FTX fiasco one of the most egregious cases of ‘gross negligence,’ says Ackman

FTX fiasco one of the most egregious cases of ‘gross negligence,’ says Ackman

Hedge-fund titan Bill Ackman appears to be walking back comments he made via Twitter last week about Sam Bankman-Fried that some interpreted as implicit support for the 30-something who presided over one of the most epic bankruptcies in financial markets in recent memory.

Last week, Ackman tweeted that Bankman-Fried’s statements made during a widely watched interview, streamed to New York from the crypto founder’s location in the Bahamas, was “believable.”

“Many have interpreted my tweet to mean that I am defending SBF or somehow supporting him. Nothing could be further from the truth,” Ackman wrote Saturday, referring to Bankman-Fried by his initials SBF.

Ackman went on to describe the implosion of Bankman-Fried’s crypto exchange FTX, and some of its associated businesses, as “at a minimum, the most egregious, large-scale case of business gross negligence that I have observed in my career.”

Check out: The Sam Bankman-Fried roadshow rolls on: 10 crazy things the FTX founder has just said

Ackman, who is the chief executive of Pershing Square Capital, a prominent investor in traditional markets, and an advocate of crypto, last week, tweeted this message following the widely watched interview of Bankman-Fried at the New York Times Dealbook Summit:

“Call me crazy, but I think SBF is telling the truth.”

Ackman has been chastised by some for seemingly offering verbal succor to a person who some have accused of, at the least, an epic mismanagement of client assets.

Speaking against the wishes of his lawyers, Bankman-Fried on Wednesday, during the Dealbook interview, admitted to making mistakes but said that he never intended to mingle client funds with those of the firm to make leveraged bets on crypto via hedge fund Alameda Research, which he founded before he started FTX.

“I didn’t know exactly what was going on,” Bankman said at the time.

At least one response to Ackman’s Saturday tweet, questioned whether the hedge funder might be responding to blowback from his own clients.

It isn’t the first time that Ackman has cast Bankman-Fried’s actions in a positive light. As the implosion of FTX was unfolding, Ackman said, in a now-deleted tweet, that he’d never before seen a CEO take responsibility as the crypto exchange operator did and that he wanted to give him “credit” for his actions. “It reflects well on him and the possibility of a more favorable outcome” for FTX, he wrote.

On Saturday, one Twitter user asked Ackman if had any ties to Bankman-Fried, which the investor bluntly said he doesn’t.

Bankman-Fried had been viewed as a financial darling inside and outside the crypto industry until his empire collapsed on Nov. 11 and it was revealed that affiliated hedge fund Alameda lost billions in FTX client money in leveraged crypto bets.

John Ray, the new chief executive of FTX, in a filing to the U.S. Bankruptcy Court for the District of Delaware, described the state of the crypto platform “as a complete failure of corporate controls and such a complete absence of trustworthy financial information.” 

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