My Writings. My Thoughts.

Thursday November 17, 2022

// November 17th, 2022 // Comments Off on Thursday November 17, 2022 // Daily News

AND FTX donated to the Democrat’s campaigns in the rigged midterms

Never seen ‘such a complete failure’ of corporate controls, says new FTX CEO who also oversaw Enron bankruptcy

KEY POINTS

  • Newly appointed FTX CEO John Ray III scorched Sam Bankman-Fried for a total absence of trustworthy data and lack of financial safeguards.
  • Ray, who led the restructuring of Enron, said that FTX lacked adequate human resources, cybersecurity, accounting and auditing teams.
  • Ray disclosed that he had no confidence in the balance sheet statements of Alameda, FTX, or their subsidiaries.

Newly appointed FTX CEO John Ray III minced no words in a filing with the U.S. Bankruptcy Court for the District of Delaware, declaring that “in his 40 years of legal and restructuring experience,” he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

Ray formerly served as CEO of Enron after the implosion of the energy titan. He promised to work with regulators to investigate FTX founder Sam Bankman-Fried.

In the filing, Ray disclosed that he did “not have confidence” in the accuracy of the balance sheets for FTX and its sister company Alameda Research, writing that they were “unaudited and produced while the Debtors [FTX] were controlled by Mr. Bankman-Fried.”

The document is a declaration from Ray in his new role as CEO of FTX and associated entities, which filed for bankruptcy last week in an implosion that left the crypto world reeling and investors shaken.

Ray excoriated Bankman-Fried and his management team for what were described as lackadaisical controls on systems and regulatory compliance.

“The concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals” was unprecedented, the former Enron recovery boss said.

Ray said a “substantial portion” of assets held with FTX may be “missing or stolen,” following widespread reports on social media of the theft of hundreds of millions in cryptocurrencies.

Coordinating with regulators, Ray wrote, the Chapter 11 bankruptcy process would examine the actions of Bankman-Fried in connection with FTX’s collapse.

Alarmingly, Ray wrote that part of his remit would be to implement controls and basic corporate standards such as “accounting, audit, cash management, cybersecurity, human resources, risk management, data protection and other systems that did not exist, or did not exist to an appropriate degree, prior to my appointment.”

Bankman-Fried and FTX “management practices included the use of an unsecured group email account as the root user to access confidential private keys and critically sensitive data for the FTX Group companies around the world, the absence of daily reconciliation of positions on the blockchain, the use of software to conceal the misuse of customer funds.”

Bankman-Fried wasn’t immediately available for comment.

Sophisticated software was similarly used to conceal mismarked and fraudulent customer positions in the 2008 collapse of Bernie Madoff’s Ponzi scheme.

FTX is presently working to account for an accurate statement of cash and crypto assets. Ray said it would not be “appropriate for stakeholders or the Court to rely on the audited financial statements as a reliable indication of the financial circumstances” of FTX.

Tuesday November 15, 2022

// November 15th, 2022 // Comments Off on Tuesday November 15, 2022 // Daily News

Do NOT MISS TRUMP’S ANNOUNCEMENT AT 9PM

ECONOMY

Household debt soars at fastest pace in 15 years as credit card use surges, Fed report says

Households increased debt during the third quarter at the fastest pace in 15 years due to hefty increases in credit card usage and mortgage balances, the Federal Reserve reported Tuesday.

Total debt jumped by $351 billion for the July-to-September period, the largest nominal quarterly increase since 2007, bringing the collective household IOU in the U.S. to a fresh record $16.5 trillion, up 2.2% from the previous quarter and 8.3% from a year ago.

The increase follows a $310 billion jump in the second quarter and represents a $1.27 trillion annual increase.

Debt has surged over the past year due to inflation running near its highest pace in more than 40 years and amid rising interest rates and strong consumer demand.

The biggest contributors to that debt load came from mortgage balances, which rose $1 trillion from a year ago to $11.7 trillion, and credit card debt, which climbed to $930 billion.

The credit card balance collectively rose more than 15% from the same period in 2021, the largest annual jump in more than 20 years, according to the New York Fed, which released the report. The increase “towers over the last eighteen years of data,” a group of Fed researchers said in a blog post on the central bank site.