BREAKING: Sam Bankman Fried and FTX Hit With $12.7B Tab… Jobs, Jobs, Jobs!

Mr. Market has been more moody than my wife on a road trip without snacks.

After the hump-day selloff—apparently triggered by the "Oracle of Omaha" buying more T-bills than the Fed—stocks rebounded Thursday with a confidence boost from new labor market data. 

The S&P 500 bounced up 2.3%, the Dow Jones climbed 692 points (1.8%), and the Nasdaq shot up 2.8%.

Eli Lilly led the charge with a 9% surge thanks to strong earnings from its Ozempic knockoff weight loss drug.

AI pioneers, Nvidia and Broadcom also jumped over 6% as investors shifted back into chipmakers.

Despite the recovery, the week’s scorecard still shows red, with the S&P 500 down 0.5% and both the Dow and Nasdaq slipping 0.6%.

BREAKING: Sam Bankman Fried and FTX Hit With $12.7B Tab… Jobs, Jobs, Jobs!

Well everyone, get ready for a fresh round of crypto memes because the saga of Sam Bankman-Fried (SBF for those in the know) just got even juicier. Remember when we joked about him trading rice in prison with his inmates? 

Well, he's back in the headlines, and this time he’s in even more of a pickle. The US district court in New York has decided to spice things up by slapping FTX Trading and Alameda Research with a colossal $12.7 billion bill to pay back fraud victims.

The Commodity Futures Trading Commission (CFTC) proudly announced this court order, marking the largest recovery ever. It’s like the Guinness World Record of financial penalties.

SBF's rise and fall could be a blockbuster movie to rival Wolf of Wall Street, but instead of Leo, the star would be Jonah Hill. FTX shot up to crypto stardom, partnering with celebs like Tom Brady and Kevin O’Leary, only to crash and burn spectacularly in November 2022, causing a panic on crypto Twitter. 

I’m sure you remember when the firm collapsed in November 2022 and sent an all out panic through crypto twitter. Well in March, SBF was sentenced to 25 years in the slammer and ordered to forfeit $11 billion for luring in customers with the promise of security and stability, only to gamble away all the money from their sister company Alameda Research, run by his girlfriend, Caroline Ellison.

The CFTC's order includes $8.7 billion in restitution (paying back the victims) and $4 billion in disgorgement (essentially giving up the ill-gotten gains). These funds are meant to help the victims of FTX's collapse. But here’s the twist: the CFTC won’t collect a penny until all customers are repaid with interest. So, if you’re one of those unlucky investors, hang in there. FTX has promised 100% recovery on customer claims based on their account values at the time of bankruptcy.

FTX is currently in the midst of a bankruptcy liquidation process, selling off assets that were bought with misappropriated funds. from prime real estate in the Bahamas—where they threw their infamous wild, polygamous parties—to investments in other tech companies.

As FTX solicits votes on its bankruptcy proposal, tensions are high on social media. Some customers, feeling short-changed, are not buying the repayment terms. Votes are due by August 16, with the final wind-down plan approval set for October 7.

Just when you thought things couldn’t get worse for SBF, this latest development adds another dent to his already tarnished legacy. Once hailed as a humble billionaire compared to Warren Buffett, he's now the punchline of every crypto joke. My biggest question about all of this is how does the judge expect Sam to lasso $12.7 billion from a prison cell? I guess we’ll see, but if you’re owed any money at all I wouldn’t get your hopes up.

(Source: NY Post)

Stock.News does not have positions in companies mentioned.