Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.

Sam Bankman-Fried's parents are accused in a new lawsuit of exploiting their influence within FTX

to enrich themselves directly and indirectly by millions of dollars at the expense of FTX

customers.

The lawsuit alleges that even as FTX was rapidly descending into insolvency last year, Sam's

parents discussed with their son the transfer of a $10 million cash gift and a $16.4 million luxury property

in the Bahamas to them, according to the new management of FTX, who are tasked with winding

up the bankrupt crypto exchange.

One of the more puzzling things about the rise and fall of FTX was the involvement of Sam

Bankman Freed's parents, Joseph Bankman and Barbara Freed. To some extent they were portrayed

as being bystanders who hung around the office at FTX, high-fiving people at the water

cooler, with no idea of what was actually going on.

Or at least that's how they were portrayed after the bankruptcy.

The actor Kevin O'Leary famously claimed that both parents were compliance lawyers, which was, of course, untrue.

Both parents are instead law professors at Stanford Law School,

Joseph Bankman being an expert on tax law and clinical psychology, and Barbara Fried being an expert

on legal ethics. This new lawsuit, which was filed on Monday to recover millions of dollars in

fraudulently transferred

and misappropriated funds, is shedding new light on their level of involvement at FTX and Alameda.

Now look, I'm a parent and understand getting involved in and encouraging your kids' hobbies.

Luckily for me, my kids' hobbies

are music and tennis. If your kids' hobbies are large-scale financial fraud, money laundering,

...