Taylor Swift didn't sign $100 million FTX sponsorship because she was the only one to ask about unregistered securities, lawyer says

Taylor Swift (L) and Sam Bankman-Fried (R).

Octavio Jones/TAS23/Getty Images for for TAS Rights Management; Michael M. Santiago/Getty Images

• Taylor Swift pulled out of a $100 million sponsorship deal with Sam Bankman-Fried's FTX.
• The lawyer suing other celebrities for promoting FTX says she was the only one to ask about unregistered securities.
• Both Tom Brady and Stephen Curry are being sued for endorsing the now-bankrupt crypto exchange.

Taylor Swift managed to avoid signing a $100 million sponsorship deal with FTX because she was reportedly the only celebrity to question the crypto exchange, according to the lawyer handling a class-action lawsuit against several FTX promoters.

Lawyer Adam Moskowitz appeared on "The Scoop" podcast to discuss the lawsuit, and said the plaintiffs are seeking over $5 billion from FTX's celebrity endorsers, including Shaquille O'Neal, Tom Brady, and Larry David.

He alleged that those celebrities didn't do their due diligence to check whether FTX might be breaking the law. Except for Swift, who pulled out of the deal and never promoted the now-bankrupt exchange. "The one person I found that did that was Taylor Swift," Moskowitz told The Scoop's Frank Chaparro.

The singer – whose father used to work for Merrill Lynch – began discussing the $100 million tour sponsorship with FTX in the fall of 2021, per the Financial Times.

It reported the terms included selling tickets as NFTs, although FTX marketing staff told the newspaper "no one really liked the deal" and they thought it was "too expensive from the beginning."

"In our discovery, Taylor Swift actually asked them: 'Can you tell me that these are not unregistered securities?'" Moskowitz added.

A security is a tradeable asset that holds value, like a stock or a bond. All of those which are offered and sold in the US must be registered with the Securities and Exchange Commission. In a complaint against FTX executives last December, the SEC said the company's cryptocurrency, FTT, is classified as a security because it was sold as an investment contract. It was not appropriately registered, however.

Moskowitz's lawsuit, therefore, accuses the celebrities of promoting an unregistered security and seeks to recover damages for customers who lost money after FTX filed for bankruptcy last November.

It claims that the defendants "made numerous misrepresentations and omissions ... in order to induce confidence and to drive consumers to invest in what was ultimately a Ponzi scheme."

The crypto exchange imploded last November after concerns that the commingling of funds with its sister firm, Alameda, led to mass customer withdrawals. It didn't have enough money to fulfill that demand, partly due to lavish spending and a $65 billion line of credit, lawyers said.

FTX founder and CEO Sam Bankman-Fried was arrested in the Bahamas a month later and faces over 100 years in prison if found guilty of charges including securities fraud, money laundering, and bribery.

Representatives for Swift did not immediately respond to Insider's request for comment. Bankman-Fried's spokesperson declined to comment.

Read the original article on Business Insider

from Business Insider https://ift.tt/b6J5TN4
via IFTTT