Prager Metis Becomes First CPA Firm Involved With FTX Scam
From the Desk of Jim Eccleston at Eccleston Law.
Prager Metis becomes the first CPA firm to open a Metaverse headquarters in the metaverse platform Decentraland.
It also is the first CPA firm to become embroiled in the FTX scam.
Prager Metis and another accounting firm, Armanino LLP, were “willfully blind” to a pattern of “racketeering” at FTX, a client who allegedly lost $20,000 has alleged in a Nov. 23 lawsuit filed in San Francisco federal court, according to Bloomberg Tax. Industry experts anticipate that this suit is expected to be the first of many as regulators probe the company to assign liability for billions of dollars in missing funds.
The recent lawsuit implicates FTX’s bankruptcy filing, in which new CEO John J. Ray III noted that the company’s books were a mess. Ray, who helped manage Enron Corp.'s liquidation, detailed a significant lack of oversight at the company, including expense reports being approved by emoji as well as the absence of a human resources or accounting department.
“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 in a bankruptcy court submission.
Ray directly called out the auditors, citing “substantial concerns as to the information presented in these audited financial statements”, notably for the portion of the business audited by Prager Metis.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.
Tags: eccleston, eccleston law, advisors, law, ftx
