Former customers of the collapsed crypto exchange FTX are filing an amended complaint against the law firm Fenwick & West, accusing it of playing a significant role in the schemes that led to an alleged multibillion-dollar fraud.
Allegations Against Fenwick & West
In a proposed amended complaint filed on August 11, plaintiffs claim that new evidence from Sam Bankman-Fried's criminal trial and FTX's ongoing bankruptcy proceedings show the Silicon Valley firm was 'deeply involved' in the structures and practices that enabled alleged fraud.
Support from Former FTX Employees
According to the filing, Fenwick provided 'substantial assistance' to FTX by crafting corporate arrangements that facilitated the diversion of customer funds. The plaintiffs also allege that the firm represented related entities, including Alameda Research and its subsidiary North Dimension, despite 'obvious conflicts of interest' and a lack of safeguards to protect customer assets. Testimony from former FTX executives supports these claims; Nishad Singh reportedly testified that he informed Fenwick about improper loans, false statements, and misuse of customer funds.
Conclusion and Next Steps
The amended complaint adds two new claims under Florida and California securities laws, asserting that Fenwick helped design and promote unregistered securities sales, including FTX's native token (FTT) and other financial instruments. Bankman-Fried had previously testified that Fenwick oversaw critical legal work for North Dimension accounts handling customer deposits.
Currently, Fenwick denies any wrongdoing, arguing its actions fell within the scope of standard legal representation and that it cannot be held liable for a client's misconduct.
