Former FTX Law Firm Denies Role in Collapse; Challenges Allegations as ‘Fatally Deficient’ in Court Motion 

San Francisco-based instrumentality steadfast Fenwick & West LLP is denying allegations from FTX laminitis Sam Bankman-Fried that the steadfast provided ineligible proposal enabling the alleged fraud that led to the cryptocurrency exchange’s collapse. In a caller tribunal filing, Fenwick & West asserts the allegations are “fatally deficient” and should beryllium dismissed with prejudice.

Law Firm Challenges FTX Founder’s Claims

In a motion to dismiss filed Wednesday successful Florida national court, Fenwick & West argues the ailment fails to authorities viable claims for conspiracy, aiding and abetting fraud, negligence, oregon racketeering. The steadfast asserts the allegations improperly question to clasp it liable based connected providing regular ineligible services to FTX wrong the scope of representation. Fenwick & West claims the ailment does not amusement it acted extracurricular its relation arsenic ineligible counsel, an indispensable constituent for the asserted causes of enactment against a instrumentality firm.

“A lawyer’s practice of a lawsuit and cognition of their employees does not marque them omniscient arsenic to the client’s interior workings,” the question insists.

Additionally, Fenwick & West contends the ailment lacks plausible allegations the steadfast had existent cognition of the alleged fraud by FTX laminitis Sam Bankman-Fried and different insiders. The steadfast states the claims neglect to specify the purported misconduct with capable particularity, arsenic required for fraud-based cases nether tribunal procedural rules. Fenwick & West further reason that the ailment does not found the steadfast substantially assisted the alleged fraud oregon proximately caused claimed damages.

“Each of these claims against Fenwick is fatally deficient, and the Complaint should beryllium dismissed successful its entirety,” Fenwick & West wrote.

The instrumentality steadfast asserts the ailment is deficient successful pleading a assertion nether the Racketeer Influenced and Corrupt Organizations Act, lacking allegations Fenwick & West agreed to enactment successful a transgression endeavor oregon that specified an endeavor adjacent existed. Fenwick & West support the alleged endeavor comprises lone FTX and employees acting wrong their roles, which caller precedent indicates cannot prolong a RICO claim.

In contrast, attorneys for Bankman-Fried claimed successful a abstracted filing helium was assured his actions complied with the law, based connected ineligible advice. The lawyers said Bankman-Fried understood lawyers had reviewed and approved FTX policies, refuting accusations helium intended to defraud.

What bash you deliberation astir Fenwick & West’s tribunal motion? Share your thoughts and opinions astir this taxable successful the comments conception below.