From the always interesting Wall Street on Parade, December 16:
Over the past week Wall Street On Parade has reached out to a number of individuals connected to FTX Capital Markets, the stock trading platform and SEC-registered brokerage firm that was majority owned by the indicted crypto kingpin, Sam Bankman-Fried. We’ve received two answers to our questions: Either, “I can’t talk about it” or “no comment.” Regulators have been just as tight-lipped. When we emailed one of the lawyers handling the bankruptcy process for FTX, James Bromley of Sullivan & Cromwell, the response came back from a crisis management/public relations firm, Joelle Frank. Their response was “decline to comment.”
Bankman-Fried’s ability to enter the regulated world of stock trading in the U.S. while, according to Justice Department prosecutors, he was operating a vast fraud, raises red flags about what other crypto firms may be doing or contemplating.
Despite all of the stonewalling, Wall Street On Parade has been able to significantly pull back the curtain at FTX Capital Markets. Here’s what we’ve discovered thus far.
The Wall Street self-regulator, FINRA, has documents on file showing that Sam Bankman-Fried is the indirect owner of 50 to 74 percent of FTX Capital Markets, which was purchased outright by an FTX related firm, West Realm Shires.
Despite the fact that the bankruptcy handlers for FTX are supposed to be maximizing value for the defrauded customers and investors, this brokerage firm has “ceased doing business” as of November 30 according to FINRA, just 19 days after the bankruptcy filing, and despite the fact that it was not part of the bankruptcy filing.
FINRA states that FTX Capital Markets had two primary business lines: “retailing corporate equity securities over-the-counter” and “arranging for transactions in listed securities by exchange member.” Bankman-Fried bought this brokerage firm, previously called RJL Capital, in August of last year. It had been in operation since 2011. The price he paid is unknown at this time.
In the declaration that the newly appointed FTX CEO, John Ray, filed with the bankruptcy court on November 17, he stated that “Based on the information that I have reviewed at this time” both FTX Capital Markets and an affiliated company, Embed Clearing LLC, are “solvent.” Neither firm was part of the bankruptcy petition.
If FTX Capital Markets was solvent, why wasn’t it sold quickly so that customer accounts could move easily to another SEC-registered brokerage firm, as is typically the case? If FTX Capital Markets was insolvent and Bankman-Fried used it also as his personal piggy bank, why wasn’t this mentioned in the SEC complaint filed against Bankman-Fried or the indictment filed by the Justice Department?....
....MUCH MORE
Also at WSOP:
- Congressman Brad Sherman Versus the Crypto Gang in Congress
- Senate Banking Hearing on FTX Collapse Pits a Courageous Law Professor Against Paid Shill Kevin O’Leary
- An Insider Blows the Whistle on How the Fed Has Allowed Crypto to Invade Federally-Insured Banks
- Sam Bankman-Fried Quietly Bought an SEC-Registered Stock Trading Operation; There Are Big Questions as to What’s Happening with Customer Accounts
- No One Trusts the FTX Bankruptcy Case: News Outlets Intervene; Justice Department Trustee Demands Independent Examiner; SEC Orders Disclosures
- Senate Banking Chair Threatens a Subpoena If Sam Bankman-Fried Doesn’t Show for Next Wednesday’s Hearing; Says SBF “Orchestrated a Coverup”
