FirstFT: FTX sues Sam Bankman-Fried’s parents over ‘misappropriated funds’


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Good morning. FTX has sued the parents of Sam Bankman-Fried, claiming they enriched themselves by siphoning off millions of dollars in “fraudulently transferred and misappropriated funds” from the cryptocurrency exchange their son founded.

In a court filing late on Monday evening, the FTX debtors said Joseph Bankman and Barbara Fried, both of whom are tenured professors at Stanford Law School, used their influence to funnel money from the business to their pet charitable causes.

Bankman-Fried, who was arrested last December after FTX collapsed with a multibillion-dollar hole in its balance sheet, has previously asserted that his parents “weren’t involved in any of the relevant parts” of the business.

But lawyers for the FTX debtors said the truth was that “Bankman and Fried were very much involved — from the founding of the FTX Group until its collapse”. Here are more details from the allegations.

Here’s what else I’m keeping tabs on today:

  • China policy rate decision: China’s benchmark rates announcement will be closely watched for the next big signpost on the trajectory of the world’s second-largest economy.

  • US interest rate announcement: The Federal Reserve is widely expected to keep interest rates on hold at the end of its latest policy meeting.

  • United Nations: The UN holds its inaugural one-day Climate Ambition Summit, alongside this week’s general assembly.

Join Martin Wolf, FT China watchers and Tao Wang, China economist at UBS, for a subscriber webinar on China’s economic slowdown on Thursday September 21 at 1100-1200 BST (1000-1100 GMT). Register for your free pass here.

Five more top stories

1. India expelled a Canadian diplomat on Tuesday as an extraordinary rift deepened over allegations that New Delhi was involved in the murder of a Sikh activist in British Columbia. A day after prime minister Justin Trudeau said Canadian authorities were investigating whether “agents” of New Delhi were behind the June killing of Hardeep Singh Nijjar, the government of Narendra Modi dismissed Ottawa’s statements as “absurd and motivated”. Here’s our report on the explosive allegations.

2. US president Joe Biden called on world leaders to oppose early peace talks that would lead to Ukraine being “carved up”. In his speech to the UN’s general assembly, Biden argued that standing firm against Russia’s goal of winning a big chunk of land would deter future invasions of independent nations. Ukraine president Volodymyr Zelenskyy was in the audience and delivered his own appeal to the assembly later on Tuesday.

3. A European business group said China should do more to stimulate domestic consumption, saying huge investment in electric vehicle capacity has caused “understandable” concern in the EU. Brussels last week announced an anti-subsidy probe over concerns that Chinese exports could swamp its automotive industry as they previously did its solar panel sector. Read the full story.

4. Shares in grocery delivery group Instacart jumped more than 10 per cent on their first day of trading, in the latest sign of investor appetite for new listings. Strong demand had been expected after Instacart priced its initial public offering at $30 a share, the top of an already-increased price range on Monday evening. Here’s more on Instacart’s public market debut.

5. SoftBank is leading a $280mn funding round in US location-mapping company Mapbox, as the Japanese conglomerate’s founder and chief executive Masayoshi Son steps up his dealmaking in artificial intelligence. The investment in Mapbox is part of a push into AI that fulfils Son’s promise to go on the “counteroffensive” and has included discussions with multiple potential investment targets including OpenAI. FT’s Leo Lewis reports from Tokyo.

The Big Read

Sarah Cardell, CMA chief executive © FT Montage/Bloomberg

The recent Microsoft/Activision saga has pointed to the UK competition regulator’s newfound clout on the global regulatory stage and raised questions about its decision-making. Critics say the Competition and Markets Authority is taking big swings as it works out its place in the world, but supporters say its more resolute stance on policing large takeovers comes at a time when competition authorities in the US are also adopting a more assertive approach.

We’re also reading . . . 

  • Not ‘peak China’ yet: There are deep structural problems in the economy, but this is also a country with significant strengths, writes Martin Wolf.

  • Japan boy band abuse scandal: Some of country’s largest businesses and media groups are trying to distance themselves from a troubled talent agency.

  • Why don’t people leave bad jobs?: The answer can reveal a lot about the way an economy does (and doesn’t) work, writes Sarah O’Connor.

Image of the day

Researchers at Google DeepMind have used an artificial intelligence tool called AlphaMissense to predict whether mutations in human genes are likely to be harmful. The findings are one of the first examples of AI helping to accelerate diagnosis of diseases caused by genetic variants. Here’s how the technology may be used — and what its limitations are.

AlphaMissense predictions shown on mutations in a protein structure. Red are harmful, blue are benign and grey are uncertain

Take a break from the news

Members of the deaf community recount how they have embraced and challenged their diagnoses. “I hope to open people’s eyes to the fact that deaf people can achieve in sports,” said rugby player Jodie Ounsley.

© Lily Bertrand-Webb

Additional contributions from Tee Zhuo and Gordon Smith

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