Former Alameda executives confronted Sam Bankman-Fried in April 2018, offering him a buyout in exchange for his resignation.
According to a report from TIME, citing early employees at the now-defunct Alameda Research, Bankman-Fried’s approach to managing the business raised serious concerns from his colleagues.
When Alameda began to implement basic corporate controls, executives said they found several instances where Bankman-Fried took “dangerous and egregious shortcuts.”
“And in many cases [he] had concealed the fact that he had done that,” said one former Alameda employee.
According to Naia Bouscal, a former software engineer at the firm, the amount of money in their possession soon became unclear to employees, owing to the lack of a proper accounting record of trades.
“Sam continued pushing us more and more in this direction of doing a huge number of trades, a huge number of transfers, and we couldn’t account for that,” said Bouscal. She also claimed that Bankman-Fried continued to spend significant sums of money at this time, with no distinction between firm capital and trading capital.
Although an early equity agreement would have left him with a 40% controlling interest in Alameda, he reneged on this deal and registered himself as the sole owner, according to two people familiar with the situation. Another employee described his behaviour as “dictatorial” and three former employees alleged he had inappropriate romantic relationships with his subordinates.
Eventually, the management team decided the best path forward for the firm was without him at the helm. In a meeting in early April 2018, four executives called Bankman-Fried to an intervention style meeting, presenting him with a document that outlined how he had misreported numbers and conveyed the team’s lack of trust in him.
“Sam will lie, and distort the truth for his own gain,” read the document, reviewed by TIME.
The executives called for Bankman-Fried’s resignation as CEO, threatening to quit if he refused. Bankman-Fried reportedly remained silent throughout the course of the meeting, and came back with an answer the next day – that he would not be stepping down. The four Alameda executives then resigned, along with half of the firm’s 30 employees at the time.
Earlier this week, the FTX debtors disclosed that Bankman-Fried had received $2.2 billion in payments from FTX and Alameda. In total, the loans made to key executives, including Nishad Singh and Caroline Ellison, amount to $3.2 billion, which does not include the $240 million luxury penthouse purchase in the Bahamas.