Lawyers for former Alameda Research CEO Caroline Ellison seek leniency before sentencing

Caroline Ellison, the former CEO of Alameda Research, should be sentenced to time served and supervised release, according to a filing by her attorneys late Tuesday.

The request comes ahead of his scheduled sentencing on September 24, 2024 for his role in the collapse of the FTX cryptocurrency exchange.

Extraordinary Cooperation

In Tuesday’s filing, his legal team emphasized Ellison’s “extraordinary cooperation with the government,” which they say warrants leniency in the sentence. They also referenced a Probation Department filing report recommending three years of supervised release and no fines.

“(Ellison) poses no risk of recidivism and poses no threat to public safety. Therefore, it would promote respect for the law to grant clemency in recognition of (Ellison’s) early disclosure of the crimes, his acceptance without mitigating their liability and, most importantly, their extensive cooperation with the government,” the filing stated.

John J. Ray III, the CEO overseeing FTX’s bankruptcy proceedings, highlighted his “valuable” role in helping his team as it worked to take control of the failed exchange.

Ray’s notice indicated that FTX’s bankruptcy estate was nearing a deal with Ellison, under which it would lose nearly all of its remaining assets and continue to support efforts to restructure the exchange and its affiliated entities .

Lawyers leading the class-action lawsuits against former FTX executives have also credited him with essential assistance in recovering funds for the exchange’s creditors. Robert Cleary, a court-appointed examiner in the case, also noted that he had been helpful throughout the process.

His lawyers supported his request with diary entries, statements about his cooperation with the bankrupt FTX estate and character references from colleagues, friends and family.

While some names in those letters have been removed due to harassment or doxing concerns, Inner City Press has requested a hearing to argue that they should be shown. The legal team, however, maintains that the redaction is necessary to protect writers from potential harm.

Caroline’s sentencing date

Ellison, a key partner of FTX founder Sam Bankman-Fried, testified last year that he instructed him to commit fraud and conceal FTX and Alameda’s financial problems from investors.

Her testimony contributed to Bankman-Fried’s conviction on seven counts of fraud and conspiracy. After the collapse of FTX in November 2022, he pleaded guilty and cooperated with prosecutors.

Her sentencing, set for September 24 at 3:00 p.m. EDT, will make her the third major figure in the FTX scandal to face trial, following Ryan Salame and Bankman-Fried of 7.5 and 25 years, respectively.

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