FTX Lawsuit & Defendants Tom Brady, Steph Curry, Shohei Ohtani, et al.

Welcome to THE Sports Law Podcast, where the Dans keep you up to date on everything at the intersection of sports and the law. We wish everyone a very happy and safe Thanksgiving!

This episode is dedicated to the impact on the sports world from the implosion of FTX. Class action lawsuits have been filed against a number of entertainment and sports figures such as Tom Brady, Golden State Warriors, Shohei Ohtani, Kevin O’Leary, and many more. The cause of action stems from false advertising and misleading statements encouraging investment. These class actions will have a massive impact on sports marketing and endorsement deals.

Alan Milstein (@amilst44) joins to break down the FTX lawsuits. (12:17) The issue in these lawsuits is that these investors were placing their money into FTX accounts, similar to a bank, with a guaranteed rate of interest return, as high as 8%. Another issue is whether these transactions constituted securities, and thus the sale of unregulated securities. If this is the case, then joint and several liability would kick in for all defendants involved. What is the required due diligence of athletes before signing endorsement deals with certain companies? What is the threshold of liability for these athletes for being endorsers or brand ambassadors? Dan and Alan also discuss what needs to be done to be granted class certification in these actions. The Miami Heat stadium naming rights deal might not be enough to hold the team liable but the Golden State Warriors having FTX being the "official crypto platform" of the team may.

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Dan Wallach (@WallachLegal) | Dan Lust (@SportsLawLust) | Mike Lawson (@mike_sonof_law)

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