> Michelle (note: her name has been changed) I do wonder what is the point of that. It takes 2 minutes of searching to find it out.
99.99%+ of people are not willing to take that 2 minutes though
This guy scrolls
Why I did not go to jail (2014)
111–120 of 151 posts
Re: Why I did not go to jail (2014)
#112This is one of the more important bits to be periodically reposted on HN. Compliance with the law is not 'optional', and if you cross that line there is a fair chance that it will come back to bite you. Regulated industries, stock transactions (and options, as in this bit of startup history) all have their peculiarities and you need to realize that not all of these end up with the proverbial slap on the wrist if you…
> a 3.5 month non-suspended sentence is not something that is handed out lightly for a white collar issue Only a single American banker saw jail time from the 2008 mortgage crisis https://ig.ft.com/jailed-bankers/
Hell, I get more than that for child-support (while funding their ivy league schools)!
Re: Why I did not go to jail (2014)
#113> One area where she thought we were less than competitive was our stock option granting process. She reported that her previous company’s practice of setting the stock option price at the low during the month it was granted yielded a far more favorable result for employees than ours.
Whether it's legal or not - not my area, but this is obviously disadvantageous to the shareholders. The strike price is what you get (as a shareholder) for the newly created shares at exercise, if you lower that you have just paid your employees more.
Also, in addition to giving more to the employees rather than the shareholders this results in more short delta rather than short gamma exposure on the company/shareholder part, i.e. it makes it more like a stock grant rather than an option grant.
If you want to give your employees more compensation then just straight up give them more stock/options/money and account that as an expense. There's no free lunch.
Re: Why I did not go to jail (2014)
#114An argument: part of the imperative of startup "disruption" culture includes the idea of get big first, and permission or forgiveness later. Uber, Airbnb to mention some obvious examples didn't exactly put a high value on regulatory compliance from the get-go...
Re: Why I did not go to jail (2014)
#115Earlier quoted context omitted.
So lying about the date, and not reporting properly was the problem not the price in and of itself. That makes much more sense.
No. The date is correct (they were issued at the end of the month), but the price chosen is the best price for the grantee. This is roughly theft from the other stockholders.
Are you sure? From the linked article upthread:
> Companies involved in backdating use the benefit of hindsight to look back and choose a date when their share price was low, then falsely claim that the options were granted on that date.
So it sounds like they -- for example -- granted options on April 15th, looked back and saw that April 8th had a better price, and claimed that they were granted on April 8th.
I don't believe this would have been a problem if the equity plan disclosed to shareholders explicitly said "the option strike price will be the lowest closing price over the 30 days prior to the grant date", but they did not say that; they lied about when they were granted.
Re: Why I did not go to jail (2014)
#116Earlier quoted context omitted.
It seems there is more to this story than the author lets on. Michelle cheated on her personal taxes: https://news.ycombinator.com/item?id=7193033
When someone is a habitual line stepper there is always another line they stepped over.
Yeah, I have a story about that: in one of my first software projects, a freelance contractor told me on my first or second day over lunch how he did semi-professional alcohol smuggling on RV trips to Norway.
Come next week, the project manager called an all-hands meeting to tell us that guy had been fired because he cheated on his reported hours.
Re: Why I did not go to jail (2014)
#117Earlier quoted context omitted.
> I agree with all of that, but there's also the idea that once the government decides you're guilty, they will find something. I don't think the government had any vendetta against this particular person. (ie: Martin Skherli) However, she was probably investigated for money matters (ie: her tax reports) as she probably was shadier than Ben would like to admit.
I'm pretty sure the article is talking about backdating options. Looking at https://www.sec.gov/spotlight/optionsbackdating.htm the person being talked about likely didn't have any sense it was happening, but it did become pretty clear, later (2006/7) that the SEC was on the warpath about it.
Upthread someone linked a comment saying the she also cheated on her personal taxes.
Re: Why I did not go to jail (2014)
#118This is why I firmly believe that ALL law - every single piece of it should be written as a formal model with code so that assertions can be tested to see if something is illegal or not.
Re: Why I did not go to jail (2014)
#119Earlier quoted context omitted.
> If your boss tells you to do something that might land you in jail: resign. Let me make it better: resign, but also take precautions, in case after your resignation, your boss offloads some guilt to you.
Yes, good point.
Just needed a little Italian flavor to it :)
Re: Why I did not go to jail (2014)
#120This is one of the more important bits to be periodically reposted on HN. Compliance with the law is not 'optional', and if you cross that line there is a fair chance that it will come back to bite you. Regulated industries, stock transactions (and options, as in this bit of startup history) all have their peculiarities and you need to realize that not all of these end up with the proverbial slap on the wrist if you…
It seems there is more to this story than the author lets on. Michelle cheated on her personal taxes: https://news.ycombinator.com/item?id=7193033
I never like the whole sentiment about taxation. Why is the taxation so complicated with full of weird language and many complicated clauses ? Ideally it should be very simple, so any layman (even not educated) can understand it. Most people I see either scared and pay taxes without understanding anything or people always looking for cheat. People who understand whole process thorougly and proud tax-payers are rare.
Sometimes I wonder, why this nobel idea become so currupt ? May be it is failure of Govt/System. When Govt wastes tax-payers money (e.g. f35) and not held accountable, layman doesnt have choice than cheating.