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News

Former FTX Legal Counsel Faces Class Action Lawsuit Of Aiding Billion-Dollar Fraud

August 9, 2023 - Around 2 mins mins to read

Key Points:

  • Fenwick & West faces a lawsuit alleging alleged multi-billion-dollar fraud by FTX.
  • Plaintiffs claim an implicit agreement to deceive clients; exchange insiders are involved.
  • Fenwick & West seeks legal support as the FTX fallout persists for its co-founder and industry.
In a recent development, Fenwick & West LLP, the law firm that previously served as FTX’s primary legal counsel, has been hit with a class action lawsuit, according to documents collected by Cointelegraph.
Former FTX Legal Counsel Faces Class Action Lawsuit Of Aiding Billion-Dollar Fraud

The suit, filed in California District Court by a group of FTX clients, accuses the firm of aiding FTX in a series of fraudulent activities amounting to billions of dollars.

The plaintiffs claim that Fenwick & West went beyond its typical legal role, creating “shadow entities” that facilitated illegal tactics employed by FTX’s co-founder, Sam Bankman-Fried (SBF), and other executives.

These shadow entities, including North Dimension and North Wireless Dimension, allegedly misappropriated client funds. The lawsuit contends that the law firm willingly turned a blind eye to false statements and misrepresentations made by the exchange to its clients.

This behavior, the plaintiffs argue, suggests an implicit agreement between the exchange, its affiliates, and Fenwick & West to deceive customers, alluring the law firm with financial gains from the alleged misconduct.

Bankman-Fried, former Alameda Research CEO Caroline Ellison, former FTX co-founder Gary Wang, and former engineering lead Nishad Singh are identified as the insiders in the lawsuit.

Fenwick & West had previously been implicated in a similar class-action lawsuit in February, which claimed the firm assisted Bankman-Fried and his exchange in their operations.

Bankman Fried, facing charges including wire fraud, conspiracy, and money laundering, remains under house arrest and is slated for two criminal trials in October and March. Prosecutors also plan to re-add a charge related to illegal campaign finance.

In other related news, Sino Global Capital’s Liquid Value fund, led by Matthew Graham, pursued a $67.3 million claim against FTX.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Caroline Ellison

Class Action Lawsuit

Fenwick & West LLP

FTX

Gary Wang

Sam Bankman-Fried

Sino

Avatar of Harold

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

Former FTX Legal Counsel Faces Class Action Lawsuit Of Aiding Billion-Dollar Fraud

Key Points:

  • Fenwick & West faces a lawsuit alleging alleged multi-billion-dollar fraud by FTX.
  • Plaintiffs claim an implicit agreement to deceive clients; exchange insiders are involved.
  • Fenwick & West seeks legal support as the FTX fallout persists for its co-founder and industry.
In a recent development, Fenwick & West LLP, the law firm that previously served as FTX’s primary legal counsel, has been hit with a class action lawsuit, according to documents collected by Cointelegraph.
Former FTX Legal Counsel Faces Class Action Lawsuit Of Aiding Billion-Dollar Fraud

The suit, filed in California District Court by a group of FTX clients, accuses the firm of aiding FTX in a series of fraudulent activities amounting to billions of dollars.

The plaintiffs claim that Fenwick & West went beyond its typical legal role, creating “shadow entities” that facilitated illegal tactics employed by FTX’s co-founder, Sam Bankman-Fried (SBF), and other executives.

These shadow entities, including North Dimension and North Wireless Dimension, allegedly misappropriated client funds. The lawsuit contends that the law firm willingly turned a blind eye to false statements and misrepresentations made by the exchange to its clients.

This behavior, the plaintiffs argue, suggests an implicit agreement between the exchange, its affiliates, and Fenwick & West to deceive customers, alluring the law firm with financial gains from the alleged misconduct.

Bankman-Fried, former Alameda Research CEO Caroline Ellison, former FTX co-founder Gary Wang, and former engineering lead Nishad Singh are identified as the insiders in the lawsuit.

Fenwick & West had previously been implicated in a similar class-action lawsuit in February, which claimed the firm assisted Bankman-Fried and his exchange in their operations.

Bankman Fried, facing charges including wire fraud, conspiracy, and money laundering, remains under house arrest and is slated for two criminal trials in October and March. Prosecutors also plan to re-add a charge related to illegal campaign finance.

In other related news, Sino Global Capital’s Liquid Value fund, led by Matthew Graham, pursued a $67.3 million claim against FTX.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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