Tr?id=566623520170033&ev=PageView&noscript=1

Prager Metis Becomes First CPA Firm Involved With FTX Scam

Posted on December 5th, 2022 at 1:05 PM
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

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

Jim, Stephany and the whole team were a God send.  We felt like we were put into a situation where we had no advocate. Jim’s team came in with a strong, well laid out strategy on how to get our story heard. Where our outside compliance company had no ability to help, our Broker Dealer was impenitent, and the regulators were aggressive pursuing vague rules, Jim came like a barricade against an assault we did not understand. Though you pay member dues to be affiliated with FINRA and a B/D, you have no voice. The only thing that is truly heard in this un-level playing field is a bulldog’s bark like Jim’s. I would encourage anyone to call Jim and his team to find a real ally in the tough and complicated world of securities regulation. They are truly the best.

Greg P.

LATEST NEWS AND ARTICLES

1793209405 Law
October 28, 2026
FINRA Panel Orders Kingswood Capital Partners and Executives to Pay Former Advisor $11.3 Million

A Financial Industry Regulatory Authority (FINRA) arbitration panel has ordered Kingswood Capital Partners LLC, CEO Michael Nessim, and Chief Compliance Officer Mohamed Alsoraimi to pay former advisor Rikin Patel $11,341,369.25.

1793123026 Law
October 27, 2026
CFTC Seeks Public Comment on Proposed Crypto Asset Regulatory Framework

The Commodity Futures Trading Commission (CFTC) has issued an Advanced Notice of Proposed Rulemaking (ANPRM) seeking public comment on a potential regulatory framework for retail commodity transactions involving crypto assets, which the agency calls "CTXs." According to the CFTC's press release, the initiative focuses on Section 2(c)(2)(D) of th...

1793034027 Law
October 26, 2026
FINRA Bars Former Wedbush Broker Over $3.5 Million in Complex ETP Losses

The Financial Industry Regulatory Authority (FINRA) barred former Wedbush Securities broker William H.