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Sam Bankman-Fried’s parents have filed to dismiss charges from the FTX estate
The pair called the case against them “threadbare” and emphasized their lack of influence in the company
The charges involve mismanagement of funds and a breach of fiduciary duty by the couple
The parents of imminent jailbird Sam Bankman-Fried have filed to have the charges against them, made by the FTX estate, dismissed. Joseph Bankman and Barbara Fried called the case against them “threadbare” and solely based on their son’s association with the defunct exchange, arguing that they did not hold positions of influence within the company. The pair are charged with mismanagement of company funds and a breach of fiduciary duty.
Bankman and Fried Accused of Close FTX Ties
Bankman and Fried were hit with the lawsuit last September, with FTX accusing them of receiving a $10 million cash gift and a $16.4 million Bahamas home, concealing complaints against their son’s business, coaching on evading disclosure rules for political donations, and involvement in a straw donation scheme.
According to FTX, Joe Bankman was listed as part of FTX’s management, facilitating loans to top employees and billing FTX for luxury travel, as well as allegedly representing FTX in other minor ways. Barbara Fried’s alleged advice on political donations and connection to a luxurious Bahamas property were also referenced, suggesting awareness or willful ignorance of fraudulent activities.
Defense Says Pair Kept Their Distance
In the rebuttal filed yesterday, the couple’s lawyers assert that neither Bankman nor Fried held executive roles at FTX, challenging the claim of fiduciary duty breaches. They argue that the estate must present “specific facts showing actual knowledge” of actions leading to fiduciary breaches, emphasizing that mere knowledge or assumption is insufficient.
While Bankman had no formal position at FTX, a September 2023 Bloomberg report noted his attendance at meetings discussing tax issues and marketing materials for FTX’s FTT token. The defense contends that attendance at meetings doesn’t equate to executive roles, reinforcing their position that fiduciary duties weren’t violated.
The filing also referenced the $10 million gift, which Bankman and Fried’s lawyers stated originated from their son’s personal account during a time when FTX was deemed solvent and thriving.
The defense’s argument centers on the necessity for the estate to demonstrate that Bankman and Fried knowingly engaged in actions leading to fiduciary breaches, challenging the lawsuit’s foundation and seeking its dismissal.
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