FTX’s Collapse Was a Crime, Not an Accident

Re:FTX’s Collapse Was a Crime, Not an Accident by themitigating on Wednesday November 30, 2022 @07:20PM (#33810261)

Isn't the pension fund for regular people?

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Re:FTX’s Collapse Was a Crime, Not an Accident by akiselev on Wednesday November 30, 2022 @07:34PM (#33810463)

Regular people with a diversified portfolio of $180 billion who lost 0.1% of their fund.

That’s a small price to pay when interest rates are 3% to find out your fund managers need to be fired.

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Re:FTX’s Collapse Was a Crime, Not an Accident by throwaway2037 on Wednesday November 30, 2022 @08:00PM (#33810731)

I Googled it. Here is the official statement from Ontario Teachers’ Pension Plan: https://www.otpp.com/en-ca/about-us/news-and-insights/2022/o...

    In October 2021, Ontario Teachers’ invested US$75 million in FTX International and its US entity (FTX.US).  In January 2022, we made a follow-on investment of US$20 million in FTX.US. ... Our investment represented less than 0.05% of our total net assets...

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Re:FTX’s Collapse Was a Crime, Not an Accident by akiselev on Thursday December 01, 2022 @04:57AM (#33814323)

Thank you for the exact numbers!

I don’t know why but that extra factor of two somehow makes it even worse. 0.05% of assets isn’t even enough for petty cash for most businesses and they couldn’t do some due diligence when it was $75 million?!

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Re:FTX’s Collapse Was a Crime, Not an Accident by throwaway2037 on Saturday December 03, 2022 @06:33AM (#33842708)

You raise a good point about due diligence. They probably did as much as possible, but remember that they were investing in a private company that was committing massive fraud. It is hard to know if a company is lying to you when you are doing due diligence without direct access to internal materials. Also, for FTX, 75m USD was a tiny investment, so the amount of access granted for due diligence was probably very limited. I guess the sale was done with a 50ish page powerpoint presentation, and a few meetings with the C-suite. Some part of investing in private companies is always a gamble.

If we consider publicly listed companies that require annual audits by external professionals: Look how many people were taken surprise by Germany's largest start-up: Wirecard. It took years for highly skilled investigative journalists to expose the extent of fraud. Yes, you can be cynical about professional auditers, but they were also subject to an impressive level of deceit. When Dan Mccrum from FT was getting very close, I still thought it might be their Asian ops were a fraud, but EU ops OK. I was dead wrong -- the whole thing was a fraud.

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Re:FTX’s Collapse Was a Crime, Not an Accident by lmm on Wednesday November 30, 2022 @11:20PM (#33812291)

Is it? Or is it for the guy who gets paid 2.85 million/year to run it?

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