Three top former executives at FTX and its affiliates have accepted final punishments from the U.S. Securities and Exchange Commission as the agency resolves its enforcement cases related to the stock market crash, the SEC said in a notice of litigation Friday.
As former CEO Sam Bankman-Fried continues his federal prison sentence for his fraud convictions, Caroline Ellison, former CEO of his Alameda Research division, is among those who agreed to consent judgments to resolve enforcement actions filed in 2022 and 2023, which still must be approved in court. Others who signed the agreements include Zixiao “Gary” Wang, former chief technology officer at FTX Trading, and Nishad Singh, former co-chief engineer at FTX.
Each of them will be prohibited from serving as officers or directors at other companies, the SEC said, with Ellison agreeing to a 10-year restriction and the others getting eight-year bans. They are also subject to five-year “conduct-based judicial measures,” 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 misappropriated FTX customer funds for Alameda business activity.”
Ellison had received a two-year prison sentence for her role in the FTX fraud, although she was recently reportedly released early from prison. Wang, who was a key cooperating witness in the government’s case, avoided prison time, as did Singh.
