(Though, Newmann potentially committed fraud with some of the ways that investor money left WeWork and somehow ended up in his own pocket, but that's unrelated)
Sam massively broke the law because FTX customers had given FTX those funds on the condition that FTX not touch them. The agreement was that all those funds would sit in a bank account or crypto wallet until it was time to withdraw.
But Sam and friends stole the customer funds and gambled them away. Nobody would have ever known if the gamble succeeded before a "bank run", but it was still highly illegal.
And investors get a share of the profits if the gamble pays off. That's why they are investing. If Sam's gamble had paid off, the profits would have gone to Alameda, not the customers.
Moreover, Uber has effectively made employees out of many drivers while they were not treated like employees, and courts have forced payments-- that's not like disappearing deposits but since laborers were wrongly under-compensated it's effectively just as harmful.
Had SBF somehow raised say just $1-2b, which seems to be what the gap will be for the recovery, I wonder if today he'd still be a billionaire and out of jail like TK and AN.
This lawsuit was later dropped, so it seems to have been without merit. And it was part of a power struggle that happened on the Uber board after he resigned, not related to anything that happened while he was CEO, or any of the shitty things that Uber did.
> Had SBF somehow raised say just $1-2b, which seems to be what the gap will be for the recovery, I wonder if today he'd still be a billionaire and out of jail like TK and AN.
Well, yes.
But only because he wasn't caught. Not being caught doesn't make the fraud legal.
Lol the lawsuit against TK was filed because he refused to resign. If the lawsuit was without substance, then Sunsan Fowler must have been a conspiracy and all the Greyballing evidence also faked like the moon landing.
The top “victims” of FTX were VC speculator funds. Perhaps if TK had realized losses for Benchmark and Google like SBF did, then TK would be facing additionally wire fraud.
1) he lied about key details of what would be done with the money people gave him, which is a specifically bad kind of lying because there are special laws for it
2) it wasn't just VC funds that lost money