FTX Founder Bankman-Fried Claims Actions Were Based on Legal Advice, Denies Fraudulent Intent
In a court document filed Wednesday, attorneys for Bankman-Fried from Cohen & Gresser LLP maintain he received assurance from both in-house and external lawyers that his actions complied with the law. They contend this indicates Bankman-Fried operated in good faith, without intentions of misleading FTX clients and investors.
- Bankman-Fried was aware that lawyers reviewed and approved decisions related to FTX’s policies and operations.
- Lawyers guided the creation of shell corporations used for transferring client funds.
- The defense argues that Bankman-Fried’s awareness of legal involvement refutes claims of criminal intent to defraud.
- Mark Cohen, Bankman-Fried’s attorney, emphasizes that evidence indicates no criminal intent.
- Bankman-Fried denies allegations of wire fraud and conspiracy.
The Challenges and Potential Advantages of an Advice-of-Counsel Defense
Using an advice-of-counsel defense presents challenges but can have potential advantages for those accused of white-collar offenses. While it concedes potentially incriminating information, such as seeking legal counsel, it can also absolve the defendant by illustrating efforts to adhere to legal standards. If reliance on legal advice seems justified, it can highlight a lack of fraudulent intent.
Hot Take
Bankman-Fried’s defense team is arguing that his actions were based on legal advice and that he operated in good faith. While seeking legal counsel may indicate doubts about the legality of his actions, it can also show efforts to comply with the law. Ultimately, the court will determine the validity of this defense and whether Bankman-Fried deliberately broke the law.
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