A former FTX lead attorney has accused the firm’s US general counsel of directing business to Sullivan & Cromwell (S&C), which is currently serving as FTX’s bankruptcy counsel.
FTX Chief Regulatory Officer Daniel Friedberg resigned in November. 8, making the charges as part of court documents filed on January 19.
The filing is a statement supporting FTX creditors’ opposition to FTX’s plan to continue using S&C as its counsel throughout the bankruptcy case.
In the statement, Friedberg claimed that FTX.US’s lead attorney, Ryne Miller, was a former S&C partner who had directed business to his former law firm in many cases, Friedberg said:
“Mr. Miller told me that it was personally important to him to direct a significant amount of business to S&C, as he hopes to return to S&C as a partner after his tenure at Debtors.”
Friedberg claimed in the filing that he reminded Miller that his “loyalty” was to the debtors, not S&C, which he believed “had been a problem throughout his time at FTX.”
Friedberg alleges that after Miller was hired in early 2020, Miller asked if he could hire his former law firm, to which Friedberg replied that it was Miller’s job to “hire only the best external consultant”.
Friedberg wrote that Miller ultimately hired S&C as lead counsel to FTX.US, FTX Derivatives (formerly LedgerX) and Sam Bankman-Fried’s holding company, Emergent.
He noted that S&C also acted as a personal advisor to Bankman-Fried and Nishad Singh, another key FTX executive.
related: FTX CEO Says He’s Exploring Restarting Exchange: Report
While the filing was merely a statement in support of FTX creditors’ objection to retaining FTX counsel, Sullivan & Cromwell LLP, it made some previously undisclosed allegations.
Well, I just finished reading Daniel Friedberg’s manifesto.
It’s fair to say this is one of the most shocking affidavits I’ve read in a long time.
If Mr. Friedberg’s half is telling the truth, he’s just blowing up this bankruptcy case.
— MetaLawMan (@MetaLawMan) January 19, 2023