Martin Shkreli has been sentenced to seven years in prison • Hacker News Board

Re: Martin Shkreli has been sentenced to seven years in prison

#361

Post by kbenson » Sat, Mar 10, 2018, 12:29 AM UTC

bhouston wrote: post #5

He was so obnoxious that I guess it is easy to be happy about that, but he was so small time in the grand scheme of things. But nearly no bankers responsible for the 2008 financial crisis ever went to jail: https://www.theatlantic.com/magazine/archive/2015/09/how-wal...

The interesting thing about this casae, if I recall the facts correctly (I'm sure someone will fact check this, I'll attempt to and update this in a bit), is that in this case the breaking of the law was mostly an attempt to make sure his investors were left whole.

Here's the facts as I understand them:

1) He ran a hedge fund, and lost a lot of money.

2) He didn't disclose to his investors that he lost the money, and falsified reports.

3) In an effort to make sure people didn't lose money (whether to protect himself or to make sure his investors were made whole) he took profits from another company he ran and used them to pay these investors.

4) Almost all investors in the hedge fund ended up making a profit because of this.

It's fairly easy to interpret this as someone that screwed up bad, and then broke the law to cover it up and try to make it right, and by lucky happenstance was actually able to get people's money back, but still ended up breaking the law. That's a fairly good story to have, and I would think lends itself towards a mitigated sentence.

On the other hand, he repeatedly presented himself in an unsympathetic way that antagonized the judge and the regulatory bodies involved.

It is, to put it mildly, a fairly complex and (to my layman eyes) unique situation, compounded by the fact that his behavior may or may not have to do with being socially inept (is it right to punish someone for a social disability, if that is indeed the case here?)

There was a discussion about this when the guilty verdict was announced[1]. Much of my info comes from that article and this other one[1] from the same time period.

1: https://news.ycombinator.com/item?id=14931004

2: https://www.nytimes.com/2017/08/04/business/dealbook/martin-...

Re: Martin Shkreli has been sentenced to seven years in prison

#362

Post by archagon » Sat, Mar 10, 2018, 12:30 AM UTC

tpush wrote: post #184

The majority of comments here being sad about Shkreli kinda reaffirms my views about HN, I have to say. Shkreli always seemed like a personified 4chan teenager "memelord" with money. Good to see that playing out your delusions of grandeur and arrogance toward the justice system is met with consequences. Maybe in prison he will mature a bit.

Seems like a pretty even split to me. I'm glad the community is healthy enough to have this kind of debate even though I'm very much on the anti-Shkreli side.

Re: Martin Shkreli has been sentenced to seven years in prison

#363

Post by rayiner » Sat, Mar 10, 2018, 12:30 AM UTC

kbenson wrote: post #354

rayiner wrote: post #291

Earlier quoted context omitted.

"Fraud" can be civil fraud, or criminal fraud. Criminal fraud is something like "they said they were going to sell me something, but just took my money instead." Civil fraud might be something like "they sold me 10-inch sandwiches as 12-inch sandwiches." What you're describing in the paragraph above is even one step removed from the sandwiches. Knowing that "loans had material underwriting and compliance defects" doe…

> Criminal fraud is something like "they said they were going to sell me something, but just took my money instead." Civil fraud might be something like "they sold me 10-inch sandwiches as 12-inch sandwiches." Is it purely a matter of partial delivery, or does magnitude matter? What if it's "they sold me 10 tons of gold as 12 tons of gold?" Because that's a big difference. Then again, 10 inch sandwhiches sold as 12 i…

Civil fraud versus criminal fraud is very fuzzy. it often comes down to what you think you can prove about fraudulent intent. I gave the sandwich example because you can create “reasonable doubt” by saying the mistake was due to bad QA, rather than fraudulent intent. The fact that the sandwiches are shorter, by itself, does not prove fraudulent intent.

The mortgages are even harder. The banks are accused of lying about whether borrowers could pay. The fact they couldn’t pay doesn’t prove that. The fact that the banks ignored warning signs doesn’t prove that. The fact they knew about underwriting failures doesn’t prove that. Not beyond a reasonable doubt.

Re: Martin Shkreli has been sentenced to seven years in prison

#364

Post by rhizome » Sat, Mar 10, 2018, 12:31 AM UTC

rayiner wrote: post #291

toomuchtodo wrote: post #248

Earlier quoted context omitted.

CDO (Collateralized Debt Obligation) origination fraud is a crime. The GFC was not caused by law abiding activities. It was fraud, plain and simple. https://www.justice.gov/opa/pr/bank-america-pay-1665-billion... As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout…

"Fraud" can be civil fraud, or criminal fraud. Criminal fraud is something like "they said they were going to sell me something, but just took my money instead." Civil fraud might be something like "they sold me 10-inch sandwiches as 12-inch sandwiches." What you're describing in the paragraph above is even one step removed from the sandwiches. Knowing that "loans had material underwriting and compliance defects" doe…

OK now do SarbOx. Let's use Jamie Dimon as our example.

Re: Martin Shkreli has been sentenced to seven years in prison

#365

Post by rhizome » Sat, Mar 10, 2018, 12:32 AM UTC

dayaz36 wrote: post #204

To give some background on how his sentencing increased so dramatically, initially he was convicted but since no one lost any money his sentencing guidelines were 0-12 months(most likely no jail time since it was his first offence). As a general rule of thumb in federal fraud cases sentencing is primarily determined by the what's called the "loss amount" of the crime in question. But a couple weeks ago the judge deci…

Guidelines were 27 years.

Re: Martin Shkreli has been sentenced to seven years in prison

#366

Post by meowface » Sat, Mar 10, 2018, 12:33 AM UTC

ecommerceguy wrote: post #347

dwild wrote: post #319

Earlier quoted context omitted.

2012 - Malaria person: please dwild, help me. dwild: no 2017 - Malaria person: please dwild, help me. dwild: no 2012 - Sick person: please Daraprim, help me. Daraprim: Sure, for US$13.5 2017 - Sick person: please Daraprim, help me. shkreli: Sure, for US$750 You see the difference? With me, they stayed at the same level of help, none. In the second, he purposefully profited from the help they were getting from Darapri…

Gosh I wonder if a replacement was made for Daraprim.. >Imprimis Pharmaceuticals, a specialty pharmaceutical company that creates compounded drugs, released a $1 a pill alternative to , a toxoplasmosis treatment whose price skyrocketed by over 5,000% in recent months. >While the new pill is a boon for patients in need of treatment for the food-borne illness, especially those with weak immune systems like HIV/AIDS and…

He wasn't charged for raising the price of daraprim. That wasn't illegal. Defrauding investors is illegal. I highly doubt the case will be overturned.

Re: Martin Shkreli has been sentenced to seven years in prison

#367

Post by mwfunk » Sat, Mar 10, 2018, 12:34 AM UTC

daxorid wrote: post #299

danso wrote: post #267

Earlier quoted context omitted.

> That's basically what this comes down to. The judge didn't create the law regarding securities fraud, nor did she instigate the charges of fraud, nor did she even have a voice when it came to deciding to convict (it was a jury trial). So how does this all boil down to a judge's feelings being hurt? All crimes will be inconsistently enforced until we've built a policing apparatus that operates like the equivalent of…

> So how does this all boil down to a judge's feelings being hurt? The way I read the parent is that this conviction would almost certainly not merit seven years in a typical non-Shkreli case. But the judge handed down seven years, not because of his crime, but because of his attitude . The OP even suggested as much, suggesting if he had just "kissed the ring", the sentence would have been substantially less. I read…

That's not at all what's being said. There are far more possible cases that could be prosecuted than there are resources to prosecute them, so to better discourage all crime they will tend to go after higher profile targets, in particular those who flaunt their criminality.

Similarly, cops don't spend all their time giving out tickets to every single jaywalker or every single speeder. That would be a waste of their time. But they need to give out some tickets every once in a while or else the law becomes meaningless. Given a choice between giving a ticket to a random person spotted jaywalking, vs. giving a ticket to someone who took out a full page ad the day before declaring the time and place in which they plan to jaywalk and taunting the police for being unable to do anything about it, the police will choose to give the ticket to the latter person, and that totally makes sense to me.

That's very different from going after socially awkward people who don't know when they're being assholes.

Re: Martin Shkreli has been sentenced to seven years in prison

#368

Post by meowface » Sat, Mar 10, 2018, 12:36 AM UTC

gfosco wrote: post #10

ModernMech wrote: post #7

Earlier quoted context omitted.

"Your honor, I must protest this sentence! After all, my clients paid back all the money they stole from the bank!"

Not really a good analogy. They invested with him, he lost it but found another way to make that money back. There wasn't any theft.

He not only lost it, he lied and said he did not lose it and that their money was safe and sound. Big difference. When you fabricate numbers and lie to people who have given you money, you're committing fraud, regardless of your ultimate intentions or if you manage to recover the money through other means.

Re: Martin Shkreli has been sentenced to seven years in prison

#369

Post by rainieri » Sat, Mar 10, 2018, 12:36 AM UTC

BenSahar wrote: post #359

tpush wrote: post #184

The majority of comments here being sad about Shkreli kinda reaffirms my views about HN, I have to say. Shkreli always seemed like a personified 4chan teenager "memelord" with money. Good to see that playing out your delusions of grandeur and arrogance toward the justice system is met with consequences. Maybe in prison he will mature a bit.

I think his fan club is hilarious. That they picked such a whiney troll to follow speaks volumes about their character.

Nobody is actually following him as you describe. Most of people that side with him do so because they are amazed at the unfounded witch hunt that he received and at the amount of people who demonize him 95% because of the Daraprim drama and 5% for his actual conviction. And of that 5% - 0.5% might have an idea of what they are talking about.

See his videos. You wouldn't stand a chance debating him unless you were a lawyer or pharmaceutical exec.

You are coming from emotions rather than facts. Really. His troll persona is only a small portion of his character.

https://www.forbes.com/sites/matthewherper/2018/03/09/you-ha...

Re: Martin Shkreli has been sentenced to seven years in prison

#370

Post by ryanlol » Sat, Mar 10, 2018, 12:36 AM UTC

tedunangst wrote: post #48

ryanlol wrote: post #13

Earlier quoted context omitted.

Worded differently, it doesn't sound like that would be such an unreasonable sentencing argument?

That was his argument. The judge decided that payback after the loss was mostly irrelevant, and loss is loss, even if never realized.

Just because it didn't work for Shkreli doesn't make it any less of a reasonable argument in general.

In Shkrelis case the judge dismissed this argument specifically because he only paid his investors back after they had already became suspicious, had he done so before that his behavior would have almost certainly been viewed differently.

It is absolutely normal to take things like this into account during sentencing.

And since it seems to be terribly difficult for some people here to understand, I'm not defending Shkreli and nor do I think there's anything wrong with his sentence.