The appeal war is about to ignite SBF’s parents stand up to the legal storm

Legal Storm Brewing SBF's Parents Prepare to Battle in Appeal War

Source: The Wall Street Journal

Compiled by: LianGuaiBitpushNews Yanan

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Barbara Fried wanted to be closer to her son on the courtroom bench.

During the month-long recess of her eldest son Sam Bankman-Fried’s criminal fraud trial, Barbara Fried would occasionally leave her seat and walk to the railing separating the spectator area from the defendant’s seat, quietly watching SBF and his team of lawyers. Although just a few feet away, Barbara Fried couldn’t defend her son or prevent the conviction that everyone had already anticipated.

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As their son rose swiftly as a shining star in the cryptocurrency industry, Joseph Bankman and Barbara Fried had always been by his side. And when SBF’s company collapsed and faced prosecution, they also offered some advice to their son. Now, a federal jury has found SBF guilty, subjecting him to decades of imprisonment. Meanwhile, SBF’s parents are doing their best to lend a helping hand to help their child face the upcoming challenges.

The couple firmly believes in their son’s innocence and is assisting SBF in preparing for an appeal. On Tuesday, they visited their son in a prison in Brooklyn, New York, to convince him that even though most of his time will be spent in prison, his life is still worth continuing. SBF’s conviction could potentially result in a maximum sentence of 110 years, although defendants are rarely handed the harshest punishments.

As parents, their unwavering support is not surprising. However, what sets them apart from most families is that 68-year-old Bankman and 72-year-old Fried are respected professors at Stanford Law School, paving the way for their son’s rapid development of the FTX cryptocurrency exchange. However, their direct involvement with FTX and the benefits they received from their son prior to the company’s bankruptcy announcement have also landed them in trouble.

Bankman had served as a paid employee at FTX for a period of time. Fried did not hold an official position in the company, but FTX claims that she provided consultancy services to SBF for political donations worth millions of dollars. Currently, the company has been taken over by a new management team and has filed a lawsuit against the couple, alleging that they misappropriated millions of dollars and should be required to repay.

The lawyers for this couple said that these allegations are “completely false” and “are a dangerous attempt to intimidate Joe and Barbara.”

Several friends also stated that even if Bankman and Fried regret their own or their son’s actions, they would not show it.

“I don’t think it’s a time for mutual blame,” said Bob Gordon, a former colleague who worked with Bankman and Fried at Stanford Law School for decades, “whether it’s for their child or for themselves.”

The parents raised Sam and his younger brother on the campus of Stanford University. There is a student apartment nearby known for its vegetarian and nude parties. Friends and colleagues revealed that they always treated their children as adults and encouraged others to do the same.

As respected legal elites, Bankman and Fried have vast networks of friends from Silicon Valley and Wall Street. When Bankman-Fried built his cryptocurrency empire, his parents’ reputation became his passport, opening doors to investors, regulatory agencies, and politicians.

When FTX moved its headquarters to the Bahamas in 2021, it was already a billion-dollar cryptocurrency giant. According to court documents, Bankman and Fried both applied for permanent residency in the Bahamas. Bankman even resigned from his position at Stanford University to work at his son’s company.

FTX claims that Bankman became a key decision-maker for the company, responsible for managing tax matters and providing advice on hiring. In a company full of young people, Bankman should play the role of a mature adult.

The lawsuit also states that FTX agreed to pay Bankman a yearly salary of $200,000. Additionally, Bankman lobbied the company for a raise in early 2022. Shortly thereafter, Bankman-Fried transferred $10 million to his own parents.

According to the court documents, Bankman wrote to his son, “We are extremely touched by this gift.” “If not for this, mom wouldn’t have announced her retirement.”

In addition to money, this couple also received other benefits from their son’s company—Bankman made a cameo in FTX’s Super Bowl commercial, with Larry David (translator’s note: Larry David is a well-known American comedian, writer, and television producer) as the star of the commercial.

According to the lawsuit, shortly afterward, FTX purchased a $16.4 million property near its headquarters for this couple, and their names were also on the property deed.

A spokesperson for Bankman and Fried said that this house “is Joe’s temporary residence during his work in the Bahamas” and they never considered themselves the owners of this house.

The spokesperson also revealed that FTX’s external lawyers assured this couple that “FTX will have full ownership of the house and agree to document this in writing.”

When FTX went bankrupt in November 2022, Bankman still tried to stay optimistic. Shortly after, SBF resigned as CEO and FTX filed for bankruptcy. Within weeks, SBF was arrested.

And in the past year, most of the time, SBF has been living with his parents, under house arrest. His parents’ two friends at Stanford University offered hundreds of thousands of dollars as surety for him to secure his release and avoid prison.

In his parents’ home, SBF continued to openly discuss his case. In August, the judge revoked his bail and sent him to jail awaiting trial.

Whether before or after their son was sent to jail, for the most part, this couple tried to maintain a normal rhythm of life. They still had Sunday dinners with friends. Since the end of 2021, although Bankman did not return to teach at Stanford, he still attended faculty lunches and was often seen walking a small dog named Sanduo on campus. For safety reasons, this German Shepherd was adopted by SBF’s parents after FTX collapsed.

Last month, SBF’s trial officially began in New York. His parents usually arrive at the court around 8:30 am, listening to the hearing and taking notes. During lunch break or before the court officers take SBF back to jail, Fried sometimes has a chance to briefly speak to his son.

When SBF testified for the first time without a jury present, his mother put her head in her hands due to the prosecutor’s successive questions.

On the day the closing arguments began, Bankman and Fried were absent from the morning session, when the prosecution was delivering its final statement to the jury. But in the afternoon, when the defense started its statement, the two appeared in the spectator seats. That evening, they left the courtroom with their arms around each other’s shoulders.

The next day, the federal jury found SBF guilty on all seven charges. As the verdict was read, Bankman collapsed to the ground. Fried covered her face with both hands, tears streaming down.

Throughout the trial, SBF rarely looked back at his parents sitting in the spectator seats. As he was being taken away from the courtroom, SBF smiled at them.

A sentencing hearing for SBF will take place on March 28th next year. He also faces other charges, including conspiracy to commit bank fraud and bribery, which may go to trial in March. Meanwhile, his parents are preparing to appeal.

This could be a long process.

“Criminal appeals are always a very difficult battle,” said Renato Mariotti, a former federal prosecutor not involved in the FTX case and partner at the Bryan Cave Leighton LianGuaiisner law firm in Chicago. “When there is overwhelming evidence and comprehensive charges, you need a factor that can change the situation, a game changer. But if you don’t have such a factor, the situation becomes very difficult.”

Insiders say Bankman and Fried returned to California on Wednesday.

Bankman is also a clinical psychologist who has continued to serve some clients over the past year. He plans to focus on his old profession.

People familiar with them say that the couple’s circle of friends remains unchanged. Insiders also reveal that Bankman is expected to resume teaching next year. A spokesperson for Stanford University declined to comment on this.

LianGuaiul Brest, former dean of the Stanford Law School, said he saw no reason why Stanford University should not welcome his friends back. He said, “I can’t imagine any institution taking a biased stance because of a faculty member’s child or showing a biased or unfriendly attitude toward the faculty member themselves.”

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