The Department of Justice (DOJ) has announced that it will summon former FTX CEO Sam Bankman-Fried’s former FTX customers, investors, and personnel as witnesses in his upcoming trial.
DOJ Seeks Insight into Asset Management
The DOJ aims to call these witnesses to gain insight into Sam Bankman-Fried’s statements and actions, particularly concerning FTX’s asset management. This way, the DOJ intends to uncover the experiences of retail and institutional customers who entrusted significant assets to FTX, believing that the platform would protect them.
All Companies Dealing with FTX Under Scrutiny
However, the legal process related to FTX is not solely an investigation conducted by the DOJ. The United States Securities and Exchange Commission (SEC) also filed a lawsuit against Prager Metis, an accounting firm that partnered with FTX in 2021.
The SEC alleges that Prager Metis committed hundreds of violations related to auditor independence over a two-year period while working with FTX in 2021. The SEC claims that Prager Metis did not maintain the necessary independence while providing audit services to clients, which is considered prohibited under the framework of auditor independence.
“Auditor independence is a crucial reminder of protecting investors.”SEC
Law Firm Responsible for FTX’s Collapse
Furthermore, it was revealed that the law firm Fenwick & West, which provided services to FTX, is also under scrutiny. In a court filing made on September 21, the plaintiffs argue that the U.S.-based law firm Fenwick & West exceeded norms in the service offerings it provided to FTX, claiming that it should be partially held responsible for FTX’s collapse.