FTX Endorsers Face Probe as Texas Investigates Stephen Curry and Tom Brady
Texas State Securities Boards has announced probing payments remitted to FTX endorsers Stephen Curry and Tom Brady alongside other celebs.
The lead enforcement director Joe Rotunda emphasized the scrutiny targets to understand the input of celebrities in promoting FTX warranting the payments.
Besides, Rotunda considers the investigation desires discovery of the disclosures made and how the payment details were accessible for review by investors.
Nevertheless, Rotunda clarified that the Texas Watchdog would consider the celebrity endorsements as an element of the comprehensive probe into the FTX Group’s collapse rather than a priority.
Class Action Suit Against FTX Endorsers
Besides the investigations initiated by the Texas watchdog, Curry and Brady were included in the class-action lawsuit filed on November 15 alongside former FTX chief Sam Bankman-Fried.
The suit alleges they were actively promoting, facilitating, participating, and controlling FTX Trading Ltd products and endorsing its affiliate West Realm Shires Services Inc.
The class action has dragged other celebrities, including the Golden State Warriors, Seinfeld Larry David co-creator, Udonis Haslem- NBA star, tennis star Naomi Osaka, and model Gisele Bündchen.
The petitioner alleges the celebrities teamed with Bankman-Fried to encourage unsophisticated investors to invest in FTX Group’s fraudulent scheme. The lawsuit accuses Curry, Brady, Shohei Ohtani, and David Ortiz, among others, of pushing unwitting retail consumers to adopt the deceptive FTX Group platforms.
The lawsuit initiated by Edwin Garrison portrays the celebrity endorsing presenting a deceptive product to unsuspecting consumers in a scheme that thrived from their support.
Endorsers Wrongdoing in Deceptive Schemes
The inclusion of big names in sports and entertainment alleges they hyped FTX, similar to FTX’s ex-chief Bankman-Fried, in raising funds and drawing investment from American consumers.
Past surveys indicate that almost half of the retail consumers embrace investment following the digital advice from celebrities and influencers who convey convincing tips using their social media accounts.
The convincing capability was cited in October this year when US Securities and Exchange Commission (SEC) imposed a $250000 fine on reality star Kim Kardashian alleging her role in touting for EMAX. The SEC held that Kardashian failed to disclose receiving an endorsement fee.
The TV star settled the fine without denying or admitting the wrongdoing. Besides, she expressed her commitment to suspend endorsing cryptos for three years.
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