The judge overseeing former FTX CEO Sam Bankman-Fried’s fraud trial has imposed restrictions on his ability to shift blame onto FTX’s legal counsel as part of his defense.
Jury selection for Bankman-Fried’s case begins Tuesday in New York federal court. But in a pre-trial order, Judge Lewis Kaplan ruled that SBF cannot use his opening statement to claim FTX lawyers approved or condoned alleged criminal actions.
Judge Kaplan explained that allowing Bankman-Fried to focus too heavily on FTX lawyers’ role risks confusing jurors and prejudicing them against the prosecution’s case.
SBF Wanted to Pin Blame on FTX Attorneys
According to August court filings, Sam Bankman-Fried’s lawyers signaled plans to argue that he relied on legal advice from Fenwick & West LLP and FTX’s in-house counsel regarding key company decisions now being scrutinized.
This includes autosweeping customer funds to crypto trading firm Alameda Research, deletion policies for electronic communications, and issuance of unregistered securities.
SBF’s team wants to present evidence showing attorneys “reviewed and signed off” on such actions to absolve Bankman-Fried of wrongdoing.
But Judge Kaplan’s order aims to prevent the trial from digressing into arguments over the conduct of FTX lawyers, who are not defendants in the criminal case.
DOJ Argued Against Allowing FTX Lawyer Defense
The Department of Justice previously contended that Bankman-Fried should provide more specifics if he plans to employ a reliance on counsel defense.
Federal prosecutors also asked Judge Kaplan to prohibit any legal advice-related questioning or arguments by SBF’s lawyers that are irrelevant to the fraud and conspiracy charges he faces.
While Bankman-Fried can still maintain that he acted in good faith based on attorney recommendations, Kaplan’s ruling places limits around overemphasizing that narrative in a way that could confuse or unfairly sway the jury.
As the high-profile trial kicks off, the judge’s effort to keep proceedings focused directly on SBF’s alleged actions aims to prevent distraction from the core criminal charges at stake. But Bankman-Fried will still have opportunities to claim that fault ultimately lies with the lawyers who enabled FTX’s illicit practices according to his defense.