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FTX lawsuit overview:
- Who: FTX Trading Ltd., Alameda Research LLC, Alameda Research Ltd., North Dimension Inc., Cottonwood Grove Ltd. and West Realm Shires Inc. have sued Samuel Bankman-Fried, Zixiao “Gary” Wang, Nishad Singh and Caroline Ellison, all former FTX executives.
- Why: The lawsuit claims the executives took unlawful transfers of hundreds of millions of dollars and misappropriated funds.
- Where: The lawsuit took place in federal bankruptcy court in Delaware.
FTX Trading Ltd., Alameda Research LLC, Alameda Research Ltd., North Dimension Inc., Cottonwood Grove Ltd. and West Realm Shires Inc. have filed a lawsuit against FTX executives claiming that they took unlawful transfers of hundreds of millions of dollars and misappropriated funds leading to the FTX Group collapsing.
The lawsuit says that Samuel Bankman-Fried, Zixiao “Gary” Wang, Nishad Singh and Caroline Ellison had “virtually limitless power to direct transfers of fiat currency and cryptocurrency and to hire and fire employees, with no effective oversight and no checks on how they exercised those broad powers,” according to the FTX Bankman-Fried lawsuit.
The lawsuit aims at recovering whatever money or property can be recovered that was illegally transferred to the executives before the FTX bankruptcy filing on Nov. 11 and Nov. 12 of 2022 in federal bankruptcy court in Delaware.
“They commingled and misused corporate and customer funds, lied to third parties about the business of the FTX Group, joked internally about their tendency to lose track of millions of dollars in assets and impulsively bought companies with misappropriated funds without conducting any due diligence,” the FTX Bankman-Fried lawsuit claims. “Their misconduct caused the FTX Group to collapse, to the great detriment of customers, creditors and shareholders.”
Defendants received over a billion dollars in fraudulent transfers, FTX Bankman-Fried lawsuit claims
Fraudulent transfers worth over a billion dollars went to the defendants between February 2020 and November 2022, according to the FTX lawsuit.
Hall of Fame basketball player Shaquille O’Neal was served in April after eluding service for awhile on a class action lawsuit against FTX’s Bankman-Fried and several celebrity endorsers of FTX.
Were you invested in FTX and lost money? Let us know in the comments.
The debtors are represented by Adam G. Landis, Matthew B. McGuire, Kimberly A. Brown and Matthew R. Pierce of Landis, Rath and Cobb LLP along with Steven L. Holley, Andrew G. Dietderich, Brian D. Glueckstein, Christopher J. Dunne and Jacob M. Croke of Sullivan and Cromwell LLP.
The FTX lawsuit is FTX Trading Ltd., et al. v. Bankman-Fried, et al., Case No. 23-50448-JTD, in the U.S. Bankruptcy Court for the District of Delaware.
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