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Friday, February 23, 2024

Taylor Swift’s simple question saves her from costly lawsuit

Swift's due diligence saved her from a costly lawsuit involving FTX's alleged promotion of unregistered securities.

Taylor Swift, one of the world’s most popular pop stars, was almost included in a class-action lawsuit against FTX, a now-bankrupt cryptocurrency exchange, along with 11 other celebrities and a basketball team. However, she avoided the lawsuit by simply asking whether the securities she was being asked to promote were registered.

The class-action lawsuit against FTX’s celebrity ambassadors is seeking $5 billion in damages for promoting the sale of unregistered securities. The lawsuit includes celebrities such as Tom Brady, Larry David, and Shaquille O’Neal. In this article, we explore how Swift’s financial acumen, and her simple question, helped her avoid this costly lawsuit.

Swift’s Financial Background

Swift’s father, Scott Swift, is a managing director of the Swift Group, a wealth management company that is part of Bank of America. He also began his career as a financial advisor for Merrill Lynch Wealth Management in 1980. With this financial background, it is no surprise that Swift is well-versed in the financial world and has made smart financial decisions throughout her career.

Swift’s Net Worth and Real Estate Portfolio

According to Forbes, Swift has an estimated net worth of $570 million. Additionally, she has built a real estate portfolio worth over $150 million, according to The Wall Street Journal. Swift’s financial success is a testament to her smart financial decisions and her ability to manage her wealth.

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FTX’s Alleged Unregistered Securities

FTX is a now-bankrupt cryptocurrency exchange that allegedly promoted the sale of unregistered securities. The Securities and Exchange Commission (SEC) has ruled that interest accounts offered by FTX are securities. Those who joined FTX were automatically registered for interest accounts, and they would receive a return based on the actions of others. Under state securities laws, promoting unregistered securities for financial gain makes an individual liable.

FTX’s Failed Sponsorship Deal with Swift

According to the Financial Times, FTX was in talks with Swift for a $100 million sponsorship deal that would have made her one of FTX’s celebrity ambassadors. However, the deal fell through shortly before FTX’s collapse in November of last year. Swift’s due diligence saved her from a costly mistake as she asked the simple question of whether the securities she would be promoting were unregistered.

Moskowitz’s Comments on the Lawsuit

Adam Moskowitz, one of the lawyers leading the class-action lawsuit against FTX’s celebrity ambassadors, revealed in a podcast that Swift was the only person who asked whether the securities she would be promoting were unregistered. Moskowitz said that if the other celebrities had asked the same question, they could have avoided the lawsuit.

Moskowitz also emphasised that promoting unregistered securities for financial gain makes an individual liable under state securities laws. Therefore, the celebrities named in the lawsuit could face significant damages if they are found to have promoted unregistered securities.

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Swift’s financial acumen and simple question helped her avoid a costly mistake that could have resulted in her being included in a class-action lawsuit against FTX. The lawsuit seeks $5 billion in damages from celebrities who promoted the sale of unregistered securities. With her estimated net worth of $570 million and a real estate portfolio worth over $150 million, Swift’s smart financial decisions have paid off well.