(NEW YORK) — Subaru is recalling more than 270,000 SUVs due to a potential fire risk, with owners urged to park their cars outside until inspected and repaired.
The recall impacts certain 2019-2022 model year Subaru Ascent vehicles, the company said.
A production-related defect involving a ground bolt may increase the risk of fire while the heater is in operation, according to Subaru.
So far, two fires have been reported, though there have been no crashes or injuries due to this issue, the National Highway Traffic Safety Administration said in a statementTuesday about the recall.
The NHTSA said the recall affects 271,694 select Subaru Ascent vehicles, which is Subaru’s largest vehicle and only three-row SUV. Subaru said an estimated .6% of potentially affected vehicles will likely require repair.
Subaru said it will contact the owners of the affected vehicles within 60 days and replace the ground bolts and other components if necessary for free.
Until an inspection and repair are completed, owners are advised to park their vehicle outside, away from garages, carports or other structures, and to avoid leaving the vehicle unattended while the engine is running.
“If an owner notices or smells smoke coming from the dash or driver’s footwell area, they should immediately stop operating the vehicle and turn the ignition switch to the ‘off’ position,” Subaru said in a statement.
Customers can find out if their car is affected here by entering the vehicle’s 17-digit vehicle identification number.
Lizzo says she turns to Adele for industry advice because, as she told Howard Stern, “She’s literally me in a different font.” As for whether they will ever collaborate, Lizzo says, “We’ve never talked about that,” but said she “would play flute with Adele” if Adele ever asked.
Speaking of Adele, you might catch her on a nature walk. Daily Mail reports she told the audience during her Vegas residency, “I’ve started hiking. I really like it. I put my headphones on and get on with it.”
Selena Gomez celebrated her Golden Globe nomination by sharing a throwback video to TikTok of her younger self dreaming of being nominated for a Grammy. “I think it would be an honor, of course, but I’m more of a Golden Globe or Oscar girl,” she had said. Selena wrote, “Dreams do come true!!” She’s up for Best Performance by an Actress in a Television Series — Musical or Comedy for Only Murders in the Building.
Pink released the Sam Feldt remix of her new song, “Never Gonna Not Dance Again,” which transforms the disco song to a bass-heavy clubhouse rave.
The Jonas Brothers are thrilled to be heading back to Las Vegas for another encore of their residency in February and teased on Instagram, “3 more Vegas shows is just the beginning… 2023 is going to be a fun one!”
CamilaCabello got her goth on and jumped on the “Wednesday Dance” craze on TikTok. She danced alongside her Voice finalist Morgan Myles, who could be voted this year’s champion during Tuesday night’s season finale.
Sabrina Carpenter launches a new, 36-date Emails I Can’t Send tour in March, with tickets going on sale Thursday, December 15, on her website. She’ll also perform on Jimmy Kimmel Live! on January 4.
You might catch Adele on a nature walk. Daily Mailreports she told the audience during her Vegas residency, “I’ve started hiking. I really like it. I put my headphones on and get on with it.” She also joked walking around a big theater is a workout.
Pink released the Sam Feldt remix of her new song, “Never Gonna Not Dance Again,” which transforms the disco song to a bass-heavy clubhouse rave.
Jewel is none too happy with the animal a TikTok randomizer claims she represents most — a goldfish. She shared the video and her disappointed reaction before pretending to be a sad goldfish. “Well that went right down the toilet…,” she captioned the video.
The Jonas Brothers are thrilled to be heading back to Las Vegas for another encore of their residency in February, but they teased on Instagram that fans need to buckle up for a busy year. They cryptically posted, “3 more Vegas shows is just the beginning… 2023 is going to be a fun one!”
Camila Cabello got her goth on and jumped on the “Wednesday Dance” craze on TikTok. She dressed in all black and danced alongside her Voice finalist Morgan Myles, who could be voted this year’s champion during Tuesday night’s season finale.
(WASHINGTON) — The Respect for Marriage Act, which will be signed into law on Tuesday by President Joe Biden, is being celebrated as historic by him and lawmakers of both parties.
While the law will guarantee federal recognition of same-sex and interracial marriages, it was passed through Congress essentially as a compromise and as a backstop in case the Supreme Court overruled its prior rulings, which are currently the legal basis for such rights.
Here’s what the Respect for Marriage Act (RFMA) does and doesn’t do:
A constitutional right to same-sex and interracial marriage is currently guaranteed only by Supreme Court precedent. Every state is required to issue marriage licenses to same-sex and interracial couples according to the 2015 ruling in Obergefell v. Hodges and the 1967 ruling in Loving v. Virginia.
If the Supreme Court were to overrule either of those precedents — a fear among Democrats and advocates in light of a concurring opinion in the conservative majority’s June ruling to scrap national abortion rights — then the RFMA acts as a limited remedy.
RFMA does not enshrine a right to same-sex or interracial marriage nationwide. That means it does not require states to perform same-sex and interracial marriages.
States would be free to deny marriage licenses to same-sex or interracial couples if the Supreme Court precedents were overruled. (Justice Clarence Thomas, in his June concurring opinion on abortion, specifically pointed to Obergefell as having been wrongly decided.)
What RFMA does do is require the federal government and all states to recognize same-sex and interracial marriages if they were legally performed in the past or are performed in the future in places where they are still legal, including other states.
Effectively, this means that all same-sex and interracial couples who are legally married today — some 710,000 same-sex couples as of 2021, according to the U.S. Census Bureau; while about 10% of married households were interracial as of 2012-2016 — and going forward cannot be denied the civil benefits of their unions in any state if court precedents were to be overruled.
RFMA also offers explicit protections for religious groups with moral objections to same-sex or interracial marriages: They are not required to provide goods or services to the marriages they object to and their tax-exempt status cannot be rescinded for refusing to perform or respect a marriage.
Prior to Obergefell, 32 states prohibited or likely prohibited same-sex marriages, according to the National Conference of State Legislatures. Most of those laws remain on the books.
As was the case with states’ abortion laws in the wake of Roe v. Wade being overruled this summer, many of the restrictive state marriage measures would likely snap back into effect if Obergefell was struck down.
In that case, same-sex marriage licenses may be available in some states, but not others. However, under RFMA, marriages legally performed in one state would need to be honored everywhere.
The law does not prevent a state from legally challenging Obergefell or Loving — or the Supreme Court from revisiting those decisions, as Justice Thomas has called for.
There is currently no legal case headed to or before the court on these issues, however. It’s not clear that a sufficient number of justices would have the appetite to heed Thomas’ call.
The annual M3 Rock Festival is out with the lineup for their 14th edition, and they’ve landed some heavy hitters.
The festival, set for May 6th and 7th at the Merriweather Post Pavilion in Columbia, MD, opens with Styx, Extreme, Winger, Slaughter, Lita Ford and Quiet Riot on Saturday, with Warrant, Great White, Loudness, former Guns N’ Roses drummer Steven Adler, FireHouse, Riley’s L.A. Guns, Vixen, White Lion’s Mike Tramp, and Maryland’s own KIX wrapping the weekend on Sunday.
Two-day tickets and VIP packages go on sale Friday at 12 p.m. ET via Ticketmaster and at the 9:30 Club, The Anthem and Lincoln Theatre box office. The Merriweather Post Pavilion box office will begin selling tickets Monday at 10 a.m. Single-day tickets will go on sale at a later date.
(WASHINGTON) — LGBTQ families are celebrating after President Biden signed the Respect for Marriage Act Tuesday afternoon in a ceremony held on the White House South Lawn.
The act codifies protections for same-sex and interracial marriage by mandating that states recognize lawful unions performed in other states. It does not require states to issue marriage licenses for same-sex or interracial couples — currently those marriages are protected by the Supreme Court’s 2015 Obergefell v. Hodges and 1967 Loving v. Virginia decisions — however, the new law would effectively prevent married same-sex and interracial couples from being denied the civil benefits granted to them now, should either of those decisions ever be rolled back.
The House of Representatives passed the bill by a margin of 258-169 on Thursday last week, after the Senate pushed the bill through in late November on a 61-36 vote, following months of negotiation, sending the proposed legislation, which received bipartisan support, to the president’s desk.
Thirty-nine House Republicans and 12 Senate Republicans joined Democrats in passing the measure.
Kent Love-Ramirez, who married his husband Diego Love-Ramirez in 2007 and then again in a legal ceremony in 2012, told “Good Morning America” they followed the bill as it moved through Congress over the past year, and on Tuesday applauded Biden’s signing of the act, calling it a “happy” development.
“It was reassuring to see how many Republican elected officials aligned with the Democrats to move this forward,” the Michigan resident added. “But it was equally discouraging to see how many opposed it. So, there’s certainly work to be done although we’re also very reassured by what we see happening in society — that our families are becoming more widely accepted — and frankly, a lot of elected officials just need to sort of catch up with what we’re already seeing in our daily lives in our communities.”
At the same time, Love-Ramirez said the act isn’t a complete package that ensures marriage equality for everyone.
“It’s definitely a moment to celebrate but it is not without its compromise,” the father of two said. “I always try to make clear that although this is a good moment, it’s not the end game, that there are still limitations and it is not full equality for families like ours.”
In addition to codifying some protections for same-sex and interracial couples, the Respect for Marriage Act also offers protections for religious groups who oppose those marriages, preventing them losing their tax-exempt status if they refuse services or goods to those couples.
Beth McDonough of Northwest Pennsylvania also praised the passage of the Respect for Marriage Act this week, while cautioning that she felt more still needed to be done to fully protect same-sex and interracial couples.
“I’m thrilled our country has come such a long way in a short amount of time regarding public opinion around same sex marriage, and I’m excited about the federal protections being put in place to protect existing marriages,” McDonough told “GMA” in an email.
“I think many people don’t realize that this still leaves LGBTQ+ couples who are seeking to get married vulnerable to being discriminated against within their state,” she added. “As far as we’ve come, we still have a long way to go in protecting the equal right of queer people to build families. Our culture is still saturated with the belief that there’s a very specific ‘right’ way marriage should look, and it’s important for us to keep pushing progress and normalizing the fact that there are many ways to form a family.”
Nadine Smith, the executive director of Equality Florida, an LGBTQ rights nonprofit based in St. Petersburg, hailed the act’s signing as a “hopeful step” and an “important piece of legislation at a time when LGBTQ children and parents are under relentless attack.”
“I think today is an important step in reinforcing that our families deserve the same protections that others take for granted,” Smith told “GMA.”
The act in particular specifically recognizes marriages like Smith’s, who is Black and is married to a white woman.
“As a lesbian in an interracial marriage, this is pretty important,” she said.
She continued, “The majority of Americans support marriage equality. The majority of Americans support LGBTQ rights, but I think it’s important that everybody wake up to this grueling cadre of domestic terrorists who wish to silence most people for whom this is not the most important daily issue of their lives and intimidate those with us for whom it is most important issue that affects our lives daily.”
Love-Ramirez said that for LGBTQ couples who aren’t yet married, like he and his husband are, there were likely still obstacles ahead.
“The compromise in the act, in terms of it [not obligating] states to perform same sex marriages, is not necessarily a concern for us, but we recognize it as a concern for people who are not yet married, who, if the Supreme Court overturns marriage equality, they’re still going to have to go out of state if they live in a state that doesn’t perform same sex marriages — and that’s appalling,” he said.
Love-Ramirez said he will continue advocating for others in the LGBTQ community until this “slow march” toward marriage equality is achieved.
“It’s a continuation of many steps that have brought us to this point because a lot of advocacy and advancements led us to this point,” he added. “So it’s one moment to celebrate on a long journey towards full equality.”
(NEW YORK) — In the last couple of days, hundreds of migrants have been trying to cross the U.S.-Mexico border in Texas, as the future of Title 42, the Trump-era border restriction ordered at the beginning of the pandemic, is in question.
ABC News’ Matt Rivers, who is at the border, spoke with “Start Here” Monday about the situation and how a possible repeal of the order next week could affect the rise in migrants.
START HERE: Matt, you’ve covered immigration for years. How abnormal is a sight like the one you’re looking at?
MATT RIVERS: Where we are right now, which I’m literally looking at the downtown skyline of the city of El Paso, what I’m seeing, is hundreds of migrants beneath the border wall here. That is unusual to see. We’ve seen large groups of migrants end up in other parts of the border over the last few years, with hundreds of people arriving at once. For example, people will remember, in 2021, there were thousands of Haitian migrants that ended up in a place called Ciudad Acuna, which is right across the border from Del Rio, Texas. But to have this many migrants here on the border in downtown El Paso essentially is relatively unprecedented.
I have come to this part of the border for years now, this exact spot on the border [and], many people often cross here because the Rio Grande is quite low here, and I’ve never seen anything like this. When we arrived on Sunday evening, we saw hundreds of people who had just crossed all at once.
This was a group of people that had gotten together over the last several weeks. We don’t know exactly how all of these people managed to come together, but what we do know is that they arrived here in Ciudad Juarez on Sunday using buses. So mainly these groups of hundreds of people arrived in Ciudad Juarez all at the same time, and they collectively made a decision, as is often what happens in a lot of these caravans…to cross all at once. And so basically, for the first time that I’ve seen at this particular border crossing…hundreds of people decided to cross the river at once. And what that did was effectively overwhelm, very quickly, the relatively limited migrant facilities that Customs and Border Protection officials have.
They can only process a certain amount of people at a time, and so you saw hundreds of people in line. They’ve been there for more than a day now. Border Patrol agents are prioritizing women and children. They get processed first, [and] single males then thereafter. [They’re] either going to be selectively released pending other immigration proceedings in the United States, or they will be taken to other Border Patrol facilities along other parts of the border. Because, simply put, the El Paso sector right now, where we are, is just overwhelmed by the number of migrants that are arriving there.
START HERE: Is it this key deadline coming up in the immigration policy debate? Title 42 is this policy that was implemented during the pandemic that basically made it easier for us to boot migrants out of the country when they arrive. That’s supposed to be going away soon. I’m wondering, is that changing what types of crowds are going to be crossing the border?
RIVERS: It very well might. I mean, every single person. And when I say every single person, I mean every single person has the same opinion that I’ve spoken to here on the Ciudad Juarez side of the border in Mexico. They say that the amount of people that are going to be showing up because of this policy ending is going to grow perhaps substantially.
This was a policy that was put in place during the Trump administration. It is actually a health policy order. It’s a directive that allows the United States for public health reasons to immediately expel people from the United States, migrants from the U.S., who otherwise would be granted asylum cases or at least asylum hearings. And that has been in place now going back to 2020. There’s a possibility, depending on a couple of court cases that are pending, that the Title 42 policy will be ending as soon as next week. And this is something that migrants know about. So the migrants that we’ve seen cross already in just the last 36 hours, they’re not waiting for that policy to end.
I have personally spoken to a half dozen migrants on this side of the border, and they’re representative of many other people who say they are waiting for Title 42 to end potentially next week.
START HERE: Oh, like Dec. 22nd, I’m going to cross?
RIVERS: Exactly. Dec. 22nd. That’s my day, or maybe even on the 21st, whenever that ruling comes down, they’re leaving the shelter; they’re going across and they’re going to apply for asylum in the United States. So the crowds that we’re seeing today could be even greater next week. It’s the border. We can’t say anything for sure, but that is certainly a possibility and something that people on both sides of the border are planning for.
Cyndi Lauper made a trip to Washington, D.C., Tuesday to thank President Joe Biden for his support of the Respect for Marriage Act.
ABC News reports that ahead of the signing ceremony, Lauper surprised the press in the White House briefing room, with White House press secretary Karine Jean-Pierre introducing her by joking, “I know we have some serious business ahead of us today, but, you know, sometimes girls just want to have fun,” referring to one of Cyndi’s biggest hits.
“I came here because I wanted to say thank you to President Biden, Speaker Pelosi, Vice President Harris and all the advocates and his team for all families — mine and a lot of my friends and people you know,” Lauper told reporters. “We can rest easy tonight because our families are validated, and because now we’re allowed to love who we love.”
Lauper also performed at the signing ceremony, treating those gathered to her classic song “True Colors,” introducing it by saying, “Well this time love wins.” Sam Smith was also on hand to perform their hit track “Stay With Me.”
Biden signed the bill into law Tuesday afternoon. It repeals the 1996 Defense of Marriage Act, which prohibited federal recognition of same-sex marriages.
(WASHINGTON) — President Joe Biden on Tuesday signed legislation protecting same-sex and interracial marriage.
Thousands of people gathered on the White House South Lawn to commemorate the Respect for Marriage Act becoming law.
“Today is a good day,” Biden said as he took the podium after Vice President Kamala Harris. “A day America takes a vital step toward equality, for liberty and justice — not just for some, but for everyone. Toward creating a nation where decency, dignity and love are recognized, honored and protected.”
“Look, we’re here today to celebrate their courage and everyone who made the day possible,” the president continued. “Courage that led to progress we’ve seen over the decades, progress that gives us hope that every generation will continue on our journey toward a more perfect union.”
The ceremony included performances from Grammy winners Sam Smith and Cyndi Lauper. Smith, who announced in 2019 they were nonbinary and use they/them pronouns, performed their hit song “Stay With Me” followed by Lauper singing “True Colors.”
Appearing in the White House briefing room ahead of her performance, Lauper, a longtime LGBTQ advocate, told reporters, “We can rest easy tonight because our families are validated.”
“And because now we’re allowed to love who we love, which sounds odd to say. But Americans can now love who we love and bless Joe Biden and all the people that worked on this for allowing people not to worry and their children not to worry about their future,” Lauper said.
She founded the True Colors Fund, a nonprofit that educates people on LGBTQ issues and helps to end homelessness for LGBTQ youth.
A White House official said that notable guests attending the signing ceremony included Club Q founder Matthew Haynes and two survivors of the shooting that happened just last month at the Colorado Springs, Colorado, LGBTQ nightclub. Other attendees included a survivor of the 2016 Pulse nightclub shooting that killed 49 people in Orlando, Florida, and plaintiffs and counselors from the Obergefell and Loving Supreme Court cases.
“We must stop the hate and violence like we just saw in Colorado Springs for a place of acceptance and celebration was targeted for violence and terror,” Biden said Tuesday. “We need to challenge the hundreds of callous, cynical laws introduced in the states targeting transgender children, terrifying families and criminalizing doctors who give children the care they need. We have to protect these children so they know they’re loved and we will stand up for them.”
“Folks, racism, antisemitism, homophobia, transphobia are all connected,” Biden continued. “But the antidote to hate is love … This law matters to every single American no matter who you are or who you love.”
The Respect for Marriage Act passed with bipartisan support in both chambers of Congress after months of negotiation, particularly over provisions related to religion. The House voted last week 258-169 to send the bill to Biden’s desk after the Senate passed it 61-36. A minority of Republicans joined Democrats in both votes.
It became a priority for Democrats after the Supreme Court’s June decision in Dobbs v. Jackson Women’s Health Organization, in which five conservative justices overruled Roe v. Wade and the national guarantee to abortion access.
Justice Clarence Thomas, in a concurring opinion, said he believed the court should reconsider other precedents based on similar legal doctrine, including 2015’s Obergefell v. Hodges — which found that the 14th Amendment requires all states to license same-sex marriages.
The Respect for Marriage Act doesn’t include Obergefell’s national requirement but will mandate that individual states recognize same-sex and interracial marriages that were lawfully performed in another state.
Some Republicans who voted for the legislation in Congress noted additional language around protecting religious groups who still object to same-sex marriage.
Critics like Utah Sen. Mike Lee said it didn’t go far enough, however.
Biden has long been outspoken on the issue of same-sex marriage and in 2012, famously preempted then-President Barack Obama in declaring his public support.
“I am absolutely comfortable with the fact that men marrying men, women marrying women and heterosexual men and women marrying one another are entitled to the same exact rights, all the civil rights, all the civil liberties,” Biden said during an interview at the time on NBC’s “Meet the Press.”
“Who do you love? Who do you love and will you be loyal to the person you love?” Biden said then. “And that’s what people are finding out, what all marriages at their root are about.”
After Lauper finished her performance at the bill signing, audio of Biden’s 2012 “Meet the Press” interview was played. A White House official said they planned to distribute commemorative items at Tuesday’s ceremony that invoke Biden’s remarks from 10 years ago announcing his support for gay marriage.
As Biden finished signing the law to cheers from the crowd, Lady Gaga’s pro-LGBTQ song “Born This Way” began to play.
House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer kicked off Tuesday’s ceremony, with Schumer touting the marriage legislation as an “important step forward” in the march toward equality.
Pelosi, who is stepping down from Democratic leadership, has said she’s “happy” this bill is one of the last she will sign as speaker and became emotional when the measure passed in the chamber.
Pelosi on Tuesday noted the full-circle nature of the legislation, after repealing Don’t Ask Don’t Tell when she was ending her speakership the first time in 2010. Biden gave Pelosi and other lawmakers who worked to get the bill through Congress a shout-out in his remarks.
“This is about respect. This is about taking pride,” Pelosi said, “and it’s about time that we do so at the federal level.”
(NEW YORK) — The U.S. Securities and Exchange Commission on Tuesday charged Sam Bankman-Fried, the embattled former CEO of cryptocurrency giant FTX and trading firm Alameda Research, with defrauding investors.
“FTX’s collapse highlights the very real risks that unregistered crypto asset trading platforms can pose for investors and customers alike,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.
Bankman-Fried was arrested Monday in the Bahamas after federal prosecutors in New York filed criminal charges contained in a sealed indictment, according to the Royal Bahamas Police Force. He is expected to appear in court in the Bahamas on Tuesday.
Here’s how the news is developing. All times Eastern.
Dec 13, 5:01 PM EST
Bankman-Fried denied bail due to flight risk
Sam Bankman-Fried’s application for bail was denied on Tuesday after a judge determined he was too much of a flight risk.
He will be remanded until Feb. 8, 2023, in the Bahamas Department of Corrections.
-ABC News’ Will Gretsky
Dec 13, 3:49 PM EST
Jean-Pierre won’t say whether Biden will return donations
White House press secretary Karine Jean-Pierre would not engage when asked specifically about FTX founder Sam Bankman-Fried’s arrest, and deferred to the Hatch Act when pressed if President Joe Biden planned to return the more than $5 million in donations that were given to his 2020 campaign.
The Hatch Act prevents federal employees, like Jean-Pierre, from engaging in political campaigning.
Jean-Pierre also wouldn’t give Biden’s opinion on the arrest and collapse of FTX. However, she was more willing to talk about what could be done to put regulations in place in the crypto sphere.
“This administration has consistently urged Congress to take action to address regulatory gaps posed by digital assets and support legislative efforts to enact crypto legislation to better protect American consumers that just last month Secretary [of the Treasury Janet] Yellen, in fact, called on Congress to ‘move quickly to fill the regulatory gaps.’ That’s a quote that she said herself and the administration has identified what those gaps look like,” Jean-Pierre told reporters. “But again, we have urged this is something for Congress to do.”
U.S. Attorney Damian Williams urged politicians to return the millions of dollars donated by Bankman-Fried at a press conference earlier Tuesday.
-ABC News’ Molly Nagle
Dec 13, 2:52 PM EST
More than $8 billion in FTX customer losses, federal official says
Sam Bankman-Fried defrauded customers and investors in FTX as well as lenders to his hedge fund, Alameda Research, and he violated campaign finance laws, federal prosecutors in New York said Tuesday as they discussed the fruits of a “complex and sprawling” investigation.
The criminal charges came one month after FTX filed a $32 billion bankruptcy and U.S. Attorney Damian Williams said the investigation was ongoing and “moving very quickly.”
Williams said he authorized charges against Bankman-Fried on Wednesday of last week. A grand jury returned an indictment Friday.
There are more than $8 billion in customer losses, said Gretchen Lowe of the Commodity Futures Trading Commission.
In addition to fraud and conspiracy, the indictment alleged Bankman-Fried violated campaign finance laws by making tens of millions of dollars in campaign donations — to both Republicans and Democrats — with stolen funds. The contributions were made in the name of Alameda Research with money taken from FTX, the indictment alleged.
Williams urged political campaigns and candidates who received donations from Bankman-Fried or Alameda to work with his office to return the money.
Bankman-Fried is fighting extradition from the Bahamas to New York to face all of these charges.
“Fraud is fraud,” FBI Assistant Director Michael Driscoll said. “It does not matter the complexity of the investment scheme.”
-ABC News’ Aaron Katersky
Dec 13, 12:22 PM EST
Bankman-Fried doesn’t waive extradition in court appearance
Sam Bankman-Fried did not waive his rights to an extradition hearing as he made his first court appearance in the Bahamas on Tuesday.
Had he waived his rights, the U.S. would have been able to extradite Bankman-Fried immediately. It’s unclear now how quickly an extradition could happen.
The court proceedings were still ongoing as of noon.
-ABC News’ Will Gretsky
Dec 13, 12:09 PM EST
‘No separateness whatsoever’ between FTX and Alameda Research, FTX CEO says
FTX CEO John Ray, who is overseeing the company’s bankruptcy proceedings, told House members on Tuesday that no separation existed between the operations of FTX and Alameda Research, a crypto hedge fund also founded by Bankman-Fried.
“There were virtually no internal controls and no separateness whatsoever,” Ray said.
Bankman-Fried faces accusations that FTX used deposits to pay Alameda Research creditors, a claim reportedly made by former Alameda Research CEO Caroline Ellison during a call in early November.
In an interview last week, Bankman-Fried told ABC News’ George Stephanopoulos that he was not aware that was true but said Alameda had a large position open on FTX that was “overcollateralized a year ago.”
Ray told House members that FTX transferred several billion dollars in customer funds to Alameda Research.
When asked by Rep. Patrick McHenry, R-N.C., if there was a distinction between FTX and Alameda Research, Ray said, “Absolutely not. There’s no distinction whatsoever.”
“The owners of the company could run free reign,” Ray added, noting that Bankman-Fried owned 90% of Alameda Research.
Dec 13, 11:38 AM EST
Bankman-Fried’s lawyer offers first comment
Sam Bankman-Fried’s lawyer, Mark S. Cohen, offered his first comments on the arrest of his client Tuesday morning.
“Mr. Bankman-Fried is reviewing the charges with his legal team and considering all of his legal options,” Cohen said in a statement.
Bankman-Fried was scheduled to make his first court appearance in the Bahamas Tuesday.
Dec 13, 11:38 AM EST
FTX CEO John Ray blasts ‘utter lack of record keeping’
John Ray, the new CEO of bankrupt crypto exchange FTX, who oversaw the dissolution of Enron, testified before House members on Tuesday that FTX lacked corporate controls to an extent he had never witnessed.
“I’ve never seen an utter lack of record keeping,” Ray said. “Absolutely no internal controls.”
Earlier this year, FTX was valued at $32 billion. Within weeks of a customer sell-off totaling billions of dollars, the company declared bankruptcy.
Company officials communicated invoice and expense reports over Slack, an internal messaging service, Ray said.
He said FTX employees used the accounting software QuickBooks, which is popular among small businesses.
“Nothing against QuickBooks — it’s a very nice tool,” Ray said. “Not for a multibillion-dollar company.”
Dec 13, 9:57 AM EST
Eight-count indictment unsealed against Bankman-Fried
The eight-count indictment from the Southern District of New York charges Sam Bankman-Fried with conspiracy and fraud.
“Bankman-Fried, along with others, engaged in a scheme to defraud customers of by misappropriating those customers’ deposits, and using those deposits to pay expenses and debts of Alameda Research,” the indictment said.
The indictment also said Bankman-Fried provided false and misleading information to lenders about the true financial condition of Alameda, his privately held crypto hedge fund.
There’s a final count of conspiracy to violate campaign finance laws through political donations that concealed the source and exceeded the permissible amount.
“In or about 2022, Samuel Bankman-Fried, the defendant, and one or more other conspirators agreed to and did make corporate contributes to candidates and committees in the Southern District of New York that were reported in the name of another person,” the indictment said.
Federal prosecutors were expected to elaborate on the charges at an afternoon news conference in Manhattan.
Dec 13, 8:51 AM EST
‘It’s serious’: Former prosecutor says public statements could hurt FTX founder
While the full criminal charges have yet to be released, the Securities and Exchange Commission released it’s complaint against Sam Bankman-Fried early Tuesday.
“It’s serious,” said Brendan Quigley, a former federal securities fraud prosecutor in New York who is now a partner at Baker Botta. “Assuming they can show promises were made to counterparties, investors or clients about where money was going to go, and that it didn’t go there, that’s a serious offense, probably wire fraud at least.”
Bankman-Fried’s public statements could come back to haunt him, including an interview with ABC News’ George Stephanopoulos.
“The big thing will be if SDNY can shows conflicts either between his public statements or between his current public statement and something that was said or promised to investors,” Quigley said.
Dec 13, 8:32 AM EST
Bankman-Fried built ‘house of cards’: SEC
Though cryptocurrency can seem a mystical world, the civil complaint from the Securities and Exchange Commission reads like a standard case of securities fraud, accusing Sam Bankman-Fried of building a “house of cards.”
Bankman-Fried raised $1.8 billion for FTX while “orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customer funds for his own personal benefit and to help grow his crypto empire,” the complaint said.
Customers sent billions of dollars to FTX believing their assets were secure but, from the start, the SEC said Bankman-Fried “improperly diverted customer assets to his privately-held crypto hedge fund, Alameda Research LLC, and then used those customer funds to make undisclosed venture investments, lavish real estate purchases, and large political donations.”
Federal prosecutors in New York said they would unseal related criminal charges later Tuesday.
“We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,” said SEC Chair Gary Gensler.
The civil complaint seeks penalties and fines, but also to prohibit Bankman-Fried from “participating in the offer or sale of securities including crypto asset securities” in the future, a move that would complete his fall as the poster child for the emerging cryptocurrency marketplace.
Dec 13, 8:32 AM EST
Bankman-Fried refused request for Senate testimony
While Sam Bankman-Fried was set to give testimony to a House committee Tuesday, later canceled after his arrest late Monday, he continues to reject requests from the Senate for a hearing of its own.
In a joint statement Monday afternoon, prior to his arrest, the top Democrat and Republican on the Senate Banking Committee called Bankman-Fried’s refusal to appear “an unprecedented abdication of responsibility.”
“Virtually every CEO, financial regulator, and administration official for Republicans and Democrats has agreed to testify in front of both the Senate and House when called upon — that is how congressional oversight works,” Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement. “We have offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony. He has declined in an unprecedented abdication of accountability.”
The committee will continue efforting an appearance from Bankman-Fried because he is “unwilling to accept service of a subpoena.”
Dec 13, 8:32 AM EST
What to know about former FTX CEO Sam Bankman-Fried?
Sam Bankman-Fried, the 30-year-old founder of FTX, quickly ascended to the top of the cryptocurrency sector, garnering goodwill in recent years as a philanthropist and leading proponent of industry regulation.
The cover of Fortune Magazine in August asked readers whether Bankman-Fried, known by some as “SBF,” was “the next Warren Buffett.”
After the sudden bankruptcy of FTX, however, he faced withering questions over the mismanagement of billions in customer funds.
Meanwhile, his net worth plummeted from $16 billion to $0 in less than a week, according to an estimate from Bloomberg.
