It seems ‘Mr. Wonderful’ has run into some trouble. Kevin O’Leary is facing the wrath of FTX investors, who have sued him and other celebrities such as Larry David and Tom Brady. According to the investors, these celebrities should have taken greater care and done more due diligence before promoting the crypto exchange.
O’Leary, a popular Shark Tank judge and investor, had promoted FTX aggressively online, especially on Twitter. He had talked about his close connection with Sam Bankman-Fried, the disgraced founder of FTX, who is now facing several investigations.
The Canadian investor recently appeared on CNBC’s pre-market morning news and talk show, Squawk Box. The show’s hosts questioned him over his failure to assess the risks associated with investing in FTX and promoting it. Responding to the questions, he said he had fallen prey to ‘groupthink.’ He also added that his investment partners had not lost their money.
O’Leary revealed that the total deal was valued at nearly $15 million. He invested about $9.7 million into crypto and had over $1 million of FTX equity. They have now become worthless because of the bankruptcy protection process. The remaining deal amount was eaten up by agent fees and taxation. He thus lost all of the $15 million he had received from FTX to act as their spokesman.
What had driven O’Leary to promote the crypto exchange was its compliance systems. In a deleted tweet of August 2021, he mentioned how he had finally solved his compliance problems with cryptos. John Ray III, the new CEO of FTX, summed up the risk, audit, and compliance procedures of the exchange as a ‘complete failure of corporate controls.’