There's Starting To Be A Received Narrative Here, And I Don't Believe A Word Of It

The narrative of Sam Bankman-Fried and the Alameda-FTX bankruptcies has been settling into consensus, but as I've said here all along, I'm an Aristotelian as well as a contrarian, which means in this case that I look for causes, and I'm likely not to be satisfied with conventional answers. I think the conventional version boils down to this: Bankman-Fried and his enablers were quirky geniuses who had brilliant ideas but maybe got themselves in too deep. But they were effective altruists, so maybe their hearts were in the right place. Anyhow, crooks or not, the Establishment has come to the rescue, and John H Ray, III, who solved Enron, is on the case:

John H. Ray, III is the principal of Ray & Counsel, P.C. He is an experienced Harvard Law School graduate and Harvard Law Review editor with over 20 years of complex business and class action litigation, as well as appellate experience, with special expertise in securities litigation, officer and director liability, closely held corporation sharedholder disputes, First Amendment and intellectual property/media litigation, discrimination and substantial practice in labor and employment class actions. He served as a law clerk in the United States Court of Appeals for the Seventh Circuit, and worked in large national law firm environments for over 10 years, at Cravath, Swaine & Moore LLP and Jenner & Block LLP.

So, as an Aristotelian, I've got to ask who hired Ray? This story says,

Ray had been chosen as the new FTX chief executive officer and chief restructuring officer during late-night talks that led, at 4:30 a.m. Nov. 11, to Bankman-Fried’s exit.

Fine, but note we have the passive "had been chosen", and we don't know by whom. We also know from the same story,

Financial publications said Ray’s compensation includes a $200,000 retainer and a $1,300 hourly fee.

But from Ray's public statements, the company has no board of directors, and there are no board meetings. Ray is an attorney and is working for pay on behalf of clients, but we don't know who the clients are, nor what their interests are. But never fear, Ray solved Enron, whatever that means, except Kenneth Lay, just like Jeffrey Epstein, left this mortal coil before everything Enron could be solved. The United States Department of Justice issued a statement saying it remained committed to pursuing all available legal remedies for victims of the fraud. So it's all gonna work out, huh?

YouTubers are already thinking SBF may wind up like Jeffrey Epstein. He'll need at least to make sure the cameras near his cell are all in working order. However, I do not endorse wild and completely unfounded conspiracy theories.

Anyhow, the received narrative goes on to say that FTX was run by a dozen or so polyamorous hippie-style geniuses who suffered from ADHD, lived communally in a luxury penthouse in the Bahamas, and had their own doctor-therapist who prescribed amphetamines for their ADHD. The only female in the group I'm aware of was Caroline Ellison, so according to that doctor, there wasn't really that much action. Nevertheless, it was the synergy between Beanbag Boy Bankman-Fried and Queen Caroline that drove the whole enterprise, or something like that. But they let Caroline lose $10 billion in unsupervised trading, and John Ray III says he's nver seen anything like it.

Never underestimate what a beautiful woman can do.

But by early November, this had gotten out of hand, and both Bankman-Fried and sexy siren Caroline had to resign, and at 4:30 AM the same day, "they", whoever "they" is, hired John Ray III, caudillo of Enron, to fix things for them at $1300 an hour. But with no company board that holds no meetings, we don't know who "they" are, except "they" had also engaged white-shoe law firm Sullivan & Cromwell to work for FTX even before the bankruptcy, and Sullivan & Cromwell has also been brought in again to straighten things out.

Sounds like some very important people want things straightened out by some very expensive lawyers. The altruistic hippies who were thought to be running things in the penthouse are nowhere to be seen, and New York lawyers hired by someone else with a checkbook are on the case like white on rice. In fact, I doubt if the altruistic hippies ever had much to do with the company.

Just for starters, FTX had an app. Adults with ADHD, which the received narrative of the penthouse hippies claims they had, suffer from carelessness and lack of attention to detail, inability to focus or prioritize, and poor organizational skills, just the people you need to manage an app and its servers. Somebody else, almost certainly not in the penthouse, was running the app and its servers. Someone else had to tell the app not to authorize withdrawals when things got tight. The techies had to be paid, they had to have someone set their piorities and keep them focused. Almost certainly these people also were not in the penthouse, and they weren't working for pep pills or sack time with Caroline. Who and where were they, and what do they know? (Hint: Sullivan & Cromwsell are getting them to sign non disclosure agreements.)

In fact, someone, and that was before the bankruptcy, hired Sullivan & Cromwell to do FTX's legal work. Remember that adults who suffer from ADHD have difficulty keeping quiet, speak out of turn, are edgy and irritable, and forgetful. Who among those in that penthouse has even the basic button-down style to hire or manage people like white-shoe lawyers? Someone else involved with FTX had to have the legal expertise to know they needed a Sullivan & Cromwell and the credibility to convince Sullivan & Cromwell to work for FTX. An altruistic hippie who forgets what he wanted yesterday isn't that guy. And that person had, and still has, a serious checkbook, no matter $50 billion of someone else's money is down the drain.

Someone else was behind FTX. John Ray III and Sullivan & Cromwell are working for them, and they're closer to the Aristotelian cause of what's going on here. Beanbag Boy and Hornrim Girl are distractions.

And people ask why I think Ferdinand Lundberg had a point.