FTX’s former general counsel has accused the company’s US general counsel of steering business to Sullivan & Cromwell (S&C), which currently serves as bankruptcy counsel to FTX.
Daniel Friedberg, who was FTX’s chief regulatory officer until he resigned on November 8, made the allegations in court on January 19 filing.
The filing was a statement in support of FTX’s creditor objection to FTX’s plan to continue using S&C as its attorneys throughout its bankruptcy proceedings.
In a statement, Friedberg alleges that FTX.US senior counsel Ryne Miller, a former partner at S&C, steered business to his former law firm in numerous cases, with Friedberg stating:
“Mr. Miller informed me that it was very important to him personally to direct a lot of business to S&C because 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 borrower and not to S&C, which he said “remained an issue throughout his tenure” at FTX.
Friedberg claimed 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 “only hire the best outside counsel for the job.”
Miller eventually hired S&C to be primary counsel for FTX.US, FTX Derivatives (formerly LedgerX) and Sam Bankman-Fried’s holding company Emergent, Friedberg wrote.
He noted that S&C also acted as a personal adviser to Bankman-Fried and another key FTX executive, Nishad Singh.
While the filing is merely a statement in support of the FTX creditors’ objection to the retention of FTX attorneys Sullivan & Cromwell LLP, it contains a number of allegations that have not been previously disclosed.
Well, I just finished reading Daniel Friedberg’s Statement.
It’s fair to say that this is one of the most shocking affidavits I’ve read in a long time.
If half of what Mr. Friedberg says is true, then he just blew the top off this bankruptcy case.
— MetaLawMan (@MetaLawMan) January 19, 2023