Ortiz, Brady named among defendants in FTX collapse lawsuit
Former Red Sox slugger David Ortiz and quarterback Tom Brady are listed along with a number of other athletes and celebrities in a class-action lawsuit filed Tuesday over the sudden collapse of cryptocurrency exchange FTX. The lawsuit was filed in US District Court in Miami, Florida, where Bahamas-based FTX had recently purchased naming rights for the home arena of the Miami Heat. It says plaintiff Edwin Garrison, of Oklahoma, bought an unregistered security from FTX and financed it “with a sufficient amount of crypto-assets to earn interest on his holdings.” Garrison claims he decided to invest with FTX after being exposed to “misrepresentations and omissions”[ads1]; about the platform. Because Brady, Ortiz and other listed defendants served as brand ambassadors, the lawsuit alleges they are liable for damages suffered by investors. Other notable defendants include supermodel Gisele Bundchen, “Shark Tank” investor Kevin O’Leary, Miami Heat player Udonis Haslem, Golden State Warriors player Stephen Curry and his entire team, former NBA star Shaquille O’Neal, Jacksonville Jaguars quarterback William Trevor Lawrence, Los Angeles Angels player Shohei Ohtani, tennis player Naomi Osaka and actor-comedian-writer Larry David. FTX’s founder and former CEO, Sam Bankman-Fried, is also named as a defendant.” Part of the scheme employed by the FTX entities involved using some of the biggest names in sports and entertainment—like these defendants—to raise funds and drive American consumers to invest in (yield bearing accounts), which were largely offered and sold from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the deceptive FTX platform to keep the entire scheme going liquid,” the lawsuit states. One of the counts included in the lawsuit is an allegation of civil conspiracy. “The FTX Entities and Defendants made numerous misrepresentations and omissions to Plaintiff and Class Members about the deceptive FTX Platform in order to create confidence and to induce consumers to invest in what ultimately was a Ponzi scheme, misleading customers and potential customers with the false impression that any cryptocurrency assets held on the Deceptive FTX platform were safe and were not invested in unregistered securities,” the lawsuit states. FTX filed for bankruptcy protection on Friday, sending tsunami-like waves through the cryptocurrency industry, which has seen its fair share of volatility and turmoil this year, including a sharp decline in the price of bitcoin and other digital assets. Other crypto firms are failing as a result of FTX’s dissolution, events reminiscent of the domino-like meltdowns of the 2008 financial crisis. Just days after FTX’s collapse, the public is beginning to get a sense of how messy the bankruptcy case could be. Users remain frustratingly in the dark about when they can get their money back, if at all. In a court filing, FTX’s lawyers said there were already more than 100,000 claims against the company and estimated that number could grow to more than 1 million, most of them customers, when the case is settled. The court ordered FTX to provide at least a list of the company’s 50 largest creditors by November 18. criminal activity or securities offenses were committed. The Associated Press contributed to this report.
Former Red Sox slugger David Ortiz and quarterback Tom Brady are listed along with a number of other athletes and celebrities in a class-action lawsuit filed Tuesday over the sudden collapse of cryptocurrency exchange FTX.
The lawsuit was filed in US District Court in Miami, Florida, where Bahamas-based FTX had recently purchased naming rights to the home arena of the Miami Heat.
It says plaintiff Edwin Garrison, of Oklahoma, bought an unregistered security from FTX and financed it “with a sufficient amount of crypto assets to earn interest on his holdings.” Garrison claims he decided to invest with FTX after being exposed to “misrepresentations and omissions” about the platform.
Because Brady, Ortiz and other listed defendants served as brand ambassadors, the lawsuit alleges they are liable for damages suffered by investors.
Other notable defendants include supermodel Gisele Bundchen, “Shark Tank” investor Kevin O’Leary, Miami Heat player Udonis Haslem, Golden State Warriors player Stephen Curry and his entire team, former NBA star Shaquille O’Neal, Jacksonville Jaguars quarterback William Trevor Lawrence, Los Angeles Angels player Shohei Ohtani, tennis player Naomi Osaka and actor-comedian-writer Larry David. FTX’s founder and former CEO, Sam Bankman-Fried, is also named as a defendant.
“Part of the scheme used by the FTX Entities involved using some of the biggest names in sports and entertainment – like these defendants – to raise funds and get US consumers to invest in (yield-bearing accounts), which were largely offered and sold from the FTX Entities’ domestic base of operations here in Miami, Florida, pouring billions of dollars into the deceptive FTX platform to keep the entire scheme afloat,” the lawsuit states.
One of the counts included in the lawsuit is an allegation of civil conspiracy.
“The FTX Entities and Defendants made numerous misrepresentations and omissions to Plaintiff and Class Members about the deceptive FTX Platform in order to create confidence and to induce consumers to invest in what ultimately was a Ponzi scheme, misleading customers and potential customers with the false impression that any cryptocurrency assets held on the Deceptive FTX platform were safe and were not invested in unregistered securities,” the lawsuit states.
FTX filed for bankruptcy protection on Friday, sending tsunami-like waves through the cryptocurrency industry, which has seen its fair share of volatility and turmoil this year, including a sharp decline in the price of bitcoin and other digital assets. Other crypto firms are failing as a result of FTX’s dissolution, events reminiscent of the domino-like collapses of the 2008 financial crisis.
Just days after FTX collapsed, the public is starting to get a sense of how messy the bankruptcy case could be. Users remain frustratingly in the dark about when they can get their money back, if at all.
In a court filing, FTX’s lawyers said there were already more than 100,000 claims against the company and estimated that number could grow to more than 1 million, most of them customers, when the case is settled. The court ordered FTX to provide at least a list of the company’s 50 largest creditors by November 18.
Meanwhile, The Associated Press reported that FTX and its CEO are under investigation by the Department of Justice and the Securities and Exchange Commission to determine whether any criminal activity or securities violations were committed.
The Associated Press contributed to this report.
