Just because a marketing deal may look good on paper due to its massive guaranteed compensation provision, that does not mean that it comes free of risk. The existence of these cases alone should serve as a warning of caution to celebrities and their agents as well as their legal counsel. Whether or not these celebrities properly disclosed their financial stakes also plays a key role in this case.
Curry is unique in that he is named in this lawsuit and the Florida lawsuit, but this California case also named celebrities such as Kevin Hart, Snoop Dogg, Serena Williams, and Post Malone as defendants. Here, the plaintiffs also allege the improper promotion of unregistered securities and claim that consumers relied on the statements of celebrities, which led to losing investments. Second, the California class action lawsuit centers on celebrities who promoted Bored Ape Yacht Club NFTs. There is a separate claim for violations of the Florida Deceptive and Unfair Trade Practices Act. Stat." Liability is extended to agents of or for the seller if the agent personally participated or aided in making the sale and it is argued that the celebrities provided material assistance, offered and sold the unregistered YBAs. § 517.061, is a federally covered security, or is registered pursuant to Ch. § 517.051, is sold in a transaction exempt under Fla. That Act states that "it is unlawful and a violation for any person to sell or offer to sell a security within the State of Florida unless the security is exempt under Fla.
The conclusion the court comes to on this issue will lead to the creation of a substantial amount of leverage for the plaintiffs or the promoter defendants, at least with regard to the first cause of action alleged, which is a violation of The Florida Securities and Investor Protection Act. FTX has taken the position that they were not while the plaintiffs say otherwise. There is a key question underneath the claims, which is whether or not the yield-bearing accounts (YBAs) that were promoted by the celebrities are actually considered securities. Celebrities like Brady and Curry are being blamed for fraudulently inducing unsophisticated investors to purchase unregistered securities by way of their promotional activities, which were paid for by FTX but not fully disclosed by the promoters. Lawsuits have been filed from coast-to-coast, with the most prominent recent cases being a class action lawsuit in Florida against Brady, Curry, and others as well as a proposed class action California lawsuit against Fallon, Paltrow, etc.įirst, the Florida class action lawsuit revolves around the fallout from the collapse of cryptocurrency derivatives exchange FTX, founded by Sam Bankman-Fried. What is clear at this point is that litigation in the crypto and NFT space is just ramping up and that people with deep pockets will continue to be the targets of aggressive litigants and their legal counsel. In the meantime, each celebrity will be required to retain and pay legal counsel to defend against filed Complaints and deal with any negative publicity surrounding the filings. Whether valid causes of action exist against these individuals is up for debate and will ultimately be decided by courts of law.
What do Tom Brady, Stephen Curry, Shaquille O'Neal, David Ortiz, Trevor Lawrence, Naomi Osaka, Jimmy Fallon, Gwyneth Paltrow, and Justin Bieber all have in common?Įach celebrity has recently been named in lawsuits alleging that they misled their followers into buying non-fungible tokens (NFTs) or engaged in deceptive practices by promoting cryptocurrencies.
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