HARPER v. O'NEAL

On May 23, 2023, Daniel Harper (“Plaintiff”), on behalf of himself and all others similarly situated, represented by Adam M. Moskowitz and Joseph M. Kaye of the Moskowitz Law Firm, PLLC; and Jose Ferrer and Michelle Genet Bernstein of Mark Migdal Hayden LLP, filed a class action lawsuit against Shaquille O’Neal (“Defendant”), seeking declaratory relief and damages for alleged selling and registration of unregistered securities in violation of the Securities Act. This case was filed in the U.S. District Court for the Southern District of Florida, with Judge Federico A. Moreno presiding. 

In the complaint, the plaintiff alleged, “Harper is a citizen and resident of the state of Virginia, he is a natural person over the age of 21 and is otherwise sui juris. Plaintiff Harper invested in the Astrals Project and suffered investment losses because of Defendant’s conduct. Plaintiff brings this lawsuit on behalf of himself and all others similarly situated, pursuant to Rule 23(a), (b)(2), (b)(3), and/or (c)(4) of the Federal Rules of Civil Procedure.”

Plaintiff further alleged, “With respect to cryptocurrency, O’Neal explained that he initially did not know about cryptocurrency when it first became popular, but educated himself sufficiently to the point that he and his son, Myles O’Neal, subsequently founded their own non-fungible token (NFT) project called ‘Astrals’ (the ‘Astrals Project’).”

The plaintiff also alleged, “‘NFTs’ (non-fungible tokens) are unique cryptographic tokens that exist on a blockchain—the digital database supporting cryptocurrencies—and cannot be replicated. NFTs permit investors to tokenize and secure ownership over a unique digital asset. Analogized to an investment in art, each NFT, like a piece of art, is a unique asset that can be tied to some amount of monetary value, and investors bet on the value of the value of the artist and its work increasing in value over time, such that it can be sold for a profit.”

The plaintiff then alleged that “Defendant, by virtue of his office, stock ownership, agency, agreements or understandings, and specific acts was, at the time of the wrongs alleged herein, and as set forth, a controlling person within the meaning of Section 15 of the Securities Act. Defendant had the power and influence and exercised the same to cause the unlawful offer and sale of Astral securities as described.”

Additionally, the plaintiff alleged, “Defendant is a ‘director, officer, partner, or agent of or for the seller,’ of the Astrals Project pursuant to § 517.211, tasked with acting on behalf of the Astrals Project within the state of Florida and beyond to broadly solicit potential investors to purchase Astrals NFTs from the Astrals Project. The Astrals Project held out Defendant as possessing sufficient authority to sell securities when it publicly collaborated or partnered with Defendant, for instance, in a way that sanctioned Defendant to discuss selling Astrals NFTs investments and related crypto assets. The average and reasonable person looking at these collaborations and brand partnerships would reasonably believe that the Astrals Project held out Defendant as possessing sufficient authority to sell securities.”

Plaintiff presented six claims for relief, including for alleged violations of Sections 5, 12(a)(1), and 15 of the Securities Act; Florida Statute Section 517.07; the Florida Deceptive and Unfair Trade Practices Act; the Virginia Securities Act; and the Virginia Consumer Protection Act. 

In the prayer for relief, the plaintiff requested a judgment granting restitution, declaratory relief, and injunctive relief. The plaintiff also requested an award for actual, direct, statutory, and compensatory damages.

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