Jessy Edwards  |  June 22, 2021

Category: Legal News

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Panel of judges rule that the decision to dismiss securities class action lawsuit against Rapper T.I., shown here on stage at One Music Festival 2018, and entertainment executive Ryan Felton was right.
(Photo Credit: Jamie Lamor Thompson/Shutterstock)

No, you can’t make the securities laws “Whatever You Like,” a panel of appeals court judges ruled in their opinion on a case against rapper T.I. and his cryptocurrency offering, FLiK Tokens.

On Monday, three judges from the 11th Circuit Court of Appeals published an opinion peppered with the rapper’s song titles and ruling in favor of T.I. and entertainment executive Ryan Felton in a class action case accusing the pair of securities law violations. 

Plaintiff Kenneth Fedance filed the class action lawsuit in May 2019 against Clifford Joseph “T.I.” Harris Jr. and Felton, alleging the pair dealt in unregistered securities when they sold him and other investors FLiK Tokens.

Fedance alleged that Felton and T.I. pushed the tokens heavily, and promised giant returns on investment. However, he alleges, they were simply tricking their customers into paying for a security which is now worth nothing.

In 2020, a district court threw out the claims, siding with T.I. and Felton, who argued the statute of limitations had run out on the plaintiff’s claims. They argued, under law, he should have filed within a year of buying FLiK Tokens in August 2017.

Fedance appealed, saying that due to “fraudulent concealment” by the rapper and his business partner, he didn’t realize he had bought a security until a court ruled FLiK Token was a security in April 2019. 

However, on Monday, the Court of Appeals panel ruled that Fedance had all the relevant information before April 2019 to work out that he had bought a security, Law360 reported.

“Fedance alleges that neither he nor putative class members could bring claims for the sale of unregistered securities within the one-year limitations period because Felton and Harris fraudulently concealed the facts necessary to reach the legal conclusion that FLiK Tokens were securities,” the panel wrote.

“But you cannot make fraudulent concealment mean ‘Whatever You Like,'” they added, in reference to T.I.’s hit single.

They also said that Fedance did not identify any concealed facts, Law360 reported.

“Felton and Harris allegedly fooled Fedance and other token purchasers into thinking that FLiK would be wildly successful, but they did not fool those purchasers into thinking that they were buying FLiK Tokens as anything but an investment.” 

Despite siding with the cryptocurrency sellers in this case, the panel indicated that an extension of the statute of limitations — or “equitable tolling” — could have been available if the cause of action was in fact fraudulently concealed. 

Meanwhile, the rise in use of cryptocurrency is being closely followed by a rise in cryptocurrency class action lawsuits. 

Earlier this month, cryptocurrency exchange Coinbase was accused of randomly locking users out of their accounts for months at a time, causing them to lose funds. 

The nationwide class action lawsuit was filed in California on June 4, with a group of Coinbase users alleging the company locked them out of their accounts for no reason, stopping them from trading, investing or selling their funds, and even deleted accounts completely.

What do you think of the Court of Appeals’ decision in this case? Let us know in the comments! 

Fedance is represented by Alexander Loftus of Loftus & Eisenberg Ltd.

The T.I. Cryptocurrency Class Action Lawsuit is Kenneth Fedance v. Clifford Harris Jr. et al., Case No. 20-12222, in the U.S. Court of Appeals for the Eleventh Circuit.


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