By Manya Sani and Hannah Lang
(Reuters) – Robinhood said on Friday it had entered into a $605.7 million stock purchase agreement with the United States Marshals Service (USMS) to buy a stake in Sam Bankman-Fried’s emergent Fidelity Technologies.
After Bankman-Fried FTX and Emergent filed for bankruptcy protection last year, Robinhood shares were seized and transferred to US government control. Bankman-Fried has pleaded not guilty to criminal fraud and conspiracy charges stemming from the November 2022 collapse of FTX.
Shares of Robin Hood rose more than 3% in premarket trading on the news.
The online brokerage said 55.3 million shares were traded at $10.96 a share.
U.S. District Judge Lewis Kaplan in Manhattan approved the deal, court records show. Kaplan, who is overseeing Bankman-Fried’s criminal case, called Robinhood’s stock purchase agreement “appropriate” and “in the best interest of the relevant stakeholders” in an order published Friday, Aug. 28.
Robinhood announced its intention to buy back the stock in February, and said the company’s board had given it permission to buy back most or all of the stock.
Six months before the company filed for bankruptcy last November, Bahnmann-Fried said it owned a 7.6% stake in Robinhood but said it had no interest in controlling the retail platform. He told Reuters at the time that FTX was “excited about Robinhood’s business prospects and the ways we can partner with them”.
Bankman-Fried has made significant advances in bitcoin and other digital assets to build an estimated net worth of $26 billion and has become an influential political donor in the US, but the FTX collapse wiped out his wealth.
Kaplan earlier this month ordered Banman-Fried to be detained ahead of an October hearing, where the former billionaire violated witnesses while being held at his parents’ home in Palo Alto, Calif., on $250 million bail.
(Reporting by Manya Sani in Bengaluru and Hannah Lang in Washington; Additional reporting by Luke Cohen in New York; Editing by Devika Syamna and Mark Potter)
