Caroline Ellison, Gary Wang, and Nishad Singh face permanent anti-fraud bans under settlement plan with the SEC

Source: Yellow Original Title: Caroline Ellison, Gary Wang and Nishad Singh face permanent anti-fraud bans under SEC settlement plan

Original Link: https://yellow.com/es/news/caroline-ellison-gary-wang-y-nishad-singh-enfrentan-vetos-antifraude-permanentes-bajo-plan-de-acuerdo-con-la-sec The U.S. Securities and Exchange Commission (SEC) announced that it has filed proposed consent judgments against Caroline Ellison, Gary Wang, and Nishad Singh, three key former lieutenants of Sam Bankman-Fried, seeking permanent anti-fraud measures and long-term bans from leadership roles related to the collapse of FTX.

What happened

In filings submitted to the Southern District of New York, the SEC indicated that Ellison, former CEO of Alameda Research, accepted a 10-year ban from serving as an officer or director, while Wang, former CTO of FTX, and Singh, former co-CEO of engineering at the exchange, each accepted an eight-year ban, subject to court approval.

The three consented to permanent measures against violations of federal anti-fraud laws, along with five-year conduct restrictions.

The Commission stated that the defendants “consented to the entry of final judgments” without admitting or denying the allegations, and that the orders will prohibit them from future misconduct.

How Ellison, Wang, and Singh facilitated the FTX-Alameda scheme

Ellison, Wang, and Singh were among the first cooperating witnesses in the federal cases related to the 2022 collapse of FTX and Alameda Research:

• Caroline Ellison served as CEO of Alameda Research and previously worked as a trader at Jane Street. She pleaded guilty in late 2022 to federal fraud charges, admitting her role in misusing customer funds.
• Gary Wang, co-founder of FTX and Alameda, also pleaded guilty in 2022 to fraud and conspiracy charges, and stated that he wrote the code that allowed Alameda access to customer assets.
• Nishad Singh, who joined FTX in 2019 and became CTO, pleaded guilty in early 2023, claiming he helped implement functions that facilitated Alameda’s trading privileges and liquidity extraction.

SEC allegations

According to SEC filings, the trio helped Sam Bankman-Fried raise over $1.8 billion from investors while hiding that Alameda had preferential access to FTX customer funds, an “unlimited line of credit,” and exemptions from risk mitigation rules.

The agency claimed that Wang and Singh “created the FTX software code that allowed funds to be diverted from FTX customers to Alameda,” while Ellison used those misappropriated funds to support Alameda’s trading operations and venture capital bets.

Hundreds of millions of dollars were also channeled to Alameda for new investments and loans to Bankman-Fried and other executives, according to the SEC.

The legal process moving forward

The proposed judgments are now awaiting approval from Judge James R. Cho in the Southern District of New York.

If approved, they will formalize some of the most significant regulatory sanctions related to the FTX collapse.