed that he won't talk to them.

"Mr. Samuel Bankman-Fried has publicly stated that he 'ha[s] a duty to talk to people,' to 'explain what happened,' to 'do everything [he] can to try and do what's right,' and to 'try and help customers,'" they said in a filing released on Jan. 26.

"Yet, despite these statements, Mr. Samuel Bankman-Fried has not responded to or complied with the Requests on a voluntary basis. As a result, a court-authorized subpoena is necessary."

Of course, in normal circumstances, anyone facing serious criminal charges likely wouldn't want to testify under oath in a civil trial first.

Nor, however, have FTX attorneys had any luck in getting Bankman-Fried's father, mother or brother to testify.

While discussions with Joseph Bankman, an attorney and Stanford University law professor are ongoing, Barbara Fried "has ignored the Requests altogether" FTX's attorneys said. They added that they "have not received meaningful engagement or any response" from brother Gabriel Bankman-Fried.

Where is It?

FTX's new management and their advisors "have been working tirelessly and nonstop over the last 70 plus days… to implement controls, recover and protect estate assets," the filing said.

Among those assets are the $16.4 million house Bankman and Fried lived in when visiting The Bahamas. Bought with company funds, it was nonetheless titled in their names despite an "understanding that the house was 'intended to be the company's property.'"

Both Fried and Gabriel Bankman-Fried ran political action committees funded by SBF and his employees. FTX's attorneys have already asked that any political donations made be returned to the company, but a large number were reportedly given to charities by politicians trying to distance themselves

As for Bankman, the FTX attorneys seem to believe he should have substantial knowledge about the firm and its funds.

Bankman "acted in a senior advisory role to the Debtors and their former executives, and was personally involved with the events leading up to the collapse of the FTX group," the filing said.

He was also "'deeply involved in FTX' going so far as to 'recruit its first lawyers,' join 'FTX staff in meetings on Capitol Hill,' and provide FTX employees with advice on tax-related matters" it said.

Finally, FTX attorneys want the court to subpoena four of FTX's top executives. These include FTX co-founder Gary Wang and Caroline Ellison, the former CEO of its sister trading firm, Alameda Research. They have both pleaded guilty to fraud and are cooperating with federal authorities against Bankman-Fried.

They both have "expressly declined to provide the requested information," the filing said

A third is FTX's former head of engineering, Nishad Singh, who is reportedly trying to cut a deal of his own with prosecutors — and therefore has no incentive to give any information away before that.

The last is Constance Wang, COO of FTX Trading Ltd. and co-CEO of FTX Digital Markets Ltd. Like Bankman, she is negotiating and may reach a consensual agreement, the filing said.

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