Tom Brady is reportedly among the customers and shareholders likely to lose money in the FTX collapse.
The NFL star and his supermodel wife Gisele Bundchen — who had both promoted the company — owned shares in FTX Trading, Brady owning 1.1 million shares and Bundchen 680,000, Bloomberg reported Tuesday (Jan. 10).
Those investments are likely to be worthless because shareholders of bankrupt companies are last in line to get repaid, according to the report.
Other high-profile investors can expect the same result. They include New England Patriots owner Robert Kraft, billionaire Paul Tudor Jones, tech giant Peter Thiel, Tiger Global Management, the Ontario Teachers’ Pension Plan and Sequoia Capital, the report said.
“At the end of the day, we’re not going to be able to recover all of the losses here,” John J. Ray III, who was appointed FTX CEO in November to manage the company during its bankruptcy, said last month.
Brady, Bundchen and other celebrities who endorsed FTX during its heyday are also considered a “juicy target” for lawsuits.
With FTX and more than 100 of its affiliated companies having filed for bankruptcy protection, those who endorsed the firm still present an opportunity, for those who lost out on FTX, to recover their losses, Bloomberg reported in November.
At least three lawsuits naming celebrities have already been filed, and with their wealth, fame and potential liability making them a “juicy target,” it is likely that they will settle, the report said.
Celebrities who promoted FTX and its cryptocurrency offerings could be liable for damages if the lawsuits proceed, especially if those products are found to be securities, per the report.
As PYMNTS reported Monday (Jan. 9), the FTX collapse provides a master class in crypto industry risk management and accounting failures.
Court documents confirm that the world’s one-time third-biggest cryptocurrency exchange was set up from the start so that customer funds entrusted to the platform could be comingled without their owners’ knowledge or consent.
Ray said about the imploded crypto exchange that, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”