The court filing of the SEC’s case against Sam Bankman-Fried (SBF) was released this morning. Attached below is the filing with some initial observations.
Bob Bishop shared these observations with TGP this morning and on Twitter.
Bankman-Fried Indictment.pdf – Google Drive
The complaint is 28 pages long.
Even though it was clear that the company could not make its payments, executives at FTX took out millions in personal loans. The company was involved in all sorts of activities, as well, including ‘yield farming”.
Bankman-Fried made numerous false claims that even though he owned 90% of Alameda, he was not the ultimate decision-maker. In addition, FTX customer funds were comingled in Alameda, and the loan to Alameda was hidden on FTX’s balance sheet using an internal account labeled “[email protected]”
(Hint: never comingle funds)
The auditors of FTX appear to have some real big problems. National accounting firms Armanino and Prager Metis failed to document the FTX multi-billion loans to Alameda in the audited financial statements. Also, missed related party transactions with FTX Executives. Massive audit failure.
(Bob Bishop is a retired auditor, he should know.)
Also, according to Bishop, Bankman-Fried committed perjury in testifying to Congress that FTX had a risk engine that mitigated client exposure. Will he get charged with lying to Congress like Roger Stone and others?
SBF executed promissory notes of $1.3 billion while FTX Executives Singh and Wang borrowed $554 million and $224.7 million, respectively.
What is not in the SEC’s filing is the mention that SBF’s former girlfriend was the CEO of Alameda, Caroline Ellison. Her father worked alongside SEC Chairman Gary Gensler at MIT for a period of time.
The filing also doesn’t mention SBF’s parents who are attorneys at Stanford University and any connections they have with the operation.
Most glaring is the omission of the amount of donations by FTX to corrupt politicians. We still have no idea how much money went to corrupt US politicians through FTX using cryptocurrencies.
Hat tip Bob Bishop