This article reflects the opinions of its author and not necessarily those of ShareSoc.
FTX prosecution vs that of Patisserie Valerie
FTX, a cryptocurrency exchange which became one of the largest in the world with billions in deposits, declared bankruptcy on 12 November 2022. The trial of Sam Bankman-Fried (SBF) commenced in the US at the Manhattan federal court on 3 October, 2023. SBF faced seven counts of fraud and conspiracy. Three FTX executives agreed to plea deals, hence they became witnesses for the prosecution. The trial ended on 2 November, 2023, the jury decided that SBF was guilty on all seven counts.
From collapse to the CEO being found guilty, in less than one year.
Meanwhile back in the UK, Patisserie Valerie is a chain of cafés. The chain specialises in cream cakes, plus continental breakfasts, lunches and teas and coffees.
It’s a tricky question: what is more complex – a cryptocurrency exchange which became one of the largest in the world with billions in deposits or a retail chain selling cream cakes.
I guess the latter because it has taken four and a half years for the Serious Fraud Office, or perhaps more accurately the ‘Seriously Flawed Organisation’, to charge four people with the January 2019 financial collapse of the cream cake empire.
Compared to the SFO, the Financial Reporting Council acted very quickly, in fact commencing an investigation before the cream cake empire collapsed, in November 2018. In September 2021, the FRC announced a financial sanction against Grant Thornton of £4m, reduced to £2.34m because Grant Thornton cooperated. The good old chestnut of lack of professional scepticism was one of the reasons for the fine. (Oh, for more sceptical and experienced auditors to be part of audit teams.) The Grant Thornton audit partner in charge of the audit was also fined.
Summarising, we do seem to have an ambivalent attitude in this country to white collar crime. The US acts quickly when companies collapse, in this country the problem seems to enter the pending tray for far too long.
The Secret Auditor