Joseph Bankman, the father of the former FTX CEO, Sam Bankman-Fried (SBF), raised concerns about his compensation during his tenure at FTX US, transforming what appeared to be a straightforward contractual matter into a family-centric issue.
In a filling dated 18 September, the FTX debtors initiated legal proceedings within the United States (US) Bankruptcy Court for the District of Delaware, levelling allegations against Joseph and Barbara, which suggest that SBF’s parents may have been involved in the misappropriation of substantial sums within the exchange’s operations.
According to the contents of the court documents, Joseph’s employment agreement with FTX US had stipulated an annual salary of $200,000, a figure established following his leave of absence from Stanford Law School in December 2021.
Joseph had emailed his son according to the filling:
“Gee, Sam I don’t know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this.”
However, a twist emerges as he appeared to be unaware of the terms within the contract, asserting to both FTX US and his son that he had anticipated an annual salary of $1 million instead.
The legal complaint further illuminates this intricate family dynamic by mentioning that Joseph sought to involve Barbara, implying that SBF’s mother may have played a pivotal role in influencing her son’s perspective on the salary adjustment.
It is important to note that Barbara is the former CEO of FTX.
Remarkably, the complaint outlines that Joseph’s efforts in this regard did yield favourable results.
Subsequently, SBF extended significant financial benefits to his parents, including a sum of $10 million sourced from Alameda, a $16.4 million property situated in The Bahamas, funded through FTX Trading.
Additionally, Joseph was able to expense approximately $90,000 to FTX Trading, located in the island nation, and was granted options to acquire company stock.
Referring to the lawsuit brought Monday against SBF’s parents, their two attorneys said:
“This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins. These claims are completely false. [John J. Ray III, FTX’s bankruptcy-era CEO] and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better.”