QUESTION ASKED AND ANSWERED: Could Sam Bankman-Fried go to prison for the FTX disaster?
Even if the facts seem may seem damning on the surface, lawyers contacted by Fortune cited two potential obstacles to any criminal conviction—though ones prosecutors could likely overcome.
The first is jurisdiction. Since FTX is an offshore business with headquarters in the Bahamas, and did not cater to Americans, defense lawyers could argue the actions of its executives are beyond the reach of U.S. law enforcement.
The Justice Department, however, is good at finding a “nexus” linking overseas defendants to American shores, according to Randall Eliason, a former prosecutor who now teaches law at George Washington University. Two other lawyers who spoke to Fortune echoed this view, saying it would likely be easy for prosecutors to find a nexus in the FTX case—in the form of a tie between FTX and U.S. banks, emails, stateside meetings, or other interactions.
The second potential obstacle to a criminal prosecution comes in the form of intent. Specifically, Eliason says that any conviction will turn on whether SBF was not simply incompetent but whether he deliberately deceived investors.
“Mismanaging your company and losing a bunch of other people’s money is not criminal. It happens all the time. For a criminal case, there has to be deception,” he said.
Eliason added that he was not familiar with the details of the FTX debacle, but that prosecutors can show deception by means of something like a smoking gun communication, or by showing a pattern of behavior that points to fraudulent intent.
A longtime crypto lawyer, however, told Fortune he has no doubt that SBF’s behavior and FTX’s business practices clearly demonstrated fraud. The lawyer, who spoke on condition of anonymity, pointed to evidence like FTX’s terms of service as well as the company’s investor presentations and public statements by SBF.
In the meantime though, will SBF show up for this discussion, which was announced by the New York Times in October? Yellen, Zelensky and Zuckerberg Will Speak at DealBook Summit. The conference, scheduled for Nov. 30, will bring together the biggest newsmakers in business, politics and culture.
We are pleased to announce our lineup for the DealBook Summit, to be held at Jazz at Lincoln Center in New York City on Nov. 30. Andrew will host a series of conversations with the biggest newsmakers in the world of business, politics and culture.
Among the speakers: President Volodymyr Zelensky of Ukraine; Treasury Secretary Janet Yellen; Mark Zuckerberg, Meta’s co-founder, chairman and C.E.O.; Shou Chew, TikTok’s C.E.O.; Mike Pence, former vice president of the United States; Andy Jassy, Amazon’s C.E.O.; Reed Hastings, Netflix’s co-founder and co-C.E.O.; Mayor Eric Adams of New York; Larry Fink, BlackRock’s chairman and C.E.O.; Sam Bankman-Fried, FTX’s C.E.O.; and Priscilla Sims Brown, Amalgamated Bank’s C.E.O.
It’s the people who brought you 2022 — C’mon Gray Lady, make this panel happen!