Former FTX General Counsel Says US Attorneys Drive Business to S&C

A former FTX general counsel has accused the company’s US general counsel of selling business to Sullivan & Cromwell (S&C) – the firm that currently works for FTX as a bankruptcy counsel.

Daniel Friedberg, who was the CEO of FTX until he resigned in Nov. 8, he made the allegations as part of the trial Jan 19. filed.

The filing is an affidavit in support of FTX’s creditor’s opposition to FTX’s plan to continue using S&C as its attorney in throughout his bankruptcy case.

In the affidavit, Friedberg alleged that FTX.US chief counsel Ryne Miller, a former partner at S&C steered business toward his former law firm in several cases, with Friedberg saying:

“Mr. Miller told me that it was important for him to handle more business at S&C because he wanted to return there as a partner after his work at Debtors.

Friedberg said in the filing that he reminded Miller that his “loyalty” was the debtor and not S&C which he suggested “continued to be a problem throughout his career” at FTX.

Friedberg alleged that after Miller was hired in early 2020, Miller asked if he could hire his former law firm, to which Friedberg responded by saying that Miller’s job “is just hiring a great outside consultant for the job.”

Miller eventually hired S&C as the primary advisor for FTX.US, FTX Derivatives (formerly LedgerX), and Sam Bankman-Fried’s holding company Emergent, writes Friedberg.

He said S&C is also acting as a personal adviser to Bankman-Fried and another FTX director, Nishad Singh.

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While filing an affidavit in support of FTX’s creditors’ opposition to the retention of FTX’s attorneys Sullivan & Cromwell LLP, it has made a number of previously undisclosed allegations.