David Ortiz, Tom Brady and Gisele Bundchen are among several celebrities ensnared in a class action lawsuit tied to the collapse of major cryptocurrency exchange FTX.
The complaint, which names Ortiz, Brady and Bundchen among the defendants, alleges FTX deployed a deceptive “house of cards, a Ponzi scheme" — relying on a bevy of advertising pitches from athletes and celebrities over the last year — whereby FTX entities "shifted customer funds between their opaque affiliated entities."
Filed in U.S. District Court in Florida Tuesday, the complaint alleges that plaintiff Edwin Garrison of Oklahoma bought an unregistered security (in violation of state statutes) from FTX “with a sufficient amount of crypto assets to earn interest on his holdings.” FTX and former CEO Sam Bankman-Fried, who resigned last week, are reportedly under investigation after allegations of using customers' money to make transactions.
A big part of the alleged scheme involved bringing on “some of the biggest names in sports and entertainment” as the faces of FTX, according to the complaint. Appearing in ads on television and online, and posting about FTX over social media, makes the celebrities and athletes liable for investors' damages after the company collapsed, the complaint argues.
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“The FTX entities and defendants made numerous misrepresentations and omissions to plaintiff and class members about the deceptive FTX platform in order to induce confidence and to drive consumers to invest in what was ultimately a Ponzi scheme, misleading customers and prospective customers with the false impression that any cryptocurrency assets held on the deceptive FTX platform were safe and were not being invested in unregistered securities,” the complaint says.
In addition to the former Red Sox slugger and former Patriots quarterback, the complaint names “Shark Tank” investor Kevin O’Leary; Udonis Haslem of the Miami Heat; the Golden State Warriors and their star Stephen Curry; Shaquille O’Neal, the former NBA star and analyst; William Trevor Lawrence, the Jacksonville Jaguars quarterback; Los Angeles Angels star Shohei Ohtani; tennis pro Naomi Osaka; and comedian and “Curb Your Enthusiasm” creator Larry David. All of them were among the celebrities that FTX inked "ambassadorship" deals with in order to promote the exchange.
Read the full complaint and much more on this story from Boston Business Journal
