🏠 FAMILY

In FTX Parentis ↗

A new filing and a twist to the Sam Bankman-Fried/FTX saga. This time, instead of the apple, we get the tree(s). That’s right, Allan Bankman and Barbara Fried, Sam’s parents, are on the chopping block for a number of claims asserted by the FTX bankruptcy trustee.

SO WHAT'S HAPPENING?

In short, the Bankruptcy Trustee is claiming that Bankman “played a key role in perpetuating [a] culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud committed” by a group at insiders at FTX.” And, together with Fried, siphoned millions out of FTX for their own benefit. Let’s dive in a bit.

WAIT, WHAT ABOUT LARRY DAVID?

Let’s back up a second. Apparently Bankman played a BIG part in FTX management, being considered part of the “Management Team” and acting as a “strategic advisor to and general overseer of the FTX businesses”

Effectively, as alleged, a de facto director. And for this role, he was paid really, really well. I mean, he even got to be in that infamous FTX Super Bowl commercial with Larry David.

Like a parent, Bankman had a lot of control and influence at FTX. But instead of making sure things were done properly, it’s alleged that Bankman both bad conduct and siphoned (with Fried) millions for their personal benefit and the benefit of a number of pet charities and political campaigns.

The Trustee has alleged a host of claims against the pair, including breach of fiduciary duty, and fraudulent transfer. Doesn’t look like the apple falls far from the tree.

💼 HIERARCHY

Titles, Titles, Titles ↗

The legal profession is a sucker for a good title. In private practice, we fight tooth and nail to get the Partner tag. In-house is generally no better. Head of Legal, VP of Legal, Director of Legal, Corporate Counsel, are all titles that could potentially be the lawyer in charge. There is less confusion when we are talking about the General Counsel, at least there was up until the last few years.

There are now two roles that could potentially confer the person you are talking to the leader of the legal department: General Counsel (GC) and Chief Legal Officer (CLO). For some departments, those roles are the same person. For others, a CLO sits above the General Counsel, with the roles looking like this:

To get to the bottom of whether there was a distinction between these two roles, we went to Twitter (X?) and asked the in-house lawyers their thoughts. Unsurprisingly, we received a resounding “it depends.”

Some noted that their organization had a GC handing the day-to-day legal issues that arose, while the CLO took over big picture strategy and the board room. Others noted that they had a GC per region and a global CLO above the organization. But then we also received plenty of:

Our take? Generally speaking, the bigger the organization, the more likely to have a CLO and GC working in tandem. It’s even more likely when there are country or region specific legal departments. Smaller department? A combination of the two roles. Again, we are speaking broadly and generally.

Have thoughts on the GC v. CLO distinction? Let us know!