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Former CEO of Alameda Research begins serving prison sentence
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Caroline Ellison, former CEO of Alameda Research and key witness in the case against Sam Bankman-Fried, the SBF, will serve her prison sentence. According to reports, Ellison reported to a low-security federal prison in Connecticut on Thursday (07).
After FTX’s collapse, Ellison struck a deal to testify against SBF, the company’s former CEO and founder. As a result, she reduced his sentence to two years in prison. Additionally, Ellison had to return $11 billion taken from Alameda Research.
Initially, the federal Probation Department recommended a sentence of three years of supervised release with no prison time. Ellison’s defense attorneys also sought a sentence in which their client could serve freedom, due to Ellison’s support in the case.
However, Judge Lewis Kaplan chose to give the former Alameda CEO a prison sentence. The judge praised Ellison’s role in SBF’s conviction, but highlighted that prison was necessary. According to Kaplan, the penalty aims to prevent other fraudsters from committing similar crimes in the future.
Caroline Ellison begins prison sentence
Ellison was the chief executive of Alameda Research, a hedge fund firm that had close ties to FTX. The company’s role was to lead the investments made by FTX with clients’ money. At the time, Ellison was also romantically involved with Sam Bankman-Fried, which remained secret for a long time.
She managed Alameda as it absorbed much of the $8 billion that SBF secretly took from FTX. The exchange’s former CEO has repeatedly denied that FTX and Alameda had any relationship.
However, the fraud revealed itself in November 2022 when FTX declared bankruptcy. During the investigation, it was discovered that the money diverted to Alameda belonged to FTX clients. As a result, the exchange’s insolvency left thousands of people with their resources blocked.
A month after FTX’s collapse, Ellison reached a plea deal with federal prosecutors and pleaded guilty to conspiracy and financial fraud charges. So, Judge Kaplan then handed down a ruling while rebuking FTX’s fraud, which had never been seen before in American financial history.
The judge called the FTX case the “largest financial fraud ever committed.” Resisting pleas for leniency from the Probation Department, which recommended three years of supervised release, Kaplan said he could not give her a “get out of jail free card.”
Kaplan credited Ellison’s extraordinary cooperation with the government, balancing his contrition and stress of testifying against Bankman-Fried. “I have seen many defendants cooperate over the years, and I have never seen one like Ms. Ellison,” Kaplan said.
Former CEO of Alameda Research begins serving prison sentence
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Former CEO of Alameda Research begins serving prison sentence
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Former CEO of Alameda Research begins serving prison sentence
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Former CEO of Alameda Research begins serving prison sentence
