FTX Investors Sue Celebrities Including Tom Brady and Larry David For Endorsing Exchange The class-action suit asserts celebs took part in "deceptive practices."

By Steve Huff

entrepreneur daily

Cryptocurrency investors burned by the spectacular failure of FTX are prepared to sue exchange founder Sam Bankman-Fried and the celebs who took part in promoting it. In a class-action suit filed in Miami late Tuesday, the plaintiffs targeted celebrities, including Tom Brady, Larry David, and Steph Curry, alleging that by shilling FTX, they were taking part in deceptive practices.

The lawsuit also claims that FTX was selling unregistered securities in the form of yield-bearing accounts. According to the suit, the defendants made "misrepresentations and omissions" designed to "induce confidence and to drive consumers to invest in what was ultimately a Ponzi scheme."

The Washington Post has more:

The lawsuit, filed Tuesday in U.S. District Court in Miami, alleges that FTX was designed "to take advantage of unsophisticated investors" by persuading them to use the company's services to invest in crypto. None of the defendants who appeared in advertisements for the investment platform "performed any due diligence before marketing these FTX products to the public," the filing added.

Noted attorney David Boies — who recently represented Theranos entrepreneur Elizabeth Holmes in her trial for fraud — filed the suit on behalf of Oklahoman Edwin Garrison, owner of an interest-earning FTX account.

The filing states that while the celebrities named as defendants did disclose they were in partnership with FTX, they didn't detail "the nature, scope, and amount of compensation they personally received in exchange for the promotion of the Deceptive FTX Platform."

Court papers point out that the Securities Exchange Commission (SEC) has said that a "failure to disclose this information would be a violation of the anti-touting provisions of the federal securities laws."

The suit didn't ask for a specific dollar amount but claimed that the defendants may be liable for "many billions of dollars in damages."

Steve Huff

Entrepreneur Staff

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

Woman Goes Viral After Recording Her Disastrous Call With HR After Being Let Go: 'They Tried to Gaslight You'

Brittany Pietsch posted a nine-minute-long clip of her firing from Cloudflare on TikTok, and it went viral. The company's CEO responded on X — and also went viral.

Business Solutions

Upgrade Your AI Skillset with This $30 E-Degree

This deal features a collection of courses on ChatGPT, Gemini AI, and other leading machine-learning areas for growing professionals.

Starting a Business

They Grew Up in a Financially-Challenged Single-Parent Home and Now These Twins Run a Multimillion-Dollar Real Estate Business. Here's How They Turned Hardship Into Inspiration.

How Jeremy and Joshua Mathis overcame adversity and turned their challenging upbringing into a foundation for real estate success.

Thought Leaders

How This Family-Run Company Has Thrived for Five Generations

Marty Ozinga, the CEO of Ozinga, explains the legacy and future of the powerhouse construction materials company.

Leadership

How To Embed Your Client Needs into Your Business DNA

Integrating client feedback into the very fabric of your business operations will keep your clients returning for more.