Then FTX filing for bankruptcy In a vaporized epic collapse According to the bankruptcy filing, Livieratos has at least $10 billion in assets, including all the funds it had on its platform.now he is the plaintiff Proposed class action lawsuit It seeks to hold Brady, his supermodel ex-wife, Gisele Bündchen, and nine other celebrity backers of FTX responsible for luring him into a very bad deal.
Until its collapse, FTX was one of the largest cryptocurrency exchanges in the world and one of the most aggressive in marketing digital currencies to the masses. The company partnered with his NBA team, patched Major League Baseball’s umpire uniforms, and acquired the naming rights to the Miami Heat arena. We ran flashy TV ads during NBA and NFL games. At last year’s Super Bowl, a celebrity featured his FTX as an exciting but safe investment place.
On Tuesday, the U.S. government brought both Criminal Prosecution and Civil Litigation It accused Sam Bankman-Fried, 30-year-old founder of FTX, of orchestrating one of the biggest financial frauds in US history. But the chances of his FTX customers like Livieratos getting refunded are slim. “We can’t recoup all our losses here,” said John J. Ray III, FTX’s new CEO. told a House committee.
As such, Livieratos and his fellow plaintiffs are attempting a different approach. Working with Adam Moskowitz, an attorney in Coral Gables, Fla., their case Attention from FTX executives to what Moskowitz sees as a larger circle of collusion involving some of the world’s most famous actors and athletes.
Moskowitz argues that FTX’s interest-bearing accounts are securities, requiring Brady and other promoters to disclose payment details from FTX. The complaint alleges that “they failed to disclose the nature, extent and amount of compensation they received personally in exchange for promotion.” Instead, it appeared in ads featuring moments like a rabid Brady calling everyone on his contact list, pitching crypto trading on FTX, and repeatedly asking, “Would you like to join?” did.
“We had some very wealthy people who we love telling us they had checked this and it was fine,” Moskowitz said in an interview. “Why don’t you take responsibility?”
Moskowitz’s lawsuit partially reflects the reality that wealthy celebrities are likely to leave behind large sums of money. 1 valid credit cardCelebrities may also tend to settle quickly to avoid the notoriety of lengthy trials.
But there are significant legal hurdles to holding promoters accountable.Just this month, a federal judge in California dismissed the lawsuit Reality TV star Kim Kardashian and boxer Floyd Mayweather Jr. accuse others of promoting an obscure crypto token known as EMAX as part of a scheme to artificially inflate the value of the coin. From an investor. agreed to pay millions of dollars in fines For the Securities and Exchange Commission, which did not disclose that it was paid to promote the tokens, Judge Michael W. Fitzgerald said that investors are partially responsible for what happens to their money. Said there was.
Fitzgerald wrote that the case “raises legitimate concerns over the ability of celebrities to easily persuade their millions of uninformed followers to purchase snake oil with unprecedented ease and reach.” But investors “should act rationally before making bets based on the zeitgeist of the moment.”
Moskowitz, who specializes in class action lawsuits, never intended to be a crypto watchdog. However, when Miami became the epicenter of cryptocurrency investment and referrals came from consumers who had lost money to various digital currency scams, he began scrutinizing the industry.
Moskowitz said he also brought a prominent lawyer, David Boise, to the case.
If FTX accounts were ruled to be securities, Moskowitz said celebrities would be held liable for investor losses under strict “blue sky” laws in many states that prohibit the promotion of unregistered securities. It claims that promoters could be held liable even if they didn’t understand what they were doing. they supported.
FTX and most of the crypto industry have argued that digital assets are not securities. However, citing a criterion that emerged from a 1946 Supreme Court case, Moskovitz The complaint alleges that it does, stating that it fits the definition of public investment as an investor profiting from the efforts of others.
Proving that the interest-bearing accounts offered by FTX were in fact unregistered securities will not be trivial, given that the issue remains controversial among regulators. There is none. Moskowitz filed a separate state class action lawsuit in Florida against Brady and two of his others, and Judge He asked Michael Hanzman to rule on the matter.
Even if a judge ruled that FTX interest-bearing accounts were not securities, Moskowitz said he would argue that celebrities should be held liable under Florida’s strict consumer protection laws. increase. trade or commerce. ”
All defendants in the Moskowitz federal class action—from tennis champion Naomi Osaka to NBA star Stephen Curry to entrepreneur Kevin “Mr. did. In a video posted on his website a month before FTX filed for bankruptcy, O’Leary said he had complete trust in the exchange. . “If there’s one place he can stay out of trouble, it’s FTX,” he said.
Moskowitz argues that such comments make his argument very convincing.
“O’Leary is on Shark Tank, so people trust him,” said Moskowitz. “Who doesn’t like ‘Shark Tank’?”
Spokespeople for Brady, Bundchen, Osaka, Curry and O’Leary did not respond to requests for comment.A lawyer for Brady did not provide comment for this story.
British cryptocurrency investor and plaintiff in the lawsuit, 42-year-old Sunil Kavli, said O’Leary’s endorsements amounted to seven figures, including funds he intended to use for two transactions. amount was deposited into your FTX account. Education of a one-year-old son. Kavli says all that money is gone and he’s stuck with a number of other funds in FTX’s bankruptcy proceedings. Kavuri said O’Leary would be well aware of the legal limits to unfair promotions because he has run a successful SEC-regulated investment fund.
In an interview on CNBC’s “Squawk Box” last week, O’Leary said He was paid just under $15 million as a spokesperson for FTX, much of which is gone. (He says he invested most of his money in cryptocurrencies through exchanges, but prices have since plummeted. About $4 million in taxes and agent fees, and $1 million in his FTX Used for stocks, which have no current value.)
Asked about the August 2021 statement that FTX meets his own “rigorous compliance standards,” O’Leary said he and other institutional investors “rely on each other’s due diligence.” ‘ said.
Now, “we all look like idiots,” he said.
Moskowitz’s pursuit of A-listers was in fact Dallas Mavericks owner Mark Cuban, O’Leary’s “Shark Tank” co-star, who promoted Voyager, a now-bankrupt cryptocurrency lender. It began with another lawsuit against
In October 2021, Cuban held a press conference with Voyager co-founder Steve Ehrlich to announce a five-year partnership with Mavericks. ”
in widespread circulation youtube video, Cuban gave $100 in Bitcoin to anyone who downloaded the Voyager app and made a transaction of $100 or more. “I think Voyager will become a leader among sports and crypto fans across the country,” Cuban said. American Airlines, where the Mavericks play in his arena, soon saw advertisements for Voyager.
But then, as cryptocurrency prices crashed and Voyager filed for bankruptcy, many customers lost access to the money they thought they could easily get back. In August, Moskowitz and Boies filed a class action lawsuit in federal court in Miami, arguing that Cuban support was a major factor in creating that false sense of security.
Those who filed lawsuits are waiting for a judge to rule on Cuban’s motion to dismiss. Moskowitz, meanwhile, has collected depositions from several NBA veterans, including Mavericks general manager Don Nelson, to show his deep involvement with Cuban’s Voyager.
In a brief email to the Post, Cuban said that as a Mavericks sponsor, Voyager is “supported by the team like any other sponsor.” Stephen A. Best, an attorney for Cuban and the Mavericks, said Moskowitz did not prove that Cuban’s remarks prompted anyone to make a deal with Voyager.
“Mark Cuban and the comments he made were part of a sponsorship announcement that Voyager has become the official sponsor of the Dallas Mavericks,” said Best, adding: In this case, by the named plaintiff. ”
Similar allegations are made in the FTX lawsuit against defendants including basketball stars Shaquille O’Neal and Udonis Haslem, quarterback Trevor Lawrence, and baseball players David Ortiz and Shohei Ohtani. Officials declined to comment. Representatives for O’Neal, Haslem, Lawrence and Ohtani did not respond to requests for comment.
In 1990, actor Lloyd Bridges was at a Detroit-based firm where executives were sentenced to prison for mortgage fraud. Settled a lawsuit for an undisclosed amount after creating a commercial promoting a certain AJ Obie & Associates.
Jeff Greenbaum, an advertising attorney in New York, said celebrity supporters can be held liable for false advertising allegations, but the Federal Trade Commission is usually the primary enforcer. It’s not very common for individual plaintiffs to sue supporters, he said, adding that courts have generally been hesitant to bind spokespeople. Responsibility when investment fails.
For FTX, “What we’re all looking very closely at is what standards the courts will apply,” Greenbaum said. “In other words, what level of involvement does a celebrity need? What level of knowledge does a celebrity need to be responsible?
To be held liable under Florida’s consumer protection law, Moskowitz must produce evidence that the public figure knew FTX could be deceiving investors. said Florida attorney Daniel Lustig, which is difficult to prove. He said no one, including Brady, most likely did not expect FTX to collapse.
Moskowitz acknowledges the difficulty of the case. But he says celebrities neglected their responsibility to fans who lost a lot of money.
After the bankruptcy of FTX, the Riviera Tos removed a photo of Brady that had been hanging on its wall for years.
“I can’t see anymore,” he said.