The parents of FTX founder Sam Bankman-Fried are asking for the lawsuit filed against them by the exchange to be dismissed. They maintain they were not involved in the alleged fraudulent transfers or breaches of fiduciary duty.
Lawyers for Joseph Bankman and Barbara Fried stated in their filing that the plaintiffs, including the debtors of FTX and Alameda Research, sought to “take advantage of the fact that Defendants' son is a founder and director of the Debtor entities.”
“This relationship is not actionable. Although Plaintiffs allege that Defendants interacted with the Debtor entities in limited capacities, neither Defendant ever held any executive role,” Bankman and Fried's attorneys wrote.
This document supporting the motion to dismiss the case comes after FTX filed a complaint against Bankman-Fried's parents in September 2023.
The complaint sought to recover damages caused by fraudulent transfers, breaches of fiduciary duties, and other alleged misconduct.
“As parents of Bankman-Fried, Bankman and Fried used their access and influence within the FTX business to directly and indirectly enrich themselves by millions of dollars, knowingly doing so to the detriment of the debtors and creditors in these Chapter 11 Cases,” the plaintiffs alleged in their September filing.
The plaintiffs also alleged that Bankman described Alameda as a “family business” and purchased a $16.4 million luxury estate in the Bahamas called “Blue Water,” or “Old Fort Bay,” with cash provided by debtors.
Bankman and Fried denied these allegations, stating that Bankman's family relationships and communications with Bankman-Fried “do not make Mr. Bankman the de facto director of Alameda or FTX US.”
*This is not investment advice.