The cryptocurrency exchange FTX, once privately valued at $32 billion, filed for bankruptcy in November, and its former leader, Sam Bankman-Fried, has been arrested in the Bahamas and is facing criminal charges.
But Bankman-Fried isn’t the only person in hot water because of FTX; quarterback of the NFL’s Tampa Bay Buccaneers Tom Brady has recently turned to Big Law firm Latham & Watkins to fight lawsuits tied to his promotion of FTX.
Latham has confirmed that Andrew Clubok, the Washington-based leader of the firm’s securities litigation and professional liability practice, is representing Brady — as well as several other named defendants — in federal and state actions filed in Florida. In the past, Clubok represented Andreessen Horowitz co-founder Marc Andreessen in litigation concerning the crypto exchange platform Coinbase.
There have been several legal actions filed against individuals and outside parties since FTX initiated bankruptcy proceedings. Both federal and state lawsuits target Bankman-Fried and the FTX ambassadors, including Brady, his ex-wife (model Gisele Bundchen), and comedian Larry David.
A federal suit filed on November 15 on behalf of a proposed class of FTX customers alleges that FTX’s yield-bearing accounts (accounts that pay interest on crypto holdings) were unregistered securities — which violates both U.S. and Florida laws — and that the celebrities who endorsed them should therefore be held liable for damages to investors — damages in excess of $11 billion.
A separate state action in Florida names Brady, TV personality Kevin O’Leary of Shark Tank fame, and former Boston Red Sox star David Ortiz, as defendants. All three are Florida residents. This separate action is backed by Boies Schiller Flexner co-founder David Boies and partner Stephen Zack. They are seeking a declaratory judgment on whether FTX’s yield-bearing accounts are unregistered securities and if, therefore, the celebrities named in the action violated consumer laws by promoting them.
In 2021, Brady became an FTX ambassador and starred in a commercial in which he said he was “getting into crypto with FTX” and then asked viewers to join him.
In the past, Brady has retained Latham for legal matters tied to the formation of his film production company and to his TB12 trademark.