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Photo: Jeenah Moon/Bloomberg via Getty Images
Inaccuracy — or the perception — has advantages as a legal defense, especially when you face allegations of fraud, experts told Axios.
Why: Sam Bankman-Fried’s conversation with the New York Times is very clear, and he talks a lot about FTX’s sudden collapse into bankruptcy as a result of his own distractions, procrastination and acting as CEO.
- ”If I had been more focused on what I was doing, I would have been able to do better,” he told the NYT. ”That allows me to catch things on the risky side.”
The big picture: Bankman-Fried, who has not yet been charged with a crime, faces serious legal scrutiny due to the sudden collapse of FTX, the crypto exchange he founded, and his trading firm Alameda Research, like many others. reports. reported.
- The biggest question about the recession is whether businesses are doing it wrong possibly billions of dollars of customer money from FTX trading accounts, according to reports from Reuters and the Wall Street Journal.
- The Justice Department, Securities and Exchange Commission and Commodity Futures Trading Commission are investigating the scandal, according to multiple reports.
What they are saying: “Bankman-Fried looks like he’s at a very high risk of going to jail,” said Renato Mariotti, a former prosecutor in the DOJ’s anti-theft and property division, and now is a defense attorney at Bryan Cave Leighton Paisner.
How to do it: Lawyers call Axios the biggest criminal risk Bankman-Fried faces charges of fraud – one of the more serious allegations in the white collar lawsuits. But to convict, prosecutors must prove beyond a reasonable doubt that someone knew or intended to commit fraud, which is fraud, they say.
- That’s why the defense is so focused on accusations like, “It’s not cheating, I really hated my job.”
- “Usually, in a fraud case, the person at the top will argue that he was indifferent, that it was passed on to others, that he did not pay attention to the information,” Mariotti told Axios. . “The point is to plead guilty or negligent, not fraudulent.”
Yes, but: Other defenses are possible. According to Mariotti, there may be something buried somewhere on FTX’s site that gives the company and Bankman-Fried some legal coverage — though Axios reporters couldn’t find it in detail. of crypto exchange service.
For the record: Axios reached out to Bankman-Fried and her law firm, Paul Weiss. They didn’t answer.
The bottom line: Prosecutors and regulators are combing through email exchanges, text messages and other written communications as well as compiling information from former co-workers about conversations with Bankman-Fried, all of which can be used to try to establish an opinion in a criminal case.
- Meanwhile, Bankman-Fried continues to speak to reporters and posted on Twitterin investigations – could lead to legal headaches, said Philip Moustakis, a former SEC attorney and consultant at the law firm Seward & Kissel.
- “The public comments we see reduce the available barriers and create problems for the barrier,” he said.
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