The U.S. Securities and Exchange Commission (SEC) presented, last Friday, settlement proposals for key figures linked to former CEO and co-founder of FTX, Sam Bankman-Fried. These collaborators played a decisive role in testifying against him in his criminal trial.
According to the regulatory body, consensual sentencing proposals involving Caroline Ellison, former CEO of Alameda Research, Gary Wang, former technology director of FTX, and Nishad Singh, former head of engineering of the company, were filed in the U.S. District Court for the Southern District of New York.
Without contesting the SEC charges, the three accepted measures that include a ban on future violations of market rules, temporary restrictions related to conduct, and limitations on holding leadership positions in publicly traded companies.
Ellison, who left prison this week after serving 11 months, committed to not conducting securities transactions outside of her personal accounts. Additionally, she accepted a ten-year suspension from holding board positions in listed companies. She had been sentenced to two years in prison, although she faced the possibility of up to 110 years for crimes such as wire fraud, securities fraud, and money laundering.
Wang also agreed to restrictions similar to those of Ellison, according to another court document. Both he and Singh accepted to stay away from executive and board positions for eight years. Both avoided prison sentences, receiving only three years of supervised probation, after having already served time in detention. Judge Lewis Kaplan highlighted their cooperation, stating that they "did the right thing."
John J. Ray III, current CEO of FTX and bankruptcy expert, advocated for a lighter sentence for Singh, emphasizing that his cooperation was essential to increase asset recovery for creditors.
The three former FTX and Alameda executives played a key role in building the case against Bankman-Fried, entering into cooperation agreements with prosecutors before the trial.
Bankman-Fried was sentenced to 25 years in prison in 2024, found guilty of diverting about $8 billion from clients, in addition to defrauding investors and creditors. The money was used for risky financial bets, political donations, and the acquisition of luxury real estate. Despite the conviction, he is appealing the decision and continues to claim innocence. In October, he published a 14-page document on the X platform, arguing that FTX was never insolvent, repeating arguments already presented in his criminal defense.
