‘Ponzi scheme’ lawsuit hits celebs including Tom Brady, Shaq and more big names

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A number of celebrities including Tom Brady and Steph Curry, along with the now-defunct cryptocurrency company FTX’s CEO Sam Bankman-Fried, are being hit with a class-action lawsuit for promoting a “Ponzi scheme” that cost the company’s clientele billions.

(Video Credit: Yahoo Finance)

The company imploded taking $8 billion with it and has now declared bankruptcy. It’s being claimed that the firms controlled by Sam Bankman-Fried and his associates were allegedly fraudulently intertwined, which, in turn, caused a liquidity crisis as users rushed to withdraw funds, according to the Daily Wire.

The lawsuit was filed on Tuesday in the Southern District of Florida on behalf of investor Edwin Garrison and others who lost massive amounts when the company tanked. The suit listed as defendants former FTX CEO Sam Bankman-Fried and celebrity ambassadors who allegedly participated in the “fraudulent scheme” against naive investors. The lawsuit seeks $11 billion in damages.

“The Deceptive FTX Platform maintained by the FTX Entities was truly a house of cards, a Ponzi scheme where the FTX Entities shuffled customer funds between their opaque affiliated entities, using new investor funds obtained through investments in the YBAs and loans to pay interest to the old ones and to attempt to maintain the appearance of liquidity,” the plaintiffs said in their complaint.

The celebrity ambassadors received equity stakes in the company. They are accused of neglecting to perform “any due diligence” before marketing the cryptocurrency to the public. In addition, they ostensibly failed to disclose “the nature, scope, and amount of compensation they personally received” in exchange for promoting FTX which constitutes “a violation of the anti-touting provisions of the federal securities laws.”

Among those being sued are Tampa Bay Buccaneers quarterback Tom Brady and supermodel ex-wife Gisele Bündchen. Celebrity investor Kevin O’Leary is also being sued after assuring the public that FTX was a reliable entity as recently as October.

Others who are about to be dragged into court include State Warriors point guard Steph Curry, retired baseball player David Ortiz, basketball legend Shaquille O’Neal, comedian Larry David, tennis sensation Naomi Osaka, pitcher Shohei Ohtani, basketball player Udonis Haslem, and Jacksonville Jaguars quarterback Trevor Lawrence. There could be others as well.

The lawsuit, citing “misrepresentations and omissions made and broadcast around the country through the television and Internet” by the defendants, is asserting that the celebrities were responsible for the “many billions of dollars” lost by the plaintiffs.

Bankman-Fried was worth $15 billion and was a huge Democratic donor. He’s now broke but can’t seem to shut up.

He posted on Twitter that his current goal is to “do right by customers” before satisfying investors. He claims his team was once “held as paragons of running an effective company.” Being featured “on the cover of every magazine” and garnering attention as the “darling” of Silicon Valley reportedly caused him to grow “overconfident and careless.”

The former crypto sensation is under supervision by police along with his colleagues in the Bahamas where his company is headquartered. The US wants him extradited back to the states for prosecution. Word has it that Bankman-Fried was prepping to flee to Dubai and therefore the police stepped in according to Cointelegraph.

Members of the House Financial Services Committee want a word with him and to hold hearings on the situation in December. They want to hear from Bankman-Fried and other executives involved in related entities, including competitor Binance, which almost purchased FTX.

Bankman-Fried donated $39 million to Democratic candidates and organizations during the midterm elections according to Open Secrets. He was unbelievably the nation’s sixth-largest individual midterm donor.

Open Secrets also reported that FTX Co-CEO Ryan Salame donated heavily to organizations.

Republished with permission from American Wire News Service.

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