Federal Judge Rejects Sam Bankman-Fried’s Attempt to Blame FTX’s Lawyers in Opening Statements
In a significant development in the case against Sam Bankman-Fried, the federal judge overseeing the proceedings ruled on Sunday that the founder of FTX, cannot attribute the company’s collapse or its operational decisions to its lawyers in his opening statements. This decision comes as Bankman-Fried’s defense team sought to employ a so-called “advice-of-counsel” defense strategy.
Judge Lewis Kaplan made it clear that while Bankman-Fried’s attorneys cannot mention the involvement of external counsel in their opening statements, they are still allowed to pursue this line of defense later in the trial if they provide adequate notice to the judge and the Department of Justice (DOJ) without the jury present.
The defense team had initially informed the DOJ and the court earlier this year of their intention to argue that FTX’s legal counsel, both in-house and from the firm Fenwick & West, played a role in certain pivotal decisions made by the company. These decisions included the use of auto-deleting messaging services like Signal, the establishment of the “North Dimension” entities, the banking relationship between FTX entities and Silvergate Bank, loans extended to FTX and Alameda Research executives, intercompany agreements, and FTX’s terms of service.
However, Judge Kaplan’s ruling emphasized that the defense’s vague and unspecified references to the involvement of legal counsel in these decisions could potentially confuse or bias the jury. As a result, the judge opted to block the defense team from raising this issue during the opening statements.
The “advice-of-counsel” defense is a legal strategy that often arises in cases where a defendant seeks to justify their actions by claiming they acted based on the advice of legal counsel. In this case, Bankman-Fried’s defense team asserted that both in-house and external lawyers were integral in shaping the decisions and actions taken by FTX.
The DOJ opposed this defense, arguing that Bankman-Fried’s legal team had not provided sufficient details to support their argument and should be prohibited from pursuing it. Judge Kaplan’s ruling appears to reflect a balance between allowing the defense to present their case while ensuring that it adheres to the rules of evidence and maintains clarity for the jury.
Sam Bankman-Fried, a prominent figure in the cryptocurrency industry, faces a complex legal battle with allegations related to the collapse of FTX, a company that once held a significant position in the cryptocurrency exchange market. With this recent ruling, the stage is set for a closely-watched trial where the defense’s strategy and arguments regarding the role of legal counsel will play a central role in determining Bankman-Fried’s legal fate.
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