The Texas Securities Board has asked the judge to consider imposing a cease-and-desist order, administrative fines, and forced refunds on SBF and FTX.US.
Bankman-Fried is on the hook in Texas and has been summoned to appear at the hearing in February.
The Texan securities regulator has summoned former FTX CEO Sam Bankman-Fried to a hearing on February 2 to determine whether he and FTX.US have broken Texas securities laws.
The regulator claims that FTX US offered unregistered securities to Texans through its “EARN” accounts in a Notice of Hearing signed by SSB director of enforcement Joe Rotunda and served on Bankman Fried on November 29.
Before FTX’s global operations’ dramatic collapse and bankruptcy on Oct. 14, the investigation was first announced. At the time, the regulator said that it was looking into FTX Trading, FTX.US, and its principals, including Sam Bankman-Fried, for selling yield-bearing products that offered securities that were not registered.
Rotunda made an appeal to the general public via Twitter on November 18 to contact him if they were a previous client of FTX and were based in Texas.
The SSB claimed in the most recent notice that Sam Bankman-Fried violated a section of the Securities Act while he was the CEO of FTX at the time.
Rotunda stated, “Respondent [Sam Bankman-Fried] violated Section 4003.001 of the Securities Act by offering and selling securities in Texas that were not registered or permitted for sale in Texas,” and it also stated that it did not register as a dealer or agent in the state of Texas.
In order to prevent FTX from “engaging in fraud in connection with the offer or sale of securities in Texas,” the regulator stated that it hoped the hearing would result in a Cease and Desist order.
Additionally, it was “praying” for the judge to direct Bankman-Fried to return funds to Texan investors in its “unregistered EARN accounts.”
If Bankman-Fried has benefited financially from the securities law violations, the regulator wants to consider imposing an “administrative fine.”This sum would not exceed $20,000 for each violation, but it could reach $250,000 for each “illegal or fraudulent act” against Texans over 65.
According to Rotunda, the hearing will begin on February 2, 2023, at 9:00 a.m. local time, and Bankman-Fried will be able to attend the hearing via Zoom.
It appears that Bankman-Fried is currently in the Bahamas.
The former CEO of FTX expressed regret over his handling of the company and the bankruptcy filing in a recent interview with crypto blogger Tiffany Fong.
In the interview that was just made public on November 16, he stated, “You don’t get into the situation we got into if you, like, make all the right decisions.”