Former top FTX attorney assisted US authorities in Bankman-Fried . case

Friedberg provided details about FTX during a November 22 meeting with two dozen investigators, the person said. The meeting, held at the U.S. Attorney’s Office for the Southern District of New York, included officials from the Department of Justice, the Federal Bureau of Investigation and the U.S. Securities and Exchange Commission, sources told Reuters. know. Emails between attendees scheduling meetings with those agencies were viewed by Reuters.

At the meeting, he told prosecutors what he knew about Bankman-friedThe source said the use of client money to finance his business empire. Friedberg recounted his conversations with other top executives on the topic and provided details on how Bankman-Fried’s Alameda Research hedge fund was performing, the source said.

Friedberg’s collaboration has not been previously reported. He was not charged and was not informed that he was under criminal investigation, the source said. Instead, he hopes to be called as a government witness in the Bankman-Fried trial in October, the person said.

Friedberg’s attorney, Telemachus Kasulis, the FBI and FTX did not respond to a request for comment on its partnership. Spokespersons for the SEC, Department of Justice and Bankman-Fried declined to comment.

Bankman-Fried allegedly transferred billions of dollars of FTX client funds to Alameda to fund venture capital investments, high-end real estate purchases and political donations. On Tuesday, he insist not guilty in Manhattan federal court.

Manhattan U.S. Attorney Damian Williams, who is leading the criminal case against the now-bankrupt FTX, said last month: “If you’ve engaged in misconduct at FTX or Alameda, now is the time. to get over it.”

Bankman-Fried’s two closest associates, Caroline Ellison, a former CEO of Alameda, and Gary Wang, former chief technology officer of FTX, pleaded guilty to fraud and agreed to cooperate. Ellison’s attorney did not respond to a request for comment. Wang’s attorney declined to comment.

PROSECUTOR MEETING

FTX filed for bankruptcy protection on November 11. A few days later, on November 14, Friedberg received a call from two New York-based FBI agents. He told them he was willing to share information but needed to ask FTX to give up its attorney-client privilege, according to a person familiar with the matter and emails seen by Reuters.

Friedberg wrote to FTX the next day asking the company to waive his privileges so he could cooperate with prosecutors, according to emails seen by Reuters. FTX did not do so, but agreed with Friedberg on points he could disclose to investigators, the person said.

Friedberg later wrote back to the two FBI agents, telling them in an email reviewed by Reuters: “I want to cooperate on all fronts.”

The US attorney’s office held a meeting for Friedberg to sign the so-called proposal letters prepared for him by the SEC and other agencies, according to the source and an email exchanged by the participants. Proposal letters often describe a potential agreement between authorities and individuals who are witnesses or the subject of an investigation.

“Thick and Thin”

Before working as a consultant for FTX, Friedberg consulted for many banking, fintech and online gaming companies.

One of his previous employers, a Canadian online gaming company called Excapsa Software, where he was a general counsel, also caused controversy due to a related fraud scandal. to a poker site it runs called Ultimate Bet. A Canadian gambling commission in 2008 fined Ultimate Bet $1.5 million for failing to enforce measures to prevent fraudulent activities. Excapsa has since dissolved.

According to an audio recording available on the PokerNews website, Friedberg and several other Ultimate Bet associates discussed separately that year how to handle the scandal and minimize player refunds. Friedberg previously told NBC News that the audio was recorded illegally, but the NBC article did not say that Friedberg challenged its authenticity.

Friedberg first represented Bankman-Fried in 2017 as an outside counsel while working at US law firm Fenwick & West, where he chaired the company’s payments systems team, the source said. with this problem said. At the time, the source said Friedberg advised Bankman-Fried to run Alameda, the company he founded that year.

In 2020, when Bankman-Fried launched a separate exchange for US customers called FTX.US, Friedberg moved in internally as the chief executive officer of FTX.

In a now-deleted blog post published that year on the FTX’s website, Bankman-Fried wrote that Friedberg was FTX’s legal counsel “from the beginning,” noting that he had been “in the company of things.” with us from all difficulties”.

Friedberg resigned on November 8, a day after Bankman-Fried revealed to top executives that FTX was almost out of money, according to the source and three others briefed on the talks, along with with text messages that his legal team exchanged at the time.

This story has been published from the electronic agency’s feed without any modification to the text. Only the title has been changed.