Texas is Investigating Tom Brady, Steph Curry and Other Celebs For Endorsing FTX.US
The Texas State Securities Board is probing payments received by Tom Brady, Stephen Curry and other celebrities to endorse FTX.US.
Regulators from the Lone Star State, commonly known as Texas, are investigating potential securities-law violations tied to the promotion and endorsement of FTX.US by famous athletes and celebrities.
According to Bloomberg, the Texas State Securities Board is probing Tampa Bay Buccaneers quarterback Tom Brady, Golden State Warriors point guard Stephen Curry, and other celebrities for receiving funds to endorse the FTX.US. In particular, the regulator is looking into whether they disclosed they were paid to make the endorsements, if they made public their earnings from such activities, and whether the information was available to retail traders.
However, Joe Rotunda, director of enforcement at the Texas State Securities Board, told Bloomberg that the investigations into the athletes and celebrities are not at the top of their list of priorities, given that the collapse of FTX is a more significant issue. Still, Mr Rotunda emphasised that they were ‘taking a close look at them.’
Celebrities Endorsing Investments Without Saying So, Constitute a Violation of Securities Laws
John Olson, a retired securities lawyer and former Georgetown University law professor, told Bloomberg that the celebrities are potentially liable in this situation.
He explained, ‘If a celebrity says, I’ve looked into this investment and it’s terrific and you ought to put your money into it — and if they haven’t looked into it, that could be a misrepresentation…they’re basically doing something that may very well violate state securities laws.’
Tom Brady and Stephen Curry Sued by Investor
In mid-November, FTX, its CEO Sam Bankman-Fried, Tom Brady and Stephen Curry were named as defendants in a lawsuit by an investor who claims that the exchange targeted ‘unsophisticated investors’ using celebrity endorsers.
The complaint was filed in a federal court in Miami by Oklahoma resident Edwin Garrison in a class action suit representing ‘thousands, if not millions, of consumers’ in the United States.
In addition to Tom Brady and Stephen Curry, Mr Garrison claims that FTX used Brady’s ex-wife Gisele Bundchen, and Shaquille O’Neal to promote the exchange and its unregistered securities, which resulted in the mishandling of user funds in a potential Ponzi Scheme.
‘FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments. As a result, American consumers collectively sustained over $11 billion [in damages],’ Mr Garrison said in the lawsuit.
~By John P. Njui~
