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The hedge fund, founded by billionaire Daniel Loeb, invested a total of $60M into FTX
Robert Boroujerdi , managing director at Third Point , testified on Thursday at Sam Bankman - Fried ’s trial in assistance with the governing ’s case to render and witness the defendant guilty on seven counts link up to fraud and money laundering .
Boroujerdi formerly served as the head of planetary securities research at Goldman Sachs . He testified that while he got access to FTX ’s “ data point elbow room , ” which is digital document that consisted of strategical decks , organizational chart and financial statements , they were n’t made aware of the interrelation between FTX and its sister company Alameda .
Third Point is an institutional alternate asset handler that serves pension fund , gift and eminent - net - worth individual . The hedgerow fund was founded in 1995 by billionaire Daniel Loeb . Boroujerdi ’s job is to look for investment funds chance for the firm and as a result , he get wind about FTX .
In the late first twenty-five percent to early second fourth of 2021 , Boroujerdi first email with Bankman - Fried and other related party as a first step to potentially invest in the crypto exchange . By mid - March of that twelvemonth , the informant had a Zoom call with Bankman - Fried and Third Point investment squad members . He evidence that on the call , Bankman - Fried mainly led the conversation and let the cat out of the bag about FTX ’s increment , strategic plan , financial prospect and so on .
Third Point relied on the fiscal data point provided by FTX to gift and was not recount of other expenses not show in the data room , Boroujerdi testified . Everythingshouldbe prove , whether it ’s “ good or bad , ” he add .
They had a second rapid climb call encounter several week subsequently .
Boroujerdi tell Alameda come up on the call and Bankman - Fried speak of it as something he co - constitute , but called its relationship with FTX an “ arm ’s length business organization ” and that it “ operated severally and had its own self - interests . ” He added that Bankman - Fried shared that he had fairness in Alameda , but it was n’t impacting the relationship .
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Third Point was under the impression Alameda was treated like every other trading business firm that used the exchange . “ There should be no preferential treatment on an exchange , ” Boroujerdi said . If the house knew Alameda had limited perquisite and that it could withdraw customer funds from FTX , Third Point would not have invested , he impart .
SBF ask FTX general counsel to create ‘ effectual justification ’ for using billions in client fund amid prostration
But , Boroujerdi and Third Point were in the dark at the time and the firm pass away ahead with initially investing $ 35 million in FTX ’s $ 900 million Series B majuscule raise in July 2021 . That rung had over 60 investors , include VC firm Sequoia Capital , SoftBank Group Corp and British billionaire hedging fund coach Alan Howard . At the clip , FTX ’s valuation rise up to $ 18 billion ( it hit a $ 32 billion valuation at its point . )
Boroujerdi recalled being told by FTX that the capital would be used to expand the team , increase marketplace part and for strategy , among other thing . He testified he was not aware that the money was being transpose to Alameda and had he known that , again , Third Point would n’t have invested .
But the firm did n’t know — and Third Point offer more working capital for extra funding rounds , marking its total investiture in FTX to $ 60 million , Boroujerdi testified .
When asked by prosecutors what was the value of the house ’s investment in FTX , Boroujerdi responded stiffly , “ Zero . ” But the house seems to be doing all right — Loeb wrote in Third Point ’s Q2 2023investor letterthat it still sees a “ healthy upside in the valuations of [ its ] portfolio . ”
In a similar melodic phrase , Matt Huang , conscientious objector - founder and managing partner of crypto investiture firm Paradigm , testifiedduring Bankman - Fried ’s trial before this month that the blood-red flag in FTX would have dissemble his firm ’s decision on adorn in the interchange — especially if they knew FTX used customer funds to shore up Alameda .
Over two funding rounds between 2021 and 2022 , Paradigm invested $ 278 million into FTX . When prosecuting attorney call for what Paradigm estimates the current economic value of that investment to be , Huang replied , “ We have denounce it to zero . ”
Both testimonies point to the harm that FTX ’s and Alameda ’s crash have caused to investors . These witnesses may also strengthen the authorities ’s case against Bankman - Fried in regards to whether he commit the alleged fake .
While the trial will be on recess until October 26 , the government shared that its concluding three likely witnesses will dwell of an FBI agent , an investor and a client .
After that , Bankman - Fried ’s main lawyer , Mark Cohen , shared that “ if there ’s a defense mechanism case , it ’ll be one week or less . ” It was not clarified whether Bankman - Fried will testify during that fourth dimension .
