A federal judge has chosen to narrow, rather than dismiss completely, lawsuits against celebrities like Tom Brady, Stephen Curry, and Shohei Ohtani, who are accused of promoting the fallen cryptocurrency exchange FTX. Investors claim these celebrities ignored clear warning signs and lured them into becoming customers as part of a conspiracy involving FTX. They allege the celebrities obscured their multi-million dollar payments while acting as brand ambassadors.
On Wednesday, in a 49-page ruling, Miami US District Judge K. Michael Moore dismissed 12 out of 14 claims, stating that the investors failed to demonstrate they recognized FTX as fraudulent. Simply receiving payments wasn’t enough to prove a conspiracy, according to the judge.
However, he did indicate that investors could pursue claims alleging the defendants assisted FTX in selling unregistered securities, which aligns with Florida law. Some claims under the Oklahoma Act also remain active.
Other notable defendants include athletes like David Ortiz and Naomi Osaka, supermodel Gisele Bündchen, comedian Larry David, businessman Kevin O’Leary, and the Golden State Warriors basketball team.
Attorneys for the defendants haven’t commented yet regarding the recent developments in the case.
Investor attorney Adam Moskowitz referred to the ruling as a win, emphasizing that Florida law enforces strict liability, meaning defendants are responsible regardless of their knowledge of FTX’s fraudulent activities. He plans to amend complaints to include additional defendants, potentially from Major League Baseball and Formula 1 racing, after Shaquille O’Neal and Trevor Lawrence settled previously.
FTX declared bankruptcy in November 2022, and Bankman-Fried is currently appealing his fraud conviction and 25-year prison sentence. In October, FTX received court approval for its bankruptcy plan, allowing full repayment to customers.
This case is being heard in the US District Court, No. 1, Southern District of Florida, under the reference 23-MD-03076 concerning the FTX cryptocurrency exchange collapse lawsuit.
