The judge assigned to oversee the massive criminal trial of Sam Bankman-Fried removed herself from the case late Friday, citing a potential conflict of interest stemming from the fact that her husband’s law firm had previously advised FTX, Bankman-Fried’s cryptocurrency exchange. that has now stopped.
Federal Judge Ronnie Abrams of the US District Court for the Southern District of New York formally withdrew from adjudicating the case Friday afternoon, just one day after Bankman Fried’s decision. Released from custody to stay with his parents at their home in Palo Alto while he awaits trial Eight criminal charges Including wire fraud, conspiracy to commit money laundering, and violations of federal campaign finance laws.
Abrams’ husband, Andres, is a partner at the law firm Davis Polk & Wardwell, which advised FTX in 2021, according to Abrams. Order. Although Andres himself did not personally advise FTX, Abrams chose to recuse herself from the case to “avoid any potential conflict, or one coming up.”
The order also stated that Davis Polk & Wardwell previously represented parties that “may be adverse to FTX and Defendant Bankman-Fried,” though Andres did not represent those clients either.
A new judge will now have to be selected from the Southern District of New York to oversee the Bankman-Fried trial. No timeline has yet been set for when this selection will be made.
Judges in such circumstances are usually appointed at random to hear cases, and are removed from hearing only in the event of a possible conflict of interest.
It’s unclear why Abrams waited until now to recuse herself, given that her husband’s company connection to FTX was likely not new information. Often, judges considering whether to deviate from cases discuss such matters with the Chief Justice of their district, ethics committee, and case law before making a decision.
In court on Thursday, another judge, Gabriel Gornstein, approved a deal to release Bankman-Fried from prison in a record $250 million appearance guarantee. Bankman-Fried didn’t actually have to pay a dime to secure his release: that money is only owed in court (by the fallen cryptocurrency mogul, his parents, and another yet-to-be-named signer) if Bankman-Fried fails to show it. Even on any future court date.
Meanwhile, the billionaire who spent less than a week in jail in the Bahamas is yet to come there last week before it was it was delivered To the US on Wednesday, he got home just in time for Christmas. He boarded a Thursday night flight to California and was seen using his laptop in the American Airlines business class lounge.
That Judge Abrams recuse on Friday, while it may not be exceptional in itself, highlights the complex interconnectedness of the upper echelons of America’s political, academic, and business elite, a topic well covered in the Bankman-Fried case.
Bankman-Fried’s parents are both professors of law at Stanford University. Carolyn Ellison, the former president of FTX’s sister trading company Alameda Research, is the daughter of two MIT professors, one of whom was the supervisor there of then-MIT professor Gary Gensler, who is now chair of the SEC.
On Thursday, the Securities and Exchange Commission — which charged Bankman-Fried with defrauding investors earlier this month– revealed that Ellison and FTX co-founder Gary Wang are cooperating fully with the agency’s investigation into FTX, and pleaded guilty to set of cartoons.
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