Sam Bankman-Fried Launches "Long-Shot" Bid for New Trial on FTX Fraud Charges

Sam Bankman-Fried Asks for New Trial on FTX Fraud Charges

FTX co-founder Sam Bankman-Fried filed a long-shot request for a new trial on the charges for which he’s currently serving a 25-year prison sentence, arguing that new witnesses can refute the prosecution’s case that he defrauded the cryptocurrency exchange’s customers.

The motion, dated Feb. 5 but docketed Tuesday in Manhattan federal court, was filed pro se, meaning Bankman-Fried, 33, is representing himself. The filing is separate from a formal appeal of his 2023 conviction. It was sent to the court clerk by Bankman-Fried’s mother, retired Stanford Law Professor Barbara Fried.
A three-judge appeals panel is currently considering his appeal, which claims that rulings by the trial judge tainted the verdict. The judges appeared skeptical of his lawyer’s arguments at a November hearing.

How Fake Invoices Duped BlackRock Unit Into a $400 Million Loan

BlackRock went all in on Wall Street’s booming business of private lending last July when it acquired HPS Investment Partners, a firm founded by alumni of Goldman Sachs that was one of the stars of the sector.

Days after the deal closed, an analyst at HPS’s Midtown Manhattan headquarters spotted a big problem. The company was the lead lender on a more-than $400 million credit agreement with a telecom entrepreneur, Bankim Brahmbhatt, accepting as collateral accounts receivable the executive’s firm had acquired from other businesses.

Reviewing those invoices, the analyst noticed that the email address domain on one didn’t match what was on the website of the company it was supposed to be from. HPS dug deeper, and found the same issue again and again. The lender scrambled to get answers from Brahmbhatt, but he had left for India and eventually stopped picking up the phone.

Two weeks later, HPS was in court accusing Brahmbhatt of carrying out a “breathtaking” fraud. The emails were fake, the invoices were fake—and the collateral was worthless, they alleged.

Crypto Founders Accused of Fake AI, Market Manipulation and Staged Death

A proposed class action filed Monday in Manhattan federal court accused the founders of a cryptocurrency project of defrauding investors in a sham artificial intelligence venture that unraveled after one founder allegedly staged his own death, a move that helped divert scrutiny as the token’s price collapsed and insiders exited with millions of dollars.

Max Burwick, the managing partner at Burwick Law, represents the plaintiffs in their lawsuit against defendants Jeffry Yu and Agustin “Tint” Cortes. He said that what’s important about the market-making allegations in this case is that they are not novel or exotic; they are the same mechanics that underpin nearly every pump-and-dump scheme we see in the crypto industry. […]

During the collapse, the lawsuit alleged, Yu escalated the deception by publicly staging his death, broadcasting what appeared to be a suicide and arranging for an obituary to be published. He did so to allegedly divert attention from the missing technology, collapsing token price and mounting questions surrounding insider conduct and trading activity.

Yu later resurfaced alive, the complaint said, with him posting photographs of himself holding large amounts of cash and continuing to launch new cryptocurrency projects.

Clayton On FCPA Enforcement

In a recent event hosted by Securities Docket, Jay Clayton (U.S. Attorney for the Southern District of New York) stated that he “hates corruption of foreign officials” but also “hates the FCPA as applied” and noted “because of the application of the FCPA and the way we do it, I think corruption in many places around the world has increased.”

These pages have highlighted Clayton’s candid observations about Foreign Corrupt Practices enforcement for many years and the above statement is consistent with Clayton’s long-held views.

A 2011 whitepaper titled “The FCPA and Its Impact on International Business Transactions” written by a New York City Bar Association committee chaired by Jay Clayton stated:

“The costs to the United States of the FCPA extend beyond out-of-pocket costs and missed opportunities that are borne by specific firms subject to the FCPA. For example, the costs the FCPA imposes on U.S. regulated companies provide an incentive for non-U.S. companies not to offer or register their securities in the U.S., or, if they have previously listed their equity securities on a U.S. exchange, to delist, in an effort to avoid FCPA jurisdiction and other compliance costs….”

Pfizer to collect $29 million from SEC case against Steven A. Cohen hedge fund

Pfizer agreed to accept $29 million to resolve a dispute with the U.S. Securities and Exchange Commission stemming from the regulator’s 2013 insider trading settlement with billionaire Steven A. Cohen’s former hedge fund SAC Capital Management.

The proposed payment disclosed in a Tuesday court filing represents nearly two-fifths of the $75.2 million left over from SAC’s $601.8 million settlement over trades in drugmakers Wyeth and Elan by Mathew Martoma, a former SAC employee who was later convicted of securities fraud and conspiracy. The U.S. Treasury would get the remaining $46.2 million.

Pfizer had been appealing a November 2024 ruling by U.S. District Judge Victor Marrero in Manhattan that it deserved none of the funds left over after Wyeth and Elan investors were compensated for their losses because Wyeth wasn’t one of Martoma’s victims.

The Lawyer Gearing Up for a Fight on Private Equity in 401(k)s

The American retirement system is on the verge of one of its biggest changes in decades, with Wall Street’s private equity and credit firms close to getting a piece of the $14 trillion socked away in workplace retirement savings plans. They’ve created new types of investment funds for 401(k)s and clinched deals with household-name money managers to include them.

They may still need to get past one man: Jerome “Jerry” Schlichter.

“Buyer beware,” Schlichter says, referring to employers who are considering adding private equity and other alternative funds to their company plans. “You better be prepared for defending that choice.”