After Enron, Lehman Brothers… the giant FTX falls in turn

2022: FTX, the crypto herald’s bowl

Sam Bankman Fried, founder and boss of FTX, at a conference on cryptocurrencies, in Nassau (Bahamas) on April 27, 2022.

At 30, Sam Bankman-Fried was still, at the beginning of November, at the head of a fortune estimated at 15.5 billion euros. Boss of FTX, the world’s second largest cryptocurrency exchange, the American, who lives in Nassau, Bahamas, managed 300 employees, and his company hosted the capital and electronic tokens of 100,000 customers. Famous athletes, such as tennis player Naomi Osaka or retired basketball player Shaquille O’Neal, advertised it. In one week, Sam Bankman-Fried lost everything. Friday, November 11, he had to resign and declare his company bankrupt. He would have used a good part of the billions deposited by his clients to finance his own company, based in the Bahamas, and to speculate on his own account.

2011: MF Global, the boss’s lost bet

Jon Corzine, former boss of MF Global, during a hearing in Washington, December 8, 2011.

Specialist of future – futures contracts – and commodities, the brokerage company in derivatives MF Global decides, under the impetus of its boss, Jon Corzine, to bet on European debts. Arrived in 2010, Corzine wants to make MF Global a mini-Goldman Sachs – the investment bank he led from 1994 to 1999. A losing risk. In 2011, the valuation of the 6.3 billion in European sovereign debt that MF Global had undertaken to acquire collapsed. MF Global declares bankruptcy on October 31, weighed down by insufficient equity. The press will reveal that Jon Corzine had gone so far as to use monies from MF Global investors to finance the company’s losses, a crime.

2008: Lehman Brothers, the domino effect

The headquarters of Lehman Brothers in New York, September 12, 2008.

We believed her too big to fail – “too big to fall”. And yet. On September 15, 2008, the investment bank Lehman Brothers, 27,000 employees, declares bankruptcy. Weighed down by its “toxic” securities backed by subprime mortgages, it leaves more than 650 billion dollars in debt. With the bursting of the real estate bubble in the United States and the explosion in the number of insolvent borrowers who took out subprime mortgages – risky mortgages – a whole financial ecosystem of banks that were insufficiently capitalized and fed on toxic loans was tottering. The United States is experiencing its worst financial crisis since the Wall Street crash of 1929. The world is entering recession, despite the reactions of governments and central banks.

2005: Refco sunk by its rogue CEO

Phillip Bennett, former CEO of Refco, in New York on November 18, 2005.

When it comes to collapse, Refco is a model of speed. On August 11, 2005, this derivative brokerage heavyweight had a triumphant IPO: about $580 million in shares sold. But the British CEO, Phillip Bennett, at the head of Refco since 1998, had set up a system of fictitious loans to hide debts to the tune of 430 million dollars. The deception was discovered and exposed on October 10, 2005. On November 10, Refco’s main assets were sold at auction in the Manhattan bankruptcy court, and his boss is indicted for securities fraud, forgery and false declarations, among others. In July 2008, Bennett was sentenced to sixteen years in prison.

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