Tom Brady, Stephen Curry, Larry David probed over FTX endorsements


Share post:

Celebrities who endorsed the now-bankrupt cryptocurrency trading platform FTX — including Tom Brady, Stephen Curry, and Larry David — may soon learn not to mess with Texas state regulators.

Joe Rotunda, the director of enforcement at the Texas State Securities Board, told Bloomberg News on Monday that his agency is investigating payments made to star athletes and entertainers who pitched the failed crypto exchange run by disgraced founder Sam Bankman-Fried.

Rotunda is examining the extent to which these celebrity endorsers disclosed their financial stakes in FTX as well as how accessible the disclosures were to retail investors.

“We are taking a close look at them,” Rotunda told Bloomberg News on Monday.

Rotunda added that celebrity endorsements of FTX are not the main priority of the investigation. Rather, they’re one of the elements that are being looked at.

Tom Brady, the Super Bowl-winning quarterback, is reported to have bought an equity stake in FTX.
Getty Images

Rotunda said that FTX is also a focus of the investigation. Texas officials are said to be in contact with regulators in other states who are also looking into potential securities violations by FTX and FTX-linked entities.

Regulators have not shied away from going after celebrity endorsers of cryptocurrency. Last month, reality television star Kim Kardashian agreed to pay a $1.26 million fine to settle charges brought by the Securities and Exchange Commission.

The SEC alleged that Kardashian promoted a cryptocurrency initiative on her Instagram feed without disclosing to her tens of millions of followers that she was a paid celebrity endorser. The reality TV star did not deny or admit to the charges.

Kardashian and former boxer Floyd Mayweather were named in a lawsuit earlier this year alleging they misled their online followers into buying cryptocurrency as part of a “pump and dump” scheme. Former Boston Celtics star Paul Pierce was also named in the suit.

Last week, an Oklahoma resident who opened an FTX yield-bearing account filed a class action lawsuit naming Brady, Curry, David, Brady’s supermodel ex-wife Gisele Bündchen, Shaquille O’Neal, David Ortiz, Naomi Osaka, Trevor Lawrence, Kevin O’Leary, and Udonis Haslem.

Steph Curry, the Golden State Warriors star, has been named in a lawsuit filed by an investor who bought a yield-bearing account with FTX.
Steph Curry, the Golden State Warriors star, has been named in a lawsuit filed by an investor who bought a yield-bearing account with FTX.
NBAE via Getty Images

Brady and Bündchen, who also appeared in commercials touting FTX, bought equity stakes in the company, which was forced to file for bankruptcy protection after it was learned that customer deposits were being used to make risky bets through a subsidiary research firm.

David, the “Seinfeld” co-creator and star of HBO’s “Curb Your Enthusiasm,” appeared in a Super Bowl commercial for FTX in which he is seen expressing skepticism about investing in cryptocurrency.

The sports stars and celebrities were accused in the lawsuit of touting a “deceptive” platform that preyed on vulnerable retail investors.

The proposed class action filed last week also alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the US.

Larry David, the co-creator of "Seinfeld" and star of HBO's "Curb Your Enthusiasm," filmed a Super Bowl commercial touting FTX.
Larry David, the co-creator of “Seinfeld” and star of HBO’s “Curb Your Enthusiasm,” filmed a Super Bowl commercial touting FTX.
FilmMagic for HBO

FTX was “ultimately a Ponzi scheme, misleading customers and prospective customers with the false impression that any cryptocurrency assets held on the Deceptive FTX Platform were safe and were not being invested in unregistered securities,” the lawsuit states.

Bankman-Fried is also under intense scrutiny by federal regulators. He was named in several lawsuits, including one by a Canadian resident of Hong Kong who alleges he lost $750,000 as a result of opening an FTX yield-bearing account.

The lawsuit filed by Elliott Lam also names the Golden State Warriors basketball team, whose roster includes Curry.

FTX had entered into a number of sports-related deals, some of which are crumbling.

The NBA’s Miami Heat and Miami-Dade County announced earlier this month that they would move to terminate their relationship with FTX, and will rename the team’s arena.

Sources familiar with the matter told Bloomberg News that US and Bahamian authorities have been discussing possibly extraditing the 30-year-old Bankman-Fried, whose company is based in the Bahamas.

Bankman-Fried is said to be cooperating with investigators in the Bahamas. It is likely that he would be brought back to the US for questioning, though it is premature to discuss any possible criminal charges, according to Bloomberg.

The collapse of FTX, which was once worth as much as $32 billion, is being compared to Enron and the Bernie Madoff scandals.
The collapse of FTX, which was once worth as much as $32 billion, is being compared to Enron and the Bernie Madoff scandals.
dpa/picture alliance via Getty I

Customers fled the exchange over fears about whether FTX had sufficient capital, and it agreed to sell itself to rival crypto exchange Binance. But the deal fell through while Binance’s due diligence on FTX’s balance sheet was still pending.

FTX had valued its assets between $10 billion to $50 billion, and listed more than 130 affiliated companies around the world, according to its bankruptcy filing.

With Post wires

Source link

Related articles

Bettor up! Queens pol submits bill to convert Mets lots into casino

New Yorkers could be singing take me out to the casino if a Queens pol has his...

Waldorf Astoria’s delay-plagued reopening pushed back to 2025: sources

Manhattan’s iconic Waldorf Astoria Hotel, which has been “temporarily” closed since February 2017, will not reopen until...

GM to stop making Chevy Camaro car after sales slump

The Chevrolet Camaro, for decades the dream car of many teenage American males, is going out of...

Bill Gates says AI-powered ChatGPT ‘as fundamental as PC’

Bill Gates likened the development of artificial intelligence-powered ChatGPT to the advent of the personal computer and...