Kenne Michael 
Several FTX clients have filed a lawsuit in California District Court accusing the company of working with FTX on some billion-dollar fraud schemes.
Plaintiffs allege that Fenwick & West, the law firm, exceeded its typical legal function by establishing “shadow entities” that facilitated illegal tactics employed by FTX co-founder Sam Bankman-Fried (SBF) and other top executives.
These shadow organizations, which include North Dimension and North Wireless Dimension, are accused of misappropriating client funds. The lawsuit claims that Fenwick & West knowingly disregarded fraudulent statements and misrepresentations made by the exchange to its clients.
According to the plaintiffs, this conduct suggests a tacit agreement between the exchange, its affiliates, and Fenwick & West to deceive customers, with the law firm being enticed by financial gains resulting from the alleged misconduct.
The lawsuit names as defendants Bankman-Fried, the former CEO of Alameda Research, Caroline Ellison, the former co-founder of FTX, Gary Wang, and the former engineering director, Nishad Singh.
Fenwick & West had previously confronted similar allegations in a class action lawsuit filed in February, which alleged that the firm assisted Bankman-Fried and his exchange in their activities.
Two criminal trials are scheduled for October and March for Bankman-Fried, who is presently under house arrest and is accused of wire fraud, conspiracy, and money laundering. In addition, prosecutors intend to reintroduce an allegation involving illegal campaign financing.
In related news, Matthew Graham has pursued a $67.3 million claim against FTX on behalf of the Liquid Value fund managed by Sino Global Capital.
