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Sam Bankman-Fried, co-founder of FTX, was denied his request to obtain documents from Silicon Valley law firm Fenwick & West LLP as part of his defense strategy in an ongoing federal fraud case, Bloomberg reports. Bankman-Fried hoped to use these documents to support his claim that he relied on legal advice while engaging in activities for which he is currently facing prosecution.
Recently, Bankman-Fried’s legal team approached the judge in charge of the case and urged the prosecution to hand over documents received from Fenwick & West or allow them to be obtained directly through a subpoena. However, U.S. District Judge Lewis Kaplan denied the request, calling it “an undue fishing expedition.”
In preparation for his defense, Bankman-Fried’s legal team planned to argue that he relied on advice provided by the law firm Fenwick & West. Bloomberg noted that this strategy is often used by criminal defendants to refute prosecutors’ claims of deliberate violation of the law.
Fenwick & West’s lawyer reportedly touched on various topics, including the use of encrypted messaging apps, multimillion-dollar loans to FTX executives, and compliance with US banking laws, which Bankman-Fried’s lawyers say are integral to the charges leveled against their client. .
Related: US lawmaker seeks answers from SEC on documents related to Sam Bankman-Freed’s arrest
Bankman-Fried, who is facing two criminal trials, is accused of running a complex fraudulent scheme involving the misappropriation of billions of dollars from FTX client funds. The funds were allegedly used for high-risk investments, personal expenses, and even political donations.
On June 22, FTX filed a lawsuit in United States Bankruptcy Court for the District of Delaware seeking to recover more than $700 million from investment firms associated with the company. The lawsuit is directed against K5 Global, Mount Olympus Capital and SGN Albany Capital, as well as their affiliates and K5 co-owners Michael Kives and Brian Baum. FTX claims the funds were transferred from its affiliate Alameda Research to these entities through shell companies and is seeking to recover the funds in avoidable transactions.