Caroline Ellison, former co-CEO of Alameda Research and ex-girlfriend of SBF, was previously found guilty of seven counts of fraud and conspiracy and will have a sentencing hearing in a New York court on September 24.
Her lawyers said in a sentencing memorandum filed late Tuesday that the court's probation department recommended she be sentenced to "time served" with conditions of three years of supervised release, meaning her past cooperation and conduct were not sufficient punishment. A further custodial sentence is required, subject only to supervision for the next three years. Lawyers also emphasized that Caroline Ellison has cooperated with the government and FTX's creditors, and that her testimony in the trial of FTX founder SBF was very helpful to the case.
Her attorney stated in the filing:
"Caroline is not a risk to reoffend and does not pose a threat to public safety. Therefore, respect for the law should be based on Caroline's early disclosure of her crimes, her full admission of responsibility for her crimes, and most importantly, her extensive cooperation with the government , grant leniency,"
The document outlines Caroline's childhood, college and early career, including meeting SBF at Jane Street Capital and eventually joining SBF's first company, Alameda Research. Caroline was the CEO of Alameda Research before FTX went bankrupt, a company with strong ties to FTX, both founded by SBF. The financial entanglement between the two companies, as well as FTX's loan to Alameda Research, raised questions about conflicts of interest and mishandling of potential client funds.
In an accompanying sentencing memorandum, current FTX CEO John Ray said Caroline provided "valuable assistance and cooperation to creditors, which resulted in the recovery of hundreds of millions of dollars in debtor assets for the benefit of creditors."
Robert J. Cleary, the bankruptcy examiner for FTX, also wrote in a letter that Caroline was cooperative and "provided credible information," which was "very helpful" in fulfilling his duties as a bankruptcy examiner.
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