A regulation agency that when supplied providers to FTX defended itself and tried to dismiss a category motion go well with by a authorized submitting on Sept. 22.
The related lawsuit started in August. There, clients tried to argue that Fenwick & West was partly answerable for alleged fraudulent exercise at FTX.
In its present submitting, Fenwick defended itself on numerous grounds. It argued that plaintiffs didn’t allege that Fenwick acted exterior of the scope of illustration.
Moreover, Fenwick mentioned that plaintiffs failed to point out that Fenwick knew about or immediately assisted FTX’s fraud, and failed to point out that or that Fenwick participated in a Racketeer Influenced and Corrupt Organizations (RICO) enterprise.
Every of these factors is crucial to clients’ authorized claims. Accordingly, Fenwick goals to have the category motion go well with dismissed by its newest authorized submitting.
Newest submitting discusses finer factors
Fenwick additionally addressed different factors. The regulation agency famous that plaintiffs didn’t argue that it “orchestrated” FTX’s fraud. As an alternative, plaintiffs repeatedly affirmed of their declare that former FTX CEO Sam Bankman-Fried was chargeable for that fraud.
Fenwick asserted that it represented solely FTX, not Bankman-Fried or another firm insider. It went on to notice that it was simply certainly one of many regulation corporations that represented FTX and in any other case described its providers as “routine” all through its submitting.
The regulation agency additionally responded to allegations that it supplied sure providers that went “properly past” the providers that regulation corporations usually present. Fenwick mentioned that these controversial providers concerned using legal professionals who freely left Fenwick to hitch FTX, creating corporations by which Bankman-Fried later dedicated fraud, and advising FTX on regulatory compliance as associated to cryptocurrency buying and selling.
Fenwick famous that the plaintiffs don’t declare that these providers had been fallacious or legally actionable in their very own proper. As an alternative, it mentioned that the plaintiffs argued that Fenwick is liable as a result of it supplied authorized providers whereas it knew of FTX’s fraud.
Fenwick added that plaintiffs based mostly sure arguments on inferences concerning the regulation agency’s monitoring and diligence insurance policies, mixed with the truth that two Fenwick workers — Daniel Friedberg and Can Solar — left the regulation agency to work with FTX. To that finish, clients of their authentic lawsuit drew consideration to a 2021 e mail wherein Friedberg acknowledged cash-sharing between FTX and its sister agency Alameda Analysis.
As with numerous different factors, Fenwick denied that the existence of this e mail plausibly exhibits that it was conscious of alleged wrongdoing at FTX.
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