Law firm Fenwick & West has denied charges from an updated class action lawsuit claiming it was central to the fraud and ultimate collapse of the crypto exchange.
Earlier this month, FTX users sought an update to the lawsuit against Fenwick, originally filed in 2023. New information from bankruptcy and criminal cases shared evidence that the law firm “played an important role in playing the most important aspect of how FTX fraud was carried out.”
Fenwick told a Federal Justice Florida judge in Monday’s filing that the court should reject a request for FTX users to renew the case against the company, arguing their theory that the exchange would be “as simple as flawed.”
“Fenwick is not responsible for supporting and believing fraud that he knew nothing based solely on allegations that Fenwick did what the law firm does every day. He provides clients with routine, legal legal services.”
The lawsuit uses “old information,” Fenwick says.
The new accusations against Fenwick stem from a large multi-district class action lawsuit filed by FTX users after the collapse of FTX users in late 2022.
The group also filed claims against celebrities and businesses that they allegedly worked with FTX, including law firms Sullivan & Cromwell.
“The proposed updated complaints are based on old information available over the years, but are misleading and in vain.”
A highlighted excerpt from Fenwick’s claim that FTX users are trying to delay the courts. sauce: CourtListener
Fenwick also noted allegations that they “mirrored” the company they “very aggressively” used against Sullivan and Cromwell before the group dismissed the lawsuit after reports concluded that Sullivan was unaware of the FTX fraud.
“They add that the same allegations do not provide a reliable reason for Fenwick to survive,” he added.
“False Characterization” of FTX Executive’s claims
Fenwick also testified that FTX chief engineer Nishad Singh was hiding FENWICK in the criminal trial of FTX co-founder Sam Bankman-Fried, and that he was hiding “misuse of client funds” and “inappropriate loans.”
“Singh testified that Fenwick simply advised on how to build founder loans, a common tool for closely held companies like FTX,” the company said.
At Bankman-Fried’s trial, “dozens of witnesses” added that the fraud at FTX was “taken away from the knowledge of FTX’s internal lawyers, other FTX employees, executives, directors, longtime FTX accountants, and other external law firms and experts who worked closely with FTX.
Fenwick rejects new securities claims
Meanwhile, Fenwick said the new claims in the complaint that it helped launch and promote the FTX token (FTT) in violation of Florida and California securities laws were overstated and frivolous, and “should have been argued years or so before the end of the year, if not months.”
“These new claims are too late,” he wrote. “If the plaintiffs really thought there was a request for state securities against Fenwick, they had every opportunity to claim them first.”
After the judge rejected everything except the state securities law claims against celebrities allegedly promoting FTX, the group accused of adding two new claims.
“This was an 11-hour attempt to avoid a court decision on a celebrity defendant’s motion to dismiss, reworking the lawyer as a ‘promoter’,” Fenwick argued. “But this theory doesn’t go anywhere either.”
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