In Miami, a class action lawsuit is proceeding further against ex-FTX CEO Sam Bankman-Fried and a number of celebrity endorsers who were paid by the crypto exchange before it went under.
Judge Michael Moore of the United States District Court for the Southern District of Florida has combined three claims brought by plaintiffs backed by the boutique Moskowitz Law Firm and the white-shoe law firm Boies Schiller & Flexner.
Plaintiffs in the original lawsuit referred to FTX as a “house of cards,” claiming that the company was operating a “Ponzi scheme” by moving customers’ money around among various shadowy subsidiaries.
FTX Promotion Has Got People In Trouble
According to the plaintiffs, celebrities like NFL quarterback Tom Brady, comedian Larry David, tennis player Naomi Osaka, and the NBA’s Golden State Warriors team helped in promoting the company among ordinary investors who lacked financial expertise while also promoting unregistered securities.
Adam Moskowitz, the primary attorney for the plaintiffs, states: “We have been working with our team of crypto experts and are more confident than ever that all of the FTX interest accounts will be found by our state and federal courts to be ‘securities’ and thus each of the FTX Brand Ambassadors will be liable for promoting an unregistered security,”
Moskowitz believes that the FTX celebrity promoters broke state and federal anti-touting statutes.
“We have no doubt that Sam [Bankman-Fried] committed one of the country’s largest financial scams and he had no intention of complying with any of these FTC and SEC celebrity endorsement regulations,”
Moskowitz further asserts that this “was part of his fraudulent plan to compete with Voyager, Gemini, Coinbase, and BlockFi.”
Meanwhile, Texas’s financial regulator was reported to investigate Brady and NBA point player Stephen Curry in November.