In a surprising turn of events, Joe Bankman and Barbara Fried, parents of Sam Bankman-Fried, are facing a lawsuit filed by FTX, the company their son used to run. The lawsuit, filed in a Delaware bankruptcy court, accuses the couple of “fraudulently transferring and misappropriating” funds from FTX, as reported by CNN. FTX claims that Bankman and Fried took advantage of their influence within the company to enrich themselves. Notably, their son, Sam Bankman-Fried, is scheduled to stand trial on federal fraud charges on October 3. The lawsuit alleges that the couple ignored significant warning signs of their son’s fraudulent activities.
Both Joe Bankman and Barbara Fried are renowned law professors at Stanford University. Bankman also worked for the cryptocurrency exchange as a paid employee for about a year. The lawsuit argues that Bankman played a pivotal role in promoting a culture of misrepresentation and gross mismanagement within the company, according to the Wall Street Journal. The lawsuit further alleges that Bankman received a $10 million gift from his son, in addition to his $200,000 salary. Moreover, company funds were allegedly used to facilitate the couple’s acquisition of a luxurious $16 million home in the Bahamas.
According to the lawsuit, Bankman had significant involvement in the operational aspects leading to the collapse of the company. On the other hand, although Fried did not hold an official position at the firm, she played a significant role in directing political contributions amounting to approximately $40 million before last year’s midterm elections, as per the Journal. In response to the lawsuit, the couple’s legal representatives vehemently denied the allegations, dismissing them as “completely false.” They characterized the lawsuit as an attempt to intimidate Joe and Barbara and subvert the integrity of the jury process right before their child’s trial commences. (Read more about Sam Bankman-Fried’s legal troubles in Sam Bankman-Fried stories.)
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