The parents of former FTX chief and convicted fraudster Sam Bankman-Fried have told a court that claims against them worth millions of dollars from the bankrupt exchange should be dismissed because “neither defendant ever held an executive role of any sort.”
FTX has been seeking to recover funds from Joseph Bankman and Barbara Fried since September last year, claiming that millions of dollars were fraudulently transferred.
However, in a court filing, the couple, who are both professors at Stanford Law School, claim that “Plaintiffs seek to capitalize on the sheer fact that Defendants’ son was a founder and executive of the Debtor entities. That relationship is not actionable.”
They further argue that “as to the breach of fiduciary duty claims, (made against Mr. Bankman only), Plaintiffs have not adequately pleaded a fiduciary relationship between Mr. Bankman and Debtors, nor can they, as Mr. Bankman never served as a director, officer, or manager, de facto or otherwise.”
A deep dive into FTX’s lawsuit against Sam Bankman-Fried’s parents
Read more: FTX owes more in legal fees than it does to creditors
The motion goes on to claim that the plaintiffs have failed to prove that either Bankman or Fried had any knowledge of any potential breaches of fiduciary duty taking place within FTX.
It’s not been confirmed exactly how much FTX claims the couple converted, however, its original filing from 2023 details $18 million for a property in the Bahamas, an annual salary of $200,000 paid to Bankman, and more than $5 million in donations paid to Stanford.
Shortly after FTX began its suit against Bankman and Fried, their son was found guilty on seven charges of fraud. He is due to be sentenced in March.
Read the full article here