Bankman-Fried lawsuit overview:
- Who: The debtors of Alameda Research, FTX Trading and West Realm Shires filed a lawsuit against Allan Joseph Bankman and Barbara Fried.
- Why: The lawsuit alleges that millions of dollars in fraudulent transfers and misappropriated funds went from the companies to the parents of FTX founder Samuel Bankman-Fried.
- Where: The Bankman-Fried lawsuit was filed in federal bankruptcy court in Delaware.
The debtors of Alameda Research, FTX Trading and West Realm Shires filed a lawsuit in bankruptcy court against the parents of FTX founder Samuel Bankman-Fried alleging that millions of dollars in fraudulent transfers and misappropriated funds went to them.
Allan Joseph Bankman and Barbara Fried are accused of exploiting their access to the FTX enterprise to enrich themselves and did so knowingly at the expense of debtors in the Chapter 11 bankruptcy case.
The lawsuit is attempting to recover assets that were wrongfully given to the Bankman-Fried parents and allow those assets to instead benefit the debtors in the bankruptcy case.
“Bankman played a key role in perpetuating this culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud committed by the FTX Insiders,” the Bankman-Fried lawsuit says. “And together, Bankman and Fried siphoned millions of dollars out of the FTX Group for their own personal benefit and their chosen pet causes.”
Father appeared in Super Bowl commercial, mother received millions for PAC, lawsuit claims
Bankman is tenured Stanford Law School professor who was said to have received millions of dollars in unearned gifts along with flying on private charter jets, expensing $1,200-per-night hotel stays to FTX and appeared in a Super Bowl commercial with actor Larry David months before FTX imploded, the lawsuit claims.
Fried is also a Stanford Law School professor who is accused of getting Bankman-Fried to donate millions of dollars to her political action committee, Mind the Gap Inc., along with getting FTX to place billions in speculative unhedged bets on crypto assets, the lawsuit claims.
A combined $1.8 billion in settlements were reached last fall with 15 broker dealers and an affiliated investment adviser accused of failing to prevent their workers from using unauthorized messaging apps — such as WhatsApp — on personal cellphones to discuss work-related matters.
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The plaintiffs are represented by Adam G. Landis, Matthew B. McGuire, Kimberly A. Brown and Matthew R. Pierce of Landis Rath and Cobb LLP, along with William A. Burck, Sascha N. Rand, Katherine A. Lemire, John B. Quinn and William R. Sears of Quinn Emanuel Urquhart and Sullivan LLP.
The Bankman-Fried lawsuit is Alameda Research LLC, et al. v. Bankman, et al., Case No. 22-11068-JTD, in the United States Bankruptcy Court for the District of Delaware.
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