Eight teenage girls who met through social media were charged with the murder of a homeless man in Toronto on Sunday, police said.
The gang of three 13-year-olds, three 14-year-olds and two 16-year-olds swarmed their 59-year-old victim at a plaza near the main rail station just after midnight Dec. 18, the Toronto Police Service announced.
Bystanders that saw the girls stabbing the man at York Street and University Avenue flagged down EMS, who transported the victim to a nearby hospital. The victim, who had been living in the city’s shelter system for several weeks, died from his injuries, Detective Sergeant Terry Browne said at a Tuesday press conference.
The teenagers were found near the scene carrying a “number of weapons,” Browne revealed.
Detective Sergeant Terry Browne described the girls’ behavior as “swarming.”Toronto PoliceThe girls allegedly killed the homeless man at York Street and University Avenue in Toronto.Google Maps
The group of girls — whose identities are protected under Canada’s Youth Criminal Justice Act — may have gone out with the intention of causing trouble. Police said the teenagers were involved in another altercation about two hours before they allegedly killed the homeless man.
“What they are alleged to have occurred that evening would be consistent with what we traditionally call a swarming or swarming type behavior,” Browne said.
The eight girls were involved in a separate altercation before they attacked the homeless man, police said.Getty Images/iStockphoto
Three of the teenagers have a history with police, Browne said.
The girls live in varying parts of Toronto and met through social media, though police do not yet know how long they’ve known each other. Officials are still investigating why they met in the area and what their plans for the evening may have been.
All eight girls have been charged with second-degree murder. They were remanded into custody and are scheduled to appear again at the end of the month.
Boxes of petitions against proposed reforms that solar energy advocates claim would handicap the rooftop solar market are displayed before being taken to the governor’s office during a rally at the Capitol in Sacramento on Dec. 8, 2021. Photo by Rich Pedroncelli, AP Photo
The California Public Utilities Commission today overhauled the state’s rooftop solar regulations, reducing payments to homeowners for excess power but providing nearly a billion dollars in incentives to encourage more solar projects for low-income homes.
Commissioners called the new rules — adopted unanimouslyafter hours of highly charged public comments that were almost entirely opposed — a much-needed course-correction to California’s 27-year-old residential solar rules.
Both the power companies and the solar industry criticized the new rules that outline details of the financial incentives to encourage people to build rooftop solar. Utilities did not get all the concessions they hoped for to lower bills for non-solar customers. And solar developers say the rules will discourage people from installing solar panels.
A victory for the solar industry came earlier this year, when the commission dropped an unpopular plan to charge homeowners an 8% per kilowatt-hour tax for newsolar systems.
In remarks before the vote, commissioners acknowledged how divisive the matter has been. Commissioner John Reynolds said the decision was a “heavy one,” saying “nothing in energy policy is black and white, and nothing in this decision has been.”
Commissioner Clifford Rechtschaffen said the agency faced “competing and challenging priorities.” He called it a “responsible and forward-looking decision.”
The new regulations will:
For new customers, reduce the amount utilities pay them for excess power by at least 75% compared to current rates, starting in April. The change would not apply to residents with existing solar systems.
Fund $900 million in new incentive payments to residents to help them purchase rooftop solar systems. Two thirds of the funds, $630 million, will be set aside for low-income households. The remainder provides funding for paired solar-battery storage systems.
Set rates that aim to shift all consumers’ use of power to the times of day that improve grid reliability.
California’s original rules, called Net Metering, were implemented in 1995. They established a framework for utilities to buy excess solar energy from homeowners and supplement power to the grid.
The overhaul comes as California needs to lean more heavily on renewable energy to meet state targets to produce zero-carbon electricity by 2045 and end use of fossil fuels.
About 1.5 million rooftop solar systems are installed on California’s houses, schools and small businesses. About 14% of California’s total electricity comes from large-scale solar projects; another 10% of the state’s power comes from rooftop residential solar.
Solar companies and environmental groups say the policy could undermine the state’s booming solar industry by raising the costs of operating panels on homes and small businesses. They say that in states where similar rate shifts have been adopted, solar system installation has plummeted.
Bernadette Del Chiaro, executive director of the California Solar & Storage Association, called the decision a backward step.
“The CPUC’s final proposal is a loser for California on many levels,” she said in a statement. “For the solar industry, it will result in business closures and the loss of green jobs. For middle class and working class neighborhoods where solar is growing fastest, it puts clean energy further out of reach.”
Woody Hastings, The Climate Center’s energy program manager, said “California needs more solar power — not less.”
“Just as more middle and lower-income Californians are putting solar panels on their rooftops, the new rules adopted by the CPUC today threaten to slow the growth of clean energy across the state,” he said.
The years-long fight was played out across social media and opinion pages. The complex process of revising the rules elicited tens of thousands of public comments and was, at one point, arbitrated by Gov. Gavin Newsom.
Today’s meeting began with three hours of lively public comment. Callers to the virtual meeting gave the five commissioners an earful, with the vast majority asking the panel to vote no.
Some callers made the point that the provision to nudge consumers to install solar systems with batteries will have the unintended consequence of quashing new solar systems because the cost of storage systems is beyond the financial reach of many homeowners. Only about 15% of current rooftop systems currently have storage, the commission said.
Many of the arguments on either side focus on fairness. Utility companies say demand for rooftop solar is strong enough in California that the industry doesn’t need more help. They say the retail rate they pay to solar customers for their excess power is too high and doesn’t reflect the value of their power, which is produced during daytime hours.
Because residents and businesses with solar panels generally have smaller energy bills, they contribute less to a utility company’s fixed costs, such as transmission and distribution networks, which are passed on to ratepayers. As a result, non-solar residents, including low-income residents and renters, carry more of the cost burden.
“This final decision was a missed opportunity that will prolong the harm to low-income Californians and renters for decades to come,” said Kathy Fairbanks, spokesperson for Affordable Clean Energy for All, a coalition that includes the state’s three largest utility companies.
Reverend Frank Jackson, chief executive officer of Village Solutions Foundation, a community development corporation, said “the CPUC got this vote very wrong.”
“Low-income families are struggling to buy gas, put food on their table, and pay for everything, including utilities. Continuing to pay hundreds more a year to subsidize mostly wealthy Californians is unfair,” he said.
The solar rules increased bills for customers who do not have rooftop solar by $3.37 billion in 2021, growing to $4.5 billion so far this year, according to the CPUC’s Public Advocates Office.
Solar “customers should pay their fair share of grid, wildfire, and other related costs,” the public advocates office said in an analysis. “Customers with rooftop solar depend on the … grid to use electricity when their rooftop solar systems are not generating electricity. The compensation that (solar) customers receive is greater than the value of the energy.”
Matt Baker, director of the office, said San Diego Gas & Electric customers without rooftop solar pay about 20% of their bill to cover those fixed costs; for Pacific Gas & Electric customers it’s 12% and about 11% for Southern California Edison ratepayers.
Solar advocates dispute the commission’s cost shift equations, challenging the details and pointing out that such calculations fail to consider the benefits of rooftop solar, including the need to construct costly infrastructure such as power plants.
Advocates say the widespread adoption of rooftop systems provides a valuable service to both the grid and the battle against climate change. They call the commission’s new policy a “solar cliff.”
Rather than viewing the new policy as punishing the solar industry, Baker said the new direction highlights the success of solar adoption in California.
“They have succeeded, we won, it’s amazing,” Baker said in an interview. “We have outgrown the subsidies for a solar-only system and now it’s time to pivot to solar plus storage.”
The commission said the rules would save residents with solar-plus-battery systems about $130 on their monthly bills.
The CPUC is required under state law to update its net metering rules, which triggered a prolonged, complex and politically thorny process. The commission’s proposal earlier this year was attacked by both the solar industry and utilities as unfair and inadequate.
The changes take into account evolving consumer habits: Heavy power use has shifted to evenings, when people return home and plug in a myriad of electronic devices.
This demand shift is reflected in the price of power and the availability of solar energy. Solar power is abundant during the day and the cost of electricity is about 5 cents per kilowatt-hour. In the evening, when the sun goes down and demand soars, the price for power can increase more than 20-fold, officials say.
The commission’s decision to reduce the amount utilities pay for excess power is driven by a revised cost calculator. The lower rates paid to rooftop solar owners take into account the real value of the power, the commission said, which is produced during the day when electricity is cheaper.
The program had the right intentions when it was established in 1995, Baker said, encouraging adoption of rooftop solar and compensating those residents with a retail rate for power they provided during the day, when the grid carried its heaviest load.
“At the time that was being done it was fair and equitable,” Baker said, but in ensuing years costs to install solar have dropped dramatically.
Solar and other sources of renewable energy are gradually supplanting power derived from coal and gas, which are fossil fuels that the state aims to banish from the grid by 2045.
While drought, wildfires, heatwaves and utility blackouts have prolonged the life of some natural gas-fired power plants, the state is inching toward that goal: On May 8, 100% of California’s power grid was running on renewable energy for a few hours, a record.
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Prosecutors in Illinois announced felony charges Friday against the father of the man accused of killing seven people and injuring more than 40 during a Fourth of July parade in Highland Park.
Robert Crimo Jr. was charged with seven counts of reckless conduct, said Eric Rinehart (D), Lake County’s state attorney, who accused him of taking an “unjustified risk” in signing his son’s gun ownership application in 2019. Because Robert E. Crimo III was younger than 21 at the time, state law required him to have parental consent.
“Parents and guardians are in the best position to decide whether their teenagers should have a weapon,” Rinehart said. “They are the first line of defense.”
The elder Crimo turned himself in and faces up to three years in jail. His bond hearing is scheduled for Saturday.
In July, a grand jury indicted his son with 117 felony counts, including first-degree murder. The younger Crimo faces a life sentence in prison.
The issue of charging parents criminally in instances of mass killings is likely to be contentious, and an attorney said the family will fight the charges.
Illinois State Police in July said the younger Crimo had at least two encounters with law enforcement months before he applied for a gun permit. In April 2019, he had attempted suicide, and that September police seized 16 knives, a dagger and a sword from his home after a family member informed them he had threatened to “kill everyone.”
George M. Gomez, an attorney for the elder Crimo, said in a statement to the Associated Press that the charges were “baseless and unprecedented.”
“This decision should alarm every single parent in the United States of America who according to the Lake County State’s Attorney knows exactly what is going on with their 19 year old adult children and can be held criminally liable for actions taken nearly three years later,” the statement said. “These charges are absurd and we will fight them every step of the way.
The younger Crimo was arrested hours after the shooting and investigators said he confessed to the carnage, though he later pleaded not guilty. He allegedly fired more than 80 rounds from a semiautomatic weapon from a rooftop and then fled the scene disguised in women’s clothing. Officials said he considered carrying out another shooting in Wisconsin in the following hours.
The victims of the deadly attack included a grandfather, a preschool teacher and parents of a toddler.
Rinehart, the Lake County state attorney, said people need to bear responsibility for endangering others.
“For too long, we’ve allowed gun violence to destroy lives and neighborhoods. We have allowed a cloud of fear to hang over every part of American life,” he said.
This is at least the second instance in the past year when law enforcement has sought to hold accountable the parents of mass-killing suspects. In December 2021, the parents of a teenager accused of shooting four students at a high school were arrested and charged with involuntary manslaughter in Michigan.
oversaw one of the biggest financial frauds in American history, a top federal prosecutor said in charging that the former chief executive stole billions of dollars from the crypto exchange’s customers while misleading investors and lenders.
An indictment by the U.S. attorney’s office for the Southern District of New York, unsealed Tuesday, charges Mr. Bankman-Fried with eight counts of fraud. Prosecutors allege that he took FTX.com customers’ money to pay the expenses and debts of Alameda Research, an affiliated trading firm. Mr. Bankman-Fried is charged as well with conspiring to defraud the U.S. and violate campaign-finance rules by making illegal political contributions.
Damian Williams,
the U.S. attorney for the Southern District of New York, said he authorized the charges against Mr. Bankman-Fried last Wednesday and a grand jury voted on the indictment Friday.
“This investigation is very much ongoing, and it is moving very quickly,” Mr. Williams said at a press conference in Manhattan on Tuesday. “While this is our first public announcement, it will not be our last.”
John J. Ray III, the new chief executive of FTX, testified in front of a House committee Tuesday on the collapse of the crypto exchange. Photo: Nathan Howard/Getty Images
Separately, John J. Ray III, the new chief executive of FTX, said at a congressional hearing Tuesday that FTX incurred losses in excess of $7 billion. Mr. Ray, who oversaw the Enron Corp. bankruptcy early in the 2000s decade, said funds were taken from FTX and Alameda, an affiliated trading firm that incurred trading losses.
Mr. Ray described Enron as having been brought down by sophisticated people whose machinations aimed to keep transactions secret. FTX presents as “old-fashioned embezzlement,” Mr. Ray said. “It’s taking money from customers and using it for your own purpose.”
Also Tuesday, the Securities and Exchange Commission alleged in a civil lawsuit that Mr. Bankman-Fried diverted customer funds from the start of FTX to support Alameda and to make venture investments, real-estate purchases and political donations. The Commodity Futures Trading Commission filed a lawsuit Tuesday linking his allegedly fraudulent conduct at Alameda and FTX to markets that the CFTC regulates.
“
Sam Bankman-Fried
built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair
Gary Gensler
said.
The charges are the latest twist in a saga that has rattled the world of cryptocurrencies, a largely unregulated market that boomed during the pandemic but has been hammered this year by rising interest rates and the failure of several significant industry players.
FTX, one of the largest crypto exchanges in the world, filed for bankruptcy last month after the firm ran out of cash and a merger with rival Binance collapsed. The firm’s failure marked a sudden fall from grace for Mr. Bankman-Fried, who portrayed FTX as a safer crypto exchange to use and cast himself as an ally of regulation.
In interviews since the filing, Mr. Bankman-Fried said he bore responsibility for FTX’s collapse but denied he committed any fraud.
Mark Cohen,
a lawyer for Mr. Bankman-Fried, said Tuesday that his client “is reviewing the charges with his legal team and considering all of his legal options.”
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Mr. Bankman-Fried, 30 years old, was arrested Monday in the Bahamas. He appeared in court Tuesday in Nassau. He was denied bail and has been remanded to jail until Feb. 8, according to a person familiar with the matter.
A U.S. court official said that while the case had been assigned to a federal judge in Manhattan, there was no timing yet for Mr. Bankman-Fried’s extradition.
The tales of Mr. Bankman-Fried’s alleged misdeeds resonated with crypto customers around the world, even those who haven’t suffered significant losses as various firms by turns suspended withdrawals and collapsed.
Vasco Tagachi, a 42-year-old Portuguese-Sri Lankan trader based in China, said he felt a sigh of relief after learning of Mr. Bankman-Fried’s arrest. He said he had $57,423 in an FTX account this fall but was able to withdraw almost all of it just before the firm stopped honoring withdrawal requests.
“I had a little bit of tears in my eyes hearing that,” he said.
Prosecutors allege that from 2019 through November 2022, Mr. Bankman-Fried conspired with unnamed individuals to defraud customers and lenders. He provided false and misleading information to lenders on the financial condition of Alameda, according to the indictment.
Sam Bankman-Fried was arrested in the Bahamas on Monday, a day before he was expected to testify on the sudden collapse of FTX before the House Committee on Financial Services. Illustration: Jacob Reynolds
While the 14-page indictment was light on detailed allegations, it says that on Sept. 18, 2022, Mr. Bankman-Fried caused an email to be sent to an FTX investor in New York that contained false information about FTX’s financial condition. In June 2022, the indictment says, Mr. Bankman-Fried and others misappropriated FTX.com customer deposits to satisfy the loan obligations of Alameda.
Mr. Bankman-Fried is also accused of defrauding the Federal Election Commission starting in 2020 by conspiring with others to make illegal contributions to candidates and political committees in the names of other people.
He and his associates contributed more than $70 million to election campaigns in recent years, The Wall Street Journal previously reported. He personally made $40 million in donations ahead of the 2022 midterm elections, most of which went to Democrats and liberal-leaning groups.
Mr. Ray, the FTX CEO, said FTX is investigating whether any loans taken by FTX executives were improperly used for campaign contributions.
Mr. Ray added that tracing fund flows from FTX to executives and third parties was difficult because of the lack of a paper trail for many corporate transactions at FTX.
“We’re dealing with a paperless bankruptcy,” he said. “It makes it very difficult to trace and track assets.”
The CFTC’s complaint contains a detailed discussion of events at Alameda and FTX and argues that the agency, generally less visible to the public than the SEC, also has jurisdiction over the case. While the CFTC regulates U.S. derivatives markets, it can go after fraud that affects some commodity markets.
Besides giving Alameda access to its customer deposits, FTX granted the crypto hedge fund controlled by Mr. Bankman-Fried a series of trading-execution privileges that provided it an edge against other traders on the platform, the CFTC lawsuit alleges.
The CFTC said that while institutional customers had their orders routed through the FTX system, Alameda was able “to bypass certain portions of the system and gain faster access.” It resulted in Alameda’s orders being received by FTX several milliseconds faster than those of other institutional clients.
The lawsuit also alleges that Alameda wasn’t subject to certain automated verification processes, including on whether it had available funds before executing a transaction, giving it further advantage on the speed of its trades.
The edge wasn’t enough to keep Mr. Bankman-Fried from thinking about shutting down Alameda in September, according to the CFTC complaint.
In a document titled “We came, we saw, we researched,” Mr. Bankman-Fried laid out reasons for shutting down Alameda, according to the CFTC lawsuit. Chief among them: Alameda wasn’t making enough money to justify its existence, he wrote.
The CFTC said the statements contradicted what Mr. Bankman-Fried and Alameda were saying publicly at the time.
Tuesday’s congressional hearing was the first public appearance for Mr. Ray on FTX’s bankruptcy. Mr. Bankman-Fried had been scheduled to appear virtually at the same hearing, before he was arrested in the Bahamas at the request of the U.S. government. Bahamian police have said that they would keep him in custody and that they are awaiting an extradition order from U.S. authorities.
“The operation of Alameda really depended, based on the way it was operated, on the use of customer funds,” Mr. Ray said, responding to questions from members of Congress at the hearing. “There were virtually no internal controls…whatsoever.”
He described numerous loans totaling billions of dollars taken out by Mr. Bankman-Fried from Alameda.
“We have no information at this time as to what purpose or use of those funds were,” Mr. Ray added. He said Mr. Bankman-Fried had signed as the issuer and recipient for some of the loans.
Mr. Ray pushed back against recent statements made by Mr. Bankman-Fried that he had little to no involvement in the management of Alameda after passing control of the company to
Caroline Ellison
and
Sam Trabucco,
as well as Mr. Bankman-Fried’s statements that customer funds were passed to Alameda because of an accounting error.
“I don’t find those statements to be credible,” Mr. Ray said.
The Justice Department’s indictment of Mr. Bankman-Fried includes an array of charges with few supporting details, a tactic that could give federal prosecutors flexibility in navigating the rules involving extradition.
The charges against Mr. Bankman-Fried run the gamut from wire fraud to securities fraud conspiracy to conspiring to launder money and conspiring to break campaign-finance laws.
The statutes charged, with the exception of the campaign-finance offense, are enormously broad, said Rebecca Mermelstein, a former federal prosecutor who is now at O’Melveny & Myers LLP.
“By not being superspecific, you protect yourself later against an argument that charges relating to different criminal conduct are being added,” she said.
The arrest of Mr. Bankman-Fried is the latest case to highlight prosecutors’ push to bring white-collar cases to justice faster.
Deputy U.S. Attorney General Lisa Monaco said in a September speech that making prosecutors and companies feel that they were “on the clock” in these cases was a key priority for the department.
FTX founder Sam Bankman-Fried sat down with The Wall Street Journal to discuss what happened to the billions of dollars deposited by the exchange’s customers. Photo: Kenny Wassus/The Wall Street Journal
“We need to do more and move faster,” she said. “In individual prosecutions, speed is of the essence.”
Former federal prosecutors say that high-profile financial cases with lots of victims can increase the pressure on authorities to bring cases more quickly.
“Appearances matter when it comes to criminal justice,” said Mark Chutkow, a former federal prosecutor who is currently head of government investigations and corporate compliance at Dykema Gossett PLLC.
If Mr. Bankman-Fried remains in the Bahamas while the details of his potential extradition to the U.S. are worked out, there is only one prison there: the Bahamas Department of Correctional Services, commonly known as Fox Hill Prison.
Prison inmates reported removing human waste by buckets and developing bed sores from lying on the bare ground, according to a 2021 human-rights report on the Bahamas by the U.S. State Department. Cells were infested with rats, maggots and insects, the report said.
Inmates are supposed to get an hour every day outside for exercise. Because of staff shortages and overcrowding, there are times when inmates will only get 30 minutes a week, said Romona Farquharson, an attorney in the Bahamas.
The prison has different sections that separate those serving terms for violent crimes, for instance, from those who aren’t. Because of overcrowding, there have been instances in which inmates awaiting trial for minor crimes have been sent to the maximum-security facility, said Ms. Farquharson.
“I think they’ve got to be careful not to have him in really rough areas in the prison,” she said.
—Angel Au-Yeung, Ben Foldy and Hannah Miaocontributed to this article.
Write to Corinne Ramey at corinne.ramey@wsj.com, James Fanelli at james.fanelli@wsj.com, Dave Michaels at dave.michaels@wsj.com, Alexander Saeedy at alexander.saeedy@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com
NASSAU, Bahamas/NEW YORK, Dec 13 (Reuters) – U.S. prosecutors on Tuesday accused Sam Bankman-Fried, the founder of crypto currency exchange FTX, of fraud and violating campaign finance laws and a judge in the Bahamas denied him bail, sending him to a local correctional facility instead.
The former FTX CEO, who was arrested in the Bahamas on Monday, lowered his head and hugged his parents after the magistrate judge refused bail citing a “great” risk of flight.
He was ordered remanded to a correctional facility in the island nation until Feb. 8, where he will initially held in the medical department, according to a local official.
The day’s events capped a stunning fall from grace in recent weeks for the 30-year-old, who amassed a fortune valued over $20 billion as he rode a cryptocurrency boom to build FTX into one of the world’s largest exchanges before it abruptly collapsed this year.
Bankman-Fried has previously apologized to customers and acknowledged oversight failings at FTX, but said he does not personally think he has any criminal liability.
Earlier on Tuesday, U.S. Attorney Damian Williams in New York said Bankman-Fried made illegal campaign contributions to Democrats and Republicans with “stolen customer money,” saying it was part of one of the “biggest financial frauds in American history.”
“While this is our first public announcement, it will not be our last,” he said, adding Bankman-Fried “made tens of millions of dollars in campaign contributions.”
Bankman-Fried faces a maximum sentence of 115 years in prison if convicted on all eight counts, prosecutors said, though any sentence would depend on a range of factors.
Williams declined to say whether prosecutors would bring charges against other FTX executives and whether any FTX insiders were cooperating with the investigation.
In his first in-person public appearance since the cryptocurrency exchange’s collapse, Bankman-Fried appeared in court on Tuesday in the Bahamas, where FTX is based and where he was arrested at his gated community in the capital, Nassau.
He appeared relaxed when he arrived at the heavily guarded Bahamas court and told the court he could fight extradition to the United States.
Bahamian prosecutors had asked that Bankman-Fried be denied bail if he fights extradition.
“Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options,” his lawyer, Mark S. Cohen, said in an earlier statement.
‘BRAZEN’ SCHEME
[1/12] Sam Bankman-Fried, who founded and led FTX until a liquidity crunch forced the cryptocurrency exchange to declare bankruptcy, is escorted out of the Magistrate Court building, last month he was arrested after being criminally charged by U.S. prosecutors, in Nassau, Bahamas December 13, 2022. REUTERS/Dante Carrer
FTX’s current CEO, John Ray, told congressional lawmakers on Tuesday that FTX lost $8 billion of client money, saying the company showed “absolute concentration of control in the hands of a small group of grossly inexperienced, nonsophisticated individuals.”
In the indictment unsealed on Tuesday morning, U.S. prosecutors said Bankman-Fried had engaged in a scheme to defraud FTX’s customers by misappropriating their deposits to pay for expenses and debts and to make investments on behalf of his crypto hedge fund, Alameda Research LLC.
He also defrauded lenders to Alameda by providing false and misleading information about the hedge fund’s condition, and sought to disguise the money he had earned from committing wire fraud, prosecutors said.
Both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) alleged Bankman-Fried committed fraud in lawsuits filed on Tuesday.
The CFTC sued Bankman-Fried, Alameda and FTX on Tuesday, alleging fraud involving digital commodity assets.
Since at least May 2019, FTX raised more than $1.8 billion from equity investors in a years-long “brazen, multi-year scheme” in which Bankman-Fried concealed FTX was diverting customer funds to Alameda Research, the SEC alleged.
CRYPTO INVESTORS LOST BILLIONS
Bankman-Fried, who founded FTX in 2019, was an unconventional figure who sported wild hair, t-shirts and shorts on panel appearances with statesmen like former U.S. President Bill Clinton. He became one of the largest Democratic donors, contributing $5.2 million to President Joe Biden’s 2020 campaign. Forbes pegged his net worth a year ago at $26.5 billion.
FTX filed for bankruptcy on Nov. 11, leaving an estimated 1 million customers and other investors facing losses in the billions of dollars. The collapse reverberated across the crypto world and sent bitcoin and other digital assets plummeting.
The collapse was one of a series of bankruptcies in the crypto industry this year as digital asset markets tumbled from 2021 peaks. A crypto exchange is a platform on which investors can trade digital tokens such as bitcoin.
As legal challenges mount, the U.S. Congress is also looking at crafting legislation to rein in a loosely-regulated industry.
FTX has shared findings with the SEC and U.S. prosecutors, and is investigating whether Bankman-Fried’s parents were involved in the operation.
The attorney general’s office of the Bahamas said it expected Bankman-Fried to be extradited to the United States.
Bankman-Fried resigned as FTX’s CEO the same day as the bankruptcy filing. FTX’s liquidity crunch came after he secretly used $10 billion in customer funds to support his proprietary trading firm Alameda, Reuters has reported. At least $1 billion in customer funds had vanished.
Additional reporting by Luc Cohen and Jack Queen in New York and Hannah Lang, Chris Prentice and Susan Heavey in Washington
Writing by Nick Zieminski and Deepa Babington
Editing by Noeleen Walder, Megan Davies, Anna Driver and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
Luc Cohen
Thomson Reuters
Reports on the New York federal courts. Previously worked as a correspondent in Venezuela and Argentina.
Sam Bankman-Fried, the founder and former chief executive of the crypto exchange FTX, has been charged by the US Securities and Exchange Commission with defrauding investors in the company.
The SEC said: “The Securities and Exchange Commission today charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd, the crypto trading platform of which he was the CEO and co-founder. Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.”
The SEC said Bankman-Fried concealed his diversion of FTX customers’ funds to Alameda Research, FTX’s crypto hedge fund, while raising more than $1.8bn (£1.5bn) from investors, including about $1.1bn from about 90 US-based investors.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” the SEC chair, Gary Gensler, said. “The alleged fraud committed by Mr Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”
The SEC further alleges that Bankman-Fried used FTX customer funds, commingled with Alameda’s own capital, “to make undisclosed venture investments, lavish real estate purchases, and large political donations”. But the SEC’s focus is on the harm to investors rather than customer. With $1.1bn raised from US-based investors, the agency is asserting its right to oversee the case, despite FTX itself being nominally based in the Bahamas.
“FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike,” Gurbir S Grewal, the director of the SEC’s division of enforcement, said. “While we continue to investigate FTX and other entities and individuals for potential violations of the federal securities laws, as alleged in our complaint, today we are holding Mr Bankman-Fried responsible for fraudulently raising billions of dollars from investors in FTX and misusing funds belonging to FTX’s trading customers.”
Unusually, Bankman-Fried has been very publicly discussing the collapse of FTX even while investigations are ongoing. In a conversation with Bloomberg’s Zeke Faux in late November, he listed $6.5bn of losses from FTX and Alameda, resulting in the insolvency of both companies, including “$250m for real estate, $1.5bn for expenses, $4bn for venture capital investments, $1.5bn for acquisitions and $1bn labelled ‘fuck-ups’”.
Earlier this month he told a conference in New York: “Look, I screwed up,” but he maintained he “didn’t ever try to commit fraud” and was “shocked” by the collapse of his businesses.
On Monday Bahamas police arrested Bankman-Fried, the country’s attorney general said in a statement, adding that it had received formal notification from the US of criminal charges against him. According to the SEC, further charges are forthcoming from the US Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission.
University of Texas at Austin men’s basketball head coach Chris Beard was arrested and charged with a third-degree felony assault on Monday.
Officers responded to a “disturbance” on the 1900 block of Vista Lane at 12:15 a.m. local time and Beard was arrested, according to Austin Police Department.
Beard was charged with an assault on a family or household member by impeding breath circulation and booked in Travis County Jailat 5:18 a.m., according to the county sheriff’s office’s website.
CNN has reached out to Beard’s legal representation for comment.
“The University is aware of the situation regarding Chris Beard. We are continuing to gather information and monitoring the legal process,” Texas Athletics said in a statement to CNN.
The university announced Monday night that Beard was suspended following his arrest.
“The University takes matters of interpersonal violence involving members of its community seriously,” the statement read. “Given the information available, The University has suspended Chris Beard from his position as head coach of Men’s Basketball and will withhold his pay until further notice. Associate Head Coach Rodney Terry will serve as acting head coach for tonight’s game against Rice.”
The 7-1 Longhorns, ranked No. 7, play the Rice University Owls Monday night in Austin.
Beard is in his second season at the helm at Texas. Last season, he led the team to a 22-12 record and an NCAA tournament berth.
The FedEx driver accused of kidnapping and killing 7-year-old Athena Strand delivered her Christmas present –Barbie dolls – before the girl’s disappearance, her mother said Thursday.
Maitlyn Gandy called for stricter screening policies for delivery drivers at a news conference.
On an easel beside her was the package, a box of “You can be anything” Barbie dolls. It was the first time she’d seen the present, she said.
“Athena was robbed(of) theopportunity to be anything she wanted to be,” a tearful Gandy said. “I was robbed of watching her grow up, by a man that everyone was supposed to be able to trust to do just one simple task – deliver a Christmas present and leave.”
Athena disappeared from the driveway of her home in Wise County, Texas, on November 30. After a county-wide search, her body was recovered Friday evening, according to Wise County Sheriff Lane Akin. Authorities believe she was killed within an hour of her alleged kidnapping, but her cause of death is still under investigation, Akin said Friday.
The suspect, identified by authorities as a contract driver for FedEx, is 31-year-old Tanner Lynn Horner, Akin said. He allegedly delivered a package to Athena’s father’s home when she disappeared, authorities said.
Horner is being held in Wise County jail on capital murder and aggravated kidnapping charges, according to its website. Bond was set at $1.5 million, Akin said. CNN has repeatedly tried to locate an attorney for Horner, to no avail.
Horner told investigators he had accidentally hit Athena as he was backing up his delivery truck and although she was not seriously injured, he panicked and put her in the van before allegedly killing her, according to two arrest warrants obtained by CNN affiliate KTVT.
According to the warrants, one issued for each charge, Horner told authorities that he strangled the child because “she was going to tell her father about being hit by the Fed Ex truck.”
Horner was tracked down by his employer, a subcontractor of FedEx, after authorities learned Athena went missing around the time a FedEx delivery was made to the home, according to the warrants. Surveillance video from the truck showed the child inside, talking to the driver, according to the warrants.
After he was questioned, Horner led investigators to the child’s body and surrendered without incident, according to a warrant.
Akin, the sheriff, did not respond to CNN’s messages Thursday afternoon.
Authorities said Horner did not know the family or the child, Akin previously said.
Gandy said her goal is to affect change in hiring policies “so that monsters wearing delivery uniforms don’t show up on our children’s doorsteps.”
Her attorney Benson Varghese said he is still in the “investigation phase” of Athena’s case. Varghese said his office has put people they “think might be responsible” on notice, asking them to preserve any evidence related to the investigation.
Varghese said he plans to hold any person or corporation accountable “whose actions or inactions could have prevented this little girl’s tragic death,” but said he is not in a rush to file a lawsuit.
“The ultimate goal here is to ensure that no parent, or grandparent, or family member feels the loss that Maitlyn’s going through right now,” Varghese said.
In a statement to CNN last week, FedEx expressed its sympathies and directed further questions to law enforcement.
“Words cannot describe our shock and sorrow at the reports surrounding this tragic event. First and foremost, our thoughts are with the family during this most difficult time, and we continue to cooperate fully with the investigating authorities,” the statement reads.
Earlier this week, several school districts across Texas wore pink in honor of Athena.
Gandy, who appeared at Thursday’s news conference sporting bright pink hair, said she was grateful for the community’s outpouring of love and support.
“I have felt your prayers, I have read your messages and your letters and I see your pink everywhere.”
The Justice Department has charged a Russian spy who fed Rudy Giuliani bogus dirt on the Biden family with money laundering over his alleged attempt to secretly buy two luxury Beverly Hills condos.
Andrii Derkach, a Ukrainian member of parliament who the Trump administration accused of being “an active Russian agent for over a decade,” allegedly used a shell corporation to hide his ownership of the condos and move the $4 million used to buy them, according to a criminal complaint.
“While participating in a scripted Russian disinformation campaign seeking to undermine U.S. institutions, Derkach simultaneously conspired to fraudulently benefit from a Western lifestyle for himself and his family in the United States,” Assistant U.S. Attorney Michael J. Driscoll said in a press release accompanying the charges.
The Trump administration sanctioned Derkach shortly before the 2020 election on the grounds that he was “an active Russian agent for over a decade” who had “waged a covert influence campaign centered on cultivating false and unsubstantiated narratives” to influence the presidential election.
Derkach featured prominently in efforts by Rudy Giuliani to spread bogus conspiracy theories that former Vice President Joe Biden pressuring Ukraine to commit to anti-corruption measures was a secret plot to quash a criminal investigation of Burisma, a Ukrainian company where Biden’s son, Hunter, served as a board member.
Giuliani publicly met with Derkach during a 2019 trip to Ukraine, where the then Trump lawyer was soliciting dirt about the Bidens in anticipation of the upcoming presidential election.
Derkach also cozied up to congressional Republicans by sending packages of alleged Biden dirt to Sens. Chuck Grassley, Ron Johnson, and then-Rep. Devin Nunes. U.S. intelligence and fellow lawmakers repeatedly warned lawmakers that Derkach had ties to Russian intelligence and was seeking to undermine the election, making some Republicans skittish about embracing the Ukrainian politician. But Giuliani was undeterred.
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“The chance that Derkach is a Russian spy is no better than 50/50,” Giuliani himself admitted to The Daily Beast in an interview after the Trump administration sanctioned the Ukrainian oligarch.
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Federal prosecutors in the U.S. charged Derkach with seven counts of money laundering, bank fraud, and sanctions evasion charges but he is unlikely to make an appearance in a U.S. court anytime soon. Derkach appears to have fled Ukraine following a series of criminal investigations of him by prosecutors and intelligence agencies in Kyiv earlier this year.
In June, Ukrainian intelligence claimed that Derkach was an agent of the Russian military’s intelligence service who had plotted with Moscow to use private security companies to assist with the Russian invasion of Ukraine. In October, Ukraine’s anti-corruption court ordered the oligarch detained on charges that he accepted over half a million dollars in payments from Russian intelligence but noted that he remains a wanted fugitive.
A Texas man has been arrested and charged with making a death threat against a physician who cares for gender-nonconforming children, federal prosecutors said, as threats against health-care providers who work with LGBTQ youths have risen in recent months.
Matthew Jordan Lindner, 38, who was arrested Friday, is accused of calling the National LGBTQIA+ Health Education Center in Boston on Aug. 31 and leaving a voice mail that targeted a doctor affiliated with the center, the U.S. attorney’s office in Massachusetts said in a statement.
According to the statement, Lindner said in his message that “there’s a group of people on their way to handle” the physician and that “you signed your own warrant.” His message also told the recipient to “sleep well” and said, “You’re all gonna burn.” He accused her of castrating children, according to the statement.
Lindner, of Comfort, Tex., was charged with one count of transmitting interstate threats, and will appear in federal court in Boston at an unspecified date, the statement said. If convicted, he could face a prison sentence of up to five years, up to three years of supervised release and a fine of up to $250,000, the statement said.
Lindner’s alleged victim was not identified but was described by prosecutors as a physician who cares for transgender and gender-nonconforming patients at the National LGBTQIA+ Health Education Center, which provides educational programs and health care for sexual and gender minorities and is part of the Fenway Institute.
Prosecutors said the alleged threat was made in the same month the Boston Children’s Hospital, which is less than one mile from the center, was targeted in a harassment campaign over the care it was providing for transgender patients. Inaccurate information was spreading online about the procedures it performs, authorities said.
Boston Children’s Hospital says it faces threats after right-wing tweets
“The words used here do not amount to someone simply expressing their discontent or engaging in a heated debate,” United States Attorney Rachael S. Rollins said of Lindner in the statement. “Mr. Lindner’s alleged conduct — a death threat — is based on falsehoods and amounts to an act of workplace violence.”
“No one should have to live in fear of violence because of who they are, what kind of work they do, where they are from, or what they believe,” Joseph R. Bonavolonta, special agent in charge of the FBI’s Boston division, added in the statement.
The Washington Post was unable to reach Lindner on Sunday morning. The Associated Press reported Saturday that it was unclear whether Lindner is represented by an attorney.
Fenway Health, which operates the Fenway Institute, said it would continue cooperating with law enforcement to combat threats against health-care providers and the families who use their services.
“As the negative rhetoric surrounding the LGBTQIA+ community — and transgender and gender diverse people in particular — continues to escalate, attacks on medical professionals who provide gender affirming health care are on the rise,” a spokesman for the organization said in a statement to The Post. “We are grateful for the quick action of law enforcement in helping to put a stop to the hate-fueled threats and harassment directed at this doctor.”
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Lindner’s case is one of the more extreme examples of a long-running harassment campaign against medical providers who work with transgender children and adolescents, which escalated in August.
On Aug. 30, one day before Lindner’s alleged threat, Boston Children’s Hospital — the first in the nation to establish its own pediatric and adolescent transgender health program — was forced by authorities to lock down after it received an anonymous bomb threat, which turned out to be fake. A 37-year-old woman from Westfield, Mass., was later arrested and charged by federal prosecutors in connection with the hoax. According to the FBI, the call was among dozens of hoax threats received by Boston Children’s Hospital in recent months.
The hospital said its employees were harassed after conservative influencers targeted them in false and misleading social media posts, directing much of their vitriol at the hospital’s Gender Multispecialty Service program. The program specializes in caring for young people with gender dysphoria, the condition in which a person’s gender does not align with the sex they were assigned at birth.
Leading medical groups, including the American Academy of Pediatrics, support providing gender-affirming care for young people experiencing gender dysphoria.
Transgender medical treatment — particularly for younger people — has become a contentious issue for conservative activists and politicians, who in recent months have intensified their criticism of gender-affirming surgery and therapy, and have sought to curtail access to such services.
Derek Hawkins and Meena Venkataramanan contributed to this report.
