Former FTX CEO Sam Bankman-Fried wants the exchange’s insurers to reimburse his legal fees as a matter of priority.
According to a motion filed on March 15, Bankman-Fried has requested that Relm Insurance and Beazley Insurance pay out defense costs that have already been incurred and advance future costs as per the conditions of their policy.
Directors and officers (D&O) policies prioritize payments to insured members of the company based on their seniority. Bankman-Fried’s status as former CEO would put him on top of that list.
Although D&O insurance protects individuals from personal losses on account of being sued for alleged wrongful acts in managing a company, it typically includes an exclusion for criminal or deliberately fraudulent activities.
The policy would also likely be void if the individual in question received remuneration to which they were not legally entitled.
According to the court documents, any responses or objections to Bankman-Fried’s motion need to be filed before March 29. In the event that none are filed, the FTX founder’s legal counsel has requested that the relief request is granted without further notice.
Bankman-Fried faces a total of 12 criminal charges, ranging from conspiracy to commit wire fraud and money laundering to defrauding the Federal Elections Committee (FEC). In addition to charges from the U.S. Department of Justice, he also faces civil actions from the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), although these cases have been deferred until the conclusion of the DOJ’s proceedings.
His parents, Joseph Bankman and Barbara Fried, said that they were worried their son’s legal bills would wipe them out financially, the Wall Street Journal reported in December.
