In a pivotal decision over the weekend, Judge Lewis Kaplan has ruled against allowing Sam Bankman-Fried, the embattled founder of FTX, to invoke the “advice of counsel” defense in his upcoming criminal trial. This move effectively prevents Bankman-Fried and his legal team from initially blaming FTX company lawyers for their alleged involvement in the decisions made during his tenure as CEO.
The ruling, outlined in a comprehensive 10-page memo released on Sunday, was prompted by the prosecution’s request to block the inclusion of this defense in the opening remarks. Judge Kaplan expressed concern that introducing this argument from the outset might potentially prejudice the jury.
“In light of the foregoing, the risk of confusion and unfair prejudice to the government were defendant to focus on the presence or involvement of lawyers at or for FTX and Alameda… is palpable,” stated Judge Kaplan in his memo.
This decision comes in response to a filing made by prosecutors on August 29, where they argued that Bankman-Fried should not be permitted to employ the “advice of counsel” strategy without establishing a clear and substantial connection to the alleged wrongdoing. The prosecution’s move was prompted by indications that Bankman-Fried might attempt to shift blame onto the Fenwick & West law firm, which provided legal advice to FTX during his tenure.
The “advice of counsel” defense typically asserts that Bankman-Fried, guided by his lawyers at the time, operated under the belief that he was acting within legal boundaries during the ascent of FTX. This defense, however, will not be available to Bankman-Fried during the initial phase of the trial.
As the trial proceeds, Bankman-Fried and his legal team will have to navigate this significant legal setback and strategize their defense without the recourse of attributing decisions solely to the advice received from FTX’s legal representatives. The trial is expected to be closely watched by the cryptocurrency community and legal experts alike, as it holds potential implications for the broader landscape of corporate responsibility in the rapidly evolving digital asset industry.
Source: Decrypt
