Three of the former executives of FTX and its subsidiaries have agreed to final sanctions from the U.S. Securities and Exchange Commission as the agency resolves its enforcement cases related to the stock market collapse, the SEC said in a litigation notice Friday.
As former CEO Sam Bankman-Fried continues his federal prison sentence for his fraud convictions, Caroline Ellison, the former CEO of his Alameda Research arm, is among those who have accepted the judgments agreed to resolve enforcement actions filed in 2022 and 2023, which still need to be approved by the court. Other signatories to the agreements include Zixiao “Gary” Wang, former chief technology officer of FTX Trading, and Nishad Singh, former co-chief engineer of FTX.
Each will be barred from serving as an officer or director of other companies, the SEC said, with Ellison accepting a 10-year restriction and the others receiving an eight-year ban. They are also subject to five-year “conduct-based injunctions,” the agency said.
“Bankman-Fried, Wang and Singh, with Ellison’s knowledge and consent, exempted Alameda from risk mitigation measures and provided Alameda with a virtually unlimited ‘line of credit’ funded by FTX customers,” according to the SEC statement. “The complaints also alleged that Wang and Singh created FTX software code that allowed FTX customer funds to be diverted to Alameda, and that Ellison used the diverted FTX customer funds for Alameda business activities.”
Ellison was sentenced to two years in prison for her role in the FTX fraud, although she was recently reportedly released from prison earlier than expected. Wang, who was a key witness in the government’s case, avoided prison, as did Singh.
