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☆ Judge thrashes Sam Bankman-Fried for claiming FTX customers didn't lose any money before handing down 25-year sentence
▼ + stars: | 2024-03-28 | by ( Jacob Shamsian | ) www.businessinsider.com time to read: +7 min

Sam Bankman-Fried's lawyers claimed that FTX customers had "zero" losses when the exchange collapsed. Had Bankman-Fried held onto the company — and if Ray had listened to his advice rather than spurn him — FTX customers could have gotten their money back quickly, he claimed. In a recent proposal to be approved by the bankruptcy judge, credit would be determined by the value of each customer's assets at the time that FTX filed for bankruptcy. US District Judge Lewis Kaplan and Sam Bankman-Fried. AdvertisementKaplan said that, in any case, Bankman-Fried couldn't be credited for the bankruptcy debtors' work to get FTX customers their money back.

Persons: Sam Bankman, —, Lewis Kaplan, Bankman, Fried, Kaplan, John J, Ray III, Ray, FTX, Ray —, bitcoin, Jane Rosenberg Prosecutors, Nicolas Roos, Fried perjured Organizations: Service, Alameda Research, Alameda, —, Enron, Residential Capital, REUTERS, FTX Locations: Manhattan, FTX, Las Vegas, Delaware

The U.S. Department of Justice's bankruptcy watchdog has urged U.S. Bankruptcy Judge John Dorsey, who is overseeing FTX's Chapter 11, to appoint an independent examiner to investigate allegations of "fraud, dishonesty, incompetence, misconduct, and mismanagement" that are "too important to be left to an internal investigation." FTX says an examiner would merely duplicate work already being done by FTX, its creditors, and law enforcement agencies. FTX's founder Sam Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his Alameda Research hedge fund, has pleaded not guilty to fraud charges. FTX's official creditors committee has sided with FTX, saying the proposed investigation is redundant. State securities regulators in Texas, Vermont and Wisconsin supported the Justice Department's bid, saying a neutral report would benefit creditors and customers.

☆ Celsius bankruptcy examiner expected to report on Ponzi allegations
▼ + stars: | 2023-01-30 | by ( Dietrich Knauth | ) www.reuters.com time to read: +3 min

Jan 30 (Reuters) - A court-ordered examiner is expected to release a report on Monday addressing whether bankrupt crypto firm Celsius Network operated as a Ponzi scheme, which could add to the pressure on founder Alex Mashinsky, who is already facing fraud allegations. Hoboken, New Jersey-based Celsius filed for Chapter 11 protection from creditors last July in Manhattan after freezing customer withdrawals from its platform. After appointing Pillay to the job, Glenn expanded her role by asking her to address persistent customer complaints about Mashinsky's conduct. Crypto exchange FTX, which went bankrupt in November, has resisted calls for an examiner in its own Chapter 11 case, citing the cost of overlapping investigations. Pillay and her team have sought to be paid $1.86 million for work performed in October and $1.69 million for November, according to court filings.

FTX said in a court filing in Wilmington, Delaware, late on Wednesday that the DOJ's proposed review would only add cost and delay to its bankruptcy case. As part of its own investigation, FTX asked U.S. Bankruptcy Judge John Dorsey, who is overseeing its Chapter 11 proceedings, to help it secure documents from Bankman-Fried, members of his family and other insiders with information about FTX transactions that used "misappropriated and stolen" funds. FTX is also seeking information about political donations by Mind the Gap, a political action committee founded by Barbara Fried, and Guarding Against Pandemics, an advocacy organization founded by Sam Bankman-Fried and his brother, Gabriel Bankman-Fried. The U.S. Department of Justice's bankruptcy watchdog has called for an independent investigation into its collapse, a request that received backing from a bipartisan group of U.S. senators. Sam Bankman-Fried, who has been accused of stealing billions of dollars from FTX customers to pay debts incurred by his crypto-focused hedge fund, has pleaded not guilty to fraud charges.

Nov 15 (Reuters) - FTX Trading's new CEO John J. Ray III, a lawyer tapped to lead the collapsed crypto exchange's restructuring, previously oversaw the $23 billion bankruptcy of energy firm Enron Corp and has a reputation for boosting creditor recoveries. Ray, 63, on Monday declined to comment on his initial priorities as FTX's CEO. Serving as Enron's CEO throughout its years-long bankruptcy, Ray's work resulted in major settlements with banks accused of helping Enron deceive investors, including a $1.66 billion settlement with Citigroup in 2008. Mark Lichtenstein, an attorney who worked on Enron's bankruptcy, saw many parallels between FTX and that case. "You’ve got such a meltdown, similar to Enron, sort of a run on the bank," Lichtenstein said.

☆ The future of FTX and Sam Bankman-Fried is now in the hands of these 3 lawyers who have worked for Enron, Michael Milken, and Elon Musk
▼ + stars: | 2022-11-11 | by ( Jack Newsham | ) www.businessinsider.com time to read: +7 min

A senior Paul Weiss lawyer has been hired to defend FTX founder and ex-CEO Sam Bankman-Fried. FTX said on Twitter that a sprawling group of companies founded by Bankman-Fried, known as SBF, filed for Chapter 11 bankruptcy in Delaware. The new CEO of FTX is John J. Ray III, a lawyer-turned-executive with a colorful past leading troubled companies, most notably Enron. The firm Paul Weiss and its lawyer Martin Flumenbaum, who represented the junk-bonds king Michael Milken, are representing Bankman-Fried personally. John J. Ray IIIRay joined FTX as CEO just in time to sign its bankruptcy filing.

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