The US Department of Justice is against the FTX hiring Sullivan & Cromwell as lawyers. there might be a conflict of interest given that Ryne Miller, general counsel of FTX US, previously worked at S&C for eight years. The DOJ said the investigation would place the law firm “in the conflicted position of investigating itself and its former partner.”
“Second, the scope of S&C’s retention cannot be allowed as proposed,” the complaint added, detailing that bankruptcy rules “specifically preclude debtors in possession from investigating themselves.” The DOJ asked the Court to deny S&C’s application. The DOJ complaint comes just days after a bipartisan group of four United States senators, including John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis, lashed out at S&C for almost the same reasons.
Bankman-Fried said S&C’s relations with FTX prior to its downfall had been more than purely transactional, and that its staff had pressured him into filing for bankruptcy on Nov.11 – echoing concerns over the law firm’s independent made by Senators in a Jan.10 letter. Jack Schickler is a CoinDesk reporter focused on crypto regulations, based in Brussels, Belgium. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period.
“Any investigation led by S&C would be duplicative and wasteful of estate resources if the Court were to grant the U.S. Trustee’s pending motion to appoint an examiner with a comprehensive investigative mandate,” Vara added. FTX’s General Counsel Ryne Miller previously worked at S&C for eight years, Vara noted, and the law firm might find itself in the “conflicted position” of investigating both itself and its former staffer.
Retaining the law firm is “necessary and in the best interests of the Debtors and their estates and stakeholders,” John Ray, appointed FTX chief executive officer on Nov. 11, said in a Dec. 21 deposition. “S&C is one of the leading law firms in the world in all of the key practice areas.”
“Second, the scope of S&C’s retention cannot be allowed as proposed,” the complaint added, detailing that bankruptcy rules “specifically preclude debtors in possession from investigating themselves.” The DOJ asked the Court to deny S&C’s application. The DOJ complaint comes just days after a bipartisan group of four United States senators, including John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis, lashed out at S&C for almost the same reasons.
