- FTX sued Sam Bankman-Fried’s parents, Joe Bankman and Barbara Fried, on Monday.
- The lawsuit claims the Stanford law professors received a $10 million gift from their son and nearly $19 million for a property in the Bahamas.
- Joe Bankman demanded to be cast opposite Larry David in FTX’s 2022 Super Bowl commercial, the filing revealed.
Sam Bankman-Fried’s parents were sued by FTX on Monday, as the defunct crypto exchange claims they received millions of dollars and the father demanded perks from their son.
Joe Bankman and Barbara Fried, who are law professors at Stanford University in California—Barbara emerita—are accused of exploiting their access and influence within the firm to “enrich themselves, directly and indirectly, by millions of dollars, and knowingly at the expense of the debtors,” according to the filing.
The bankrupt crypto exchange’s new leadership “seeks to recover millions of dollars in fraudulently transferred and misappropriated funds” from the two. FTX alleges the pair received a $10 million gift from their son as well as just over $18.9 million that was used to purchase a property in the Bahamas.
Joe Bankman, a tenured Stanford Law School professor with decades of experience in tax law, played a key role in perpetuating the culture of misrepresentations and gross mismanagement at FTX, according to the debtors.
Bankman in particular used his background in tax law and his relationship with his son to “position himself as an insider at the centre of the FTX Group,” the lawsuit claims.
Sam Bankman-Fried, who faces conspiracy and fraud charges related to the collapse of FTX, granted his father a $200,000-per-year salary for serving as a senior adviser to the FTX Foundation. Joe Bankman’s involvement with the exchange increased toward the end of 2021, as it “veered towards bankruptcy,” the lawsuit said.
Meanwhile, Barbara Fried is accused of helping to direct and obscure the source of her son’s millions of dollars worth of political donations, the filing said.
The lawsuit is a “dangerous attempt to intimidate Joe and Barbara and undermine the jury process,” just days before their son’s trial is set to begin, Sean Hecker, counsel for Joe Bankman, and Michael Tremonte, counsel for Barbara Fried, told DL News in an emailed statement.
“These claims are completely false. Mr. Ray and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better,” Hecker added.
DL News reached out to FTX for a response to Hecker’s statement but did not immediately receive a response.
‘Not a star fucker’
The benefits for FTX insiders went beyond pure financial gain, according to the filing.
FTX sought, and paid for, endorsements from a host of celebrities and sports stars during its time at the top of the crypto industry. According to the lawsuit, Joe Bankman couldn’t resist the chance to work with one of those stars, “Seinfeld” co-creator Larry David.
“OK, I’m not a star fucker and don’t really care about meeting, say, Tom Brady. But Larry David....” Joe Bankman told his son, as he requested a cameo alongside David in the firm’s 2022 Super Bowl commercial, according to the filing.
Bankman’s wish was apparently granted.
Screenshots from the commercial appear to show someone who resembles Joe Bankman, about halfway through the 2-minute-and-30-second clip, but DL News could not confirm if it was indeed Bankman, as his legal counsel did not respond multiple requests for confirmation.
The person, who resembles Bankman, even got a line, exclaiming “yes” in a farcical recreation of the debate over the Bill of Rights in 1789.
The lawsuit comes hot on the heels of several other claims against other beneficiaries of FTX, including former LA Lakers star Shaquille O’Neal and former world number one tennis player Naomi Osaka.
Last week, Trevor Lawrence, the Jacksonville Jaguars quarterback, agreed to settle the claims in a class-action lawsuit over his endorsement of the failed crypto exchange last week.
Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at email@example.com.