Judge blocks Bankman-Fried’s attempt to obtain key documents in fraud prosecution: Report

The request was denied by US District Judge Lewis Kaplan, who characterized it as a “fishing expedition” lacking justification.

Sam Bankman-Fried, the co-founder of FTX, has been denied his request to obtain documents from a Silicon Valley law firm, Fenwick & West LLP, as part of his defense strategy in his ongoing federal fraud case, Bloomberg reported. Bankman-Fried had hoped to use these documents to support his claim that he relied on legal advice while engaging in the activities for which he is currently facing prosecution.

In a recent development, Bankman-Fried’s legal team approached the judge overseeing the case, urging the prosecution to hand over the documents obtained from Fenwick & West or to allow them to be obtained directly through a subpoena. However, US District Judge Lewis Kaplan dismissed the request, calling it as “fishing expedition” that would not be justified.

In preparation for his defense, Bankman-Fried’s legal team had planned to argue that he had acted in reliance on the advice provided by the law firm Fenwick & West. Bloomberg noted that this strategy is often employed by criminal defendants to counter prosecution claims of intentional lawbreaking.

The counsel from Fenwick & West reportedly covered various topics, including the use of encrypted messaging apps, multimillion-dollar loans to FTX executives, and compliance with US banking regulations, which Bankman-Fried’s lawyers have argued are integral to the charges leveled against their client.

Bankman-Fried, who is facing two criminal trials, has been accused of orchestrating a complex fraud scheme involving the misappropriation of billions of dollars in FTX customer funds. The funds were allegedly used for high-risk investments, personal expenses, and even political donations.

On June 22, FTX initiated a lawsuit in the United States Bankruptcy Court for the District of Delaware, aiming to recover more than $700 million from investment firms linked to the company. The lawsuit targets K5 Global, Mount Olympus Capital, and SGN Albany Capital, along with their affiliated entities and co-owners Michael Kives and Bryan Baum. FTX alleges that funds were transferred from its affiliated firm, Alameda Research, to these entities through shell companies, and it seeks to reclaim the funds as avoidable transactions.

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