NEW YORK, Dec 6 (Reuters) – FTX founder and former chief executive Sam Bankman-Fried and Caroline Ellison, head of his now-defunct trading subsidiary, called in defense attorneys as authorities Americans are investigating the collapse of the crypto exchange, according to a Bankman-Fried spokesperson and a source familiar with Ellison’s selection.
Bankman-Fried has retained Mark S. Cohen, of Cohen & Gresser, Bankman-Fried spokesman Mark Botnick said in an emailed statement. Cohen could not be reached for comment.
Ellison, who ran trading firm Alameda Research, hired Washington-based law firm Wilmer Cutler Pickering Hale and Dorr to represent her, a source familiar with the matter told Reuters. Neither Ellison nor company spokespersons responded to requests for comment.
Regulators around the world, including in the Bahamas where FTX is based and in the United States, are investigating the role of top FTX executives, including Bankman-Fried, in the company’s stunning collapse, Reuters previously reported. The crypto exchange filed for bankruptcy last month after a liquidity crunch that saw at least $1 billion in client funds disappear.
Prosecutors and regulators have not charged Bankman-Fried or Ellison with a crime. They face civil lawsuits from FTX customers.
Stanford Law School professor David Mills is consulting on the matter for Bankman-Fried, Botnick said. Mills did not respond to requests for comment. Semafor previously reported Mills’ consultancy work for Bankman-Fried.
Cohen, former Assistant United States Attorney for the Eastern District of New York, recently defended Ghislaine Maxwell in her sex trafficking trial.
Bankman-Fried previously hired Martin Flumenbaum of the law firm Paul, Weiss, Rifkind, Wharton & Garrison, but the law firm said last month he no longer represents him due to disputes.
A widely followed Twitter account previously named WilmerHale as Ellison’s attorney.
In recent weeks, US authorities have sought information from investors and potential investors in FTX, according to two sources familiar with the requests. Federal prosecutors in New York are seeking details of all communications these companies have had with the crypto firm and its executives, including Bankman-Fried, the sources said. Bloomberg previously flagged the requests for information.
The Securities and Exchange Commission has also requested similar information from investors, one of the sources said.
Those sources and lawyers, speaking on condition of anonymity, said U.S. authorities are likely looking for any evidence of material misrepresentation of investor information.
Spokespersons for the Manhattan U.S. Attorney’s Office and the SEC declined to comment on the request for information.
FTX secretly transferred client funds to its subsidiary Alameda Research to fill a revenue shortfall at the crypto trading firm, Reuters previously reported. The Wall Street Journal previously reported that Ellison and senior FTX officials knew the crypto exchange dipped into client funds to help Alameda deal with its debts.
Speaking via video link at The New York Times Dealbook Summit with Andrew Ross Sorkin on Wednesday, Bankman-Fried said he did not knowingly mix client funds on FTX with funds from his proprietary trading firm, AlamedaResearch.
“I never tried to commit fraud,” Bankman-Fried said, adding that he didn’t believe he had any criminal liability.
Additional reporting by John McCrank in New York and Jenna Greene in San Francisco; Editing by Megan Davies, Noeleen Walder, Leslie Adler and David Gregorio
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