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The Latest S.B.F. Legal Saga

S.B.F.’s biggest problem continues to emanate from John J. Ray III, the new FTX C.E.O., who has made it his mission to recover as many assets as possible for the bankrupt estate and its forlorn creditors and customers.
S.B.F.’s biggest problem continues to emanate from John J. Ray III, the new FTX C.E.O., who has made it his mission to recover as many assets as possible for the bankrupt estate and its forlorn creditors and customers. Photo: Fatih Aktas/Anadolu Agency via Getty Images
William D. Cohan
July 30, 2023

Are things looking up for Sam Bankman-Fried, or down? That’s the question people on Wall Street are wondering in the wake of several recent events, as his October trial inches closer and closer. On the one hand, as my partner Teddy Schleifer shared the other day, the feds have decided to no longer prosecute S.B.F. for his more than $100 million of allegedly illegal political campaign contributions. S.B.F. caught a lucky break on that one—something to do with the technicality that the authorities in the Bahamas wouldn’t, or didn’t, consent to that charge as part of his original extradition to the United States.

Meanwhile, the feds have asked Lewis Kaplan, the federal judge in Manhattan overseeing his criminal case, to end his home confinement in Palo Alto and jail S.B.F. right now, prior to the start of the October trial, because the prosecutors alleged that he engaged in witness tampering by working with a New York Times reporter to discredit his former girlfriend, Caroline Ellison, who is slated to testify against him at the trial, by sharing her awkward personal emails with the newspaper. Ellison, of course, ran Alameda Research, S.B.F.’s hedge fund, and has since pleaded guilty to a host of crimes and agreed to cooperate with the prosecution against S.B.F., as has most of the rest of the FTX management team. Judge Kaplan decided to take the government’s request to jail S.B.F. under advisement. “I am very mindful of the government’s interest in this issue which I take seriously and I say… Mr. Bankman-Fried, you better take it seriously too,” the judge allowed. He also imposed a gag order on all parties in the case to prevent any further conversations with the media. The prosecutors also noted that S.B.F. had made more than 1,000 phone calls to journalists.