The lawmakers argued that the firm presently tasked with the work, Sullivan & Cromwell, previously advised FTX on various legal matters, including “acquisition transactions and specific regulatory inquiries related to certain U.S. business lines.” They added that the law firm also admitted that it had charged FTX over $8.5 million in legal fees before its bankruptcy.
“As legal counsel is often central to major financial scandals, given their role in drafting financial agreements, risk management compliance practices, and corporate controls, it is perfectly reasonable to have concerns about the impartiality and manner that Sullivan & Cromwell will approach any investigation of FTX with.”
According to the lawmakers, Sullivan & Cromwell is not a disinterested party in the case because it “advised FTX for years leading up to its collapse, and one of its partners even served as FTX’s general counsel.” Besides this, they pointed out that the extent of the law firm’s involvement in FTX’s operations remains unanswered.
“Put bluntly, the firm is simply not in a position to uncover the information needed to ensure confidence in any investigation or findings.”
The Senators appealed to Judge John Dorsey to support the U.S. Trustee’s Motion to appoint an independent examiner who would have “full authority and resources to conduct a thorough, objective investigation of the activities that led to the collapse of FTX.”
The letter was signed by senators John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis.