Sam Bankman-Fried Allegedly Promised Billions to Super Networkers for Access to Celebrities and Politicians
Alameda Research, the hedge fund arm of the bankrupt FTX empire, is seeking the return of $700 million that founder Sam Bankman-Fried purportedly paid to Michael Kives and Bryan Baum, two well-connected individuals known as “super networkers.” According to court filings, Bankman-Fried was impressed by their connections to politicians, billionaires, and reality TV stars.
Lawyers representing FTX’s new management argue that the billions promised to Kives and Baum demonstrate Bankman-Fried’s disregard for proper procedures in spending funds from companies he treated as a “slush fund.” They claim that Bankman-Fried treated the entities under his control as a slush fund, disregarding corporate formalities.
The allegations further state that Kives, a former aide to Bill and Hillary Clinton, and Baum “acted with dishonest minds” by accepting money that personally benefited Bankman-Fried without providing any equivalent benefit to Alameda. The court filing echoes previous criticisms of poor management at FTX, which filed for bankruptcy in November.
Bankman-Fried’s infatuation with celebrities and influential figures was allegedly evident during a party hosted by Kives in February 2022, attended by former presidential candidates, actors, reality TV stars, musicians, and multiple billionaires. Shortly after the event, Bankman-Fried committed to investing billions in Kives’ and Baum’s companies, with limited details provided regarding what FTX would gain in return. The court filing describes the term sheet as a superficial list of investment ideas without substantial due diligence.
The filing also highlights Bankman-Fried’s lack of clarity regarding Baum’s association with FTX, referring to it as “complicated and liminal and unclear.” Transfers totaling $700 million from Bankman-Fried’s companies to Kives and Baum are alleged to possess characteristics of fraud under bankruptcy law, including concealment, inflated value, and being made when FTX was on the brink of insolvency.
In response to the allegations, a spokesperson for K5 Global, the company founded by Kives and Baum, stated that they believed Bankman-Fried to be legitimate and that they entered into a fair and mutually beneficial business relationship. The spokesperson added that they consider the lawsuit to be without merit.
According to Elizabeth Ashford, the spokesperson, Bankman-Fried and Alameda’s affiliates acquired a third of K5’s general partnership through a cash and stock transaction in 2022, making a $400 million investment in the funds managed by the company. Ashford noted that K5 Global had over $1 billion in assets under management, aside from Bankman-Fried’s interests, with investments in 148 companies.
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