Fenwick & West is fighting back against efforts to revise a class-action lawsuit that alleges the law firm had significant involvement in the events leading up to the FTX downfall, according to a request filed with a Florida judge.
In a court document submitted on August 25th, Fenwick & West contends that the proposed amended complaint lacks a solid foundation. The firm insists it provided routine legal counsel without any awareness of fraudulent practices.
The timing of the updated lawsuit also drew criticism from Fenwick, who argues that the information plaintiffs are using has been available publicly for quite some time. Furthermore, the firm characterized the complaint as unsubstantiated and misleading.
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FTX users highlight testimony from Nishad Singh, a former FTX engineer. The plaintiffs assert that Singh indicated Fenwick assisted in concealing the improper use of customer funds and questionable loans.
However, Fenwick clarifies that Singh’s statements pertained to the firm’s advisory role in structuring loans for the company’s founders, a typical legal service for privately held businesses.
Fenwick further emphasized that numerous witnesses during Sam Bankman-Fried’s trial testified that the fraudulent activities were carried out without the knowledge of FTX’s internal legal team, external consultants, or accounting professionals.
The updated lawsuit also introduces accusations against Fenwick for its alleged involvement in the launch and marketing of the FTX Token (FTT), suggesting potential violations of securities regulations in Florida and California. Fenwick contends that these claims should have been part of the original lawsuit.
The firm suggests that the plaintiffs are introducing these new allegations due to the dismissal of the majority of their initial claims, especially those aimed at celebrities who promoted FTX.
In related news, U.S. federal authorities have appealed the sentencing in the case of two Estonian nationals who confessed to running a massive cryptocurrency mining scheme. Find out the reasons behind the appeal here.