Former FTX chief lawyer claims US authorized counsel channeled enterprise to S&C

A former FTX chief lawyer has accused the corporate’s US common counsel of channeling enterprise to Sullivan & Cromwell (S&C) — the agency presently serving FTX as chapter counsel.

Daniel Friedberg, who was the chief regulatory officer of FTX till he resigned on Nov. 8, made the allegations as a part of a Jan 19. court docket submitting.

Within the declaration, Friedberg alleges that FTX.US lead counsel Ryne Miller, who’s a former associate at S&C, channeled enterprise in direction of his former regulation agency throughout quite a few circumstances, with Friedberg stating:

“Mr. Miller knowledgeable me that it was essential for him personally to channel quite a lot of enterprise to S&C as he needed to return there as a associate after his stint on the Debtors.”

Lawyer and former chief of the Securities and Trade Fee Workplace of Web Enforcement John Reed Stark highlighted the magnitude of the allegation in a Jan. 20 tweet. 

Friedberg claims within the submitting that he reminded Miller that his “allegiance” was to the debtor and to not S&C which he advised “continued to be an issue all through his work” at FTX.

Friedberg alleged after Miller’s hiring in early 2020, Miller requested whether or not he may rent his former regulation agency, to which Friedberg replied by saying it was Miller’s job “to solely rent the perfect outdoors counsel for the job.”

Miller ended up partaking S&C to be main counsel for FTX.US, FTX Derivatives (previously LedgerX), and Sam Bankman-Fried’s holding firm Emergent, wrote Friedberg.

Friedberg additionally accused Miller of getting earmarked $200 million of LedgerX funds for S&C to pay its authorized charges, saying: “there was over $200 million money in LedgerX and that he was going to ship these funds to S&C, and that chapter authorized prices have been subsequently not an issue.”

Choice incoming

Whereas the submitting is solely a declaration in assist of an FTX collectors objection to the retention of FTX attorneys Sullivan & Cromwell LLP, it makes various accusations that have been beforehand undisclosed.

Friedberg apologized for submitting his declaration on the final second, saying that he had no time because of the submitting of the Dietderich Supplemental Declaration. Andrew Dietderich is a associate at S&C who filed the declaration in assist of FTX’s movement to retain S&C as their lead counsel.

Associated: FTX CEO says he’s exploring rebooting the alternate: Report

Friedberg finishes his declaration by affirming that he would “testify competently to the info set out on this Declaration” if referred to as upon to testify.

A listening to is scheduled to happen on the chapter court docket on Jan. 20, the place the decide will hear from varied events concerned earlier than deciding whether or not FTX will be capable of retain S&C as its lead counsel.

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