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Federal prosecutors are scrutinizing a growing array of people tied to Sam Bankman-Fried’s collapsed cryptocurrency empire, including his father, his brother and former colleagues, as part of a rapidly expanding investigation into one of the biggest American financial crime cases in more than a decade, the New York Times reported. The U.S. attorney’s office in Manhattan has created a special task force to pursue its investigation into the collapse of FTX, the crypto exchange founded by Mr. Bankman-Fried. More than half a dozen prosecutors, led by Damian Williams, the U.S. attorney for the Southern District of New York, are building the criminal case and tracking down the billions of dollars in customer money that Mr. Bankman-Fried has been charged with misappropriating. In recent weeks, prosecutors have had talks with lawyers representing a dozen former executives and employees at FTX and Alameda Research, the hedge fund Mr. Bankman-Fried also founded. Prosecutors have also examined the role of Mr. Bankman-Fried’s family members in his business empire. The collapse of FTX has forced virtually everyone in Mr. Bankman-Fried’s immediate orbit to seek legal counsel as the investigation intensifies and prosecutors weigh bringing more charges. Defense lawyers at the law firms Mayer Brown, Steptoe & Johnson, and Covington & Burling each represent multiple former FTX executives who may have information to contribute. The FTX investigation could also ensnare companies that either received money from the exchange or lent it funds. The collapse of FTX last year set off a crisis at the crypto lending firm Genesis, which was recently charged with securities law violations by the S.E.C. And in late January, a bipartisan group of senators sent a letter to Silvergate, a bank that did business with FTX, asking company officials whether they were aware of the exchange’s misuse of customer money.

Sam Bankman-Fried’s Emergent Fidelity Technologies Ltd., an offshore entity that owns 55 million shares of Robinhood Markets Inc., filed for bankruptcy Friday amid a fight over who should get the stock following the collapse of FTX Group, Bloomberg News reported. The Robinhood stake, worth more than $590 million at current market prices, has been seized by the U.S. government, but its ultimate fate is unclear. A hodgepodge of parties including the Justice Department, bankrupt crypto lender BlockFi Inc., and Bankman-Fried himself, are trying to take the shares for good. The chapter 11 filing gives Emergent Fidelity and its liquidators — appointed by a court in Antigua — some breathing room. The liquidators’ “duties are to the debtor’s creditors, whoever those creditors may be,” Angela Barkhouse, one of the liquidators, said in a sworn court statement. “Given the many parties claiming to be creditors or outright owners of the debtor’s assets in proceedings in the U.S., the JPLs believe that Chapter 11 protection is the only practical way to empower the debtor to defend itself, the assets, and its creditors’ interests in the U.S.” Emergent Fidelity also holds $20.7 million of cash, but has no other assets, according to court papers.

A Washington, D.C., townhouse that FTX’s new management has linked to Sam Bankman-Fried ‘s political spending has been pulled off the market after the company alleged that the $3.3 million property was purchased with FTX customer funds, WSJ Pro Bankruptcy reported. Property records show the four-bedroom, 4,100-square-foot property in Capitol Hill is owned by Guarding Against Pandemics, a nonprofit organization founded by Mr. Bankman-Fried’s brother Gabriel. FTX’s newly appointed management team said in a court filing last month that Guarding Against Pandemics was also funded by FTX founder Sam Bankman-Fried and that the organization purchased a multimillion-dollar property using what the company believes are misappropriated customer funds. The listing was taken off the market after WSJ Pro Bankruptcy contacted the real-estate agent representing the property on Thursday. Devon Fox, who handled the Capitol Hill listing, said the seller pulled it as a show of good faith. On Friday morning, a for-sale sign remained in front of the townhouse in Northeast Washington. A representative for Guarding Against Pandemics said Thursday that Gabriel Bankman-Fried is no longer part of the organization. Representatives for Gabriel Bankman-Fried and Sam Bankman-Fried didn’t respond to requests for comment. U.S. prosecutors have said that former FTX Chief Executive Sam Bankman-Fried misused customer deposits at FTX to fund his trading firm Alameda Research and make political donations. He has pleaded not guilty to prosecutors’ charges.

Aruze Gaming, the slot machine developer behind Shoot to Win Craps, Go Go Claw and other slot and electronic table games, filed for chapter 11 protection, one day after announcing the departure of its U.S. branch president, the Las Vegas Review-Journal reported. Aruze filed a voluntary petition in the U.S. Bankruptcy Court for Nevada on Wednesday. The company said in a news release that the filing was part of its efforts to restructure financially because of “a recent garnishment judgment against Aruze resulting from a separate judgment against Aruze’s shareholder.” The company said that it intends to continue operating normally. “This filing was a critical business strategy we were forced to make due to external factors outside our control. We fully understand the implications associated with this action, but we believe this is the best way for Aruze to maintain the overall health of our business,” Global CEO Yugo Kinoshita said in a statement. “This restructuring has no reflection on the health of Aruze. We’re proud of the advances we have made to establish Aruze as a casino mainstay. We are highly confident this action will protect our brand, our legacy and our suite of games. As we progress through this process, we are assured that Aruze will emerge as an even stronger company.” On Tuesday, the company announced the departure of Robert Ziems, president of Aruze Gaming America. It said Kinoshita would take on the day-to-day operations, beginning March 1, while the company’s board searches for a replacement.

Embattled FTX founder Sam Bankman-Fried has staved off a case alleging he broke Texas securities laws, after a judge ruled that the state regulator lacks jurisdiction to act against him, Bloomberg News reported. The ruling came in a case brought by the Texas State Securities Board claiming Bankman-Fried offered unregistered securities through FTX’s yield-bearing cryptocurrency accounts and that he now owes refunds to Texas investors. Administrative Law Judge Sarah Starnes has canceled a Thursday hearing at which Bankman-Fried had been ordered to testify and has given the securities agency until March 1 to file an amended complaint. Joe Rotunda, the agency’s director of enforcement, didn’t return messages seeking comment on the ruling, and it isn’t clear whether he will refile. But the case reflects the early efforts some states are making to recover money from FTX and Bankman-Fried in the wake of the crypto exchange’s implosion in November. The obstacles: a criminal fraud prosecution of Bankman-Fried and a sprawling FTX bankruptcy case.

Phoenix Services, a Radnor company that keeps the largest U.S. steel mills running by recycling their molten slag, is in its sixth month of bankruptcy reorganization, as tons of waste pile up at its clients’ plants, the Philadelphia Inquirer reported. Since Phoenix filed for chapter 11 reorganization in September, those are the rival stories lawyers have told in the fight over the future of the slag disposal company. Phoenix’s fleet of 1,700 custom-built machines clears off hot waste at mills owned by Nucor, U.S. Steel, ArcelorMittal, Cleveland-Cliffs and other big steelmakers and sells it for construction and road material. Past buyers include PennDOT. Phoenix is using the bankruptcy to force new terms on the steelmakers. Nucor, the largest U.S.-based steelmaker, is fighting back, refusing Phoenix’s pricing proposals and demanding the court set up a detailed plan for removing Phoenix’s bulky, specialized vehicles and on-site recycling facilities — or leave them so someone else can take over the work. If there’s not a plan soon, Nucor says a growing slag backlog at its large Southern mills may force it to cut production, threatening potential shortages or price hikes on the carmakers and other manufacturers who rely on American steel. Phoenix has balked at Nucor’s proposal and its claims, arguing there will be adequate steel available even if it pulls out, and that it needs flexibility to move its equipment to new clients at its own pace.

Former Bed Bath & Beyond Inc. employees say they haven’t been paid promised severance, the latest sign of the worsening financial squeeze at the home-goods retailer, Bloomberg News reported. Some former employees received an email on Jan. 26 from the human resources department that read, in part: “We are reaching out to you to inform you that there has been a delay with your payment,” according to copies viewed by Bloomberg News. “We recognize the challenges this may cause and appreciate your patience as we work to provide an update.” Former staffers who raised concerns about their severance pay in recent days received an additional email. They asked not to be identified out of concern it would jeopardize their payments. “We are working to provide you with an update, and we are aiming to be back in touch by Wednesday, February 8,” the message said. The email didn’t explain the significance of that date. The delayed payments underscore the mounting financial distress for one of the largest home-goods retailers in the US. On Wednesday, the company confirmed it missed interest payments on its bonds. Last week, Bed Bath & Beyond received a default notice from its loan agent, JPMorgan Chase & Co., warning that it didn’t have enough funds to make payments.

Johnson & Johnson faces an uphill battle to salvage its strategy for settling roughly 40,000 cancer lawsuits concerning its talc-based products through a subsidiary’s bankruptcy after a court rejected the company’s tactic, WSJ Pro Bankruptcy reported. The ruling by the U.S. Court of Appeals for the Third Circuit dismissed the chapter 11 case of J&J’s talc subsidiary, LTL Management LLC, and could force the consumer health giant to resume defending the mass personal injury lawsuits against it on a case-by-case basis, rather than through a single bankruptcy proceeding. J&J has long maintained its talc products are safe and won a majority of trials over the talc allegations. J&J has said that it would challenge the appeal’s court’s ruling. J&J has some avenues to challenge the decision dismissing LTL’s case, authored unanimously by a three-judge panel on the Third Circuit. The company has the right to ask all of the judges sitting on the appeals court to weigh in, a request that litigants often make in high-stakes cases. More than 20 appellate judges sit on the Third Circuit, according to the court’s website. It’s up to the Third Circuit to decide whether all of the judges on the appeals court will reconsider LTL’s case. The company can also request a stay of Monday’s ruling while appealing further.

Bed Bath & Beyond Inc. missed interest payments on its bonds, a week after its bank lenders sent the company a default notice because it was overdrawn on its credit lines, WSJ Pro Bankruptcy reported. The home-goods retailer failed to pay more than $28 million on three tranches of notes totaling roughly $1.2 billion due on Feb. 1, a spokeswoman for the company confirmed Wednesday. Last week Bed Bath reported that JPMorgan Chase & Co. determined the company defaulted after it failed to repay amounts it borrowed on its revolving credit lines. The company has $550 million in loans outstanding from banks led by JPMorgan Chase & Co. and an additional $375 million from a facility provided by Sixth Street Partners, according to a recent securities filing. The coupon miss comes nearly a month after the company raised the possibility of filing for bankruptcy and said it was running low on funds. The company has been making preparations for a chapter 11 process for weeks, including trying to raise a loan to fund its bankruptcy and lining up a buyer for its stronger business, the Buybuy Baby chain, the Journal has reported.

Invacare Corp., a maker and distributor of wheelchairs, hospital beds and other medical equipment, filed for bankruptcy with a deal in hand with its lenders and bondholders to slash $240 million in debt and emerge from chapter 11 within four months, WSJ Pro Bankruptcy reported. The company put itself and two of its U.S. subsidiaries under chapter 11 protection on Tuesday in the U.S. Bankruptcy Court in Houston. The chapter 11 filing doesn’t include its businesses outside the U.S., which generate a majority of the company’s sales, according to a court filing by Chief Financial Officer Kathleen Leneghan. Ahead of the filing, the company reached an agreement with its lender Highbridge Capital Management LLC and a group of bondholders owning two-thirds of its unsecured notes to slash debt from $358 million to roughly $118 million, according to Ms. Leneghan’s court filing. Highbridge is also providing a $70 million debtor-in-possession loan to fund the company’s stay in chapter 11.