In brief
- The SEC proposed settlement agreements for Alameda and FTX executives.
- The executives would be restricted from serving in corporate leadership positions for years to come.
- The group testified against Sam Bankman-Fried at his criminal trial.
The U.S. Securities and Exchange Commission proposed settlement agreements on Friday for key members of FTX co-founder and former CEO Sam Bankman-Fried’s inner circle, whose testimony played a critical role in his criminal trial.
The regulator said that it filed so-called proposed final consent judgements in the Southern District of New York with regards to former Alameda Research CEO Caroline Ellison, former FTX CTO Gary Wang, and former FTX Head of Engineering Nishad Singh.
Without denying the Commission’s allegations, Ellison, Wang, and Singh agreed to prohibitions on future violations of securities laws, temporary conduct-based injunctions, as well as restrictions on their ability to serve as officers and directors of publicly traded companies.
Ellison, who was released from prison this week after serving 11 months, agreed to not engage in securities transactions that aren’t applicable to personal accounts, according to a court filing. She agreed to a 10-year ban on serving in corporate leadership positions for publicly traded companies.
Ellison was previously sentenced to two years in prison, but she faced up to 110 years in prison after pleading guilty to wire fraud, securities fraud, and money laundering charges.
Wang agreed to similar restrictions as Ellison on handling securities, according to a separate court filing. He and Singh also agreed to eight-year officer-and-director bars.
Wang and Singh avoided prison after both were sentenced last year to time served and three years of supervised release. At their respective sentencing hearings, U.S. District Judge Lewis Kaplan commended their cooperation, adding, “You did the right thing.”
FTX CEO John J. Ray III, a storied bankruptcy executive, advocated that Singh be given a lenient sentence, describing his help as crucial to maximizing recoveries for creditors.
The aforementioned executives at FTX and Alameda, the collapsed crypto exchange’s sister trading firm, helped shape the government’s case against Bankman-Fried. All three struck cooperation agreements with prosecutors before his trial began.
Bankman-Fried, who received a 25-year prison sentence last year, was found guilty of stealing at least $8 billion in customer funds, while lying to creditors and investors. He used stolen funds to finance risky investments, donate to U.S. politicians, and purchase luxury real estate.
The former FTX CEO, who is pursuing an appeal, maintains his innocence. In October, a 14-page document was shared via his X account that claimed FTX was never insolvent, echoing arguments raised at his criminal trial years ago.