Notable litigation filed during July 2023 includes: (1) O’Keefe v. Multicoin Cap. Mgmt. LLC; (2) Bledsoe v. Order of Magnitude Ventures LLC; (3) O’Keefe v. Farmington State Bank; and (4) SEC v. Tadrus.
Connor O’Keefe v. Multicoin Capital Management, LLC, No. 23-cv-838 (W.D. Tex.)
Connor O’Keefe filed suit against Multicoin Capital Management, LLC in Western District of Texas as a potential tag-along action to In re: FTX cryptocurrency Exchange Collapse Litigation, MDL No. 3076 for losses arising from Defendant’s conspiracy and aiding and abetting of the alleged Ponzi scheme run by Sam Bankman-Fried (“SBF”) through his cryptocurrency exchange, FTX. The complaint alleges that Defendant provided critical funding of SBF’s fraudulent scheme by pumping billions of dollars into FTX’s launch, providing support and partnership to FTX, driving up FTX’s valuation, and thereby expanding SBF’s reach to victims. O’Keefe seeks individual and class recovery under theories of conspiracy, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and aiding and abetting conversion.
Connor O’Keefe v. Farmington State Bank d/b/a Moonstone Bank, et al., No. 23-cv-00213 (E.D. WA)
Connor O’Keefe filed suit against Farmington State Bank d/b/a Moonstone Bank, Deltec Bank & Trust Company, and Jean Chalopin as a potential tag-along action to In re: FTX cryptocurrency Exchange Collapse Litigation, MDL No. 3076 for losses arising from Defendant’s conspiracy and aiding and abetting of the alleged Ponzi scheme run by Sam Bankman-Fried (“SBF”) through his cryptocurrency exchange, FTX. The complaint alleges that Defendant provided critical funding of SBF’s fraudulent scheme by pumping billions of dollars into FTX’s launch, providing support and partnership to FTX, driving up FTX’s valuation, and thereby expanding SBF’s reach to victims. O’Keefe seeks individual and class recovery under theories of conspiracy, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and aiding and abetting conversion.
Joshua M. Bledsoe, et al. v. Order of Magnitude Ventures, LLC, et al., No. D-1-GN-23-004001 (Texas State District Court, 353rd Judicial District, Travis County)
Plaintiffs Joshua M. Bledsoe and Michael J. Sullivan filed suit against Order of Magnitude Ventures, LLC, Sid Jawahar, John Arrow, and Swiftarc Ventures, LLC in the Texas State District Court, 353rd Judicial District in Travis County for losses arising from an alleged Ponzi scheme of obtaining investor funds under the premise that it would be invested in GIGAFUND 0, LP (otherwise known as SpaceX). The complaint alleges that Defendants entered into agreements with Plaintiffs to invest their monies into SpaceX, but provided no valuation estimates, confirmation of investment, or concrete evidence of Plaintiffs’ ownership in SpaceX. Plaintiffs seek recovery under theories of breach of contract and conspiracy to commit fraud/negligent misrepresentation.
SEC v. Min Tadrus, et al., No. 23-cv-05708 (E.D.N.Y)
The SEC filed suit against Mina Tadrus and Tadrus Capital LLC in the Eastern District of New York for losses arising from an alleged Ponzi scheme in which Defendants solicited and sold investments into a purported pooled investment vehicle targeting members of the Egyptian Coptic Christian community. The complaint alleges that Defendants told investors that their funds would be invested in a high yielding fixed-income quantitative hedge fund, but did not in fact invest the vast majority of the investors’ funds and instead used the funds for personal benefit. The SEC seeks recovery under theories of violations of the Securities Act Section 17(a), violations of Exchange Act Section 10(b) and Rule 10b-5, violation of the Advisers Act Sections 206(1) and (2) and 206(4) of the Advisers Act, and Rule 406(4)-(8).
