Sam Bankman-Fried Released on $250 Million Bond
FTX founder makes first U.S. court appearance following his extradition from the Bahamas
FTX founder makes first U.S. court appearance following his extradition from the Bahamas
FTX founder Sam Bankman-Fried was released on a $250 million bond Thursday and ordered to detention in his parents’ Palo Alto, Calif., home, after the former executive’s first appearance in a New York federal court following his extradition from the Bahamas.
Mr. Bankman-Fried, charged with engaging in criminal conduct that contributed to the cryptocurrency exchange’s collapse, came to court shackled by the ankles and wearing a charcoal grey suit. He sat quietly at the defence table, flanked by his lawyers.
Mr. Bankman-Fried left the courthouse in a black SUV. At a later date he will enter a plea on charges that he engaged in fraud and other offences, a federal magistrate judge said. The next court hearing is set for Jan. 3.
Magistrate Judge Gabriel Gorenstein set the bail package, which requires Mr. Bankman-Fried to be under electronic monitoring and restricts his travel to parts of northern California and New York.
Assistant U.S. Attorney Nicolas Roos called Mr. Bankman-Fried’s alleged crimes “a fraud of epic proportions” and said he believed the $250 million bond was the largest ever. The judge said the bond would be cosigned by four financially responsible people, including one non-family member.
The evidence against Mr. Bankman-Fried includes the testimony of multiple cooperators and more than a dozen witnesses from FTX and his crypto-trading firm Alameda Research, as well as encrypted text messages and tens of thousands of pages of financial documents, Mr. Roos said.
The government agreed to the bail package, Mr. Roos said, because Mr. Bankman-Fried had consented to extradition. Mr. Bankman-Fried’s financial assets had diminished significantly from when they were worth billions of dollars, he said.
Mark Cohen, a lawyer for Mr. Bankman-Fried, said his client agreed to extradition, which could have taken years, in order to address the charges. He noted Mr. Bankman-Fried would be living with both of his parents, who helped to secure his bond with the equity interest in their home.
Judge Gorenstein said he agreed to the bail package because he believed Mr. Bankman-Fried wasn’t a flight risk and didn’t pose a danger to the community.
“It will be very difficult for this defendant to hide without being recognised,” the judge said. Mr. Bankman-Fried had achieved such notoriety that it would be impossible for him to conduct any financial transactions, the judge added.
When the judge asked if Mr. Bankman-Fried understood that he could be charged with bail jumping if he failed to appear in court, he looked at his lawyers then said, “Yes, I do.”
Mr. Bankman-Fried has acknowledged making mistakes while running the company, but has denied committing fraud.
His appearance caps a dramatic series of legal developments that began when Mr. Bankman-Fried told a Bahamas judge Wednesday morning that he wanted to be transferred immediately to the U.S. to face charges and try to “make the relevant customers whole.”
After U.S. officials had him on a plane en route to New York on Wednesday night, they announced that two of his closest associates had pleaded guilty to several criminal offences and were cooperating with prosecutors.
Caroline Ellison, the former chief executive of Alameda Research, pleaded guilty to seven criminal counts, and former FTX Chief Technology Officer Gary Wang to four counts, according to their plea agreements. Their cooperation with investigators likely strengthens prosecutors’ case against Mr. Bankman-Fried, who is accused of defrauding customers, lenders and investors. It could also increase the legal peril facing other former FTX officials who played a role in the alleged scheme, as prosecutors have two insiders’ accounts and documents upon which they could rely at any future trials.
According to documents made public Thursday, Ms. Ellison and Mr. Wang pleaded guilty to participating in a scheme to defraud FTX customers from 2019 through November 2022 by misappropriating customer deposits and lending them to Alameda. Ms. Ellison also admitted participating in a scheme to defraud Alameda lenders by providing false information about its financial condition. She and Mr. Wang also pleaded guilty to misleading FTX investors.
Manhattan U.S. Attorney Damian Williams said in a video statement Wednesday that the investigation into FTX is ongoing. He urged anyone who participated in misconduct at FTX or Alameda to come forward soon.
A lawyer for Ms. Ellison declined to comment after her guilty plea was announced. A lawyer for Mr. Wang said his client took his obligations as a cooperating witness seriously.
Both Ms. Ellison, 28 years old, and Mr. Wang, 29, have ties to Mr. Bankman-Fried that predate his founding of FTX. Ms. Ellison and Mr. Bankman-Fried worked together at Jane Street, a quantitative-trading firm, and were once romantically involved. Mr. Wang and Mr. Bankman-Fried were in the same coed living group at the Massachusetts Institute of Technology.
The Securities and Exchange Commission and Commodity Futures Trading Commission also filed lawsuits against Ms. Ellison and Mr. Wang late Wednesday for their roles in a scheme to defraud FTX investors. Both agreed to settle the SEC’s and CFTC’s claims and to accept liability, according to the regulators.
Mr. Bankman-Fried is also charged with conspiring with others to make illegal campaign contributions. Mr. Williams said Mr. Bankman-Fried made political contributions look like they were coming from wealthy associates when in reality they were funded by Alameda with money from stolen customer funds.
Mr. Bankman-Fried personally donated $40 million to political campaigns and committees—mostly to Democrats and liberal-leaning groups.
FTX’s new management has said it would try to recoup campaign contributions made by Mr. Bankman-Fried and other FTX executives to pay back creditors.
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
While most U.S. workers are putting in fewer hours, men in the top 10% of earners cut back their time on the job the most, according to a new study
American workers have cut the number of hours they spend in their jobs since 2019, but no group has dialled back its time on the clock more than young, high-earning men whose jobs typically demand long hours.
The top-earning 10% of men in the U.S. labor market logged 77 fewer work hours in 2022, on average, than those in the same earnings group in 2019, according to a new study of federal data by the economics department at Washington University in St. Louis. That translates to 1.5 hours less time on the job each workweek, or a 3% reduction in hours. Over the same three-year period, the top-earning 10% of women cut back time at work by 29 hours, which translates to about half an hour less work each week, or a 1% reduction.
High-earning men in the 25-to-39 age range who could be described as “workaholics” were pulling back, often by choice, says Yongseok Shin, a professor of economics, who co-wrote the paper. Since this group already put in longer hours than the typical U.S. worker—and women at the highest income levels—these high earners had longer work days to trim, Dr. Shin says, and still worked more hours than the average.
The drop in working hours among high-earning men and women helps explain why the U.S. job market is even tighter than what would be expected given the current levels of unemployment and labour force participation, Dr. Shin says.
“These are the people who have that bargaining power,” Dr. Shin says of the leverage many workers have had over their employers in a tight job market. “They have the privilege to decide how many hours they want to work without worrying too much about their economic livelihood.”
The paper published by the National Bureau of Economic Research, which isn’t yet peer reviewed, suggests high earners were more likely to benefit from flexible working arrangements, which could be a factor in reduced work hours.
Before the pandemic, Eli Albrecht, a lawyer in the Washington, D.C., area, says he worked between 80 to 90 hours a week. Now, he says he puts in 60 to 70 hours each week. That’s still more than most men in America, who averaged 40.5 hours a week in 2021, according to federal data.
Mr. Albrecht’s schedule changed when he shared Zoom school duties for two of his young children with his wife. He’s maintained the reduced hours because it’s making his relationship more equitable, he says, and gives him family time.
“I used to feel—and a lot of dads used to feel—that just by providing for the family financially, that was sufficient. And it’s just not,” Mr. Albrecht says.
The downshift documented by Dr. Shin and his colleagues occurred as many professionals have been reassessing their ambitions and the value of working long hours. Emboldened by a strong job market, millions of Americans quit their jobs in search of better hours and more flexibility.
Overall, U.S. employees worked 18 fewer hours a year, on average, in 2022 compared with 2019, with employed men putting in 28 fewer hours last year and employed women cutting their time by nine hours, data from the U.S. Census Bureau’s Current Population Survey show. The average male worker put in 2,006 hours last year, while the average female worker logged 1,758 hours.
Separate data from the Census Bureau suggests that men with families, in particular, are working less. Between 2019 and 2021, married men devoted roughly 13 fewer minutes, on average, to work each day, according to the American Time Use Survey, which hasn’t yet published 2022 figures. They spent more time on socialising and relaxing, as well as household activities, according to men surveyed by the Census Bureau. The amount of time unmarried men spent on work changed little during that same period.
As high-earning workers in the U.S. cut back, low-wage workers increased their hours, according to Dr. Shin’s research. The bottom-earning 10% of working men logged 41 hours more in 2022, on average, than in 2019. Women in the lowest earning group boosted their hours worked by 52 last year compared with 2019.
While women work fewer hours than men, the unpaid labor they perform outside of their jobs has been well documented. Many working mothers take what’s termed a “second shift,” devoting more time outside work hours to child care and housework.
Maryann B. Zaki, a mother of three who has worked at several firms, including in big law, recently launched her own practice in Houston, giving her more control over her hours. She says she’s noticed more men in her field opting for reduced schedules, sometimes working 80% of the hours normally expected—which can range from 40 to more than 80 a week—in exchange for a 20% pay cut. For the average lawyer, that would amount to a salary reduction of tens of thousands of dollars each year; such arrangements were initially offered to aid working mothers.
Responding to new expectations of work-life balance may be particularly vexing for industries already facing staffing shortages, such as those in medicine. Dr. Lotte Dyrbye, the chief well-being officer for the University of Colorado School of Medicine, said she often hears from early-career physicians and other medical professionals who want to work fewer hours to avoid burnout.
These medical workers are deciding that to be in it for the long haul requires a day every week or two to decompress, Dr. Dyrbye says. But as staff cut back their hours, it costs medical organisations money and may compromise access to care.
An influx of people could calm future volatility.