Sullivan & Cromwell office sign. Courtesy photo

Sullivan & Cromwell Didn't Ignore FTX Red Flags, Second Examiner Report Concludes

FTX Group's in-house counsel withheld information in communications with Sullivan & Cromwell that prevented the law firm from seeing red flags, the report stated.

September 25, 2024 at 04:31 PM

4 minute read

Bankruptcy

By Dan Roe
Reporter

What You Need to Know

A second report from the court-appointed examiner in the FTX bankruptcy cleared Sullivan & Cromwell of a disqualifying conflict of interest in the firms' pre-petition work for Sam Bankman-Fried in his acquisition of Robinhood shares.
The report also found that the firm was neither aware of red flags in FTX's books nor responsible for recognizing them, based on the information Sullivan & Cromwell partners received from FTX Group attorneys.
Sullivan & Cromwell has billed more than $200 million in the matter since it placed FTX in bankruptcy in November 2022.

After an initial inquiry cleared Sullivan & Cromwell of allegations that the firm knew—or should have known—of the fraud at FTX prior to representing the company as debtors counsel, a second report from a bankruptcy court-appointed examiner cleared the law firm of a disqualifying conflict of interest in the case.

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