Lawyers for FTX Trading have filed a lawsuit accusing the parents of its founder Sam Bankman-Fried of exploiting their influence over their son to siphon millions of dollars from the company, while spending lavishly on a luxury home in the Bahamas and funnelling contributions to their “pet causes” as well as Stanford University.
The complaint filed on Monday against Allan Joseph Bankman and Barbara Fried in the collapsed cryptocurrency exchange’s bankruptcy case in Delaware seeks to recover damages allegedly caused by the couple to the company.
FTX entered bankruptcy in November when the global exchange ran out of money after the equivalent of a bank run. Bankman-Fried has pleaded not guilty to charges that he cheated investors and looted customer deposits to make lavish real estate purchases, campaign contributions to politicians, and risky trades at Alameda Research, his cryptocurrency hedge fund trading firm. His trial on United States federal fraud charges is scheduled to begin October 3 in Manhattan.
Several other former FTX executives have pleaded guilty to fraud and conspiracy charges and are cooperating with investigators.
The lawsuit alleges that Bankman, a Stanford University law professor and expert in tax law, and Fried, a retired Stanford law professor, participated in the wrongdoing that led to the collapse of FTX and resulted in both criminal and civil investigations.
“Despite presenting itself to investors and the public as a sophisticated group of cryptocurrency exchanges and businesses, the FTX Group was a self-described ‘family business’,” the lawsuit states.
Link from www.aljazeera.com