The law firm representing FTX, Fenwick & West, has been slapped with a class action lawsuit by a group of FTX customers for allegedly aiding in fraud.
Fenwick & West, the law firm representing the fallen crypto exchange FTX, has been sued by a group of former FTX customers. The customers accused the firm of aiding in fraud via its legal advice to the exchange, Reuters reports.
According to the complaint lodged on August 7, Fenwick & West allegedly offered service to the exchange that “went well beyond those a law firm should and usually does provide.” The complaint states the firm’s services included structuring transactions to avoid regulatory attention and setting up entities that helped FTX’s former CEO, Sam Bankman-Fried, and other exchange executives engage in fraudulent activities.
The current complaint is the second to be lodged against Fenwick concerning its dealings with FTX. Previous reports state that the firm Gibson Dunn was appointed to represent Fenwick on similar issues related to the exchange, including in the criminal case against SBF and a federal class action lawsuit.
According to the court filing, Fenwick acted as the primary outside legal representative for the now-bankrupt exchange and therefore had a unique insight into FTX’s “convoluted organizational structure, abject lack of internal controls, and dubious business practices,” Reuters reports.
The dealings between Fenwick and FTX also extend to Daniel Friedberg. Mr Friedberg was a leading regulatory attorney for the exchange and joined FTX in 2020 from Fenwick. FTX’s new management is now suing Friedberg.
Fenwick Allegedly Helps Conceal FTX Executives’ Use of Customer Fund for Speculative InvestmentsThe complaint further alleges that Fenwick & West assisted in setting up two entities used to hide exchange executives’ use of customer funds to make speculative investments and political donations.
The law firm allegedly also advised on transactions that helped the exchange obtain regulatory licenses without having to apply directly to the necessary regulators.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
