<\/p>\n
Law firm Fenwick & West has denied accusations from an updated class-action lawsuit alleging it was central to the crypto exchange\u2019s fraud and eventual collapse.<\/p>\n
Earlier this month, FTX users asked to update their suit<\/a> against Fenwick, first filed in 2023, claiming new information from a bankruptcy and criminal case shared evidence that the law firm \u201cplayed a key and crucial role in the most important aspects of why and how the FTX fraud was accomplished.\u201d<\/p>\n Fenwick told a Florida federal judge in a filing<\/a> on Monday that the court should deny FTX users\u2019 request to update a suit against the firm, arguing their theory that it helped the exchange carry out fraud \u201cis as facile as it is flawed.\u201d<\/p>\n \u201cFenwick is not liable for aiding and abetting a fraud it knew nothing about, based solely on allegations that Fenwick did what law firms do every day \u2014 provide routine and lawful legal services to their clients,\u201d it said.<\/p>\n The new accusations against Fenwick stem from a massive multi-district class-action lawsuit filed by FTX users after it collapsed in late 2022.<\/p>\n The group has also brought claims against celebrities and companies alleged to have worked with FTX, including the law firm Sullivan & Cromwell, which the group later dropped<\/a> for a lack of evidence.<\/p>\n Fenwick argued the proposed updated complaint is \u201cuntimely \u2014 based on stale information that has been available to them for years \u2014 but also misleading and futile.\u201d<\/p>\n Fenwick also noted the allegations against the firm \u201cmirror\u201d the ones they had used \u201cquite aggressively\u201d against Sullivan & Cromwell, before the group dismissed the action after a report concluded that Sullivan didn\u2019t know about FTX\u2019s fraud.\u00a0<\/p>\n \u201cThey offer no credible reason why the same allegations should survive against Fenwick,\u201d it added.\u00a0<\/p>\n Fenwick has also refuted that Nishad Singh, FTX\u2019s lead engineer, had testified that Fenwick was aware and helped hide the \u201cmisuse of customer funds\u201d and \u201cimproper loans\u201d during FTX co-founder Sam Bankman-Fried\u2019s<\/a> criminal trial.<\/p>\n \u201cSingh testified that Fenwick merely advised on how to structure founder loans, which are common instruments for closely held companies like FTX,\u201d the firm said.<\/p>\n Related: <\/strong><\/em>US appeals time served sentences for HashFlare Ponzi schemers<\/strong><\/em><\/a><\/p>\n It added that \u201cdozens of witnesses\u201d in Bankman-Fried\u2019s trial testified that the fraud at FTX was carried out \u201cwithout the knowledge of even FTX\u2019s in-house counsel, other FTX employees, executives, and directors, FTX\u2019s long-time accountants, and other outside law firms and professionals that worked closely with FTX. Fenwick is no different.\u201d<\/p>\n Meanwhile, Fenwick said the proposed complaint\u2019s new claims that it helped launch and promote the FTX Token (FTT<\/a>) in violation of Florida and California securities laws were far-fetched, frivolous and should have been \u201casserted months \u2014 if not years \u2014 earlier.\u201d<\/p>\n \u201cThese new claims come far too late,\u201d it wrote. \u201cIf Plaintiffs truly thought they had state securities claims against Fenwick, they had every opportunity to allege them at the outset.\u201d<\/p>\n It accused the group of adding the two new allegations after a judge dismissed all but the state securities laws claims against celebrities that allegedly promoted FTX.\u00a0<\/p>\n \u201cThis is an eleventh-hour attempt to evade the Court\u2019s ruling on the Celebrity Defendants\u2019 motion to dismiss, and to recast lawyers as \u2018promoters,\u2019\u201d Fenwick claimed. \u201cBut this theory too goes nowhere.\u201d<\/p>\nLawsuit uses \u201cstale information,\u201d Fenwick says<\/h2>\n
\u201cFalse characterization\u201d of FTX executive\u2019s claims<\/h2>\n
Fenwick rejects new securities claims<\/h2>\n