FTX Lawyers Attempt to Question Bankman-Fried’s Family and Inner Circle for Financial Insight

According to court documents in the FTX bankruptcy case, the company’s attorneys seek to subpoena FTX co-founder Sam Bankman-Fried, his brother Gabriel Bankman-Fried, and his parents, Joseph Bankman and Barbara Fried. Additionally, the attorneys intend to question some of Bankman-Fried’s top deputies, including FTX co-founder Gary Wang, ex-Alameda Research CEO Caroline Ellison, the former chief operating officer Constance Wang, and the exchange’s former director of engineering Nishad Singh.

Lawyers for FTX Trading Ltd. and the bankruptcy case‘s official creditors committee filed a motion that aims to question Sam Bankman-Fried (SBF), his parents, his brother, and a few of the former CEO’s top lieutenants. The lawyers contend that specific insiders associated with Bankman-Fried’s dealings could provide much-needed insight into financial matters.

“Certain insiders are currently cooperating with the debtors to provide important information. But others are not, and thus authorization to issue subpoenas to those with the missing information is critical to the debtors’ and committee’s recovery efforts,” the joint motion details.

The current FTX CEO, John J. Ray III, told Congress that Joseph Bankman and “the family certainly received payments” from FTX. Bankman and Barbara Fried have not been charged with any wrongdoing, but the recent court filing claims they both had associations with the firm. The filing alleges that Fried’s political action committee (PAC) Mind the Gap received funds from FTX. Barbara Fried “has ignored the requests altogether,” the joint motion discloses. Bankman allegedly gave tax advice to staff and was involved in linking FTX with the company’s first litigation firm, the court filing explains.

“The insiders are best positioned to assist” the case, FTX attorneys further insist in the latest filing. The document notes that lawyers want to question Gabriel Bankman-Fried, SBF’s brother. The filing talks about Bankman-Fried’s brother’s nonprofit, Guarding Against Pandemics. It mentions the alleged political lobbying that reportedly took place near the U.S. Capitol at a “multimillion-dollar property,” which “the debtors believe was purchased using misappropriated customer funds.” In addition to Bankman-Fried’s brother and parents, Constance Wang, Caroline Ellison, Gary Wang, and Nishad Singh are mentioned in the request.

The U.S. Bankruptcy Court for the District of Delaware judge, John Dorsey, must approve the request to subpoena SBF and the members of his inner circle. Bankman-Fried has been indicted by a federal grand jury in Manhattan and faces charges of “conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.” SBF currently awaits trial over the charges, which is scheduled for Oct. 3, 2023.

“Debtors have not received meaningful engagement or any response from Singh or Mr. Gabriel Bankman-Fried,” the FTX attorneys added in the filing.

What do you think the outcome of this court request will be? Share your thoughts in the comments below.