Within the early 2000s, Mr. Ray oversaw the unwinding of Enron, the vitality buying and selling agency that collapsed in an accounting scandal. On the listening to, he referred to as the perpetrators of Enron’s crimes “extremely refined,” whereas FTX executives appeared to have engaged in “actually simply old school embezzlement,” he stated.
“Even with most failed corporations, now we have a good highway map of what occurred,” Mr. Ray stated in his testimony. “We’re coping with a literal paperless chapter. It makes it troublesome to trace.”
The S.E.C., in its grievance, amplified these issues and warnings. The grievance stated that from the start, “FTX had poor controls and essentially poor threat administration procedures.” The S.E.C. stated the corporate handled belongings and liabilities as “interchangeable” in its accounting ledgers and bookkeeping.
For now, nevertheless, nobody apart from Mr. Bankman-Fried has been charged.
On a variety of events, although, the indictment references different individuals who assisted Mr. Bankman-Fried in finishing up the allegedly fraudulent scheme, with out naming any of them.
Authorized specialists, together with some legal professionals aware of the investigation, have stated it’s doubtless that a few of Mr. Bankman-Fried’s former associates are cooperating with the authorities, particularly given the velocity with which the fees had been filed.
“Anyone needed to describe to them what occurred and what was completed with specifics,” stated Erik Gordon, a regulation and enterprise professor on the College of Michigan. “Somebody gave them a brief lower.”
Royston Jones, Jr., David McCabe, Ephrat Livni, William Ok. Rashbaum, Rebecca Davis O’Brien and Benjamin Weiser contributed reporting.