The U.S chapter resolve overseeing Ftx's chapter 11 proceedings is Considering a request by the U.S justice Department to appoint an neutral Examiner to analysis the exchanges Collapse and that decision would possibly come Today at a courtroom listening to in Delaware Joy Has now talked about with additional approved Analysis is Murphy and McGonagall Founder James Murphy thanks for Joining us this morning James so FTX is Opposing this neutral investigation Saying it may be redundant and Wasteful so why does the justice Department actually really feel it's obligatory Well Christine um the idea proper right here is that You really need an neutral Completely neutral social gathering to conduct Uh an examination and a circumstance Like this the place what we're talking about Is certainly one of many largest frauds in U.S History and so on account of The current debtors Council Sullivan and Cromwell had executed a substantial amount Of work for these debtor entities They truly don't qualify as neutral And the price of of a report from an Independent examiner is vital it Can end in recoveries in direction of third Parties who might need enabled the fraud They may not have been understanding Co-conspirators nonetheless they may have Enabled the fraud by not blowing the Whistle when they should have and that
Could be Auditors and accountants Bankers and authorized professionals and I really feel lastly People Saw the benefit of a neutral Examiner report very very recently Because the Celsius Independent examiner report merely obtained right here Out and really broke new ground that People did not know that primarily The Examiner concluded that Celsius had all Of the uh indicia of a Ponzi scheme and He pulled out some truly Telling emails the place people had been Referring to themselves as a uh enablers Of a Ponzi scheme they often say they'd been Joking nonetheless uh if you find yourself actually Working at a Ponzi scheme it most likely is Not a superb joke Uh yeah the uh John J Ray has talked about that Uh the certainly one of many arguments he Makes in direction of having this examiner is The the amount of worth that he he's Familiar with uh given what occurred With Enron with the unwinding of and Ronin and uh if one factor like over 100 Million I contemplate was the amount for for The neutral costs proper right here yeah Is that type of what we could anticipate Here in FTX that this type of worth or Does Ray have some extent Well it's going to be pricey there's No question uh that it's going to probably be pricey But what what we're attempting to Analyze is what is the value of a report
Prepared by Sullivan and Cromwell that was there at The time And might need some obligation Conceivably for enabling the fraud this Is the place that's been taken by the Four bipartisan Senators who despatched in a Letter uh to the resolve strongly urging The appointment of an neutral Examiner that's the place of 18 U.S States who've all entered into the case And talked about we truly should know this Story and the provision is critical it Needs to be a really neutral provide And these 18 states it's selection Of fascinating you've got the states of Hawaii and California on one End of the political spectrum and likewise you've Got the states of Texas and Florida all Agreeing that we truly need Transparency proper right here there have to be a Record of what occurred proper right here on account of a Lot of people had been injured victims proper right here Millions of FTX victims unfold all through The United States and Congress Has talked about we would should legislate in This area and so Um having a report from an examiner in a Circumstance the place you've purchased truly a Fraudulent catastrophe hurting a great deal of People uh makes a great deal of sense and it'll Be pricey nonetheless in case you take a look at Enron That Enron report led to Claims and recoveries in direction of authorized professionals
And bankers for Enron in numerous of Millions of {{dollars}} that had been Distributed in the long run to collectors so There could very effectively be increased issues for Sullivan and Cromwell on account of they Formally prompt FTX uh sooner than they went Insolvent they often have been questioned By Sam Baker freed a couple of senators About their conflicts of curiosity in Representing them on this case and so in Choosing an neutral examiner how is That course of executed in a way that it Ensures Independence Well there are very strict pointers uh for Instance the regulation company or the lawyer That's picked to steer the investigation Can on no account have executed work for uh the Debtor entities which in spite of everything makes Sense and that's the problem for Sullivan and Cromwell So there may be no question that Whoever is chosen uh if the resolve Grants the motion may be Independent and uh inside the Voyager chapter merely all through the ultimate Couple of days an e-mail obtained right here out from a Sullivan and Cromwell confederate the place he Was representing in an e-mail to a third Party that FTX was Rock Solid that was The quote and he talked about that 4 days Before the chapter and so now uh These authorized professionals at Sullivan and Cromwell Are going to hunt out themselves Witnesses In the Voyager chapter they usually often
Could very successfully be Witnesses inside the case Against Sam bankman freed Um and so there's there's a fairly successfully Understood tenet inside the observe of regulation That you presumably can't be every an advocate and a Witness inside the case Interesting moreover we now have the listening to Today what are you awaiting in Today's listening to with FTX Well uh it'll be fascinating I really feel Everybody inside the courtroom all involved Have a great deal of respect for John Ray so This goes to be a mini trial it's Not merely going to be authorized professionals arguing uh To the resolve the intent proper right here is that They're going to call John Ray to the Stand and he'll be sworn in and he'll be Asked questions by Sullivan and Cromwell And then the U.S trustee could have an Opportunity to cross-examine Um Mr Ray and my guess is that they'll search To make it very very clear that Sullivan And Cromwell has conflicts as a Consequence of its uh illustration not Just of FTX entities nonetheless of Sam bankman Freed himself and one different uh senior Executive on the agency Foreign By Sullivan and Cromwell to be uh Independent and folks explicit particular person Representations are pretty crucial in Your earlier part you talked about The possession of the Robin Hood shares Well Sullivan and Cromwell prompt Mr
Bankman freed personally with respect to Issues spherical possession of those Robin Hood shares and so now the possession is Is disputed and Sullivan and Cromwell Was there uh within the midst of it and That's that's just one occasion of the Difficulties uh they're going to have in In portraying themselves as neutral