With the conviction of FTX co-founder Sam Bankman-Fried (SBF) out of the way, investors are now turning their attention to celebrity endorsers of the exchange. A class-action lawsuit in Miami alleges that former football player Tom Brady, comedian Larry David, and other famous individuals encouraged them to trust the company that stole their money.
The lawsuit seeks unspecified damages from the celebrities it accuses of improper due diligence. While the conviction of SBF won’t directly affect the plaintiffs’ case, experts say the work done by his prosecutors will play a significant role in the investor lawsuit since the prosecutors showed what was happening at FTX and its sister hedge fund, Alameda Research, before both collapsed in November 2022.
SBF Conviction The “Beginning of Justice”
According to Adam Moskowitz, the lawyer fighting for the plaintiffs in the class-action lawsuit, the verdict is their first taste of justice.
“[Bankman-Fried’s] verdict is the beginning of justice for the victims who entrusted their money with FTX and all those who promoted it.”
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Videos of FTX celebrity endorsements were aired at SBF’s criminal trial, which may appear damning at first glance. However, according to Braden Perry, a former federal attorney, the celebrities could say they are not civilly liable because they were victims of a criminal enterprise.
Lawyers for the celebrities have argued their clients’ promotions didn’t directly encourage anyone to invest in FTX, nor were they party to the SBF fraud.
Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell
FTX Celebrities Are Prime Targets
Wealthy celebrities offer a prime opportunity to recover customer funds since SBF is now likely penniless. Brady, a former NFL player with seven Super Bowl titles, is worth around $300 million, while recent estimates value David at around $400 million.
So far, National Football League quarterback Trevor Lawrence and influencers Kevin Paffrath and Tom Nash have settled the plaintiffs’ claims against them. The terms of the settlement have not been disclosed.
But the complexity of the FTX case could mean other endorsers experience a long court battle. Civil cases around dealing with the infamous Bernie Madoff fraud are ongoing.
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