Bankman-Fried says Robinhood Shares needed for legal defence
Sam Bankman-Fried is in a battle to maintain control of his $450 million-odd worth of Robinhood stock, against which prosecutors staked a claim, per a new court filing.
The US Department of Justice, which moved to take custody of the shares on Wednesday, said the stock shouldn’t be included in FTX’s bankruptcy hearings. At the same time, FTX’s creditors are hopeful that the funds could make them whole, all the while Bankman Fried needs to cover his legal costs.
Sam Bankman-Fried pleaded ‘not guilty to all charges’, including wire fraud and campaign finance violations on Tuesday. “Mr. Bankman-Fried requires some of these funds to pay for his criminal defence,” the filing read, noting that the disgraced FTX founder is “facing potential criminal liability.”
Bankman-Fried’s attempted move is the latest in an ongoing disagreement over share ownership.
The equities were once valued at over $600 million and have since plunged given that they’ve been stuck in legal limbo as market forces move prices.
Over 56 Robinhood shares are on hold, worth just over $450 million as of last week’s closing prices, the court filing revealed. The shares are owned by Emergent Fidelity Technologies, of which Bankman-Fried is the 90% stockholder.
In May 2022, “Mr. Bankman-Fried and Zixiao (“Gary”) Wang borrowed the funds for Emergent to purchase the Robinhood Shares from Alameda,” the filing read.
Gregory T. Donilon from Montgomery McCracken Walker & Rhoads LLP represents Sam Bankman Fried in the bankruptcy proceeding.
Sam’s criminal lawyers are Cohen & Gresser’s, Christian R. Everdell and Mark Stewart Cohen, who curiously represented Ghislaine Maxwell in a high-profile sex and human trafficking case.
Fried’s legal fees haven’t been made public, but Sullivan and Cromwell accepted a $12 million retainer from the exchange before it filed for Chapter 11 on Nov.11, 2022. The company has already cashed in $3.4 million of its retainer as of November 3rd – around 30% of the lump sum.
The ongoing battle is part of the fallout following disgraceful misconduct by FTX’s previous leadership, led by Sam Bankman Fried.
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