Celebrities caught in the crosshairs of promoting FTX have been dealt another blow.
Daniel Friedberg, the former Chief Regulatory Officer of FTX and the Chief Compliance Officer of FTX US, moved to provide evidence that the promotional activity for FTX actually originated in Florida.
The evidence, which Friedberg provided “under penalty of perjury,” could undermine a defense argument from some of the defendants that the Miami court lacks jurisdiction and that the claims have no connection to Florida.
According to an amended complaint, filed in Florida District Court on May 11, the vice president of business development for FTX US, Avinash “Avi” Dabir, will be physically based in Miami in early 2021 and was responsible for managing brand ambassadors for FTX, including several high-profile defendants in the case such as former basketball player Shaquille O’Neal, comedian Larry David, retired NFL player Tom Brady, and Japanese lawn tennis star Naomi Osaka.
The class action, brought by Moskowitz on behalf of FTX investors, also targets the exchange’s founder Sam Bankman-Fried.
The plaintiffs in the class-action suit allege that FTX paid its brand ambassadors to illegally promote accounts that held interest in real securities, but that FTX did not register with the US Securities and Exchange Commission. (SEC) as required by law.
According to Florida state law, the plaintiffs argued, anyone who promotes unregistered securities is liable for any losses that customers suffer from holding investments, such as a drop in value. in a portfolio of various digital coins that have not performed well.
The lawsuit, which also includes the NBA basketball team Golden State Warriors, seeks billions of dollars in damages from all parties.
The defense case
Defense attorneys previously presented two main arguments in the case.
The first argument states that the lawsuit should be dismissed because their clients only made mostly favorable statements about FTX in their advertisements and never mentioned the unregistered securities accounts that the claim the plaintiffs resulted in losses.
The defendants argued that because the high-profile endorsers did not promote the specific product responsible for the damages, they could not be held liable for any losses.
The second argument applies to endorsers who do not live in Florida, including Curry, Osaka, and David, as well as the Warriors team based in Los Angeles.
These defendants maintain that none of their activities for FTX, such as contract signings or ad tapings, took place in Florida. As a result, they argued that the lawsuit should not be subject to Florida’s jurisdiction.
In a declaration filed on April 14, David stated that “I do not represent Florida for any FTX entity nor do I act in the State of Florida in connection with the Advertising Contract.”
The same filing states that “Larry David, Stephen Curry, and Naomi Osaka reside in California,” arguing that “these facts make it clear that there is no general jurisdiction over the Non-Resident Defendants. “
Ultimately it will be up to the courts to decide whether the connections are sufficient to establish jurisdiction and whether the FTX accounts sponsored by the defendants qualify as unregistered securities.