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Former FTX chief lawyer claims US legal counsel channeled business to S&C

January 20, 2023No Comments


A former FTX chief counsel accused the company's US general counsel of funneling business to Sullivan & Cromwell (S&C), the firm that currently serves FTX as bankruptcy counsel.

Daniel Friedberg, who was FTX's director of regulation until he resigned on November 8, made the allegations as part of a court hearing on January 19. presentation.

The filing was a statement in support of an FTX creditor's objection to FTX's plan to continue using S&C as its attorneys throughout its bankruptcy case.

In the statement, Friedberg alleges that FTX.US lead counsel, Ryne Miller, a former S&C partner, funneled business to his former law firm in numerous cases, with Friedberg stating:

"Mr. Miller informed me that it was very important for him personally to channel a large amount of business to S&C, as he wanted to return there as a partner after his time at Debtors."

Friedberg claims in the filing that he reminded Miller that his "loyalty" was to the debtor and not to S&C, suggesting that it "continued to be an issue throughout his work" at FTX.

Friedberg alleged that after Miller's hiring in early 2020, Miller asked if he could hire his old law firm, to which Friedberg responded by saying that Miller's job was to "hire only the best outside lawyers for the job." .

Miller ended up hiring S&C to be lead counsel for FTX.US, FTX Derivatives (formerly LedgerX) and Sam Bankman-Fried's holding company Emergent, Friedberg wrote.

He noted that S&C has also acted as personal adviser to Bankman-Fried and another key FTX executive, Nishad Singh.

Related: FTX CEO Says He Is Exploring Rebooting The Exchange: Report

While the filing is simply a statement in support of an objection by FTX creditors to the retention of FTX's attorneys, Sullivan & Cromwell LLP, it presents a number of previously undisclosed allegations.