Sam Bankman-Fried’s Criminal Trial Judge Is Married to Law Partner of Firm that Arranged the FTX-BlockFi Deal

[Gunnar Larson]

https://wallstreetonparade.com/2022/12/sam-bankman-frieds-criminal-trial-judge-is-married-to-law-partner-of-firm-that-arranged-the-ftx-blockfi-deal/



Ronnie Abrams Testifying at Her Senate Confirmation Hearing in 2011

Last week the New York Times did a puff piece on the judge that will be
presiding over the Sam Bankman-Fried criminal trial in the Federal
courthouse in lower Manhattan. The judge is Ronnie Abrams. The narrative at
the New York Times is that Abrams’ “husband, Greg Andres, is an
accomplished former Brooklyn federal prosecutor….”

Our take is that Greg Andres is part of Ronnie Abrams’ immediate household
and a law partner of Davis Polk & Wardwell LLP, a law firm that has
problematic ties to Bankman-Fried’s bankrupt crypto exchange, FTX, and
another crypto firm it became enmeshed with, BlockFi, which is also now in
bankruptcy.

According to the Davis Polk website, the following occurred in July of this
year:

“Davis Polk advised BlockFi, Inc. as borrower under a $400 million loan
facility provided by West Realm Shires Inc, an affiliate of FTX-US. Davis
Polk also advised BlockFi, Inc. in connection with an option for FTX-US to
acquire BlockFi at a variable price of up to $240 million based on
performance triggers…

“FTX is a leading cryptocurrency exchange specializing in derivatives and
leveraged products. Founded in 2018 by Sam Bankman-Fried, FTX offers a
range of trading products, including derivatives, options, volatility
products and leveraged tokens.

“The Davis Polk corporate team included partner Michael Davis and
associates Brian Lee and Malik M. Khalil. The finance team included
partners Meyer C. Dworkin and Christopher Nairn-Kim, counsel Erika D. White
and associate Matthew Vallade. Partners Lucy W. Farr and Corey M. Goodman
and associate Yixuan Long provided tax advice. All members of the Davis
Polk team are based in the New York office.”

At the very time that Davis Polk wrote that “FTX is a leading
cryptocurrency exchange” it was in reality embezzling billions of dollars
from its own customers according to the U.S. Department of Justice. The
peculiarly named West Realm Shires Inc. that was involved in the BlockFi
deal is majority-owned by Sam Bankman-Fried.

While hopefully doing some type of due diligence for their client, BlockFi,
ten Davis Polk lawyers did not, apparently, stumble upon the fact that
BlockFi was accepting an option for a potential buyout with what Damian
Williams of the U.S. Department of Justice now calls “one of the biggest
financial frauds in American history.” Sam Bankman-Fried, CEO of FTX at the
time this deal was put together, now faces eight criminal counts which have
the potential to put him in prison for life.

And the best the Federal district court for the Southern District of New
York can offer up as a judge to preside over the criminal trial is the wife
of a law partner at Davis Polk.

Davis Polk also represented the crypto exchange, Binance, and its CEO,
Changpeng Zhao, in a securities class action against the firm. On March 31
Davis Polk won dismissal of that case, Lee, et al. v. Binance, et al.,
1:20-cv-2803-ALC, which was also situated in the Federal district court in
the Southern District of New York.

Binance and Zhao also have highly problematic ties to FTX and Sam
Bankman-Fried. Bankman-Fried blames Zhao for backing away from a deal to
buy FTX in November for the collapse of FTX. The two have engaged in a war
of words on Twitter, with Zhao calling Bankman-Fried a “fraudster” while
Bankman-Fried calls Zhao a liar.

This would not be the first time that Judge Ronnie Abrams has presided over
a high-profile case while overlooking a conflict of interest on the part of
her husband and his law firm.

In 2014 Judge Abrams dismissed a whistleblower case brought by Carmen
Segarra, a bank examiner at the New York Fed, who credibly alleged she was
fired after refusing to change a negative examination of Goldman Sachs.
Just 20 days before Judge Abrams issued her written decision, she convened
a phone conference with lawyers on both sides. She alerted them that it had
just come to her attention that her husband, Greg Andres, “was representing
Goldman Sachs in an advisory capacity” according to the telephone
conference transcript.

Following that telephone conference, Segarra’s lawyer, Linda Stengle, filed
a letter with the court asking for a more complete disclosure of the
Judge’s husband’s relationship with Goldman Sachs. The New York Fed
responded with its own letter, writing: “Plaintiff’s request for additional
disclosures raises concerns about the appearance of a different sort of
impropriety: forum shopping…Under these circumstances, the Court should
deny Plaintiffs request for additional disclosures and proceed with the
case.” (See FRBNY Response to Segarra Request for Filing Amended Complaint.)

Judge Abrams went on the offensive, adopted this line of reasoning, and
accused Stengle of “judge-shopping” in her written decision tossing out the
case. It was a bizarre position to take since Stengle had not asked the
Judge to recuse herself.

Wall Street On Parade found the following interesting background details at
the time we wrote about that case:

Judge Abrams also worked at Davis Polk just prior to taking the bench in
2012;

U.S. Senator Kirsten Gillibrand, who recommended Abrams to President Obama
for the Judgeship and spoke on her behalf at her confirmation hearing, also
previously worked at Davis Polk;

Davis Polk was the second largest contributor to Gillibrand’s 2012 Senate
race, according to the Center for Responsive Politics, with its lawyers,
employees and/or PACS contributing $333,100;

One of the lawyers representing the New York Fed in the Segarra matter,
Thomas Noone, previously worked at Davis Polk and his employment there
overlapped with that of Judge Abrams;

Davis Polk previously represented the New York Fed in significant matters;

How big a retainer the Judge’s husband received from Goldman Sachs and when
he received it did not come to light. What we did discover is that Goldman
Sachs was a large, long-term client at Davis Polk.

As we have previously recommended, an independent investigation of the
federal district court for the Southern District of New York needs to
happen – sooner rather than later. (See The Carmen Segarra Case: Welcome to
New York, Wall Street and McJustice and Goldman Sachs Beats Another Fraud
Rap: Can the Public Ever Get Justice in New York Courts? and JPMorgan Chase
Quietly Settles Whistleblower Case Involving Charges of Keeping Two Sets of
Books and Improper Payments to Tony Blair.)
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