Wednesday 14 December 2022

Bankman-Fried & FTX: an entertaining indictment

Well, the criminal indictment per se is actually rather dry.  As ever in the USA, the first several charges are for Wire Fraud, that handy all-purpose offence that makes things Federal.   Then just plain Fraud, and Money Laundering, and Conspiracy etc etc.

The appealingly racy wording of the Civil Complaint livens things up considerably, and makes it clear what is alleged to have been going on. 

Unbeknownst to investors and to FTX’s trading customers, Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire ... Customers around the world believed his lies, and sent billions of dollars to FTX, believing their assets were secure on the FTX trading platform. But from the start, Bankman-Fried improperly diverted customer assets to his privately-held crypto hedge fund, Alameda, and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations ... While he spent lavishly on office space and condominiums in The Bahamas, and sank billions of dollars of customer funds into speculative venture investments, Bankman-Fried’s house of cards began to crumble... Even in November 2022, faced with billions of dollars in customer withdrawal demands that FTX could not fulfill, Bankman-Fried misled investors from whom he needed money to plug a multi-billion-dollar hole. His brazen, multi-year scheme finally came to an end when FTX, Alameda, and their tangled web of affiliated entities filed for bankruptcy on November 11, 2022.

Massive frauds; lies; lavish spending; crumbling house of cards; plugging multi-billion-dollar holes; brazen schemes; tangled webs - I like this writing style.  And there's more: the Complaint wants an order to be issued upon SB-F "to disgorge his ill-gotten gains".  That's while the prosecutors try to get him banged up, of course.

As I've often said, provided you're not a senior banker of the 2008-9 cohort enjoying some kind of 'Obama indemnity', the Americans know how to throw the book at business wrongdoers.  Strange thing is, though:  there never seems to be much to stop these massive ponzi schemes getting started, does there?



Sobers said...

"As I've often said, provided you're not a senior banker of the 2008-9 cohort enjoying some kind of 'Obama indemnity', the Americans know how to throw the book at business wrongdoers."

Or the the crack smoking influence peddling whoremongering son of a Democrat president.

djm said...

Bernie Madeoff was arguably one of the few Banksters imprisoned because whilst being of the Tribe, he stole from the Tribe. BF, whilst certainly being one of the Tribe, stole (allegedly) from all & sundry. If found guilty, will BF do time ?

Perhaps a question for your end year quiz....

Sobers said...

"If found guilty, will BF do time ?"

BF won't be found guilty or do any time, because he will 'commit suicide' before any of the details of where the money went can be revealed in court...........

Nick Drew said...

I have long been of the view that Ken Lay genuinely topped himself while out on appeal.

The Roman way. That was him all over.

E-K said...


The business model that Sunak says he wants to destroy (boat crossings) includes at its heart generosity of the UK Government towards illegal immigrants, at taxpayer expense.

Anonymous said...

Will be interesting to see what happens with the others.
I've seen rumours that Caroline Ellison has turned witness to save her own skin.