A federal judge recently rejected the pleas of investors to consolidate multiple class-action lawsuits filed against the FTX exchange. The decision was made without hearing from the defendants.
On March 8, Judge Jacqueline Scott Corley refused to combine five proposed class-action suits against the bankrupt crypto exchange. The judge noted that none of the defendants had objected to the motion, yet noted that not all parties had had an opportunity to be heard. The order stated:
“While Plaintiffs state that no Defendant has filed an opposition, they offer no declaration attesting that they have met and conferred with Defendants and that they do not oppose consolidation.”
The plaintiffs, Julie Papadakis, Michael Elliott Jessup, Stephen Pierce, Elliott Lam Russell Hawkins, accuse former FTX CEO Sam Bankman-Fried and other executives of misappropriating assets. In addition to Bankman-Fried, the suits name other defendants such as outside auditors and promoters of the exchange. This is why Judge Corley determined it was premature to appoint interim class counsel before consolidation.
Related: DOJ seeks to reduce Sam Bankman-Fried’s bail terms, use only flip phones
In the meantime, Bankman-Fried’s lawyers have suggested that the criminal trial scheduled for October may need to be postponed. In a letter dated March 8, the lawyers said that while they are not officially requesting a new date, it could be necessary as they are waiting for a large amount of evidence to be provided to them. In addition, the lawyers noted that there were additional charges leveled against Bankman-Fried in February.
