Mark Cuban and Voyager Digital CEO Stephen Ehrlich at a press conference in October 2021 announcing … [+]
Dallas Mavericks governor Mark Cuban is facing a class-action lawsuit for his promotion of bankrupt cryptocurrency brokerage Voyager Digital.
The Moskowitz Law Firm, based in Coral Gables, Florida, filed a civil suit against Cuban in the United States District Court in Southern Florida, demanding a jury hearing for the case.
The suit alleges that Cuban and Voyager Digital CEO Stephen Ehrlich used their influence to misrepresent the brokerage, making dubious claims to lure in investors and eventually defrauding them.
“Cuban and Ehrlich, went to great lengths to use their experience as investors to dupe millions of Americans into investing—in many cases, their life savings—into the Deceptive Voyager Platform and purchasing Voyager Earn Program Accounts (‘EPAs’), which are unregistered securities,” the lawsuit alleges.
The suit continues, describing Voyager Digital as an “unregulated and unsustainable fraud, similar to other Ponzi schemes” that “specifically target[s] young and inexperienced investors.”
A spokesperson for the Mavericks said that the team does not have a comment at this time.
Cuban and the Dallas Mavericks announced a five-year partnership with Voyager in October 2021, making Voyager the official cryptocurrency brokerage of the Mavericks. Their signage appeared throughout the American Airlines Center during Mavericks’ home games during the 2021-22 season.
“We understand that there’s a lot of hype, a lot of discussion behind it, but most people don’t understand the fundamentals behind it,” Cuban said about cryptocurrency during the press conference announcing the partnership.
“We’re really going to try and bring that level of education to our fans and to our joint customers. I think we’re going to extend this far deeper than just Mavs fans. I think Voyager is going to be a leader among sports fans and crypto fans around the country.”
Voyager paused all trading and withdrawals on its platform on July 1, 2022. Four days later, the company filed for Chapter 11 in the United States Bankruptcy Court for the Southern District of New York. More than 3.5 million American customers have nearly $5 billion in frozen assets on the platform.
The judge presiding over Voyager’s bankruptcy proceedings in New York cleared the company to return $270 million in customer funds held at the Metropolitan Commercial Bank. Withdrawals were set to begin in August 2022.
Plaintiffs in the lawsuit are seeking charges for aiding and abetting fraud, aiding and abetting breach of fiduciary, civil conspiracy and unjust enrichment. In addition, the suit lists relief in the form of “awarding actual, direct and compensatory damages.”
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