FTX customers have initiated an update to their lawsuit against law firm Fenwick & West, accusing it of facilitating fraudulent activities amid the FTX bankruptcy case.
Updated Lawsuit Against Fenwick & West
FTX customers have amended their complaint against law firm Fenwick & West, alleging it played a central role in concealing fraud. The amended filing includes new evidence emerging from Sam Bankman-Fried’s criminal trial and ongoing FTX bankruptcy proceedings.
Facts from FTX Bankruptcy Proceedings
The amended complaint includes testimony from former FTX executives, including co-founder Zixiao 'Gary' Wang, ex-Alameda CEO Caroline Ellison, and former engineering director Nishad Singh, indicating that Fenwick allegedly advised on methods to conceal the misuse of customer funds. Additionally, a court-appointed bankruptcy examiner reviewed over 200,000 internal documents, concluding that the law firm was 'deeply intertwined' with FTX Group operations.
New Securities Claims Added
Furthermore, the update adds two state securities law claims accusing Fenwick of designing, promoting, and facilitating the sale of unregistered securities tied to FTX products. Plaintiffs argue that the law firm played an active role in marketing and structuring those offerings.
The amended lawsuit carries significant implications for the liability of professional service providers, including law firms. If proven, these new allegations could set a precedent for future cases involving financial fraud.
