FTX CEO’s Parents Face Allegations of Involvement in Business Dealings
The FTX estate claims that Joseph Bankman and Barbara Fried, parents of FTX CEO Sam Bankman-Fried (SBF), had a more significant role in the company than previously known. If proven true, this could result in clawbacks of benefits received by the parents, including a $10 million cash gift and a luxury property in the Bahamas.
Joseph Bankman’s Advisory Role
Joseph Bankman, a Stanford law professor, officially served in an advisory capacity to certain FTX entities without receiving any salary or legally binding payments. The lack of payment documents is crucial to his defense against clawbacks, as it would indicate a breach of fiduciary duty.
“First, as to the breach of fiduciary duty claims… Plaintiffs have not adequately pleaded a fiduciary relationship between Mr. Bankman and Debtors, nor can they…”
Former FTX staffers have hinted at Bankman’s more involved approach, but this is largely hearsay. The couple also facilitated donations to Stanford University, which the institution plans to return to the FTX estate voluntarily.
Dismissing the Case Against SBF’s Parents
SBF’s parents argue that the cash gifts and perks they received were solely due to their personal relationship with their son and are non-actionable in court. They claim that the allegations against them lack evidence.
“Plaintiffs have failed to plausibly allege any underlying breaches of fiduciary duties, that each Defendant had actual knowledge of the alleged breach…”
The defendants are requesting the dismissal of the case against them, except for the Blue Water property and other gifts valued at about $16 million, which they are willing to return to the FTX estate.
Hot Take: FTX CEO’s Parents Face Allegations of Involvement in Business Dealings
Joseph Bankman and Barbara Fried, parents of FTX CEO Sam Bankman-Fried, are facing allegations of having a more significant role in FTX than previously known. If proven true, this could result in the return of substantial benefits received by the parents. However, the lack of evidence and the non-actionable nature of their personal relationship with their son may work in their favor. The case against them is currently under review, with a request for dismissal except for certain assets. The outcome of this legal battle will determine the extent of their involvement in FTX’s business dealings.
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