Three news to start your week: June 3

Stay informed with three impactful news stories: FTX executive sentenced to prison, private equity firms in SEC negotiations, and Malta's ex-PM facing corruption charges.

Three news to start your week: June 3

Top FTX Executive Sentenced to 7½ Years in Prison

(The New York Times)

Ryan Salame, a senior executive at the collapsed cryptocurrency exchange FTX, has been sentenced to seven and a half years in prison. He is the first of Sam Bankman-Fried's close circle of advisors at FTX to receive prison time.

Salame, a highly trusted aide of Bankman-Fried, the exchange's founder, pleaded guilty last year to a campaign finance law violation and a charge of operating an unlicensed money-transmitting business. He is one of four top deputies in the FTX empire who have pleaded guilty to crimes since the company imploded in November 2022.

Salame's sentence surpassed the five to seven years recommended by prosecutors despite defense lawyers asking for 18 months.

Salame stood facing Judge Lewis A. Kaplan as the sentence was read aloud in US District Court in Manhattan. Judge Kaplan called Salame's crimes "astonishing," stating, "The state of our political life in this country is in jeopardy. Efforts like those undertaken by Salame and Bankman-Fried only make matters worse."


Private-Equity Giants Near Settlements With SEC Over Texting Violations

(The Wall Street Journal)

Some of the largest private equity firms on Wall Street have stated that they are currently negotiating with the US market regulator regarding their employees' use of banned communication channels. Blackstone, TPG, and Carlyle Group have revealed in their most recent quarterly filings that they have been cooperating with the US Securities and Exchange Commission's investigations into record-keeping and have initiated discussions with the agency's enforcement staff to explore potential resolutions.

According to SEC regulations, financial firms are obligated to preserve and monitor their employees' written communications. This requirement enables regulators to scrutinize and ensure compliance with federal laws. Firms that allow their employees to discuss business matters on prohibited mobile apps such as WhatsApp run the risk of violating these rules if they fail to retain or monitor those messages. In numerous cases, the SEC has found that firms have not collected these messages since they were exchanged on employees' personal devices.


Malta's Ex-PM Muscat Faces Corruption Charges in Court


The Maltese prosecutors have formally charged former prime minister Joseph Muscat with corruption related to a 2015 public health contract. Despite the charges, hundreds of supporters cheered for him outside a courthouse in Valletta. The 50-year-old former Labour leader, who was in office from 2013 to 2020, pleaded "absolutely not guilty" to a list of charges that included money laundering, soliciting bribes, and criminal association.

Muscat's arraignment comes after a four-year inquiry, initiated by the rule-of-law activist group Repubblika, revealed misconduct in how his government handled a four billion euro ($4.35 billion) contract for managing three hospitals. His former chief of staff, Keith Schembri, and former health minister, Konrad Mizzi, faced the same charges and also pleaded not guilty.

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