Texas regulators are investigating NFL quarterback Tom Brady and Golden State Warriors star Stephen Curry for potential securities law violations related to their FTX endorsements.Â
The regulators are investigating payments received by these celebrities to promote FTX US. In addition, regulators are also scrutinizing the disclosures that were made and how accessible they were to retail investors, as per Joe Rotunda, director of enforcement at the Texas State Securities Board.
Rotunda also said that celebrities’ endorsements aren’t the most immediate priority yet are still a focus in the regulator’s larger probe into FTX’s collapse.
The FTX crash is the loudest lesson for the involved celebrities to be aware of the reputational, legal, and regulatory risks of hyping crypto. The US SEC was cracking down on plugs with proper disclosures even before the collapse.
The ongoing Texas probe is another reminder that state securities laws might also apply. Though state-level investigations are not that high-profile like SEC, they can lead to significant fines.
The FTX collapse is currently a contentious issue, and regulating authorities have become quite concerned about its implications. Last week, Plaintiff Edwin Garrison also filed a class action lawsuit against celebrity promoters and now-bankrupt crypto exchange FTX.
These celebrities included Tom Brady, Bundchen, Steph Curry, Kevin O’Leary, Gisele Bundchen, the Golden State Warriors, Larry David, and Shaquille O’Neal, among many others.
