Benzinga - by AJ Fabino, Benzinga Staff Writer.
Robinhood Markets Inc (NASDAQ:HOOD) on Friday announced an agreement to repurchase 55.3 million shares of its own stock from the U.S. government for $605.7 million. The shares were initially seized from Sam Bankman-Fried, the founder of FTX, following his bankruptcy and ongoing legal issues.
The agreement was approved by the U.S. District Court for the Southern District of New York and came amidst a cloud of controversy surrounding Bankman-Fried.
The upcoming Benzinga’s Future of Digital Assets event will provide a platform for industry leaders and stakeholders to discuss the implications of this move.
The Original Stake: Bankman-Fried's Emergent Fidelity Technologies originally acquired a 7.6% stake in Robinhood, amounting to 56,273,469 shares according to a 13D filing from May 2022.
Robinhood disclosed the share repurchase agreement with the U.S. Marshal Service (USMS) on Friday, pushing its shares up by nearly 3% in Friday's early session. The deal involves the buyback of 55.3 million shares at $10.96 per and follows Robinhood’s initial disclosure of its intent to repurchase the shares back in February, according to Reuters.
Read Also: Bankman-Fried’s Lawyers Push For Temporary Release, Claim Incarceration Inhibits His Ability To Prepare For Trial
The court approved the repurchase, which was carried out to regain stock transferred to the U.S. government after Bankman-Fried’s companies filed for bankruptcy protection last year.
This came after a legal tussle between Bankman-Fried, BlockFi, and current FTX CEO John Ray, who all pushed the courts on who should be able to claim the Robinhood stake.
Benzigna could not determine where the remaining 973,469 shares are, or what entity is claiming them.
Legal Troubles: Bankman-Fried has been in the Metropolitan Detention Center in Brooklyn since mid-August after a federal judge supported prosecutors’ calls to revoke his $250 million bail due to alleged witness interference.
His legal troubles began in earnest when he was indicted on charges of money laundering and fraud, pleading not guilty. His trial begins on Oct. 2.
Bankman-Fried’s interactions with the media have been a point of legal contention, as the Justice Department accused him of breaching his bail terms through what it perceived as consistent witness manipulation via extensive communications with the press.
The prosecution highlighted his disclosure of private journal entries of a key witness and former partner, Caroline Ellison, as a tactic to intimidate her indirectly.
Read Next: Bankman-Fried’s Trial Strategy In Jeopardy, Prosecutors Demand More Information About ‘Advice Of Counsel’ Defense
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