For Sam Bankman-Fried, the disgraced founder and CEO of the now-bankrupt global crypto exchange FTX, his close ties to Stanford University may end up working in his favor.
Anne Sraders and I, Jessica Mathews, spent yesterday on the campus of the prestigious university in Palo Alto, where Bankman-Fried grew up, and where his parents still have a home. It’s also where the recent CEO of FTX has been getting legal advice from one of Stanford’s own white-collar crime professors.
“Honestly, Sam Bankman-Fried is very lucky that he has these connections that he can have access to top practitioners—not everyone is going to have a Stanford Law team behind them,” says a third-year law student at Stanford, who spoke with Anne and me outside of Stanford’s law school yesterday. The student, who asked they not be named in fear of retaliation, said that the collapse of FTX had come up in two of their classes and that a former SEC commissioner was asked about the events when they came to speak at one of the classes.
Bankman-Fried’s connections to Stanford go back to the beginning: Bankman-Fried was born in Stanford’s hospital, and he was raised on the campus. As recently as October 2022, Bankman-Fried listed his parent’s home—a house situated on the Stanford campus off a side street near fraternity row—as his personal address. When Anne and I rang the doorbell of the home, no one answered. But two neighbors said that they believed Bankman-Fried’s parents still live in the house, although one of them said they hadn’t seen them in a while. (The neighbors declined to speak further with us for this story, apart from one neighbor stating that “they’re wonderful people.”)
While Bankman-Fried may no longer be living at Stanford, he’s still benefiting from long-held ties to the institution. As was first reported by Semafor, an FTX attorney confirmed at FTX’s first bankruptcy hearing last month that Bankman-Fried has also been advised by white-collar crime Stanford professor David W. Mills. (Bankman-Fried reportedly parted ways with his lawyers at Paul Weiss, per Semafor.) And it appears that Bankman-Fried’s father is clearing up his schedule: We didn’t find any courses on Bankman’s schedule for the next quarter (Stanford uses quarters instead of semesters), and two Stanford students confirmed to Fortune that professor Bankman had withdrawn as the professor for a class he was supposed to teach in the upcoming quarter. One of the students referred to an update sent out that listed another professor as taking over Bankman’s class next term. Additionally, a search for courses by Bankman-Fried’s mother, Fried, came up with zero results for future quarters. Representatives for Stanford University and Stanford Law School did not return requests for comment. Professors Mills, Bankman, and Fried did not respond to requests for comment. (The San Francisco Standard first reported that Bankman had withdrawn as a professor for 2023 classes.)
Bankman-Fried said last week in an interview at the New York Times Dealbook Summit that he reached out to his parents when the FTX-affiliated quantitative trading firm Alameda Research seemed to be on the brink of implosion. “I feel really grateful for the support my parents are still giving me throughout all of this,” Bankman-Fried said. During the same interview, Bankman-Fried addressed a Reuters report that his parents’ name was on a $16.4 million vacation home in the Bahamas.
“I don’t know the details of the house for my parents,” Bankman-Fried said last week. “I know it was not intended to be their long-term property. It was intended to be the company’s property. I don’t know how that was papered in, and I think that’s where it was and will end up. They may have stayed there while working with the company sometime over the last year.”
The FTX debacle is another thorn in the side of Stanford University, which has already been facing a public relations nightmare over the last year, as Elizabeth Holmes, an ex-Stanford student, was convicted of defrauding investors in her company Theranos; parents sued the school over the death by suicide of their daughter Katie Meyer, a women's soccer star; and as Stanford’s president faces accusations that research he co-authored contains multiple altered images (a spokesperson for the president contested the allegations in a recent story). Copies of Stanford’s student newspaper, the Stanford Daily, laying around campus included a damning headline: “President Under Investigation.”
“This is the joke I saw on Twitter: That it's been a rough year in the Stanford cinematic universe,” one student told us.
While the crumbling of FTX is one of the most abrupt collapses in corporate history, the Stanford student said there didn’t appear to be widespread knowledge of FTX on campus.
“I've definitely broken the news to people,” says the student, who noted they have been following the situation. “I think for people who follow crypto and the sector, everyone knows about it…Among the people who do know, I would say that the knowledge is also pretty widespread that his parents are at Stanford.”
However, the student who told Fortune that FTX had been discussed in two of their law classes added, “I think people are more looking at it as a case study that just so happens to have a connection to Stanford Law [rather] than anything that seriously [implicates] it.” Though some students, the person said, were annoyed that “Stanford Law is being dragged into it.”
See you tomorrow,
Jessica Mathews and Anne Sraders
Email: jessica.mathews@fortune.com and anne.sraders@fortune.com
Jackson Fordyce curated the deals section of today’s newsletter.
