A federal judge rejected some investors’ planned class-action lawsuits against the FTX exchange. According to the judge, the exchange’s defendants have not yet been heard.
United States District Judge Jacqueline Scott Corley issued the ruling on March 8, denying the plaintiffs’ request to combine five proposed class-action lawsuits they had filed against the defunct cryptocurrency exchange. The judge noted that even while no defendants opposed the motion, not all had been given a chance to reply. The instruction read:
“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.”
Sam Bankman-Fried, the former CEO of FTX, and other officials were accused of misappropriating funds by plaintiffs, including Julie Papadakis, Michael Elliott Jessup, Stephen Pierce, Elliott Lam, and Russell Hawkins, who filed lawsuits in California. All of the plaintiffs are suing Bankman-Fried, but there are a number of additional defendants, such as independent auditors and those pushing the exchange.
The court said there was no reason to combine in light of this before hearing from the defendants. “The Court finds no reason to act at this time without first providing the defendants a chance to be heard. Also, appointing interim class counsel prior to consolidation would be premature,” the court ruled.
Bankman-Fried’s attorneys have lately hinted that it would be necessary to postpone the criminal trial set for October. Bankman-Fried’s attorneys wrote on March 8 that, although they haven’t formally asked for a date adjustment, one could be required because they’re awaiting delivery of a sizable amount of material. The attorneys also mentioned that Bankman-Fried faced more allegations in February.