Late Friday, the judge overseeing Sam Bankman-high-profile Fried’s criminal trial withdrew from the case, citing a potential conflict of interest resulting from the fact that her husband’s law firm had previously provided advice to FTX, Bankman-now-defunct Fried’s cryptocurrency exchange.
Just one day after being released from custody to live with his parents in their Palo Alto home while awaiting trial on eight criminal charges, including wire fraud, conspiracy to commit money laundering, and contravening federal campaign finance laws, federal judge Ronnie Abrams of the US District Court for the Southern District of New York formally withdrew from hearing the case on Friday afternoon.
Abrams’ husband, Greg D. Andres, is a partner at law firm Davis Polk & Wardwell, which advised FTX in 2021, according to Abrams’ order. Though Andres himself did not personally advise FTX, Abrams chose to recuse herself from the case “to avoid any possible conflict, or the appearance of one.”
Although Andres allegedly did not represent those clients either, the order also stated that Davis Polk & Wardwell had previously represented parties “that may be adverse to FTX and Defendant Bankman-Fried.”
Since Judge Abrams has withdrawn from the #FTX criminal case due to her husband’s employment with the Davis Polk law firm, a new judge will be chosen. Who’s next then? Observe this feed. Previously: https://t.co/e8z0rfsfkS Wang cries https://t.co/h4Ofp0t0IR pic.twitter.com/TTuUD9m9WS
— Inner City Press, December 23, 2022 (@innercitypress).
It will now be necessary to choose a new judge from the Southern District of New York to preside over Bankman-trial. Fried’s There is currently no timetable for when that decision will be made.
In these situations, judges are ordinarily chosen at random to preside over cases and are only disqualified if a potential conflict of interest arises.
Given that the connection between FTX and Abrams’ husband’s company was probably old news, it is unclear why Abrams waited until now to withdraw her name from consideration. Before making a decision, judges who are debating whether to recuse themselves from cases frequently consult with their district’s chief judge, an ethics committee, and review precedent.
On Thursday, a different judge, Gabriel Gorenstein, gave his blessing to a deal that would see Bankman-Fried released from jail on a record-breaking $250 million appearance bond. Bankman-Fried didn’t actually have to pay anything to get out of jail; instead, the cryptocurrency tycoon’s parents, along with another yet-to-be-identified signatory, will only be responsible for that sum if Bankman-Fried misses any future court dates.
The former billionaire, who was arrested in The Bahamas last week and spent less than a week in jail there before being extradited to the United States on Wednesday, has now returned home in time for Christmas. He departed for California on a flight on Thursday evening, and an American Airlines employee saw him using his laptop.
SBF returning to his parents in business class. Bail ought to have been estimated at $11 billion… pic.twitter.com/oBLw5ZAWph
December 23, 2022 — Carl From The Moon (@TheMoonCarl)
Although perhaps not extraordinary in and of itself, Judge Abrams’ decision to recuse herself from the Bankman-Fried case on Friday highlights the intricate interconnections among the nation’s political, academic, and business elite.
The former head of FTX’s sister trading company Alameda Research, Caroline Ellison, is the daughter of two MIT professors, one of whom was Gary Gensler’s supervisor at MIT when he was a student and is now the chairman of the SEC. Bankman-parents Fried’s are both Stanford Law professors.
The SEC revealed on Thursday that Ellison and FTX co-founder Gary Wang are fully cooperating with the agency’s investigation into FTX and have pleaded guilty to a number of charges. The SEC had earlier this month charged Bankman-Fried with defrauding investors.
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