Law firms seek to oust Roche Freedman from Tether crypto case

Smartphone with Tether logo is placed on displayed U.S. dollars in this illustration taken, May 12, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) – Law firms seeking to lead a class-action lawsuit against stablecoin creator Tether on behalf of cryptocurrency investors have seized on secretly recorded comments by a lawyer at a competitor firm, Roche Freedman, to try to oust it from the litigation.

Four plaintiffs’ law firms have asked a federal court judge in New York to remove Roche Freedman and put them in charge of the lawsuit, which alleges that Tether is liable for market manipulation.

The firms contend that the comments by Roche Freedman co-founder Kyle Roche would distract from the investors’ claims.

Roche did not immediately reply to a request for comment on Tuesday. Tether has denied the allegations in the lawsuit.

The law firms’ jockeying comes days after a website called Crypto Leaks published video clips it said showed Roche boasting he used investor class actions to harm competitors of Ava Labs. He and other partners at the law firm had a financial stake in the cryptocurrency company, according to court filings. Clips on the site showed Roche referring to class action plaintiffs and jurors as “idiots.”

“My comments in the video were highly inappropriate, made while I was intoxicated, and I deeply regret my statements,” Roche said in a sworn statement filed in Manhattan federal court on Friday.

The firm said in a filing that it had been working on the Tether case since before it was representing Ava Labs, and that it had removed Roche from its class action practice group.

Tether, the company behind the world’s largest stablecoin, Tether USDT, asked a New York judge last week to remove Roche Freedman from the case against it.

Roche Freedman said in a filing on Tuesday that it believes a defendant in another one of its cases is behind the publication of the videos, and that disqualifying the firm over them would encourage parties to target their opponents via “underhanded means.”

Selendy Gay Elsberg and Schneider Wallace Cottrell Konecky, the law firms co-leading the Tether case with Roche Freedman, said in a letter to the judge on Friday that Roche Freedman’s involvement is now “contrary to the best interests of the class.”

Kirby McInerney and Radice Law Firm, which represent investors who previously lost a bid to lead the case, called the dispute a “sideshow” and asked the court on Monday to replace all three firms.

The judge in the case has not set a hearing on the requests.

The cases are In re Tether and Bitfinex Crypto Asset Litigation, U.S. District Court for the Southern District of New York, No. 1:19-cv-09236.

For the proposed class in the Tether case: Edward Normand of Roche Freedman; Philippe Selendy of Selendy Gay Elsberg; Todd Schneider of Schneider Wallace Cottrell Konecky; and others

For Tether: Elliot Greenfield of Debevoise & Plimpton

Read more:

Tether wants Roche Freedman off case over founder’s alleged conflict

Stablecoin Terra’s broken dollar peg hits wider crypto markets

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