Joseph Bankman and Barbara Fried are being investigated on multiple fronts over whether they were complicit in acts that led to the collapse of their son’s crypto company.
As Joe Bankman and Barbara Fried sat in a Bahamian courtroom Tuesday, the popular Stanford law professors had to be worried about more than whether their FTX founder son, Sam Bankman-Fried, will go to prison for orchestrating what a federal prosecutor described as “one of the biggest financial frauds in American history.”
It could get especially ugly for the couple, who are accustomed to a privileged life in high-minded academia. If prosecutors and the FBI want to play hardball, they could try to force Bankman and Fried to cooperate with the investigation and to testify against their beloved son. “Nevertheless, it’s likely that some level of responsibility falls on his savvy, sophisticated parents,” Barhoma said. Among other things, it’s been reported that they influenced their son’s narrative about using crypto to do good in the world. Barhoma said they could have encouraged his recent public statements about making “a lot of mistakes,” but never knowingly committed fraud.
It also was revealed on Tuesday that FTX is investigating the role that Bankman and Fried played in the company’s implosion. Testifying before the House Financial Services Committee Tuesday morning, John J. Ray, who took over as CEO after the company declared bankruptcy and Bankman-Fried stepped down, said Bankman had provided legal advice: “He received payments … the family certainly received payments.
. It’s certainly a scenario the couple never could have imagined, given the rarified, philosophically correct world they sought to create after joining the Stanford Law faculty in the 1980s., Bankman and Fried were “obsessed” with ethics. Bankman was known for his expertise in tax law, while Fried was acclaimed for her scholarship in law and philosophy.
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