1985 First Amendment case Key in analyzing Celebrity FTX Liability
Insights from White Collar Criminal Defense Attorneys Trusted Nationwide
With the historic collapse of FTX sending shockwaves through the crypto community, investors and regulators are out for blood. Recently the Texas State Securities Board announced that it is reviewing payments that Tom Brady, Steph Curry and others received to publicize their support for FTX and the disclosures they made and their accessibility to retail investors. Federal investigators are also investigating the FTX collapse but are not yet targeting celebrities.
A class action was recently filed in Florida against celebrities including Kevin O’Leary, Brady, and Curry claiming that they made misrepresentations and omissions that led investors to make significant contributions to FTX.
One important first Amendment case from 1985 may provide us some insight on how these cases will shake out. In Lowe v. SEC, 472 U.S. 181 (1985) the Supreme Court determined that a newsletter published to the general-public was not the type of “personalized” investment advice that the SEC seeks to govern. The SEC is concerned with “investment advisors” providing false or misleading information to the general-public about an investment. General information given to the public through a newsletter, TV advertisement or similar public media is considered protected by the first amendment.
Holding celebrities liable for their endorsements of securities is a slippery slope. Traditionally, endorsers of products are not required to have sophisticated knowledge of these products prior to promoting them and are not liable unless they make statements that they know are false and misleading. However, where a particular endorser has an ownership interest in a security the line becomes more blurry and several cases – including in the 11th Circuit have found liability against owners of crypto and crypto exchanges potentially liable for their statements.
Ronald Chapman II is the founder of Chapman, Dowling & Mallek and a top-rated Michigan federal criminal defense attorney who represents clients in federal courts nationwide. His practice is focused on defending individuals and organizations in complex federal prosecutions, including white-collar criminal matters and healthcare fraud investigations.
Throughout his career, Mr. Chapman has helped clients avoid more than $550 million in potential penalties, primarily in cases involving physicians, healthcare providers, executives, and professionals facing federal charges. He is widely recognized for his work as a Michigan healthcare fraud defense attorney, as well as for his results in white collar criminal defense in Michigan, where cases often involve parallel civil, regulatory, and criminal exposure.
Apr-8-2026
Hospice fraud is a serious enforcement priority for Medicare, and federal regulators are under pressure...
Apr-2-2026
In federal court, some of the most important battles happen after trial—on appeal—where the focus...
Jan-9-2026
Memphis, Tennessee – The verdict returned this week in United States v. Sanjeev Kumar closed...
Dec-31-2025
Dr. Lonnie Joseph Parker, a Texarkana physician, was recently convicted in federal court of unlawfully...
Serving Clients Nationwide.
Chapman, Dowling & Mallek is headquartered in Detroit, Michigan and represents clients in federal investigations and criminal matters across the United States. Our attorneys handle complex federal cases nationwide while maintaining offices in Michigan and other states.
456 E. Milwaukee, Detroit, MI 48202
One Comment
The danger when a state brings civil action in a matter potentially criminal, is that the defendant must deny and disprove the allegations made. If a defendant is first put at risk of losing his money and speaks, what he says can later be used against him in a criminal trial. The worry here is not that the celebrities got paid to make false statements, but that they may have profited. If any of these celebs is shown to have sold FTX shares while inviting people to buy, that may well be the smoking gun