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Paul, Weiss: Hugh Hefner and Don Henley to Steve Jobs and Eliot Spitzer, SBF’s lawyers have represented the famous – and infamous

By Raphael Sanis

Edited by Charlie Mellor

16:44, 14 November 2022

Sam Bankman-Fried testifying at a digital assets hearing in 2021
Sam Bankman-Fried stepped down on 11 November from his CEO position at FTX – Photo: Getty Images

Sam Bankman-Fried, the founder and ex-CEO of FTX, has turned to law firm Paul, Weiss for its legal services as his exchange filed for bankruptcy.

The move by Bankman-Fried followed the revelation that FTX customers have turned to David Boies, an American litigator, to potentially launch a lawsuit, according to the Financial Times.

There is some speculation that the FTX founder could be facing legal trouble for allegedly misusing billions of dollars of customer funds.

The cryptocurrency exchange had allegedly used these investments to finance “risky bets” by Alameda Research, Bankman-Fried’s trading firm, according to The Wall Street Journal.

This is said to have gone against FTX’s terms of service, which reads: “None of the digital assets in your account are the property of, or shall or may be loaned to, FTX Trading; FTX Trading does not represent or treat digital assets in users’ accounts as belonging to FTX Trading.”

What is Paul, Weiss?

The law firm, whose full name is Paul, Weiss, Rifkind, Wharton & Garrison, represents many of the world’s largest financial institutions and is “widely recognised” for handling white-collar and regulatory defences.

Its website said: “The firm’s clients have included the largest financial institutions in the world, and the earth’s neediest citizens.”

DOGE/USD

0.12 Price
-3.160% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.58 Price
-9.180% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BCH/USD

383.85 Price
+1.510% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

BTC/USD

63,859.00 Price
-1.120% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

A long list of clients is outlined on its website, including artist Andy Warhol, Apple co-founder Steve Jobs, The Eagles’ member Don Hanely, Playboy founder Hugh Hefner and former New York governor Eliot Spitzer.

SBF’s new lawyer

Specifically, Sam Bankman-Fried has hired the Paul, Weiss partner Martin Flumenbaum, according to the Financial Times.

Flumenbaum’s Paul, Weiss profile said: “He regularly advises US and international clients on a broad range of litigation issues, with an emphasis on securities, mergers and acquisitions, commercial litigation, intellectual property, antitrust and white-collar matters.”

He is known for representing the high-yield junk bond trader Michael Milken, who was jailed for nearly two years due to violating US security laws. But Milken was pardoned in 2020 by then-president Donald Trump.

Meanwhile, another lawyer has taken control of the FTX group. John Ray III is now the CEO of the bankrupt exchange and will be handling the Chapter 11 proceedings.

He said in a statement: “I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority, and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency.”

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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