A legislation agency that beforehand supplied companies to the now-defunct cryptocurrency alternate FTX has refuted a class-action lawsuit introduced towards it, claiming that it assisted within the alternate’s alleged fraudulent actions.
According to a Sept. 21 court docket submitting, United States-based legislation agency Fenwick & West denies all accusations of misconduct associated to the supply of authorized companies throughout FTX operations:
“It’s black-letter legislation that an legal professional can’t be held accountable for conspiracy or aiding and abetting a consumer’s mistaken “‘so long as [his] conduct falls throughout the scope of the illustration of the consumer.’”
The plaintiffs contend that whereas Fenwick supplied common authorized companies throughout the bounds of the legislation, Sam Bankman-Fried allegedly misused the advice to advance his fraudulent activities.
They additional argued that Fenwick exceeded the norm in its service choices to FTX.
The plaintiffs allege that Fenwick may be held liable as a result of it purportedly “supplied companies to the FTX Group entities that went effectively past these a legislation agency ought to and normally does present,” the submitting states.
It additional claims that staff of Fenwick selected to depart from the agency and be part of FTX voluntarily.
Moreover, the submitting reiterated that Fenwick assisted in establishing companies utilized by Bankman-Fried in his fraud and suggested FTX on regulatory compliance within the evolving crypto panorama.
Nonetheless, Fenwick argued it mustn’t bear legal responsibility because it was not the only legislation agency representing FTX. It asserts that it performed a comparatively minor function in offering varied facets of authorized recommendation to the bankrupt alternate.
“If Plaintiffs’ allegations have been ample to state a declare towards Fenwick for conspiracy and aiding and-abetting legal responsibility, then any lawyer could possibly be hauled into court docket and compelled to reply for his consumer’s misconduct. That’s not the legislation.“
This comes after FTX debtors filed a lawsuit against former staff of the Hong Kong-incorporated firm Salameda, which was beforehand affiliated with the FTX group.
FTX initiated authorized motion to reclaim $157.3 million, alleging that the funds have been illicitly withdrawn shortly earlier than the alternate’s chapter submitting.