Fenwick & West moved to dismiss an amended class-action claim tied to the FTX collapse, arguing the proposed update relies on stale, misleading allegations and that the law firm provided routine legal services, not knowing of any fraud. The firm asked the court to deny leave to amend.
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Fenwick says allegations are untimely and futile.
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Firm denies aiding FTX fraud and disputes characterization of witness testimony.
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Proposed securities claims and promoter theory were added late and mirror prior dismissed allegations.
Fenwick & West FTX lawsuit update: Fenwick seeks to block amended claims; read the legal reasoning and key developments. Stay informed with COINOTAG.
Fenwick & West, a law firm once contracted by FTX, asked a federal judge to deny FTX users’ motion to amend a class-action complaint that alleges the firm played a central role in the exchange’s fraud.
What is the Fenwick & West FTX lawsuit update?
Fenwick & West FTX lawsuit update: Fenwick filed a motion opposing leave to amend, calling the proposed complaint untimely, based on stale material, and legally insufficient to allege aiding and abetting fraud or state securities violations. The firm emphasizes routine legal work and lack of knowledge of any fraud.
Why does Fenwick say the proposed amendment should be denied?
Fenwick argues the plaintiffs rely on long-available material and recycled theories previously used against other defendants. It states the new allegations are misleading and futile, and that they attempt to cast routine legal advice—such as structuring founder loans—as culpable conduct. The filing calls the claims late and procedurally improper.
How does Fenwick respond to witness testimony cited by plaintiffs?
Fenwick disputes plaintiffs’ use of testimony from Nishad Singh and other witnesses, saying Singh only described common legal advice on structuring founder loans. The firm notes that many trial witnesses testified the fraud occurred without knowledge of most outside counsel and professionals, which it asserts includes Fenwick.
What new state securities claims did plaintiffs add?
Plaintiffs proposed new Florida and California securities claims, alleging Fenwick helped launch and promote the FTT token. Fenwick calls these allegations “far-fetched” and accuses plaintiffs of adding them to circumvent prior court rulings on celebrity-promoter claims. Fenwick argues the securities theories should have been asserted earlier.
Comparison: Plaintiffs’ Allegations vs. Fenwick’s Response
| Allegation | Plaintiffs’ Claim | Fenwick’s Reply |
|---|---|---|
| Aiding fraud | Firm enabled misuse of customer funds and improper loans. | Provided routine legal services; lacked knowledge of fraud. |
| Securities promotion | Helped launch/promote FTT in violation of state laws. | Allegation is untimely and unsupported by evidence. |
| Use of trial testimony | Singh and others implicated Fenwick. | Testimony, properly read, does not support culpability claims. |
Frequently Asked Questions
Can a law firm be liable for aiding client fraud?
Under federal and state law, aiding-and-abetting liability generally requires knowledge of the fraud and substantial assistance. Fenwick contends plaintiffs fail to allege known participation, arguing routine counsel work does not meet the legal standard.
What is the plaintiffs’ justification for the late securities claims?
Plaintiffs say new bankruptcy and criminal case material justify amending the complaint. Fenwick responds that the information is not new, was available earlier, and the amendment is an eleventh‑hour attempt to reframe prior dismissed theories.
How might the court decide on leave to amend?
Courts consider timeliness, prejudice, and futility. If the judge finds the proposed claims both untimely and legally insufficient, the court can deny leave to amend. Decision timing will follow pending briefing and hearings.
How to read the next steps in the case
1. Monitor court docket entries and judge’s orders for briefing deadlines.
2. Review the amended complaint and Fenwick’s motion to dismiss for legal theories used.
3. Expect dispositive motions if the court allows amendment, or a denial if futility is found.
Key Takeaways
- Motion to deny: Fenwick urges the court to refuse leave to amend based on timeliness and futility.
- Evidence use: The firm disputes plaintiffs’ interpretation of trial testimony and other cited materials.
- Next steps: The court’s ruling on leave to amend will determine whether new claims proceed to discovery or are dismissed.
Conclusion
Fenwick & West’s filing frames the plaintiffs’ proposed amendments as late, repetitive, and legally deficient. The outcome will hinge on the court’s assessment of timeliness and whether the new allegations clear the threshold for aiding-and-abetting or state securities claims. COINOTAG will monitor filings and report further updates as the docket develops.
