Celebs: We Shouldn't Be Liable for FTX Endorsements

The idea is 'nonsense,' Tom Brady, Larry David, others claim in court docs
By Arden Dier,  Newser Staff
Posted Apr 19, 2023 2:20 PM CDT
Celebs: We Shouldn't Be Liable for FTX Endorsements
The former FTX Arena logo is seen on Nov. 12 in Miami.   (AP Photo/Marta Lavandier, File)

After five months of trying, lawyers for a group of FTX investors who are suing celebrity endorsers say they've finally managed to serve the last of them: Shaquille O'Neal. "Plaintiffs in the billion $ FTX class action case just served @SHAQ outside his house," the Moskowitz Law Firm tweeted Sunday, per CNN. "His home video cameras recorded our service and we made it very clear that he is not to destroy or erase any of these security tapes, because they must be preserved for our lawsuit." Attorney Adam Moskowitz filed the proposed class-action suit in Miami against O'Neal and other celebrities, including Tom Brady, Gisele Bundchen, Steph Curry, and Larry David, accusing them of defrauding investors through ads that promoted the FTX cryptocurrency exchange and its yield-bearing accounts.

In a motion last week, Moskowitz asked a judge to approve the serving of legal notice via O'Neal's social media pages, saying the former basketball star had been "evading service in this action" over five months, which Moskowitz called "unprecedented, and frankly shocking," per CNN. Process servers showed up at his homes 20 times and spent days outside the Atlanta offices of Turner Network Television, where O'Neal works as an NBA analyst, per Fox News and Insider. According to the suit, FTX's yield-bearing accounts were unregistered securities that were illegally sold in the US, where federal securities laws require promoters to disclose any compensation received. Kim Kardashian was fined $1 million for failing to do so with her promotion of EthereumMax.

But celebrity endorsers deny promoting FTX's yield-bearing accounts in documents filed with the court on Friday, per Reuters. In asking the judge to dismiss the case, they argue they shouldn't be legally responsible for a product they endorsed. If that were the case, "actors in any brokerage ad would be liable for selling any security that an individual user later purchased using the brokerage's services," which is "nonsense," they say in their filing. Forbes refers to precedent suggesting a celebrity can be held liable if they knew their endorsement was misleading. O'Neal previously claimed he was "just a paid spokesperson for a commercial," per CNBC. Texas is separately investigating FTX's celebrity endorsers for possible violations of state securities laws, Bloomberg reported in November. (More FTX stories.)

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