Billionaires: Sam Bankman-Fried wins Texas case over lost FTX funds

In our fortnightly round-up of the world’s super wealthy, Ryan Cohen builds a stake in Nordstrom and James Packer considers investing in Argentina’s energy or mining sectors

Embattled FTX founder Sam Bankman-Fried won a legal case against the Texas State Securities Board over lost FTX funds. AP
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Sam Bankman-Fried

Embattled FTX founder and former billionaire Sam Bankman-Fried has staved off a case alleging he broke Texas securities laws, after a judge ruled that the state regulator lacks jurisdiction to act against him.

The ruling came in a case brought by the Texas State Securities Board claiming Mr Bankman-Fried offered unregistered securities through FTX’s yield-bearing cryptocurrency accounts and that he now owes refunds to Texas investors.

Administrative law judge Sarah Starnes cancelled a February 2 hearing, at which Mr Bankman-Fried had been ordered to give evidence, and has given the securities agency until March 1 to file an amended complaint.

Joe Rotunda, the agency’s director of enforcement, did not return messages seeking comment on the ruling, and it is not clear whether he will refile.

Sam Bankman-Fried — in pictures

The case reflects the early efforts some states are making to recover money from FTX and Mr Bankman-Fried after the cryptocurrency exchange’s implosion in November. The obstacles: a criminal fraud prosecution of Mr Bankman-Fried and a sprawling FTX bankruptcy case.

Because of the twin federal cases, state securities regulators have largely delayed their own investigations of FTX, even though some states have taken a leading role in cryptocurrency enforcement over federal authorities in recent years.

Lawyers for Mr Bankman-Fried, who has pleaded not guilty in the criminal case, argue that the state board alleges only that he “controlled various FTX entities and that certain FTX principals may not have disclosed material information to FTX customers”, not that he breached any Texas securities regulations himself.

Ms Starnes agreed, writing in an order that the state board had failed to meet the requirements for establishing personal jurisdiction over a non-Texas resident.

Mr Rotunda told the judge that Mr Bankman-Fried “subjected himself to the jurisdiction of Texas’ courts when he decided his business enterprise would offer and sell securities to Texas residents”.

He said he was one of those residents — a purchase he made as part of his investigation.

Mr Rotunda revealed the Texas probe in October court filings in the bankruptcy of Voyager Digital Holdings, in which he objected to FTX’s bid to purchase Voyager.

In November, he filed the board’s claims with the Texas State Office of Administrative Hearings, which resolves disputes involving state agencies.

By initiating an administrative hearing, Mr Rotunda said the board could seek refunds for clients without litigating the issue in a civil courtroom.

In addition to seeking a refund of principal to Texans who invested in the alleged unregistered accounts, his agency asked for administrative fines of as much as $20,000 per contravention of state securities laws and as much as $250,000 for each illegal act involving a Texas resident 65 or older, as determined by the judge.

“There’s been a lot of people hurt,” Mr Rotunda said. “But the impact on Texas — while significant, and significant in the other 49 states — is going to be far less than what we saw in Voyager, what we saw in Celsius and what this could have been if it percolated for another couple months.”

Mr Bankman-Fried faces a trial in October. Meanwhile, he is free on bail and living with his parents in California.

Activist investor Ryan Cohen has built up a stake in department store Nordstrom. Photo: Twitter

Ryan Cohen

Meme-stock investor Ryan Cohen has built a sizeable stake in Nordstrom and aims to replace at least one of the department store chain’s directors, according to a source.

Mr Cohen is already one of Nordstrom’s five biggest non-insider shareholders, said the source.

The effort follows Mr Cohen’s move last month to push e-commerce company Alibaba Group to buy back more of its shares, in a rare case of activism aimed at a prominent Chinese company.

“While Mr Cohen hasn’t sought any discussions with us in several years, we are open to hearing his views, as we do with all Nordstrom shareholders,” a spokeswoman for the retailer said.

“We will continue to take actions that we believe are in the best interests of the company and our shareholders.”

A representative for Mr Cohen declined to comment.

As the managing member of RC Ventures, Mr Cohen became an idol to amateur investors after championing well-known but languishing stocks such as Bed Bath & Beyond and GameStop, where he became chairman in 2021.

Mr Cohen, the co-founder and former chief executive of, ploughed virtually all of his proceeds from the 2017 sale of the pet retailer into two stocks: Apple and Wells Fargo.

At the time, Mr Cohen said that his portfolio, when including dividends and a few other stock holdings, had returned more than 40 per cent over the previous three years, beating the market.

NEW YORK, NY - DECEMBER 13: Businessman James Packer attends the "Joy" New York premiere at the Ziegfeld Theater on December 13, 2015 in New York City.  (Photo by Jim Spellman/WireImage)

James Packer

Australian billionaire James Packer, who was once engaged to multimillion-selling singer Mariah Carey, is considering an investment in Argentina’s energy or mining sectors, according to sources.

Mr Packer explored investment options during a dinner late last year at a racetrack in Buenos Aires with businessmen and politicians, including economy minister Sergio Massa, said the sources.

He inherited a multibillion-dollar business empire when his father Kerry died in 2005 and is flush with funds after last year’s sale of Australian casino operator Crown Resorts to Blackstone for almost A$9 billion ($6.4 billion). Mr Packer owned more than a third of Crown.

A representative for Mr Packer’s private investment company was not available to comment by phone and didn’t immediately respond to an email seeking comment on the possible investment.

Foreign investment has become somewhat rare in Argentina amid a series of interventionist policies, including capital controls, and annual inflation near 100 per cent.

Mr Massa, the country’s fifth Economy Minister in four years, is looking to turn the economy around and is expected to be a presidential contender in October’s elections should he succeed.

Some investors are anticipating that a new administration would improve the business climate in the resource-rich country.

Argentina’s oil and gas sector is already gaining attention thanks to plans to expand pipeline capacity that would help shale patch Vaca Muerta to unleash its potential.

A programme with the International Monetary Fund to overhaul how Argentina charges for power also makes that industry more attractive.

Italy’s Enel is selling all of its Argentine assets, including a power plant and electricity distributor in Buenos Aires.

In mining, Argentina has emerged as one of the most exciting prospects to produce lithium coveted by battery makers for the global transition to cleaner power and electric vehicles.

Miners in the Argentine Andes are also hurrying to unearth copper, another key metal needed for adoption of renewables.

Kumar Mangalam Birla, chairman of Aditya Birla Group, has appointed two of his children as directors. Bloomberg

Kumar Birla

Indian billionaire Kumar Birla appointed two of his children as directors to the retail unit of his Aditya Birla Group, setting the stage for succession.

The board of Aditya Birla Fashion and Retail, inducted singer-songwriter Ananya Birla and Aryaman Birla, according to a stock exchange filing last week.

The board believes the company will benefit from their New-Age insights and business acumen, the filing said.

Ananya and Aryaman were earlier this month appointed as directors on the board of Aditya Birla Management, the apex body that provides strategic direction to the Aditya Birla Group’s businesses.

Ananya is a successful businesswoman and platinum-selling artist.

Her first company, Svatantra Microfin, founded when she was 17, is among India’s fastest-growing microfinance institutions.

Aryaman is closely involved with several businesses of the fashion-to-cement group.

Updated: February 06, 2023, 5:00 AM