Tom Brady and Larry David among those accused of defrauding investors in FTX collapse
Former FTX Trading CEO Sam Bankman-Fried, NFL quarterback Tom Brady, supermodel Gisele Bundchen and comedian Larry David are among a celebrity-studded list of people accused of defrauding investors who lost money in the cryptocurrency exchange's sudden collapse.
A proposed class-action filed in federal court in Florida late Tuesday names those four, along with other athletes and entertainers, as defendants in the case. All promoted FTX, one of the world's largest crypto trading platform exchanges before it declared bankruptcy on November 11, with the company now under investigation for possible securities violations.
"It is still very difficult to comprehend that just one company defrauded more than $11 billion dollars from consumers, all from our backyard here in Miami," Adam Moskowitz, the attorney leading the class action, said in an email. The suit seeks unspecified damages and is the first filed against Bankman-Fried and his companies since FTX filed for bankruptcy protection.
As part of a $20 million ad campaign, Brady and Bundchen in 2021 filmed a commercial called "FTX. You In?" showing them telling acquaintances to join the FTX platform, according to the complaint, filed in Miami on behalf of Oklahoma resident Edwin Garrison and seeking to represent "thousands, if not millions, of consumers nationwide."
That involves U.S. investors who enrolled in yield-bearing FTX crypto accounts, which the suit alleges created unregistered securities that are illegal in Florida and the U.S.
The suit contends FTX deployed celebrities to tout the exchange and route them into a Ponzi scheme.
David, the creator of "Seinfeld" and "Curb Your Enthusiasm," appeared in an ad for FTX entitled "Don't Miss Out on Crypto," which aired during the 2022 Super Bowl. The ad is the sole Super Bowl commercial David has appeared in, and showed him being skeptical of historical inventions like the wheel, the light bulb and of course FTX.
Other current and former athletes named in the suit are NBA star Stephen Curry; NFL quarterback William Trevor Lawrence; baseball player Shohei Ohtani; tennis player Naomi Osaka; and broadcaster and former basketball player Shaquille O'Neal. Kevin O'Leary, a host of "Shark Tank," is also named in the complaint, which was filed Nov. 15 in the Southern District of Florida.
The exchange shuffled customer money between affiliated entities, using new investor funds and loans to pay interest to the old ones in an attempt "to maintain the appearance of liquidity," Moskowitz alleged, adding that FTX used public figures to give the operation an air of credibility.
"FTX were geniuses at public relations and marketing, and knew that such a massive Ponzi scheme — larger than the Madoff scheme — could only be successful with the help and promotion of the most famous, respected, and beloved celebrities and influencers in the world," he said.
FTX did not reply to a request for comment.
FTX's creditors will be first in line to get whatever assets a bankruptcy judge deems appropriate to distribute as the company seeks to restructure as part of its Chapter 11 filing. Investors in the Bahamas-based company, which had raised some $2 billion in venture capital, come next.
That means FTX account holders, who used the platform to trade bitcoin, ethereum and other digital currencies, may have to wait years to get their money back – if they ever do.