Former SEC Official Urges Criminal Charges Against Sam Bankman-Fried Parents

Former SEC Official John Reed Stark calls on federal agencies to consider criminal charges against the parents of former FTX CEO Sam Bankman-Fried, highlighting their potential involvement in alleged wrongdoings. He also urges the Department of Justice to pursue crypto-related prosecutions.

Posted 8 months ago in Security


Former SEC Official Urges Criminal Charges Against Sam Bankman-Fried Parents

Former SEC official John Reed Stark is advocating for federal agencies, including the Department of Justice (DOJ), to bring criminal charges against the parents of former FTX CEO Sam Bankman-Fried. Stark believes that the authorities should have included Bankman-Fried's parents as defendants in the legal actions taken against their son.

Stark suggests that Bankman-Fried's parents could potentially be named as 'relief defendants,' individuals who may have benefited from their son's alleged wrongdoings. Although relief defendants are typically not accused of wrongdoing themselves, they may hold assets that were acquired through illicit means.

Stark expressed his surprise and stated, 'I cannot comprehend why the U.S. Department of Justice and the U.S. Securities and Exchange Commission have not added SBF's parents as defendants. For the SEC, SBF's parents should at least be named as relief defendants.'

Bankman-Fried is the child of Allan Bankman, a Stanford law professor, and Barbara Fried, a professor emerita at the same law school. FTX recently launched clawback actions against Bankman-Fried's parents, claiming that they manipulated their relationship to enrich themselves and seeking to recover any gains they made.

Stark also called on the Department of Justice to pursue criminal proceedings related to cryptocurrency. He highlighted the agency's silence on crypto-related prosecutions, despite the SEC initiating multiple enforcement actions. According to Stark, this inaction allows certain cryptocurrency stakeholders to downplay SEC enforcement actions.

With the aim of changing this situation, Stark emphasized that the DOJ must support the SEC and demonstrate that it will impose serious consequences, including the possibility of prison time, for crypto-related offenses. He concluded by stating, 'Until crypto-grifters face the threat of DOJ prosecution (i.e. prison time), they will continue to treat SEC enforcement-related risks as the cost of regulatory arbitrage. Wake up US DOJ, we need you buddy.'

Last updated 9/24/2023, 9:51:57 PM

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