Following Sam Bankman-Fried’s guilty verdict last week, FTX investors call for actions against celebrity endorsers.
The conviction of Sam Bankman-Fried has marked a pivotal point in the FTX saga, but it might be far from over. The aftermath of the case is set to cast long shadows, with a notable shift in focus toward the high-profile figures and celebrities who once endorsed the platform.
Public attention will now be on the class-action lawsuit that emerged from the investors’ quarters in 2022, targeting not just Bankman-Fried’s immediate affiliates but also casting a wide net to include celebrities and professional services firms. Since Bankman-Fried’s guilty verdict, investors and users have increasingly been posting on social media to hold key celebrities accountable for this historic fraud.
The spotlight on FTX endorsers
Sam Bankman-Fried’s trial prominently featured advertisements where stars like Larry David and Tom Brady promoted FTX. These endorsements were among the evidence presented in a trial that concluded with Bankman-Fried’s conviction on multiple charges of fraud and conspiracy.
The class action, representing a vast pool of investors, is built on the premise that the celebrity endorsers, along with the financial and legal professionals associated with FTX, failed to observe the warning signals that could have unveiled the dubious operations of the exchange. Investors are seeking reparations for the staggering $8 billion that seemingly disappeared with the collapse of FTX.
While Bankman-Fried’s guilty verdict doesn’t directly implicate the celebrity promoters and advisors in the alleged fraud, it does bolster the plaintiffs’ arguments. Columbia Law School’s Daniel Richman told Bloomberg that the outcome of the criminal trial could lend weight to the civil proceedings against these high-profile figures.
Ripple effects of Bankman-Fried’s verdict
Observers note that the celebrities’ significant influence and affluence make them conspicuous targets for aggrieved investors aiming to recoup some of their funds. In the shadow of Bankman-Fried’s depleted financial state, this lawsuit parallels past litigations where major settlements followed significant corporate failures, like those of Enron and WorldCom.
Some defendants in the lawsuit could potentially leverage the conviction to position themselves as unknowing participants, duped by the criminal activities of the enterprise, thus seeking exemption from civil liabilities.
