Fenwick & West asks judge to block updated FTX fraud lawsuit
Law firm Fenwick & West asked a Florida federal judge to reject FTX customers' request to update their class-action lawsuit. The customers claim the firm played a central role in FTX's fraud scheme.
The firm filed its response in Miami federal court, where the FTX cases are grouped together. Fenwick argued that the customers' updated complaint uses old information and comes too late. The firm said the new claims are misleading and have no chance of success.
FTX customers first sued Fenwick in 2023 after the exchange collapsed in November 2022. Earlier this month, the customers tried to add new claims to their case. They said new information shows Fenwick "played a key and crucial role" in how the fraud worked.
Fenwick disagreed. The firm told the court that the customers are recycling claims they previously made against another law firm, Sullivan & Cromwell. The customers dropped those claims after a bankruptcy examiner found no evidence that Sullivan & Cromwell knew about the misuse of customer funds.
There is simply no way to interpret Plaintiffs’ Motion as anything other than an attempt to stave off the Court from ruling on Fenwick’s motion to dismiss and to further delay this litigation,
The customers want to add state securities law claims related to FTT token and include material from FTX's bankruptcy and criminal cases. Fenwick called these additions late and "far-fetched."
Fenwick also disputed how the customers described testimony from former FTX executive Nishad Singh. The firm said Singh testified that Fenwick only advised on structuring founder loans and "never testified that he told Fenwick about the 'misuse of customer funds.'"
The law firm pointed to FTX bankruptcy developments, including planned creditor recoveries, as reasons why a separate class action recovery is not needed.
Fenwick asked the judge to deny the customers' request to update their lawsuit and instead rule on the firm's earlier request to dismiss the case entirely. The firm argued that the customers' updated claims do not fix problems with their original case and only serve to delay a court decision.
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