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Sam Bankman-Fried, FTX misled investors, lent billions to Alameda, Caroline Ellison says
Caroline Ellison, former chief executive of trading firm Alameda Research, told a federal judge last week that she agreed with executives of FTX, including former CEO Sam Bankman-Fried, to mislead lenders and customers on how much Alameda was borrowing from the now-bankrupt exchange.
NEW YORK, NEW YORK – DECEMBER 22: FTX founder Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on December 22, 2022 in New York City. Bankman-Fried, who was indicted on December 9th and arrested 3 days later by Bahamas law enforcement at the request of U.S. prosecutors, consented to extradition to the U.S. where he is facing eight criminal counts of fraud, conspiracy and money-laundering offenses which includes making illegal political contributions. He is potentially facing life in prison if convicted. He was released on $250 million bond with the bail package requiring him to stay with his parents in California. (Photo by Michael M. Santiago/Getty Images)
Caroline Ellison, former chief executive of trading firm Alameda Research, told a federal judge last week that she agreed with executives of FTX, including former CEO Sam Bankman-Fried, to mislead lenders and customers on how much Alameda was borrowing from the now-bankrupt exchange.
In a transcript of a Monday hearing unsealed on Friday, Ellison said that she knew “it was wrong” and that she was aware that Alameda was given access to a borrowing facility on FTX.com from 2019 through 2022.
“We prepared certain quarterly balance sheets that concealed the extent of Alameda’s borrowing and the billions of dollars in loans that Alameda had made to FTX executives and to related parties,” Ellison, who has pleaded guilty to fraud charges surrounding the collapse of FTX, said.
FTX cofounder Gary Wang joined Ellison in pleading guilty to fraud. Both key figures of the Bankman-Fried empire are cooperating with prosecutors’ investigations into the exchange’s collapse.
Bankman-Fried is facing multiple criminal charges and was extradited from the Bahamas last week. He was released on Thursday through a US$250 million bail package, which prosecutor Nicolas Roos called the “largest ever pretrial bond.”
