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FTX founder Sam Bankman-Fried refuses to testify before the Senate and is arrested in the Bahamas as SEC charges him with defrauding investors – Stocks soar ahead of Fed meeting, CPI increases – more financial news.
Stock futures climbed for a second day as investors were bullish ahead of the Federal Reserve meeting this week.
The S&P 500 rose by 1.4% in premarket trading, and the Dow Jones industrial average advanced by 1.5%, while the technology-heavy NASDAQ composite moved up 1.2%, Yahoo Finance reported.
The benchmark 10-year US Treasury notched down -0.161 for a yield of 3.445% as of 9:15 AM EST on Tuesday.
WTI crude futures were up 0.5% to $73.58 a barrel, driven by China’s easing of COVID-related restrictions.
The latest reading of the consumer price index (CPI) was released on Tuesday increasing 0.1% in November over October. However, economists’ estimated an increase of 0.3%. The CPI fell 7.1% year-over-year, slightly better than economists’ estimates of 7.3%-7.7%.
On a “core basis,” which strips out food in energy, prices climbed 6% year-over-year and 0.2% over November, Yahoo reported.
Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, was arrested in the Bahamas on Monday evening after the United States filed charges against him, Bahamian authorities said, who expect the US to request extradition, FOXBusiness reported.
Bahamas Attorney General said it will hold Bankman-Fried in custody pursuant to the Bahamas’ extradition treaty, Yahoo reported. The extradition treaty between the Bahamas and the United States allows the US to extradite defendants on charges involving offenses that are crimes in both countries.
“The Bahamas and the United States have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” Prime Minister of Bahamas Philip Davis said in a statement. “While the United States is pursuing its own criminal charges against SBF individually, The Bahamas will continue its own regulatory and criminal investigations into the FTX collapse, with continued cooperations of its law enforcement and regulatory partners in the United States and elsewhere.”
The Securities and Exchange Commission on Tuesday “charged Samuel Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading Ltd. (FTX), the crypto trading platform of which he was the CEO and co-founder,” the SEC said in a press release. “Investigations as to other securities law violations and into other entities and persons relating to the alleged misconduct are ongoing.”
“According to the SEC’s complaint, since at least May 2019, FTX, based in The Bahamas, raised more than $1.8 billion from equity investors, including approximately $1.1 billion from approximately 90 U.S.-based investors,” the SEC statement added.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” SEC Chair Gary Gensler said. “The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws.”
Prior to his arrest Monday in the Bahamas, ex-FTX CEO Sam Bankman-Fried incensed lawmakers by declining to testify before the Senate Banking Committee. In a letter, the bipartisan leaders of the Senate Banking Committee issued a statement excoriating Bankman-Fried for his refusal to testify at a hearing scheduled for Wednesday, December 14, to discuss the implosion of the cryptocurrency exchange he founded, FOXBusiness reported.
“We have offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony,” the senators wrote. “He has declined in an unprecedented abdication of accountability.”
“Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon,” the senators added, “that is how congressional oversight works.”
In a Twitter panel on Monday, Bankman-Fried said he wasn’t planning to attend the Senate hearing because it was “duplicative” given his plans to testify before the House Financial Services Committee on Tuesday. He said he was “quite overbooked” but was “open and willing to have a conversation if they feel it’s important I attend.”
