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There are several barometers indicating just how much trouble FTX founder Sam Bankman-Fried is facing after incinerating billions of dollars of client money — his company’s balance sheet from hell, the deeply sketchy-sounding back channel for moving his customers’ funds around, the reported SEC and Bahamian probes. But the best measurement might just be his choice of counsel: The ersatz crypto king has chosen attorney Martin Flumenbaum to represent him as his scam uncoils.
Don’t know Flumenbaum? You must not be a billionaire concerned that criminal investigators are around the corner. For several generations now, Flumenbaum, of the white-shoe firm Paul, Weiss, has been representing the most prominent names of the white-collar financial world when things go south.
He’s the guy to call if your father confesses to you in his penthouse study that his successful security brokerage was actually the largest Ponzi scheme in history, as the sons of Bernie Madoff did in December 2008. He’s there to represent your ratings agency when it’s sued by a state retirement fund for its alleged role in the financial crisis — as he did in 2011 when Fitch Ratings settled a class-action suit for underwriting non-prime mortgage-backed securities. Moving back a little further, he…
