By: Hellen Zaboulani
Billionaire hedge fund manager Bill Ackman weighed in on the hefty bail posted by downtrodden FTX founder Sam Bankman-Fried.
As reported by the NY Post, Ackman, who leads Pershing Square Capital Management and who boasts a net worth of $3.5 billion, commented on Bankman-Fried’s ability to post the $250 million bail. “I instinctually want to believe the best in people,” Ackman tweeted on Thursday. “When coupled with my strong belief that one is innocent until proven guilty, I can be at risk of trusting a crook.” Bankman-Fried’s “posting $250m of bail is itself a criminal indictment and refutation of everything he has said to date,” Ackman wrote.
Bankman-Fried was the founder and CEO of the cryptocurrency exchange FTX and cryptocurrency trading firm Alameda Research. The 30-year-old quickly became a billionaire, his fortune peaking at $26 billion. It all went south in late 2022 though, with a a financial crisis which led him to resign and the company to file for chapter 11 bankruptcy. As of November 8, 2022, Bankman-Fried’s net worth was estimated to have declined by 94 percent to $991.5 million. Just a few days later, on Nov. 11, the same Bloomberg Billionaires Index estimated Bankman-Fried to have no material wealth.
On Dec. 12, Bankman-Fried was arrested in the Bahamas. Federal charges include wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations. If found guilty of all eight counts, he can face up to 115 years in jail. On Dec. 22, Bankman-Fried was offered a $250 million bond deal, which would allow him to live at his parents’ home in California while awaiting federal trial. The bail was paid, being secured by equity in his parents’ home as well as their signatures, as per the Associated Press.
“The best one can say is that he has some very wealthy friends and family that believe in him, but with the guilty pleas and cooperation from his two colleagues, things are not looking good for @SBF_FTX,” Ackman wrote in a subsequent tweet. Ackman was referring to the guilty pleas of Caroline Ellison, former CEO of hedge fund Alameda Research, and FTX co-founder Gary Wang. Both his former co-workers were indicted and are now cooperating with federal prosecutors. Very likely, they will hand over incriminating evidence against Bankman-Fried in a bid to gain some leniency for their own plights in the federal case.
The bond hearing in Manhattan federal court on Thursday, says that if Bankman-Fried were to flee before his Jan. 3 court hearing or anytime afterward, his parents and the other two individuals would be on the hook for $250 million to the federal government. The agreement also requires Bankman-Fried to wear an ankle bracelet, enabling authorities to track his movements. Also, the bail terms say he is barred from opening any new lines of credit, can’t start a business and can’t undertake financial transactions larger than $1,000 without court approval, as per the Post.
“The @FTX_Official fiasco is, at a minimum, the most egregious, large-scale case of business gross negligence that I have observed in my career, and that conclusion is reinforced by SBF’s recent public statements,” Ackman had written in another Tweet in early December. “If indeed he is telling the truth, it may make it more likely that he has civil rather than criminal liability.” Ackman added, “I understand why the victims here want him to suffer the most severe consequences including jail time. I would likely feel the same if I too was a victim.”