FTXOn February 28 Nishad Singh, the former director of engineering at FTX, entered a guilty plea in Manhattan district court on three counts of criminal fraud. The same day, the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) announced civil charges against him. According to a plea agreement with prosecutors, Singh pleaded guilty in the U.S. District Court for the Southern District of New York to one count of wire fraud, as well as conspiracy to commit wire fraud and commodities fraud against FTX customers.
SEC and CFTC press charges against Nishad Singh
The CFTC has charged Singh with fraud by misappropriation, as well as aiding and abetting fraud committed by Samuel Bankman-Fried, FTX, and Alameda Research. The SEC’s complaint alleges that Singh violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. Also, it further states that Singh was either aware of or reckless in failing to be aware of, Bankman-Fried’s operation of the companies without regard for responsible corporate controls and appropriate conduct.
Singh has agreed to a proposed consent order without contesting the CFTC charges. According to the SEC, he will be subject to a bifurcated settlement with numerous conditions that require court approval. These include a permanent injunction from violating federal securities laws, an injunction against his conduct, and a ban on him from acting as an officer and director.
Additionally, the court will decide whether he should be required to disgorge any ill-gotten gains and pay prejudgment interest and/or a civil penalty.
The SEC and the CFTC have charged former FTX CEO Sam Bankman-Fried, former Alameda Research CEO Caroline Ellison, and former FTX Chief Technology Officer Gary Wang with violations of securities laws. Ellison and Wang have settled their cases with the SEC, but have consented to stay in their CFTC cases. Meanwhile, the SEC and CFTC cases against Bankman-Fried remain stayed until the conclusion of his criminal trial.
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