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Lawyers for the company FTX are suing co-founder and former CEO Sam Bankman-Fried over the acquisition of stock-clearing platform Embed, according to an official filing filed in a Delaware court document. FTX US's acquisition of Embed Financial Technologies Inc.was intended to incorporate into the group the subsidiary Embed Clearing LLC, a new clearing firm member of FINRA, DTC, NSCC, Nasdaq and IEX. FTX lawyers are suing the company's former CEO, Sam Bankman-Fried, accusing him of failing to do due diligence before buying Embed.
Moreover, the purchase of the platform in 2022 was made against an outlay of 220 million dollars. FTX lawyers said: "The bidders realized what FTX Group and FTX Insiders didn't bother to evaluate prior to the Embed acquisition, which is that Embed's vaunted software platform was essentially worthless."
BREAKING NEWS: FTX sues Sam Bankman-Fried!
The goal of that acquisition was to allow FTX to provide white-label brokerage services to other FTX Stocks businesses, apps, and users. FTX acquired Embed in June 2022. The acquisition was completed after the implosion of the Earth/Moon ecosystem, which had already created major problems for FTX a few months before the bankruptcy.
This year, when Embed was included by the bankruptcy trustee among the FTX assets to be sold to raise cash. Once the judge approved the sale of Embed's platform, 12 potential buyers interested in taking over it came forward.
These presented their non-binding interest proposals, and among these, at that time, a bid of 78 million dollars was the winner. FTX was founded in 2019 by Sam Bankman-Fried and Gary Wang, and SBF has always been its CEO. Since it went bankrupt, filing for Chapter 11, SBF has had to resign and leave it in the hands of the bankruptcy trustee, John J.
Ray III. Therefore, at this moment SBF actually has no power within the company it founded, although it is still to all intents and purposes among the main shareholders. The fact is that serious responsibilities are suspected against the former CEO regarding the causes of the company's bankruptcy, so it is not surprising that the new staff who are managing the current delicate phase are also specifically taking it out on him .
