In the early 2000s, Mr. Ray oversaw the unwinding of Enron, the energy trading firm that collapsed in an accounting scandal. At the hearing, he called the perpetrators of Enron’s crimes “highly sophisticated,” whereas FTX executives appeared to have engaged in “really just old-fashioned embezzlement,” he said.
“Even with most failed companies, we have a fair road map of what happened,” Mr. Ray said in his testimony. “We’re dealing with a literal paperless bankruptcy. It makes it difficult to track.”
The S.E.C., in its complaint, amplified those concerns and warnings. The complaint said that from the beginning, “FTX had poor controls and fundamentally deficient risk management procedures.” The S.E.C. said the company treated assets and liabilities as “interchangeable” in its accounting ledgers and bookkeeping.
For now, however, no one other than Mr. Bankman-Fried has been charged.
On a number of occasions, though, the indictment references other people who assisted Mr. Bankman-Fried in carrying out the allegedly fraudulent scheme, without naming any of them.
Legal experts, including some lawyers familiar with the investigation, have said it is likely that some of Mr. Bankman-Fried’s former associates are cooperating with the authorities, especially given the speed with which the charges were filed.
“Somebody had to describe to them what happened and what was done with specifics,” said Erik Gordon, a law and business professor at the University of Michigan. “Someone gave them a short cut.”
Royston Jones, Jr., David McCabe, Ephrat Livni, William K. Rashbaum, Rebecca Davis O’Brien and Benjamin Weiser contributed reporting.