- Sam Bankman-Fried and his family are adopting a controversial legal strategy of blaming their law firm, Sullivan & Cromwell, for the unfolding legal issues surrounding FTX’s bankruptcy.
- A recent New York Times piece criticizes the law firm, fueling the Bankman-Fried family’s narrative that bad legal advice was at the core of their woes.
- This “advice of counsel” tactic carries significant risks, potentially backfiring by exposing new evidence to prosecutors and calling the involvement of Bankman-Fried’s parents into question.
An in-depth analysis of Sam Bankman-Fried’s legal strategy of blaming their lawyers from Sullivan & Cromwell. We explore the risks and potential implications of this approach.
Blaming the Lawyers: A Glimpse into the New York Times Piece
The Bankman-Fried family is criticizing their law firm, Sullivan & Cromwell, accusing them of betrayal and setting up Sam as the scapegoat for FTX’s downfall. These criticisms are partially fueled by a recent New York Times piece, which argues that the firm raked in millions in legal fees from the embattled exchange, only to turn around and distance themselves from their client’s troubles.
Validity of Criticisms: Are They Justified?
While some may argue that there’s merit to the criticisms against Sullivan & Cromwell, legal experts point out that claiming unethical conduct by a law firm is not equivalent to proving illegality. Sullivan & Cromwell, with its long history, presumably has mechanisms in place to ensure that it does not violate its legal obligations towards clients. However, their hefty fees in FTX’s bankruptcy case have raised eyebrows.
The ‘Advice of Counsel’ Tactic: A Double-Edged Sword
By adopting an “advice of counsel” defense, the Bankman-Fried family appears to be setting the stage for claiming that their legal woes resulted from bad advice. However, this approach is fraught with peril. Blaming their lawyers allows these legal professionals to defend themselves, potentially breaking attorney-client privilege and revealing new evidence for the prosecution. The strategy seems more like a Hail Mary than a well-thought-out defense.
The Involvement of Bankman-Fried’s Parents
The tactic also opens the door for further scrutiny into who exactly was advising Bankman-Fried in his business ventures. His tax lawyer father had a significant role in key business decisions, including the creation of the FTT token. Furthermore, his father received $10 million in FTX funds that have not been returned, adding another layer of complexity to this already tangled web.
Conclusion
In the unfolding legal drama around Sam Bankman-Fried and FTX, the strategy of blaming their lawyers may be more of a last resort than a calculated move. While it’s tempting to lay blame on Sullivan & Cromwell, especially given their exorbitant legal fees, the strategy is risky at best. It poses the threat of new evidence coming to light, all while drawing attention to the involvement of Bankman-Fried’s parents. The situation underscores the complexity of high-stakes legal battles in the crypto world, where bad decisions can be amplified, and where one’s choice of defense can make or break their case.
