The law firm representing FTX in its bankruptcy, Sullivan and Cromwell (S&C), is facing a class action lawsuit alleging complicity in the exchange’s collapse.
The suit claims S&C, FTX’s primary legal counsel for 16 months, gained $8.5 million in fees and had inside knowledge of fraudulent activities. After lawyer Ryne Miller joined FTX as General Counsel, Miller allegedly directed business to S&C, resulting in 20 engagements.
The lawsuit accuses S&C of representing Emergent, a special-purpose vehicle that used FTX customer funds to buy Robinhood stock. Miller, aware of FTX’s platform vulnerability, reportedly shared this information with S&C.
The firm’s income from FTX-related matters has surged to over $180 million. U.S. Senators previously raised concerns about S&C’s impartiality. In January 2024, the Third Circuit Court of Appeals ruled for an independent examiner to investigate FTX’s collapse, challenging the initial choice of John Ray III.
This legal battle underscores suspicions surrounding S&C’s role in FTX’s downfall, with potential consequences for the firm.
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