Athletes Tom Brady and David Ortiz Sued by Cryptocurrency Investors
by FARUK IMAMOVIC | VIEW 347
Cryptocurrency investors have filed a lawsuit in Florida against Tom Brady and David Ortiz. The lawsuit accuses the two athletes of duping investors when they endorsed the now bankrupt digital money platform Ftx. The lawsuit also names former FTX executives.
This litigation joins a similar federal lawsuit against several athletes who endorsed FTX, including Brady and Ortiz, and another one against Mark Cuban and the Dallas Mavericks. These lawsuits raise the question of what responsibility celebrity endorsers have for promoting a financial product that fails.
Could Brady and his peers be held liable for losses as the cryptocurrency market appears to collapse?
Federal judge Michael Fitzgerald made a statement last week:
“The Court acknowledges that this action raises legitimate concerns over celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach.
But, while the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment”. “That proposed RICO complaint really has no similarities to our cases at all, in terms of the specific claims, the specific allegations or any of the applicable law,” said Adam Moskowitz who represents plaintiffs in Brady and other athletes' federal and state cases “The only aspect that is similar is that they also sued a few of the cryptocurrency promoters for other claims, but specifically not for promoting the sale of unregistered securities”.
In his observations on these cases, Dan Wallach, an attorney who follows these cases closely, agreed that the charges in the Brady and Ethereum cases are not the same. “How can you prove that every member of the class bought the security, invested in FTX and made deposits based upon every one of those advertisements?” Wallach said.
“Did (Ortiz’s) commercial from the 2021 World Series induce everybody who’s a member of the class to buy the security?”