FTX customers have moved to amend their class-action lawsuit against law firm Fenwick & West, alleging it played a central role in enabling and concealing one of the largest frauds in U.S. history. The filing relies on new evidence drawn from Sam Bankman-Fried’s criminal trial and findings from the ongoing FTX bankruptcy proceedings.
According to the amended complaint, testimony from former FTX executives — including co-founder Zixiao “Gary” Wang, ex-Alameda CEO Caroline Ellison, and former engineering director Nishad Singh — asserts that Fenwick allegedly advised on methods used to hide misuse of customer funds, structure improper loans, and make false representations. The filing says Singh testified that he explicitly informed Fenwick of such misconduct.
Bankruptcy Examiner: Fenwick Was “Deeply Intertwined” with FTX
Plaintiffs say a court-appointed bankruptcy examiner reviewed more than 200,000 internal documents tied to Fenwick and concluded the law firm was “deeply intertwined” in FTX Group operations. The complaint claims Fenwick maintained close relationships with FTX executives and facilitated conflicted intercompany transactions that ultimately misused customer assets.
The amended pleading also alleges Fenwick helped create shell companies to obscure asset flows, assisted in implementing auto-deleting Signal messages used by executives, and adopted other concealment practices later cited by regulators as part of obstruction concerns.
New Securities Claims Added in Florida and California
The update adds two state securities law claims, accusing Fenwick of designing, promoting and facilitating the sale of unregistered securities tied to FTX products — including the FTX Token (FTT), yield-bearing accounts and other FTX instruments. Plaintiffs argue the firm played an active role in marketing and structuring those offerings.
Fenwick previously denied wrongdoing and moved to dismiss an earlier complaint in 2023, arguing that a law firm cannot be held liable for a client’s misconduct when acting within the scope of representation. A separate, earlier suit against Sullivan & Cromwell was dropped for lack of evidence.
Why the Amendment Matters
If the claims withstand dismissal and are proven, the case could establish a significant precedent about the liability of professional service providers — including law firms — for enabling large-scale financial fraud. Plaintiffs say the new evidence produced in SBF’s criminal trial and bankruptcy discovery justifies the expanded allegations.
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