FTX, a recent filing discloses, used company money to buy employees' homes

A recent document suggests that FTX used company money to buy residences for employees.

In a bankruptcy filing, new CEO John Ray III said that FTX used corporate money to buy homes for employees.

Ray, who was in charge of reorganising Enron, noticed that "certain real estate" was listed as being owned directly by some employees.

Ray criticises FTX for not having enough financial controls. He said that the heart of Sam Bankman's  empire, Fried's, lacked "corporate controls" and "trustworthy financial information."

A bankruptcy filing said that corporate funds were used to buy homes in the Bahamas and "personal items" in the names of FTX employees and advisors. This was just days after the penthouse apartment of FTX founder Sam Bankman-Fried was put on the market for almost $40 million.

It's not clear right away where those business funds came from.

John Ray III, the new CEO of FTX, told the court in a declaration that accounting for spending was done in a way that was "not appropriate for a business enterprise" because there were no controls over disbursements.

Corporate housing arrangements are not unusual, especially in high-cost areas, but Ray's filing said that "certain real estate was recorded in the personal name of these employees and advisors," which is not how things usually work.

A few days ago, a penthouse home in the same private complex where Bankman-Fried and other FTX executives lived was put on the market for just under $40 million. Many people say that the former billionaire and founder of FTX owned the penthouse.

In the same filing, Ray criticised the former executive's team for having "no financial controls at all" and said that he didn't trust FTX's companies' balance sheet statements.

Prager Metis, a company "with which I am not familiar," did the auditing for one of FTX's corporate verticals, which Ray called "silos."

Bankman-Fried could not be reached right away for comment. When asked for a comment, Prager Metis did not respond right away.

Ray, who was in charge of Enron's bankruptcy and reorganisation, said he had 40 years of experience in the bankruptcy and business worlds.

"The Debtors do not have an accounting department," Ray wrote, adding that he thought it would be "some time" before reliable financial statements could be made.

Alameda Research, which is Bankman-crypto Fried's trading company, is one of the companies that filed for Chapter 11 bankruptcy earlier this month.