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The S.B.F. Financial Autopsy

The first interim report by John J. Ray III, the restructuring guru and C.E.O. of the remains of FTX, depicts a horror show of moronic Gen Z hubris, financial impropriety, deceit, and so much more.

FTX interim C.E.O. John J. Ray III wrote that the lack of records and controls at S.B.F.’s company was so “pervasive,” that he and his team had to “start from scratch,” in order to “simply identify the assets.”
FTX interim C.E.O. John J. Ray III wrote that the lack of records at S.B.F.’s company was so “pervasive,” that he and his team had to “start from scratch,” in order to “simply identify the assets.” Photo: Nathan Howard/Getty Images
William D. Cohan
April 12, 2023

The initial interim report to FTX’s independent directors, recently filed with the federal bankruptcy court by John J. Ray III, the C.E.O. of the debtor-in-possession, reads like a veritable roman à clef of corporate malfeasance, starring the scatterbrained fashion icon Sam Bankman-Fried and his inner circle of Gen Z lap dogs—namely Caroline Ellison, his MIT classmate and former girlfriend who has pleaded guilty to federal fraud charges, and Nishad Singh, FTX’s co-founder and former director of engineering who has also pleaded guilty to six counts of criminal behavior. When Ray took over FTX from S.B.F. in November, as FTX was filing for bankruptcy, his initial observation was 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.” His new report unpacks this observation, often in chilling detail.