The legal representatives of the lead plaintiff, the Moskowitz law firm, stated that the law firm Sullivan & Cromwell (S&C) was voluntarily dismissed from the case without any settlement.

FTX Investors Withdraw Lawsuit Against Law Firm S&C

FTX investors have voluntarily dropped the proposed class-action lawsuit against the U.S. law firm Sullivan & Cromwell. On February 16, a group of FTX creditors filed the lawsuit, claiming that the firm played a role in the multi-billion dollar FTX fraud and profited financially from it. The lawsuit accused S&C of conspiracy, aiding in the breach of fiduciary duty, and aiding in fraud.

Plaintiffs voluntarily dismiss Sullivan & Cromwell from lawsuit. Source: The Moskowitz Law Firm

Sullivan & Cromwell served as external legal counsel for FTX in several transactions and oversaw the company's bankruptcy proceedings.

Lack of Evidence to Build the Case

The legal representatives of the lead plaintiff explained that Sullivan & Cromwell was voluntarily dismissed due to a lack of sufficient evidence. Adam Moskowitz, founding partner of the Moskowitz law firm, explained that there wasn't enough evidence at this time to proceed with the lawsuit.

"Based on the evidence we've seen, we don't believe there is enough to bring forth a cause of action, so we have dismissed the case," Moskowitz stated. He further added that this step would allow the case to focus on recovering compensation for the victims from other involved parties.

Focus on Compensation for Victims

Moskowitz noted that withdrawing the lawsuit against S&C is a positive development for FTX creditors, as they can now focus on seeking compensation from other parties. "This is a great day for all FTX victims because, working with the Estate, we will seek to provide every victim with 100% full recovery from these 43 responsible parties," Moskowitz added.

The legal firm also emphasized that there was no settlement involved in the dismissal of the lawsuit.

Judge Approves FTX Reorganization Plan

The lawsuit was dismissed shortly after the bankruptcy judge approved FTX's reorganization plan. On October 7, U.S. bankruptcy judge John Dorsey approved FTX's plan to end its operations as part of its efforts to repay creditors. The plan allows debtors to repay approximately 119% of their claimed account value.

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