Audit reports are supposed to serve as a check on corporate power — independent verification that the numbers match reality and that investors can trust what they see. When those reports are issued without that verification actually having occurred, they become something else entirely: a seal of legitimacy stamped on a lie. That is what happened when Francis Decker, a 61-year-old New Jersey-licensed CPA and equity partner at Prager Metis CPAs, LLC, led his firm through two audits of FTX Trading Ltd., then one of the world’s largest crypto asset trading platforms.
On July 30, 2021, and again on April 2, 2022, Decker authorized audit reports certifying that FTX’s financial statements were presented fairly and that each audit had been conducted in accordance with Generally Accepted Auditing Standards. Neither statement was true. On April 8, 2026, the SEC issued a settled administrative order finding Decker had engaged in improper professional conduct, banning him from practicing before the Commission and requiring him to wait two years before he can apply for reinstatement.
How Decker accepted and staffed an engagement he was never qualified to lead
The failure began before a single workpaper was prepared. Decker was introduced to FTX founder and CEO Sam Bankman-Fried in late January 2021. Bankman-Fried was eager for audited financial statements — FTX was pursuing a planned public offering and conducting private fundraising rounds with equity investors who demanded audited books as part of their diligence process. On February 8, 2021, Decker convened a kickoff meeting. Nine days later, FTX signed the engagement letter, formally retaining Prager Metis as its independent auditor.
The problem was foundational. Decker had no meaningful competence in crypto asset markets. He lacked basic knowledge of standard terminology, the mechanics of crypto trading platforms, and the industry risks that were widely publicized even then. Professional auditing standards require an engagement partner to be satisfied that the firm has the competence and capabilities to perform an engagement before accepting it — a requirement Decker ignored. He assembled a team and began work without conducting any reasonable analysis of whether he or they could actually audit what they had agreed to audit. Prager Metis had been registered with the PCAOB since 2003 and held itself out as experienced in SEC reporting and complex audits. Taking on FTX without the requisite expertise was a breach of that standard from the first day.
The FTX-Alameda relationship that the audit team saw and still failed to examine
The single most consequential failure of the Prager Metis audits was not a missing workpaper or a miscalculated figure. It was the complete failure to assess the relationship between FTX and Alameda Research LLC — the crypto trading firm that shared the same founder. Bankman-Fried created and owned both companies. Until October 2021, he served simultaneously as CEO of FTX and CEO of Alameda. Gary Wang co-founded both. Nishad Singh held the Head of Engineering title at Alameda while simultaneously serving the same role at FTX. The structural entanglement was not hidden — it was visible to anyone who looked at the corporate structure.
Generally Accepted Auditing Standards specifically require heightened scrutiny of related party relationships because, as the standards explicitly recognize, related party transactions may be motivated to conceal fraud or misappropriation of assets. Decker and his team did not apply that scrutiny. The Prager Metis audit largely excluded Alameda, according to the SEC. Auditors accepted agreements between the two companies signed by Bankman-Fried on behalf of both, and a document the SEC described as essentially a one-page IOU. At no point did the engagement team adequately assess Alameda’s extraordinary ability to borrow virtually unlimited amounts from FTX — a borrowing arrangement that was, in fact, the mechanism through which billions of dollars in customer funds were quietly drained. The FTX-Alameda relationship, the SEC found, sat at the heart of the misappropriation that destroyed the company.
Two audit opinions that told investors FTX was sound and gave the fraud a professional veneer
The consequences of those failures were not abstract. On July 30, 2021, Prager Metis released the first audit report, covering FTX’s financial statements for fiscal year 2020 and a portion of 2019. The report stated that the financial statements “presented fairly, in all material respects, the financial position of FTX.” It claimed the audit was conducted “in accordance with auditing standards generally accepted in the United States of America.” Both claims rested on audit evidence that, because of Decker’s failures, was never sufficient to support them.
In January 2022, Prager Metis began the second audit, covering fiscal year 2021. The engagement team was substantially the same, led again by Decker, and the second audit suffered from every deficiency of the first. On April 2, 2022, the firm released its second clean opinion. FTX used both audit reports to support continued private fundraising and its ongoing pursuit of a public offering. Investors and counterparties who saw those reports received a false sense of security that the most basic professional gatekeeping had occurred. It had not. What the auditors saw — an informal corporate structure, founders and senior leaders who lacked significant business experience, and a relationship between FTX and Alameda that warranted deep scrutiny — they did not meaningfully investigate.
The unclosed workpapers, the $1.95 million firm settlement, and the suspension that followed
FTX collapsed in early November 2022. Bankman-Fried resigned on November 11, 2022, and FTX and approximately 100 affiliated entities, including Alameda, filed for Chapter 11 bankruptcy protection that same day. Bankman-Fried was convicted on all seven criminal counts on November 2, 2023, and sentenced on March 28, 2024 to 25 years in federal prison with a forfeiture of $11 billion. Judge Lewis Kaplan found that FTX customers had lost $8 billion.
In the immediate aftermath of the collapse, Prager Metis’s senior management reviewed the FTX audit documentation and discovered something that made the negligence more vivid: neither the 2019/2020 audit file nor the 2021 audit file had been officially finalized in the firm’s audit software. Multiple workpapers carried no evidence that Decker had reviewed them. Others contained open comments with no indication the questions raised had been answered. Prager Metis management instructed Decker to close the workpapers after the fact. The firm also scrubbed references on its website to experience with crypto clients. In September 2024, Prager Metis agreed to pay $1.95 million — including $1.75 million in civil penalties and $200,000 in disgorgement — to resolve SEC enforcement actions over the FTX audits and related auditor independence violations. The firm also accepted restrictions on taking new audit clients and was required to retain an independent consultant to review its quality control policies.
Decker’s personal reckoning arrived on April 8, 2026. Without admitting or denying the SEC’s findings, he agreed to be banned from appearing or practicing before the Commission as an accountant. He may apply for reinstatement after two years, subject to a battery of conditions including PCAOB registration requirements, state board attestations, and a demonstration that his conduct has not been at issue in any other regulatory or criminal investigation in the interim.
Conclusion
The Decker case is not about a sophisticated concealment. The FTX-Alameda relationship was visible. The informal corporate structure was observable. The founders’ inexperience was evident at the kickoff meeting. Decker accepted the engagement without the competence to perform it, built a team with the same deficiencies, and signed off on two audit reports that told the market what FTX needed the market to believe. Bankman-Fried is now serving 25 years in federal prison. The auditor who twice certified his company’s finances as sound faces a two-year bar and a reinstatement process that will define the remainder of his career.
