Former Co-Lead Engineer of FTX Trading Charged by SEC in Multiyear Scheme to Defraud Equity Investors

The Securities and Exchange Commission has charged Nishad Sing, former co-lead engineer of FTX Trading Ltd. for his participation in a scheme designed to defraud investors in FTX Trading Ltd. Singh founded FTX with Samuel Bankman Fried and Gary Wang. The SEC also conducts investigations into individuals and entities that are related to the alleged misconduct, as well as other securities law violations.

Singh, according to the SEC complaint, developed software code to allow FTX customers’ funds to be redirected into Alameda Research. This crypto hedge fund is owned by Bankman-Fried and Wang. Bankman-Fried had assured investors that FTX is a safe crypto asset trading platform, with advanced risk-mitigation measures. He claimed that Alameda is just another client with no special privileges. Singh is accused of knowing or having to know that the statements made were false and misleading.

Singh is also accused of participating actively in the scheme designed to deceive FTX investors. The complaint states that even though it was clear that Alameda or FTX would not be able to reimburse customers for funds illegally diverted, Bankman Fried, with Singh’s consent, continued to direct hundreds of millions in FTX funds towards Alameda. These funds were then used to fund additional ventures and provide loans to Bankman Fried, Singh, other FTX executive, and for Singh. Singh, who was a key executive at FTX, also took out approximately $6 million to use for his personal needs, such as buying a multimillion dollar home and making charitable contributions.

Singh is accused in the SEC complaint of violating Sections 17a)(1), (3) and 10b of the Securities Exchange Act of 1933. The SEC has sought a number of remedies, including an order against future securities violations, an injunction based on conduct that would prevent Singh from engaging in securities transactions except for his personal account, disgorgement or ill-gotten gain, civil penalty and an officer-director bar. Singh has agreed on a settlement which will be approved by the court. The settlement would prevent him from ever violating federal securities law, impose an injunction based on conduct and a bar for officers and directors. The court will determine how much disgorgement is appropriate, as well the civil penalty and interest on prejudgment judgment, and for how long the officer and directors bar lasts.

The U.S. Attorney’s Office of the Southern District of New York, as well as the Commodity Futures Trading Commission, have both filed charges against Singh.

Singh has agreed to cooperate with the ongoing investigation of the SEC, which is conducted by the Crypto Assets and Cyber Unit. The SEC acknowledges that the U.S. Attorney’s Office of Southern District of New York and the FBI as well the Commodity Futures Trading Commission have provided assistance.

Recover Investment Losses

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SEC: What You Need to Know

Securities and Exchange Commission, or SEC, is an American regulatory agency that supervises and enforces federal laws on securities. It was created in 1934 to respond to the 1929 crash in the stock markets and the Great Depression that followed. The SEC is primarily responsible for protecting investors, maintaining fair and efficient market conditions, and facilitating capital formation.

The SEC accomplishes its goals through a variety of activities including registration and regulation for securities markets, broker, dealers, and advisors. The SEC requires that companies disclose financial information relevant to the public to ensure transparency and prevent fraudulent activities. The SEC also conducts investigations into possible violations of the securities laws and takes action against those who are involved in illegal practices.

The SEC also plays an important role in the regulation of the securities industry. It oversees stock exchanges and clearing agencies as well as self-regulatory organisations. The SEC sets standards and rules to ensure fair trading practices and market integrity, as well as prevent insider trading.

In general, the Securities and Exchange Commission enforces securities laws and regulates the securities industry to protect and promote investors, fair markets and capital formation.

More information can be found at

SEC’s Website

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