Unabomber Prosecutor to Conduct FTX Probe Into Law Firm Sullivan and Cromwell’s “Conflicts of Interest”
Unabomber prosecutor Robert J. Cleary has been given the green light by a U.S. bankruptcy judge to probe law firm Sullivan and Cromwell’s potential conflicts of interests in relation to FTX, according to a Wednesday court filing.
Cleary’s appointment by Judge John Dorsey marks a key shift in the examination of the FTX’s collapse, formally reversing his rejection of an independent examiner in February 2023. Sullivan and Cromwell spearheaded the doomed crypto exchange through its Chapter 11 bankruptcy proceedings and has since charged over $170 million for its services.
Do you have Unabomber prosecutor probing Sullivan & Cromwell on your 2024 FTX bingo card? pic.twitter.com/Da6ADWnvTp
— Nicholas Hall (@nicholashall) March 22, 2024
Last month, a number of FTX investors filed a class action lawsuit against the law firm, noting Sullivan and Cromwell’s “conduct and participation” in “racketeering activity” with Sam Bankman-Fried’s exchange.
Investors claimed that through the firm’s advisement to FTX through 2021 and 2022, Sullivan and Cromwell “placed itself in a unique position to gain deep insight into the FTX entities’ convoluted organizational structure, abject lack of internal controls, and dubious business practice.”
Additionally, they alleged that the law firm “vouched for the solvency, safety, and security of the FTX Group up until its very collapse,” misleading customers and investors of the exchange.
“Despite this knowledge, S&C stood to gain financially from the FTX Group’s misconduct and so agreed, at least impliedly, to assist that unlawful conduct for its own gain,” the filing continued.
News of Cleary’s approval comes just two months after a federal appeals court mandated the reversal of Dorsey’s February
