Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.
Current FTX CEO John Ray III, an attorney managing the bankruptcy proceedings of the cryptocurrency company founded by Sam Bankman-Fried, is earning $1,300 per hour in his current position and paying three additional executives $975 per hour each.
FTX filed for bankruptcy last month after users discovered that the company was intertwined with sister firm Alameda Research; both were controlled by Bankman-Fried and a group of amateur executives working from a luxury penthouse in the Bahamas. The disgraced entrepreneur was arrested this week by authorities in the island nation, where his companies were headquartered, as American securities regulators accused him of fraud.
Ray, a seasoned lawyer who previously oversaw the bankruptcy of defunct energy company Enron, is currently earning $1,300 per hour for his services, according to a court document. He remains an employee of Oak Hill Advisory, where he serves as a managing director.
Working alongside Ray are Kathryn Schultea, Mary Cilia, and Raj Perubhatla, who he respectively appointed to serve as chief administrative officer, chief financial officer, and chief information officer. Each is making $975 per hour, according to the court document.
Ray is therefore earning the equivalent of $2.6 million per year, assuming that he works 40 hours each week for 50 weeks. He earned $1.2 million on an annualized basis in 2005 when he worked on the Enron restructuring, according to a report from CNBC. The three co-executives are earning $1.95 million per year apiece under the same assumptions; the four executives altogether are earning a combined $4,225 per hour, the equivalent of $8.45 million per year.
Ray testified before members of the House Financial Services Committee on Tuesday that he is attempting to "mitigate, to the greatest extent possible, the harm suffered"
by customers and investors of FTX. He repeated earlier comments that the cryptocurrency exchange was the worst failure of corporate governance he has witnessed in his entire career.
"Although our investigation is ongoing and detailed findings will have to await its conclusion, the FTX Group's collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people's money or assets,"
Ray noted that his team is establishing corporate controls, such as accounting, human resources, and risk management operations, while working "around the clock" to locate FTX assets, which may prove difficult due to the lack of record-keeping under previous management.
Criminal accusations against Bankman-Fried were revealed one month after news about the commingling of funds between FTX and Alameda Research became public, causing a liquidity crisis as users rushed to withdraw funds. He was charged this week by the Securities and Exchange Commission with fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.
The disgraced entrepreneur, who has been denied bail due to the significant flight risk he poses, could spend as much as 115 years in prison if he is convicted on all counts. "We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto,"
SEC Chair Gary Gensler remarked in a press release.