Hedge Fund Billionaire Bill Ackman Empathizes With Fallen FTX Chief Sam Bankman-Fried

Topline

Hedge fund billionaire Bill Ackman appeared to defend Sam Bankman-Fried from fierce criticism on Thursday as the fallen crypto mogul fights criminal charges following the dramatic collapse of his FTX exchange in November, relaying his own experiences as a subject of a high-profile white collar investigation and urging people not to presume innocence until guilt is proven.

Bill Ackman said we should presume the innocence of Sam Bankman-Fried until he is proven guilty.

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Key Facts

In a lengthy Twitter thread posted Thursday night, Ackman said it is important to presume Bankman-Fried—who pleaded not guilty to eight criminal fraud charges—is innocent until he is proven guilty.

Ackman stressed he is “not supporting or defending” Bankman-Fried, also known as SBF, and understands why victims and investors want swift justice but said it is important we don’t “sacrifice our core values in a rush to convict.”

The billionaire recalled his own experience as the subject of a market manipulation investigation by the then-New York Attorney General in 2002, as well as a Securities and Exchange Commission investigation, for which he was “presumed guilty by the public at large” and made front page news.

Ackman said the investigations “clouded” his reputation and saw him “treated like a crook,” though neither found evidence of wrongdoing, and strengthened his belief that innocence should be presumed until guilt is proven.

He said regulators and prosecutors are incentivized to go after headline-attracting targets like himself or SBF as they are possibly a “ticket” to a well-paid job at a top law firm.

Ackman also said SBF’s behavior since FTX’s implosion differs from “every other guilty defendant of which I am aware,” pointing to his willingness to speak publicly with the media as “unique” for one accused of a financial crime.

Key Background

Bankman-Fried was arrested in the Bahamas last month and extradited to the U.S. after FTX, the crypto exchange he ran, collapsed. He was released on a $250 million bail in December and is under house arrest in California. His trial is set to be one of the most high-profile white collar criminal trials in U.S. history and he faces more than 100 years in prison if found guilty of all counts. This is not the first time Ackman has taken to social media to comment on Bankman-Fried, previously offering explanations for FTX’s collapse.

Tangent

Two of Bankman-Fried’s top associates—former Alameda CEO Caroline Ellison and FTX cofounder Gary Wang—have both pleaded guilty to fraud, admitting to diverting and misappropriating FTX customer funds. Their guilt should not be used to infer SBF’s guilt, Ackman stressed, pointing to the possibility that his conviction might secure them “dramatically reduced sentences.” With these incentives, “can’t rely on their words as proof that he is guilty,” he said.

Crucial Quote

Rushing to convict SBF “does no one any good,” Ackman said. “It doesn’t bring anyone to justice faster or return investor funds any faster. At best it makes some unhappy investors feel better that someone is suffering consequences for their loss.”

Forbes Valuation

$3.5 billion. That’s Ackman’s estimated net worth, according to Forbes’ real-time tracker. He runs Pershing Square Capital Management, which he founded in 2004 and made $2.6 billion in profit on a $27 million investment in credit hedges at the start of the Covid-19 pandemic.