FTX sues ex-compliance officer Daniel Friedberg

Present management for FTX sued the corporate’s former compliance officer, Daniel Friedberg, as seen in a courtroom submitting dated June 27.

Friedberg allegedly breached duties

The submitting broadly alleges that Friedberg breached his fiduciary duties and engaged in misconduct. Friedberg beforehand served as Chief Compliance Officer at FTX, Common Counsel at Alameda Research, and in different inner and exterior positions.

Critically, FTX alleged that Friedberg induced the waste of firm belongings and helped former FTX CEO Sam Bankman-Fried and different executives divert funds.

FTX particularly mentioned that Friedberg created an entity known as North Dimension to commingle and misappropriate funds. It additionally alleged that, when a deliberate IPO required an audit, Friedberg created a “sham” intercompany settlement to cover transfers.

Moreover, Friedberg was accused of “whitewashing” or overlaying up whistleblower complaints that involved the corporate’s misuse and commingling of funds. Friedberg allegedly fired and paid off one whistleblower with a severance package deal.

Plus, Friedberg additionally helped perform billions of {dollars} of transfers to FTX executives and portrayed these transfers as firm loans. Actually, the supposed loans weren’t repaid and couldn’t have been repaid, in line with the submitting.

In a single part, FTX alleged that the early firm was “bancrupt in any respect related instances” and was “constructed on a home of playing cards” from the time of its creation. FTX asserted that Friedberg supported a scheme that defrauded and hindered prospects.

FTX seeks fines and damages

FTX, underneath its present administration, now seeks numerous fines, damages, and disgorgements from Friedberg. It has additionally requested for sure property to be returned with curiosity. The related quantities shall be decided in a future trial.

FTX filed the fees as a part of the agency’s ongoing chapter proceedings within the U.S. Chapter Courtroom for the District of Delaware.

Different current stories recommend that FTX is attempting to restart operations underneath its present management. The corporate owes its customers $8.7 billion — nearly all of which has been recovered regardless of being lacking or misappropriated prior to now.

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