Regulation agency Fenwick & West has denied accusations from an up to date class-action lawsuit alleging it was central to the crypto alternate’s fraud and eventual collapse.
Earlier this month, FTX customers requested to replace their swimsuit in opposition to Fenwick, first filed in 2023, claiming new info from a chapter and legal case shared proof that the legislation agency “performed a key and essential function in an important features of why and the way the FTX fraud was achieved.”
Fenwick advised a Florida federal choose in a submitting on Monday that the court docket ought to deny FTX customers’ request to replace a swimsuit in opposition to the agency, arguing their idea that it helped the alternate perform fraud “is as facile as it’s flawed.”
“Fenwick just isn’t responsible for aiding and abetting a fraud it knew nothing about, based mostly solely on allegations that Fenwick did what legislation corporations do daily — present routine and lawful authorized companies to their shoppers,” it stated.
Lawsuit makes use of “stale info,” Fenwick says
The brand new accusations in opposition to Fenwick stem from a large multi-district class-action lawsuit filed by FTX customers after it collapsed in late 2022.
The group has additionally introduced claims in opposition to celebrities and corporations alleged to have labored with FTX, together with the legislation agency Sullivan & Cromwell, which the group later dropped for a scarcity of proof.
Fenwick argued the proposed up to date grievance is “premature — based mostly on stale info that has been accessible to them for years — but in addition deceptive and futile.”
Fenwick additionally famous the allegations in opposition to the agency “mirror” those they’d used “fairly aggressively” in opposition to Sullivan & Cromwell, earlier than the group dismissed the motion after a report concluded that Sullivan didn’t find out about FTX’s fraud.
“They provide no credible cause why the identical allegations ought to survive in opposition to Fenwick,” it added.
“False characterization” of FTX govt’s claims
Fenwick has additionally refuted that Nishad Singh, FTX’s lead engineer, had testified that Fenwick was conscious and helped cover the “misuse of buyer funds” and “improper loans” throughout FTX co-founder Sam Bankman-Fried’s legal trial.
“Singh testified that Fenwick merely suggested on methods to construction founder loans, that are frequent devices for intently held firms like FTX,” the agency stated.
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It added that “dozens of witnesses” in Bankman-Fried’s trial testified that the fraud at FTX was carried out “with out the information of even FTX’s in-house counsel, different FTX workers, executives, and administrators, FTX’s long-time accountants, and different exterior legislation corporations and professionals that labored intently with FTX. Fenwick isn’t any totally different.”
Fenwick rejects new securities claims
In the meantime, Fenwick stated the proposed grievance’s new claims that it helped launch and promote the FTX Token (FTT) in violation of Florida and California securities legal guidelines had been far-fetched, frivolous and may have been “asserted months — if not years — earlier.”
“These new claims come far too late,” it wrote. “If Plaintiffs actually thought they’d state securities claims in opposition to Fenwick, they’d each alternative to allege them on the outset.”
It accused the group of including the 2 new allegations after a choose dismissed all however the state securities legal guidelines claims in opposition to celebrities that allegedly promoted FTX.
“That is an eleventh-hour try to evade the Courtroom’s ruling on the Celeb Defendants’ movement to dismiss, and to recast attorneys as ‘promoters,’” Fenwick claimed. “However this idea too goes nowhere.”
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