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Sam Bankman-Fried is seeking documents from a law firm that advised his defunct FTX cryptocurrency exchange, saying in a court filing that they could help him beat fraud charges, Reuters reported. The former crypto mogul said the documents could prove that he relied on legal advice from Silicon Valley law firm Fenwick & West and did not believe he was breaking the law. Manhattan federal prosecutors must prove he knew his conduct was illegal. Bankman-Fried, the 31-year-old founder of now-defunct FTX Trading, has pleaded not guilty in Manhattan federal court to 13 counts of fraud, conspiracy, illegal campaign contributions and foreign bribery. On Tuesday, he asked a judge to order prosecutors to turn over documents related to Fenwick’s legal advice on matters central to the government’s case, including FTX’s use of disappearing messaging services and failure to properly register with regulators. Bankman-Fried said in the filing that each of the charges against him requires the government to prove he acted willfully and that Fenwick’s legal advice could prove that he is innocent because he thought his actions were aboveboard. Bankman-Fried rode a boom in digital currency to a $26 billion net worth and became an influential political and philanthropic donor before FTX sought chapter 11 protection in November. Prosecutors allege Bankman-Fried stole billions of dollars in customer funds to plug losses in his hedge fund Alameda Research, which collapsed along with FTX last year after its risky cryptocurrency bets backfired.

Reversing the district court, the Second Circuit reinstated the bankruptcy court’s confirmation of the chapter 11 plan of Purdue Pharma LP and its inclusion of nonconsensual releases of creditors’ direct claims against nondebtors, Rochelle’s Daily Wire reported today. In the majority’s 74-page opinion, Circuit Judge Eunice C. Lee found statutory authority for nondebtor, third-party releases in Sections 105(a) and 1123(b)(6) of the Bankruptcy Code and in “this Circuit’s caselaw stating that a bankruptcy court has authority to impose such releases.” Circuit Judge Richard C. Wesley wrote a 14-page concurrence that reads like a dissent and urges the Supreme Court to grant certiorari to resolve the split of circuits. Judge Wesley concurred in the judgment because he saw the issue as having been resolved in In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 293 (2d Cir. 1992), Second Circuit authority that “has not been overruled either by the Supreme Court or by this Court sitting en banc.” The third judge on the panel was Circuit Judge Jon O. Newman. Having served 44 years on the appeals court, he is the most senior judge on the Second Circuit.

Johnson & Johnson’s first jury trial in nearly two years over allegations that its talc-based baby powder causes cancer could influence plaintiffs weighing the $8.9 billion settlement offer put forth by the company last month, Bloomberg News reported. The trial in Anthony Hernandez Valadez’s suit alleging he got mesothelioma from asbestos-contaminated talc in J&J products is scheduled to go before a jury Wednesday in state court in Oakland, California. Due to Valadez’s failing health, the case was allowed to proceed as an exception to the order putting all litigation on hold after J&J sought to wall off all of its talc liability in a chapter 11 bankruptcy for its LTL Management unit. J&J, which is trying to settle more than 40,000 talc cases in the bankruptcy, must convince 75% of plaintiffs to back its settlement offer. The company is hoping the chapter 11 halt to most jury trials will help it build support for the deal. But a big award for Valadez could convince more plaintiffs to go to trial, potentially tanking the deal. Over the years, New Brunswick, New Jersey-based J&J has steadfastly maintained its baby powder — sold in distinctive white bottles — never contained asbestos, is safe and doesn’t cause cancer. Executives say they are seeking a settlement to avoid billions in legal fees and expenses, along with a new wave of trials. “The company deeply sympathizes with anyone suffering from cancer and understands they are looking for answers,” J&J said in a statement on the Valadez trial. “However, the science doesn’t support that the exceedingly rare form of mesothelioma at issue in this case is connected to talc exposure.” In 2021, another Oakland jury awarded a woman more than $26 million in a talc case against the J&J. The company is appealing the verdict.

Prosecutors urged a Manhattan federal court judge on Monday to deny a request by FTX founder Sam Bankman-Fried to dismiss criminal charges accusing him of stealing billions of dollars from customers to plug losses at his hedge fund, Reuters reported. Bankman-Fried, the 31-year-old former cryptocurrency billionaire, has pleaded not guilty to 13 counts of fraud, conspiracy, making illegal campaign contributions and foreign bribery. On May 8, Bankman-Fried urged U.S. District Judge Lewis Kaplan to dismiss most of the counts, saying prosecutors charged him in a "rush to judgment" following a broad crash in 2022 where several prominent crypto companies went bankrupt, including his own Alameda Research. In a filing late Monday, prosecutors described motions to dismiss the charges as "meritless", rebutting Bankman-Fried's argument that the indictment's allegations were insufficient and legally defective. "The Indictment sufficiently alleges that the defendant and his co-conspirators made false and misleading representations to lenders relating to Alameda's financial condition. No more specificity is required," prosecutors wrote. Judge Kaplan will hear oral arguments on June 15.

Bankrupt cryptocurrency exchange FTX is suing former chief executive Sam Bankman-Fried and others over the acquisition of stock trading platform Embed, looking to claw back hundreds of millions in funds to repay creditors and customers, WSJ Pro Bankruptcy reported. The lawsuit alleges former FTX executives did little due diligence before an “astronomical” $240 million was paid for a business now valued at no more than $1 million, the highest bid received in bankruptcy for the asset, according to the lawsuit filed Wednesday in the U.S. Bankruptcy Court in Wilmington, Del. “The result of the bidding process leaves no doubt” that the more than $240 million paid to acquire Embed “was wildly inflated,” the new FTX management team said in the lawsuit. The bidders in bankruptcy “figured out what FTX insiders didn’t bother to assess before the Embed acquisition, namely, that Embed’s vaunted software platform was essentially worthless.” In pursuing the Embed acquisition, “the FTX insiders prioritized speed above all else,” the suit said. At the time of the acquisition, Embed had a “minuscule” customer base and “serious bugs plaguing its software platform,” according to the lawsuit. The new FTX management also filed lawsuits against former Embed employees and shareholders.

Crypto lender Voyager Digital said Wednesday that customers will soon recover about 35% of their cryptocurrency deposits as the company winds down operations after a failed buyout attempt by crypto exchange Binance.US., Reuters reported. Bankruptcy Judge Michael Wiles approved Voyager's liquidation plan at a court hearing in Manhattan, allowing the company to return about $1.33 billion in crypto assets to customers and end its efforts to reorganize under chapter 11. Customers may be able to make withdrawals by June 1, Voyager's official creditors’ committee said. Any distribution beyond the initial 35% would depend on the result of future litigation. Voyager filed for bankruptcy protection in July, citing volatility in cryptocurrency markets and a default on a large loan made to crypto hedge fund Three Arrows Capital (3AC). Two sale attempts failed during Voyager's bankruptcy. It initially sought to sell its assets for $1.42 billion to FTX, a deal that failed when FTX imploded in November. Binance.US stepped in with a $1.3 billion offer, but called off the deal on April 25, citing a "hostile and uncertain regulatory climate."

When asked in a Senate hearing this week who was to blame for the demise of Silicon Valley Bank, the lender’s former chief executive, Greg Becker, had plenty of ideas, blaming regulators, the bank’s board and its own customers for bringing it down. Yesterday, senior officials from two of the bank’s main regulators, the Federal Reserve and the Federal Deposit Insurance Corporation, told members of the same Senate panel that some of the impressions Becker had left lawmakers with were false, the New York Times reported. The contradictory congressional testimony threatened to pose yet another problem for Becker, who is facing an investigation by federal criminal prosecutors into his handling of the failed California lender as well as a shareholder lawsuit accusing him and another senior leader of misleading investors about the bank’s health in the lead-up to its failure. James N. Kramer, a lawyer for Mr. Becker, said Mr. Becker stood by the statements he had made. The regulators’ statements were part of a hearing held by the Senate Banking Committee on how bank oversight should look in the future in light of the failures of three regional banks this spring. It came two days after Mr. Becker appeared alongside former senior leaders of Signature Bank, a New York lender that collapsed just after Silicon Valley Bank did and prompted the federal government to take drastic steps to prevent widespread panic in the banking system.

A $150 million settlement was approved Thursday by the California Public Utilities Commission (CPUC) between Pacific Gas and Electric Co. and the CPUC's Safety and Enforcement Division regarding PG&E's involvement in the Zogg Fire, KCRA-Sacramento reported. In 2020, a fallen tree in Shasta County landed on PG&E energy conductors, which caused a fire that burned 56,338 acres and killed four people. PG&E was taken to trial after the CPUC opened an investigation and alleged that the tree that started the Zogg Fire had not been removed in time due to poor recordkeeping by the electric company.

Failed cryptocurrency brokerage Voyager Digital Holdings Inc. won court approval to begin winding down its operations and start repaying customers a portion of their crypto that’s been held on its platform since last year, Bloomberg News reported. Judge Michael Wiles approved Voyager’s liquidation procedures Wednesday, about a month after Binance.US terminated an agreement to purchase the crypto platform and after a deal to sell itself to FTX last year fell apart. Voyager customers will get about 36% of what they’re owed but their recovery could increase if the firm succeeds in a pending dispute with FTX, according to court documents. Nobody is happy with the liquidation, Judge Wiles said, addressing Voyager customers who complained about his oversight of the case, the cost of the bankruptcy, the amount lawyers are being paid and the fact that users are getting only a percentage of their crypto back. But the wind-down is the path Voyager is taking because the firm doesn’t have enough to fully repay customers, Judge Wiles said. Options that could have resulted in a better recovery, namely selling the company to FTX or Binance, didn’t work out, he said. Voyager didn’t realize when it tried to sell itself to FTX that Sam Bankman-Fried’s firm would turn out “to be a gigantic fraud,” the judge said.