Thursday, April 18, 2024
Latest News
Rumor Alleges Reba McEntire Faces 'Serious Charges' and Asked for Prayers Regarding Fox News Lawsuit. Here's the Truth ‘Insidious campaign’ by Israel is denying life-saving aid to Gaza says UNRWA chief Chief Minister Naveen Patnaik: With Naveen In Fray, People Expect Solution To Kantabanji’s Woes | Bhubaneswar News IIFL to raise Rs 1,272 crore via rights issue How a little known spin-off of Chinese battery giant CATL has come to dominate the global home energy storage market Moto G64 vs Realme P1 vs Poco X6 Neo: Check price, specs, feature comparison Contractual Worker: Hc: Contractual Worker Has No Right To The Post | Allahabad News Volvo Profits Top Hopes Despite Easing Demand Arizona Republicans Splinter Over Repeal of 1864 Abortion Ban Water Supply: Water Supply Ramped Up To Meet Demand | Ahmedabad News Malabar Gold sees RS 51,000 crore annual sales Hong Kong restaurant Otera’s impressive dessert tasting experience highlights underappreciated ingredients ONE Championship: Rodtang faces Denis Puric in flyweight kickboxing bout at ONE 167 China’s autonomous driving players struggle to turn a profit despite heavy investments Trump lawyers say Stormy Daniels refused subpoena outside a Brooklyn bar, papers left 'at her feet' Food truck kingpin arrested in Stanislaus County on suspicion of theft Bhagalpur Lok Sabha Seat: Cong Goes All Out To Regain Lost Glory In Bhagalpur | Patna News Vinci Buys Majority Stake in Edinburgh Airport Met Gala 2024: Things to look forward to this year | IPL 2024: Bowlers shine as Delhi Capitals humble Gujarat Titans by six wickets | Cricket News Shock poll: Trump edges past Biden in key state, potential sign of cracks in Dems blue wall Funskool: Funskool Expands In Tamil Nadu | Chennai News China preps for tourism boom on May Day holiday as early bookings rocket past pre-pandemic levels US lawmakers target Chinese military firms helping Russia with bill imposing ‘full blocking sanctions’ Juventus ordered to pay Cristiano Ronaldo 9.7 million euros in back salary | Football News 7 Waymo robotaxis block traffic to San Francisco freeway on-ramp Missing medical colleges: On the case of the Madurai AIIMS Miscalculation Leads to Escalation as Israel and Iran Clash 2024 NFL jersey redesigns: Browns latest team to make change Bangalore News: When Bengaluru traffic dominates poll talk in Kerala | Bengaluru News
HomeLifestyleFTX Hires Ex-Regulators to Investigate Firm’s Collapse

FTX Hires Ex-Regulators to Investigate Firm’s Collapse

Cryptocurrency exchange FTX, whose recent collapse has led to questions about lacking regulatory oversight, has hired a fitting team to help untangle the mess: former senior U.S. regulators.

In its first hearing in Delaware bankruptcy court on Tuesday, a lawyer representing FTX said the firm has hired former enforcement chiefs from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, now both partners at law firm Sullivan & Cromwell LLP, to help the company’s new chief executive investigate what went wrong. 

FTX has hired

Steven Peikin,

who served as co-director of the SEC enforcement division between 2017 and 2020, and James McDonald, who was director of enforcement at derivatives regulator CFTC, also from 2017 to 2020. 

Another prominent FTX hire is Nicole Friedlander, who from 2008 to 2016 served as chief of the complex frauds and cybercrime unit at the U.S. attorney’s office for the Southern District of New York, one of the nation’s most influential federal law-enforcement agencies. Ms. Friedlander is also a partner at Sullivan & Cromwell.

Mr. McDonald declined to comment, while Mr. Peikin and Ms. Friedlander didn’t respond to requests for comment. 

FTX’s bankruptcy hearing disclosed that a “substantial amount” of assets are missing and may have been stolen as a run on customer deposits and a liquidity crunch precipitated a crisis of leadership, which led the firm to collapse. The SEC and the Justice Department are investigating FTX following its implosion this month.  FTX said this week it has been in contact with investigators, The Wall Street Journal previously reported. 

Hiring investigators to look into claims is a common practice in the bankruptcy process. But hiring two high-profile former regulators with enforcement background signals FTX is committed to conduct a full internal investigation, according to lawyers who defend people or companies accused of white-collar crimes.

“What a former government official brings to the table is a very sophisticated understanding of how to conduct investigations and how to interface with…various government agencies,” said Justin Weitz, a partner at law firm Morgan, Lewis & Bockius LLP and a former Justice Department official, who added the newly appointed team’s priorities likely include preserving documents.

The team will help assess what led to the collapse of the crypto exchange and will communicate with regulators in the U.S. and around the world, according to James Bromley, counsel to FTX’s new management and a partner at Sullivan & Cromwell. The team of former regulators will report to John J. Ray III, who was named FTX’s chief executive when the company filed for bankruptcy this month. 

FTX, which is based in the Bahamas, also has hired Nardello & Co., an investigations firm that specializes in anti-corruption and fraud cases, Mr. Bromley said in court Tuesday. It also retained blockchain data platform Chainalysis Inc. to help identify and secure digital assets and a cybersecurity company to help with other parts of the investigations, Mr. Bromley said. The name of the cybersecurity company wasn’t disclosed because of concerns over continuing cyberattacks on FTX, he said.

The collapse of FTX has set off the largest crypto-related bankruptcy ever, and court filings are already shedding light on what went wrong and how complicated things could get. Here are three things to know about the company’s bankruptcy process. Photo: Lam Yik/Bloomberg News

The bankruptcy petition filed by FTX last week said one of its core objectives is transparent investigations into FTX founder

Sam Bankman-Fried

and others involved in the company, coordinated with regulators in the U.S. and elsewhere. Another goal of the petition is to implement controls at FTX—in areas such as accounting, audit, cybersecurity and human resources—that didn’t exist or may not have been strong enough. 

Mr. Ray, who has helped oversee some of the biggest bankruptcies ever, including the 2001 collapse of energy company Enron Corp., said that FTX suffered a “complete failure of corporate controls” that culminated in an “unprecedented debacle,” according to the filing. 

Mr. Bromley said in court Tuesday, “It’s fair to say, we typically would not quote things that happen on Twitter, but there was a quote that I think summarizes this quite well, which is ‘What appears to be taking place is a serious investigation by serious adults.’”

Write to Mengqi Sun at

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link



Please enter your comment!
Please enter your name here

Most Popular

Recent Comments

Latest News