Civil charges were announced against former FTX director of engineering Nishad Singh on Feb. 28, the same day he entered a guilty plea to three counts of criminal fraud in Manhattan district court. Both the United States Securities and Exchange Commission and the Commodity Futures Trading Commission are pressing charges against him.
Singh pleaded guilty in the U.S. District Court for the Southern District of New York to one count of wire fraud, one count of conspiracy to commit wire fraud on FTX customers, and one count of conspiracy to commit commodities fraud after reportedly reaching a deal with prosecutors.
The CFTC said it is charging Singh with fraud by misappropriation and with aiding and abetting fraud committed by Samuel Bankman-Fried, FTX and Alameda Research. The SEC’s complaint charges Singh with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. According to the SEC:
“Singh also knew or was reckless in not knowing that, more generally, Bankman-Fried often operated the companies [FTX and Alameda Research] without regard for responsible corporate controls and appropriate conduct.”
Singh did not contest the CFTC charges and has agreed to enter a proposed consent order, that agency reported. According to the SEC, Singh has consented to a bifurcated settlement, imposing a number of conditions on him, subject to court approval. “He will be permanently enjoined from violating the federal securities laws, the above-described conduct-based injunction, and an officer and director bar,” the SEC said.
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The court will also decide on whether he is subject to “disgorgement of ill-gotten gains plus prejudgment interest and/or a civil penalty.”
Former FTX CEO Sam Bankman-Fried, former Alameda Research CEO Caroline Ellison and former FTX chief technology officer Gary Wang have also been charged by the SEC and CFTC. Ellison and Wang settled their cases with the SEC but consented to stays in the CFTC cases. The SEC’s and CFTC’s cases against Bankman-Fried were stayed until the conclusion of his criminal trial.