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Tom Brady, Gisele Bundchen and Larry David Face a Texas Investigation Over FTX Recommendations

The celebrity underwriters of failed crypto exchange FTX — a high-profile roster that includes Tom Brady, Steph Curry, and Larry David — are under investigation for possible security law violations by a Texas state regulator.

“We’re looking into them,” Joe Rotunda, director of enforcement at the Texas State Securities Board, told Bloomberg News Monday.

Rotunda told Bloomberg that celebrity endorsements were not top priority in its state investigation into the collapse of FTX, but were part of a broader investigation into potential violations.

The state regulator said it is investigating what payments the celebrities received for touting FTX, which went bankrupt earlier this month, and what kind of disclosures they made.

It’s unclear how FTX compensated its various celebrity endorsers, though in some cases it’s believed the company offered equity stakes in exchange for promoting its brand.

FTX founder Sam Bankman-Fried is seen above. The company’s famous underwriters are under investigation for possible safety violations by a Texas state regulator

Tom Brady and his ex-wife Gisele Bundchen are among the celebrities who endorsed FTX

Tom Brady and his ex-wife Gisele Bundchen are among the celebrities who endorsed FTX

Tom Brady and his ex-wife Gisele Bundchen are among the celebrities who endorsed FTX

NBA star Steph Curry

NBA star Steph Curry

Comedian Larry David

Comedian Larry David

NBA star Steph Curry and comedian Larry David also did commercials for the crypto exchange before it imploded earlier this month

In other recent developments in the collapse of FTX:

State-level investigations into securities violations are less high-profile than investigations by the U.S. Securities and Exchange Commission, but can result in hefty fines.

The SEC is reportedly investigating FTX and the company’s disgraced founder Sam Bankman-Fried, but it’s unclear if that investigation extends to the company’s celebrities.

“The SEC is not commenting on whether or not a possible investigation exists,” a spokesman for the agency told DailyMail.com.

The collapse of FTX, once one of the world’s largest cryptocurrency exchanges, has left an estimated 1 million creditors facing losses totaling billions of dollars.

Joe Rotunda, director of enforcement at the Texas State Securities Board

Joe Rotunda, director of enforcement at the Texas State Securities Board

Joe Rotunda, director of enforcement at the Texas State Securities Board

Recently valued at $32 billion, FTX has been backed by a star-studded list of celebrities, including some who took equity stakes in the company.

Last week, A-list celebrities who endorsed FTX were named in a class action lawsuit seeking $11 billion in damages.

The lawsuit filed in Florida is named Brady, Curry and David, as well as Gisele Bundchen, Shaquille O’Neal, Udonis Haslem, David Ortiz, Trevor Lawrence, Shohei Ohtani, Naomi Osaka and Kevin O’Leary

It claims the crypto giant’s founder, Sam Bankman-Fried, 30, and the celebrities he recruited to support the company are responsible for about $11 billion in losses for US consumers.

Many of the stars were “ambassadors” of the trading platform, while others appeared in prime-time commercials.

The lawsuit, brought by class action attorney Adam Moskowitz, alleges that they are collectively “responsible for the multibillion-dollar damages they have inflicted on Plaintiff.”

Tom Brady and now ex-wife Gisele Bundchen appeared in an FTX commercial last year.  They are named in a class action lawsuit alleging that the company's collapse cost consumers $11 billion

Tom Brady and now ex-wife Gisele Bundchen appeared in an FTX commercial last year.  They are named in a class action lawsuit alleging that the company's collapse cost consumers $11 billion

Tom Brady and now ex-wife Gisele Bundchen appeared in an FTX commercial last year. They are named in a class action lawsuit alleging that the company’s collapse cost consumers $11 billion

Steph Curry’s ad showed him telling viewers, “I’m not an expert and I don’t need to be, with FTX I have everything I need to buy, sell and trade crypto securely.”

Separately, lawyers for FTX on Tuesday said the company has suffered cyber-attacks and “substantial” assets are missing, after a lawsuit said the company has a total cash balance of $1.24 billion.

The cash balance on Sunday was “significantly higher” than previously thought, according to Monday’s filing by Edgar Mosley of Alvarez & Marshal, a consulting firm that advises FTX.

It includes about $400 million in accounts related to Alameda Research, the crypto trading company owned by FTX founder Sam Bankman-Fried, and $172 million at FTX’s Japanese arm.

FTX, which said on Saturday it has launched a strategic review of its global assets and is preparing to sell or reorganize some companies, had previously said it owes its 50 largest creditors nearly $3.1 billion.

Reuters has reported that Bankman-Fried secretly used $10 billion in client funds to support its trading business, and that at least $1 billion of those deposits had gone missing.

The details of FTX’s cash balances came ahead of a hearing in Delaware on FTX’s so-called first-day motions, which began Tuesday.

A lawyer for FTX said at the hearing that the company continues to be subject to cyber-attacks as bankruptcy begins, and that “substantial” assets are missing.

FTX has asked Judge John Dorsey to approve the first steps in its bankruptcy, including paying employees and critical suppliers, which will allow the company to continue operating through Chapter 11 bankruptcy proceedings.

FTX, led since filing for bankruptcy by new CEO John Ray, has accused Bankman-Fried of collaborating with Bahamian regulators to 'undermine' the US bankruptcy case

FTX, led since filing for bankruptcy by new CEO John Ray, has accused Bankman-Fried of collaborating with Bahamian regulators to 'undermine' the US bankruptcy case

FTX, led since filing for bankruptcy by new CEO John Ray, has accused Bankman-Fried of collaborating with Bahamian regulators to ‘undermine’ the US bankruptcy case

The company had also asked Dorsey to take over a separate Chapter 15 lawsuit filed last week in New York on behalf of FTX’s Bahamas unit by liquidators appointed by a court in the Bahamas. Such procedures are used by foreign companies to seek U.S. courts’ cooperation in cross-border bankruptcy cases.

Lawyers representing the Bahamian liquidators, who have previously questioned the validity of the US Chapter 11 proceeding and clashed with the team that determines which case should take precedence, agreed to that demand ahead of Tuesday’s hearing.

FTX, led since its bankruptcy filing by new CEO John Ray, has accused Bankman-Fried of collaborating with Bahamian regulators to “undermine” the US bankruptcy case and move assets abroad.

Bankman-Fried, FTX and the Bahamas liquidators did not immediately respond to requests for comment.

FTX is also seeking to indemnify unidentified individuals for actions they have taken and continue to take in connection with assets that represent a significant portion of the company’s estate, according to a filing filed Tuesday.

Sealed indemnification requests are uncommon at the beginning of a bankruptcy case. FTX said it communicated with US regulators and bankruptcy court officials, but did not name Bahamas regulators.

The company said keeping the details of its indemnification request confidential for now could help prevent “cyber attacks and other malicious activities.”

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