An object lesson in filial piety! | Illustration: The Verge; Image: Getty Images
The lawyers who represent what’s left of FTX filed suit against Sam Bankman-Fried’s parents, saying they “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.” The point of the suit is to get that money back so it can be paid out to the people FTX owes.
Before all this, Barbara Fried and Joseph Bankman were already well-known and respected Stanford Law School professors. Last week, Bloomberg dropped a fascinating profile of the two of them.
Fried “has written extensively on questions of distributive justice, in the areas of tax policy, property theory and political theory,” according to her Stanford profile. She also ran a donor network for Democratic candidates. Of note: Fried is a philosopher who is interested in consequentialism, which “is about doing good for as many people as possible, but a less charitable way to summarize it is ‘the ends justify the means,’” the Bloomberg profile noted.
Bankman “gained wide attention for his work on how government might control the use of tax shelters and has testified before Congress and other legislative bodies on tax compliance problems posed by the cash economy,” according to his Stanford profile. He was also involved with Massachusetts Senator Elizabeth Warren’s 2016 bill to simplify tax filing.
So what prizes did Sam’s parents allegedly get from FTX? Well:
According to an expense report, Bankman got “$1,200 per night” hotels for himself and plane tickets and tickets to the Formula 1 Grand Prix in France (what he called “a free trip to France”) for a student at Stanford Law School who later became outside counsel to FTX.
Bankman also got a $200,000 annual salary, per his instruction to an FTX employee: “I am no longer getting paid by Stanford, cuz I’m on leave. So you should have me on salary, starting Dec. 1.”
That salary wasn’t enough. Bankman complained that he was “supposed to be getting $1M/yr, starting in December. So that would be a bit more than $80,000 a month, gross…” and then whined to his son about it.
Sam Bankman-Fried gave his parents “$10 million in funds originating from Alameda Ltd” after Bankman’s complaint. They also got a “$16.4 million property in The Bahamas paid for with funds ultimately provided by FTX Trading..” Bankman then emailed Ryan Salame, saying, “We are hoping you can all come to celebrate the house you helped us buy/move into . . .”
FTX paid for furnishing for the residence also: “at least eight vases, and five rugs, one of which was a Persian hand-knotted rug costing more than $2,500.”
FTX paid $90,000 for a variety of expenses on the property, including cleaning and landscaping. There is no record of FTX being reimbursed, the filing notes.
Bankman got to meet Larry David, at his own request, by playing a cameo role in the FTX commercial. (“OK, I’m not a star-fucker and don’t really care about meeting, say, Tom Brady. But Larry David….” he wrote.)
Bankman also channeled $5.5 million in donations to Stanford University, “donations that did not benefit the FTX Group, and instead amounted to naked self-dealing by Bankman, who sought to curry favor with and enrich his employer at the FTX Group’s expense.”
Fried sought donations for her political group, Mind the Gap, while trying to obscure the source of the funds, the filing alleges. “Fried knowingly aided and abetted Bankman-Fried’s, Singh’s, and potentially other FTX Insiders’ breaches of fiduciary duties in connection with these offenses, including Singh’s $1 million contribution to MTG in April 2021 originating from Alameda.”
I hope my dad isn’t disappointed when I buy him more science fiction books for his birthday, because I can’t afford to buy him a vacation home in the Bahamas. On the other hand, at least I’m not facing any criminal charges?
