Former SEC Official Calls for Criminal Charges Against Parents of Former FTX CEO
John Reed Stark, the former head of the US Securities and Exchange Commission (SEC) Office of Internet Enforcement, has urged federal agencies, including the Department of Justice (DOJ), to bring criminal charges against the parents of Sam Bankman-Fried, the former CEO of FTX. Stark expressed surprise that Bankman-Fried’s parents were not included as defendants in the legal actions taken against him.
Sam Bankman-Fried’s Parents Could Be Considered ‘Relief Defendants’
Stark suggested that Bankman-Fried’s parents could be named as “relief defendants” in the lawsuit. Relief defendants are individuals who may have benefited from illicit activities but are not accused of any wrongdoing themselves.
“I cannot comprehend why the U.S. Department of Justice and the U.S. Securities and Exchange Commission have not added SBF’s parents as defendants. For the SEC, SBF’s parents should at least be named as relief defendants,” Stark said.
Bankman-Fried’s parents are Allan Bankman, a Stanford law professor, and Barbara Fried, a professor emerita at the same law school. Last week, FTX initiated clawback actions against them, alleging that they manipulated their relationship to enrich themselves and seeking to recover their gains.
DOJ Urged to Take Action on Crypto
Stark also called on the DOJ to initiate criminal proceedings related to cryptocurrencies. He criticized the agency for its silence on crypto-related prosecutions while the SEC has taken enforcement actions. He highlighted that this inaction has allowed certain crypto stakeholders to downplay SEC enforcement actions and treat them as insignificant.
To change this situation, Stark argued that the DOJ must support the SEC and demonstrate that it will impose serious consequences, including the possibility of prison time, for crypto-related offenses.
“Until crypto-grifters face the threat of DOJ prosecution (i.e., prison time), they will continue to treat SEC enforcement-related risks as the cost of regulatory arbitrage. Wake up US DOJ, we need you buddy,” Stark concluded.
Hot Take: Former SEC Official Urges Criminal Charges Against Parents of FTX CEO
John Reed Stark, former head of the SEC Office of Internet Enforcement, has called on federal agencies to bring criminal charges against the parents of Sam Bankman-Fried, former CEO of FTX. Stark believes that Bankman-Fried’s parents should have been included in the legal actions against him and suggests they could be named as “relief defendants.” He also criticizes the DOJ for its lack of action on crypto-related prosecutions, which allows some stakeholders to dismiss SEC enforcement actions. Stark argues that the DOJ must impose serious consequences, including prison time, for crypto-related offenses to change this perception.
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