Parents of Ex-FTX CEO Counter FTX Lawsuit Alleging Misconduct and Self-enrichment
Summary:
Joseph Bankman and Barbara Fried, parents of former FTX CEO Sam Bankman-Fried, are seeking dismissal of a lawsuit filed by FTX crypto exchange. They are denying claims that they knew about and benefited from misconduct at the firm. Their legal team contends that the lawsuit only exists because of their familial relationship with their son, and argues that this cannot be basis for legal action. The suit by FTX alleges the couple enriched themselves at the expense of the company's bankruptcy estate. FTX has been seeking to recover millions in cash and gifts from the pair, including a $16.4 million Bahamian villa, but Bankman and Fried maintain their innocence.
The former FTX CEO Sam Bankman-Fried's parents are fighting back against a lawsuit filed by FTX, denying accusations that they played a role in the issues at the cryptocurrency exchange, or reaped the benefits from any misdeeds. Documents filed in court on January 15 show the legal advocates for Joseph Bankman and Barbara Fried arguing that the lawsuit brought by FTX is merely attempting to leverage the fact that they are the parents of the company's former head. The suit by FTX suggests that Bankman and Fried used their positions and influence within the FTX network to unjustly enrich themselves at the cost of those in debt in the FTX bankruptcy estate. FTX has turned its sights on Bankman-Fried's parents, accusing them of using the company to financially gain at the expense of FTX's client base.
Yet, Bankman and Fried have categorically denied these allegations, asserting that most of these claims hinge on their familial connection to their son. They argue further that this relationship cannot be made into a legal suit, a stance backed by their lawyers from Montgomery McCracken Walker & Rhoads. They also dismiss claims that Bankman held a trusted role with FTX and acted as an unacknowledged director, adding that if any such trusted relationship existed, the prosecutors have not convincingly alleged a breach. “The lawsuit must contain adequate facts drawing a logical conclusion that the accused is responsible for the alleged misbehavior, not mere hasty allegations," they contended. The same defense was put forward for Bankman-Fried's mother, Barbara Fried — pinpointing failure to allege a fundamental breach and proven knowledge of any misdeeds. Their stance remains that "the suits against Mr. Bankman and Ms. Fried ought to be dismissed according to Federal Rule of Civil Procedure 12(b)(6) and Federal Rule of Bankruptcy Procedure 7012(b) for failure to make a case."
For some time now, FTX has tirelessly sought to recoup millions in cash and gifts from the couple, including a prized $16.4 million villa in the Bahamas. Last September, the crypto exchange lodged a complaint against Bankman-Fried's parents citing a combination of violation of fiduciary duty claims and deceitful transfers.
Published At
1/17/2024 4:05:43 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.