Who is John J. Ray III, the new CEO of FTX?

John Jay Ray III, a distressed corporate restructuring lawyer, helped navigate the fallout from some of the biggest corporate bankruptcies in history, including the implosion of energy trading firm Enron after an accounting scandal in 2001.

Mr Ray, 63, took over collapsed cryptocurrency exchange FTX after its chief executive, Sam Bankman-Fried, resigned last month. Mr Bankman-Fried was arrested in the Bahamas on Monday after US prosecutors filed criminal charges, and on Tuesday the Securities and Exchange Commission charged him with misleading large investors.

Mr. Bankman-Fried was scheduled to testify before the House Financial Services Committee on Tuesday in a hearing focused on the collapse of FTX. He will no longer appear, but Mr Ray is due to give evidence at the hearing, which started at 10 a.m.

In a statement prepared for the committee, Mr Ray said he had never seen “such a complete failure of corporate controls at all levels of an organisation”.

Mr Ray added that FTX had been run by “a very small group of grossly inexperienced and unsophisticated individuals”. He listed a series of “unacceptable management practices”, such as unreliable financial statements and “lack of independent governance” between FTX and Alameda Research, a hedge fund owned by Mr Bankman-Fried.

In a bankruptcy court filing for the company last month, Mr Ray said FTX used software to “conceal the misuse of customer funds” and gained access to sensitive data through a unsecured group email.

Mr. Ray has been involved in several other major corporate restructuring efforts, including that of mortgage lender Residential Capital and underwear maker Fruit of the Loom. He is best known for serving as the CEO of Enron during its bankruptcy and for recovering over $828 million for creditors.

Since Mr. Ray took over as CEO of FTX, he said his team had obtained around $740 million worth of cryptocurrency from parts of its business – a sum he called “just a fraction”. of what he hopes to recover. A run on deposits at FTX left the company owing $8 billion to its clients.

Mr. Ray and the rest of FTX’s new management have distanced themselves from Mr. Bankman-Fried, stating in the bankruptcy court filing that “Mr. Bankman-Fried is not employed by Debtors and does not speak not for them.