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Share to FacebookShare to TwitterShare to LinkedinTom Brady, Gisele Bundchen named as defendants in civil suit regarding FTX marketing

Getty Images The FTX crisis got even more complicated on Wednesday with two new lawsuits hitting U.S. courts. One of them unites Tom Brady and Gisele Bundchen as defendants with FTX founder Samuel-Bankman Fried, funnyman Larry David and a slew of other presumably deep-pocketed celebrities who helped sell what plaintiffs allege to have been unregistered cryptocurrency securities, while the other action may throw a monkey wrench into the crippled exchange’s bankruptcy proceedings.

The class-action suit says FTX sold yield-bearing accounts that were securities under U.S. law and in so doing violated both the Florida Securities and Investor Protection Act and the Florida Deceptive and Unfair Trade Practices Act. FTX is not named as a defendant, and might not be as fruitful a target as the entertainment and sports figures who helped promote the investments through marketing campaigns including television commercials. The suit cited basketball figures Shaquille O’Neal, Stephen Curry and the Golden State Warriors and investor Kevin O’Leary, known as Mr. Wonderful on the CNBC investing show Shark Tank.

The suit was brought by Edwin Garrison, an FTX investor who lives in Oklahoma and is seeking class certification. Garrison is represented by Adam Moskowitz of Coral Gables, Florida, and David Boies of Armonk, New York, the high-profile lawyer who led the U.S. case against Microsoft MSFT in the late 1990s for the Justice Department and more recently teamed with Moskowitz in a class action against Voyager, another crypto exchange that has fallen into bankruptcy.

The action claims Florida was a proper venue because many FTX investors live there and the FTX “worldwide headquarters” is in Miami, but the company’s corporate base is in the Bahamas, where Bankman-Fried and other executives live. Although 134 related companies filed for bankruptcy in Delaware on November 10, Bahamas-based FTX Digital Markets was not part of that action. Now, the Bahamas government is trying to liquidate the subsidiary, which ran a crypto exchange in the Caribbean country, and the joint provisional liquidators appointed in that case have filed for Chapter 15 bankruptcy in federal court in the Southern District of New York, which may have ramifications for the Delaware proceedings.

After revelations of the main company’s collapse, the Bahamas Securities Commission filed a petition with the country’s Supreme Court on November 11 to shut down FTX Digital. Its petition in New York seeks permission to search for FTX Digital assets in the U.S. and also seems to imply that the permission of the unit, now under government control, was required to allow the Delaware filing.

MORE FOR YOUWhy The Rock’s Social Media Muscle Made Him Hollywood’s Highest-Paid ActorThe Best New Movies And Shows On Netflix Today: November 16, 2022Fact-Checking Donald Trump On The Strategic Petroleum Reserve A statement by Brian Cecil Simms, who describes himself as a provisional liquidator of FTX Digital, reads “No person other than me, as Provisional Liquidator, was authorized to take any act including, but not limited to, filing the Delaware Petition, in connection with FTX Digital and FTX Digital’s subsidiaries to the extent the authority of FTX Digital’s directors and management was requisite.

“I did not authorize or approve — in writing or otherwise — any of FTX Digital’s officers, management or employees to file, or cause to be filed, the Delaware Petition.”

He added that “I reject the validity of any purported attempt to place FTX Affiliates in bankruptcy insofar as such filing required FTX Digital’s officers, directors, or management to approve and authorize such action.” That leaves unclear whether he will seek to disrupt the Chapter 11 proceedings.

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