From Tom Brady to Shaq, FTX's Celebrity Promoters May Be On the Hook for Damages
“We are taking a close look at them” as part of the regulator’s broader probe into FTX’s failure, he said.
Brady and Bundchen joined the company’s $20 million ad campaign in 2021 and made a commercial — “FTX. You In?” — showing them urging acquaintances to join up. They also took equity stakes in FTX Trading Ltd., according to the Miami complaint.
O’Leary, of ABC’s Shark Tank and CNBC’s Money Court, was both an investor in and a paid spokesman for FTX. He and tennis star Naomi Osaka, who has also been sued, both promoted FTX’s interest-bearing accounts, in which Elliott Lam, a Canadian living in Hong Kong, invested and lost $750,000, according to his proposed class action lawsuit in San Francisco.
David’s comic persona and quirky role in the Super Bowl ad may prove oblique enough to beat the litigation, legal experts said.
The commercial featured him as a skeptic of other inventions, such as the Sony Walkman and, earlier, the wheel. “Don’t be like Larry,” the ad cautioned. It made FTX one of the most retweeted brands during the game, lawyers for the investor in the Miami complaint said.
But the only allegation about the comedian “is that Larry David appeared in a commercial,” said attorney Brian Levin. “I don’t see how that, in and of itself, would give rise to liability.”
Stark, the former SEC internet enforcement chief, finds “the irony” that David played characters in the ad who keep saying no — including to FTX — “glaring.”
“There’s enough celebrities to choose from,” he said. “I’d probably leave him off, so as not to muddy the waters.”
As the impact of FTX’s fall unfolds, more lawsuits are expected to roll in against Bankman-Fried and celebrity endorsers from the US and elsewhere, including South Korea, Singapore and Japan, where many of the investors are based, said attorney Demetri Bezaintes.
The law firm that filed the Miami complaint filed another proposed class action suit in South Florida a week later.
This isn’t the first time celebrities have found themselves in hot water over crypto promotions. Kim Kardashian and Floyd Mayweather Jr. were sued in Los Angeles over their promotion of the EthereumMax token. In a tentative ruling on Nov. 7, the judge dismissed the lawsuit, saying the defendants hadn’t promoted the tokens as a security.
Kardashian agreed last month to pay $1.3 million, and not to tout digital assets for three years, to settle SEC claims that she broke the rules by promoting the token without disclosing that she was being paid.
Mayweather and music producer DJ Khaled were accused of violating securities laws by failing to disclose payments they received to promote initial coin offerings on social media in 2018.
Both settled with the SEC, with Mayweather paying more than $600,000 and Khaled dropping more than $150,000.
(Photo of Tom Brady: Bloomberg)
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