Udonis Haslem Settles Out of FTX Litigation

Former Heat forward Udonis Haslem has reached a settlement to escape an investor lawsuit over the collapse of crypto exchange FTX, following in the footsteps of his former teammate Shaquille O’Neal, who paid $1.8 million to settle claims against him in the same case.

Haslem, the former Heat enforcer who is now a studio analyst for Amazon Prime Video’s NBA coverage, has reached a “proposed resolution” with the plaintiffs, according to a filing made Nov. 26, which has not been previously reported. Terms of the proposed settlement were not disclosed. Haslem’s attorney declined to comment, and an attorney for the plaintiffs did not immediately respond to requests for comment.

The two sides are “in the process of preparing and finalizing the settlement agreement,” and a motion for preliminary approval is expected by Jan. 13, the filing says.

Haslem was one of many athletes named as defendants in the multidistrict proposed class action—which encompasses multiple lawsuits that were filed in various jurisdictions that were consolidated into one sprawling lawsuit in Florida federal court. The case was originally filed in November 2022. The class, which has not yet been certified by a judge, could include more than a million people, the plaintiffs say. Athletes who remain in the case include Tom Brady, Steph Curry, Shohei Ohtani, and David Ortiz, among others.

Haslem was accused of promoting FTX on social media, at public events, and in other promotional materials while failing to disclose he was being paid to do so. The plaintiffs claim he knew his endorsements—which included him saying he was “100% in” and touting the company as “safe”—would be widely disseminated, especially in Florida, according to an amended complaint filed in May.

The complaint also says Haslem knew he was promoting unregistered securities, and that FTX “did not have any of the safeguards that come with being a registered security.”

“Haslem’s advertisements were designed to lead viewers to believe that the investment was safe and suitable for everyone, regardless of knowledge level or socioeconomic status,” the amended complaint says.

Haslem was paid in equity, not cash. The complaint says his “promised compensation totaled over $1 million in value.” Before FTX collapsed, that equity position had ballooned to roughly $15 million in value, according to the complaint. 

“I got gypped out of $15 million,” Haslem told Florida’s Sun Sentinel newspaper in December 2022. “That’s what my equity had grown to.”

His settlement comes after it was revealed in July that O’Neal, who played with Haslem on the Heat for four seasons, is paying $1.8 million to settle claims over his promotion of FTX. That’s over $1 million more than the roughly $750,000 O’Neal was paid to promote FTX.

Although the judge issued an order in early May that dismissed many of the claims against celebrity and athlete endorsers, there remain a few key claims that are still being argued, including one under Florida state law that prohibits the selling of unregistered securities.

Adam Moskowitz, an attorney for the FTX investors, told Front Office Sports in July that O’Neal was smart to get out when he did, saying athletes who have not settled could be on the hook for billions of dollars in damages.

The downfall of FTX was sudden and dramatic. In the fall of 2022, the cryptocurrency exchange collapsed following revelations that its founder and CEO, Sam Bankman-Fried, had misused billions of dollars of customer funds. The scandal resulted in FTX filing for bankruptcy and Bankman-Fried being arrested and convicted on multiple counts of fraud and conspiracy. Last year, he was sentenced to 25 years in prison.