Martin Shkreli is found guilty of securities fraud • Hacker News Board

Re: Martin Shkreli is found guilty of securities fraud

#371

Post by turc1656 » Fri, Aug 04, 2017, 9:15 PM UTC

downandout wrote: post #345

jjxw wrote: post #118

There seems to be a misconception regarding what Shkreli was found guilty of. The legal case here has very little to do with the pharmaceutical pricing controversy - it is a separate case based on a separate hedge fund that he managed. The gist of it is that he took people's money to start a hedge fund, lied to investors that the fund was doing fine when the hedge fund went belly up, but ended up returning everyone's…

>When fraud happens those affected don't usually get their money back much less a return on that money. That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater . Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty. In…

I disagree. I think it will be a major factor at sentencing. First the fact that he did give them their money (with a significant return on it) back to the people well before the government got involved (meaning it wasn't a PR show) to me means there was never any intent for them to actually lose money. I think the judge will see it the same way. Because if that weren't true, he would never have repatriated the money back to pay them out. He would have just said "oops, I lost it" and continued about his regular business. As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money. He just chose a deceptive, illegal manner in which to do it.

Also, harm/damage is a big consideration in sentencing. He broke the law, yes. But usually a violation of the law in this regard results in substantial losses. Because it did not here, the only damage is his violation of his contractual obligation to provide money back to those who said they wanted to cash out. By holding the money, he deprived them of their rightful property as per the contract they signed when they invested with him. And considering they would have a real hard time beating his returns, proving any sort of tort injury is essentially impossible. This leaves only the statutory violation, meaning he amazingly didn't necessarily harm anyone or their property but rather just broke the law. Given the lack of injury to the victims of his crime, I think he's likely to see a very light sentence.

Re: Martin Shkreli is found guilty of securities fraud

#372

Post by frgtpsswrdlame » Fri, Aug 04, 2017, 9:16 PM UTC

discombobulate wrote: post #354

frgtpsswrdlame wrote: post #325

Earlier quoted context omitted.

You didn't really rebut at all, you just googled it and pasted a link here... I think here even Sowell would agree that it exists. Basically price gouging can't exist if we use a simplified view of a perfectly competitive market. If we move over to a market with only one seller then we could probably define price gouging as when the monopoly firm charges a price higher (or much higher) than what we would see in a com…

You lol. I took that as incredulity. Is there such thing as a perfectly competitive market irl? There's a canonical example used by the Mises Institute -- water after a hurricane. I watch a lecture half a decade ago. I don't have perfect information. Far from it. It was convincing. A stripped down model which made gouging look ridiculous. I think it's debatable.

>Is there such thing as a perfectly competitive market irl?

Wikipedia has the requirements for a perfectly competitive market, if you look at them you'll see that there certainly can't be many markets like that. I'd say the closest thing you're liable to run into on a day to day basis is gasoline. There's a lot of stations, you probably drive past a few everyday so you've got good price information, you know what the product will be and it's all the same.

>There's a canonical example used by the Mises Institute -- water after a hurricane. I watch a lecture half a decade ago. I don't have perfect information. Far from it. It was convincing. A stripped down model which made gouging look ridiculous. I think it's debatable.

One thing I find with libertarians (Mises tipped me off) is that they're often not too familiar with good critiques, only the surface level stuff that gets thrown around on twitter or tumblr. So here's my contribution:

http://critiques.us/index.php?title=Matt_Bruenig

Maybe read some critiques, the worst it can do is make you a better libertarian.

Re: Martin Shkreli is found guilty of securities fraud

#373

Post by artursapek » Fri, Aug 04, 2017, 9:17 PM UTC

binarymax wrote: post #96

discombobulate wrote: post #77

I quite like Martin. I talked to him a few time on YouTube, whilst he was live streaming. He's whip-smart & knowledgeable. He does, however, have a couple of major flaws. 1) He trolls. Hard. 2) It seems he lies. Which I picked up from a previous news article. (He claimed to have ~$50mm under management @ his previous hedge fund. It was more like $1.6mm. Something like that). I can forgive the trolling. It's over the…

Oh so his only two flaws are trolling and he lies. But he's OK sure. How about the fact that he caused the suffering of patients needing the drug that he was raised prices on?

You need to start questioning what you see on TV & the Huffington Post.

Re: Martin Shkreli is found guilty of securities fraud

#374

Post by wfo » Fri, Aug 04, 2017, 9:18 PM UTC

charlesdm wrote: post #366

wfo wrote: post #346

Earlier quoted context omitted.

These things can be (and are) explained. Trials that contain complex technical violations tend to take longer, sure. Judges, expert witnesses, lawyers all spend a huge amount of time learning about/explaining these issues. It's especially incumbent upon the prosecutor to explain complicated issues -- if the jury can't understand someone's guilt, they are less likely to consider someone guilty beyond a reasonable doub…

Honestly, aren't you underestimating your own intelligence? Plenty of things can be simplified for non professionals, but the nuance of certain topics is then often lost. A single word in a written law can matter a lot. No disrespect to anyone, but can an average career teacher understand the nuances of securities law? Can (s)he understand the actual difference between tax avoidance and tax evasion? Some can, absolut…

>No disrespect to anyone, but can an average career teacher understand the nuances of securities law?

Yes they can, that's exactly the position I outlined. After a week of doing nothing but learning about securities law every teacher I've met is capable of this no problem. Teachers are perhaps a bad example here though, they are highly educated (many have masters' degrees, most have bachelors) and interested in learning. But to make your argument stronger, take a minimum wage fast food worker with a GED, yes I think they are capable as well.

>Lawyers and prosecutors are great at creating stories, but isn't what matters or not whether the law has been broken?

Kind of. In fact in the US legal system this is not all that matters, because the law is often vague and abstract and sometimes obviously morally wrong. The purpose of the jury is exactly this, it's a check on a cold soulless system destroying lives robotically; not only must a law be broken, but you also have to convince a group of fairly normal human beings that what you've done is horrible enough you deserve to be punished for it before you are punished.

>Amazing charismatic lawyers (or prosecutors) will be able to bend an outcome, and that is just not right.

I agree with you here, and this essentially means the rich get away with things the poor are punished for. This will always happen, will it not? People who are able to present a more convincing argument in their defense are less likely to be convicted in any legal system? I think things can be done to mitigate this, yes, and they start with a simpler criminal code (fewer crimes) and more equal access to legal talent, like better funded public defenders.

Re: Martin Shkreli is found guilty of securities fraud

#375

Post by robryan » Fri, Aug 04, 2017, 9:18 PM UTC

frgtpsswrdlame wrote: post #295

discombobulate wrote: post #291

Earlier quoted context omitted.

Pricing something correctly isn't immoral

Sure maybe you can explain what you mean by the phrase: "pricing something correctly"

At the price which will maximize total profits.

Re: Martin Shkreli is found guilty of securities fraud

#376

Post by dgacmu » Fri, Aug 04, 2017, 9:18 PM UTC

chrischen wrote: post #331

charlesdm wrote: post #169

Earlier quoted context omitted.

Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are). I don't live in the US, but being convicted by a "jury of your peers" is frankly, ridiculous. When has the average person been able to grasp complex matters relating to say, securities fraud? Most people aren't even able to stay out of debt. A panel of judges with specialised experience…

People can’t grasp complex matters and lawyers specifically choose the least intelligent easiest to sway and manipulate people to serve on juries.

That's the kind of claim for which it's useful to have a citation. Because it's not generally true. This is an old study ('76), but they found that the jury selection processes biases against both high and low educational attainment, for example: https://www.jstor.org/stable/3053202?seq=1#page_scan_tab_con...

One of my friends just served on the jury for a murder trial. He's got a Ph.D.. From my recollection, at least two of the other jurors also had postgraduate degrees.

Remember that the jury selection process is managed jointly -- which somewhat naturally leads to the clipping off of people at either end of the extremes that the defense and prosecution are concerned about.

Re: Martin Shkreli is found guilty of securities fraud

#377

Post by Clubber » Fri, Aug 04, 2017, 9:19 PM UTC

ZenoArrow wrote: post #363

Clubber wrote: post #283

Earlier quoted context omitted.

The problem is now Congress can sit back and do nothing for a few years regarding Pharma, since the masses and media will be satisfied with this. Nothing changes.

Correct me if I'm wrong... I thought this particular court case had very little to do with the pharmaceutical industry. Also, that's a bit of a stretch. It's not like the government has a 'white collar crime prosecutions quota', and the general public doesn't overlook wrongdoing if similar crimes have been prosecuted recently.

This case has nothing to do with the pharmaceutical industry. Shkreli is known to be the "bad boy of Pharma" and is being taken down. His reputation is based on hiking the price of his drug. This will make the federal government look like they are doing something without actually doing anything. They aren't prosecuting him for price gouging his drugs and that common practice will not stop.

Re: Martin Shkreli is found guilty of securities fraud

#378

Post by protomyth » Fri, Aug 04, 2017, 9:19 PM UTC

JackFr wrote: post #301

watwut wrote: post #240

Earlier quoted context omitted.

"because it creates a much easier environment for an arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification. You could look at Japan, which tried to solve its problem of innocent people going to jail by introducing a lay-judge system (kind of like jurors who can ask questions during the trial), for a real-life example of some of the problems you might hav…

Juries convict, but judges sentence. The incarceration rate is high because of strict sentencing guidelines written in the law and voters electing tough-on-crime judges. Eliminating jury trials would change none of that.

and Legislatures legislate. The strict sentencing guidelines are the result of "Law and Order" laws (both sides of American politics have their favorite targets). I too agree, eliminating jury trials would change none of that.

Re: Martin Shkreli is found guilty of securities fraud

#379

Post by vumgl » Fri, Aug 04, 2017, 9:20 PM UTC

IshKebab wrote: post #320

jjxw wrote: post #167

Earlier quoted context omitted.

There was a joke floating around somewhere (Matt Levine I think?) that one strategy to avoid a jury trial proceeding was to become so publicly infamous that it would be impossible to select an unbiased jury. Clearly didn't work out for Shkreli in this case.

Nah that's stupid. It might delay your trial but do you really think they would just say "oh ok we won't bother"? Of course not - they'd just go ahead with the least biased jury they could find.

It may take a very long time to find an impartial jury if the Trump impeachment goes to trial.

Re: Martin Shkreli is found guilty of securities fraud

#380

Post by artemisyna » Fri, Aug 04, 2017, 9:20 PM UTC

turc1656 wrote: post #371

downandout wrote: post #345

Earlier quoted context omitted.

>When fraud happens those affected don't usually get their money back much less a return on that money. That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater . Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty. In…

I disagree. I think it will be a major factor at sentencing. First the fact that he did give them their money (with a significant return on it) back to the people well before the government got involved (meaning it wasn't a PR show) to me means there was never any intent for them to actually lose money. I think the judge will see it the same way. Because if that weren't true, he would never have repatriated the money…

If you don't mine me asking, are you actually a lawyer or are you just speculating?