A federal judge dismissed most claims against high-profile endorsers of Sam Bankman-Fried's FTX, including athletes and celebrities, citing insufficient proof of their awareness of fraudulent actions. The judge, K. Michael Moore, found that plaintiffs didnât establish causation or plausibly demonstrate defendants' knowledge of any wrongful acts. Although these entertainers may have acted negligently or recklessly, it was unclear they had intent to deceive investors. However, the case remains open as plaintiffs can amend their complaint and pursue state securities law violations against the defendants.
The plaintiffs failed to adequately plead causation and plausibly argue Defendants' knowledge of FTX fraud, as stated by Judge K. Michael Moore.
The celebrities may have been uninformed, negligent, or even reckless, but itâs unclear they had knowledge of FTX's fraud.
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