Crypto Exchange FTX Sues SBF’s Parents Over Allegations of Misappropriating Company Funds
In the latest development, crypto exchange FTX has sued the parents of disgraced FTX founder Sam Bankman-Fried accusing them for the misappropriate use of company funds for personal gains.
The lawsuit claims that Joseph Bankman and Barbara Fried, who are both professors at Stanford Law School, received substantial gifts and donations amounting to millions of dollars from their son's company. This legal action represents the first instance in which FTX has taken legal action against Bankman-Fried's parents.
The lawsuit asserts that Bankman and Fried received a $10 million gift and a $16.4 million luxury residence in the Bahamas from FTX, all while being aware of the company's insolvency or disregarding its financial instability.
Furthermore, the couple is alleged to have supported diverting tens of millions of dollars in company funds for political and charitable donations, including contributions to Stanford University and Mind the Gap, a left-leaning super political action committee co-founded by Fried.
Furthermore, the lawsuit also highlights the details about SBF’s father meddling into salary negotiations with FTX US. As per court records, Bankman's agreement with FTX US was supposed to grant him a $200,000 yearly salary after he took a leave of absence from Stanford Law School in December 2021.
Nonetheless, Bankman appeared to be unaware of the contract terms, asserting to both FTX US and his son that he was anticipating a $1 million annual salary. The complaint implies that Bankman might have sought Barbara's involvement in influencing her son, SBF, to modify the salary arrangement.
“SBF's father was unhappy with his salary at FTX US so he emailed SBF asking for more money, and then pulled the "I'm telling your mother" Dad move and looped SBF's mom into the email thread,” the court document reads.
FTX further alleges that Bankman, who specializes in tax matters, made efforts to conceal mismanagement and fraudulent activities within the company. The lawsuit contends that he positioned himself as "the responsible figure" while collaborating with inexperienced executives, directors, and managers tasked with overseeing substantial financial assets.
The couple has refrained from making any public remarks about the lawsuit. Nevertheless, a spokesperson previously indicated that Bankman had been associated with FTX for 11 months, with a primary focus on identifying healthcare-related charitable endeavors.
Sam Bankman-Fried is presently facing seven federal charges, including fraud and money laundering. Following several months of house arrest at his parents' residence in Palo Alto, he was transferred to a Brooklyn detention facility in August after a judge determined that he had interfered with witnesses. Bankman-Fried's legal team is actively seeking his release from prison before his trial, scheduled to commence on October 3