John Ray III, the newly appointed CEO of the collapsed cryptocurrency firm FTX, slammed the “complete failure of corporate control” at the company under its direction by the now-disgraced Sam Bankman-Fried.
"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," Ray said.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
Ray made his remarks in a filing with the U.S. bankruptcy court in the district of Delaware.
Ray, who oversaw Enron’s bankruptcy, among other high-profile cases, noted that many of the companies within FTX Group didn’t have appropriate corporate governance and many did not even hold board meetings.
Ray was appointed CEO of FTX when the company filed for bankruptcy protection and its CEO, Sam Bankman-Fried, resigned. FTX sought bankruptcy protection after the exchange experienced the equivalent of a bank run.
Additionally, FTX Group made numerous management procedural failures, including the absence of an accurate list of bank accounts tied to the company and account signatories, the Wall Street Journal reported.
In the filing, Ray addressed the use of corporate funds to pay for homes and other amenities for employees.
“In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas,” he said.
As detailed by Rebel News, Bankman-Fried was a leading Democrat donor, providing at least $38 million to leftist, progressive causes including PACs and political candidates.