Joseph Bankman, father of the ex-CEO of FTX, Sam “SBF” Bankman-Fried, has turned a conflict over salary into a family issue. A complaint filed in bankruptcy court on September 18 accuses Bankman and Barbara Fried, SBF’s parents, of misappropriating millions of dollars via their involvement in the company’s business. Court documents reveal that Bankman’s contract with FTX US should have guaranteed a $200,000 annual salary after he took a leave of absence from Stanford Law School in December 2021.
The complaint alleges that Bankman expressed confusion about the contract terms, asserting to both FTX US and his son that he anticipated a $1-million annual salary. In the complaint, it was suggested that SBF’s mother may have potentially influenced her son to agree to the salary adjustment.
Allegedly, Bankman’s influence proved successful as SBF later awarded his parents with $10 million from Alameda, a $16.4-million property in the Bahamas financed by FTX Trading, the ability to charge around $90,000 to FTX Trading, and options to buy company stock. Attempts to contact the legal team representing Bankman and Fried for comment have so far been unsuccessful.
The recent lawsuit by the debtors adds to the ongoing bankruptcy case that includes FTX and various subsidiaries that was filed in November 2022. Furthermore, Bankman-Fried is facing 12 criminal charges that are set to be handled across two trials slated for October 2023 and March 2024.
Bankman-Fried has been predominantly held at the Metropolitan Detention Center in Brooklyn since a federal judge rescinded his bail in August. SBF’s legal team has appealed for the ex-FTX CEO’s release from jail in order to prepare for his trial, citing the lack of internet access and First Amendment issues as significant barriers. This appeal was heard by a three-judge panel on September 19.