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CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

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Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#171

Post by wslack »

ryandrake wrote: post #53
wtf92345923 wrote: post #20

Am I crazy, or do fines never come close to matching damages? Or jailtime? I'm constantly seeing rulings or indictments where an article says "defendant faces $1500 in fines or two years jail time", as if those are in any way equivalent. Were all the fine quantities written up in 1875 and just never got updated? In this case, defendants are accused of conning "at least 11,000 income share loans" "carrying an average…

The US justice system and regulatory agencies treat corporations with kid gloves. They often get many strongly worded letters and many chances to correct their bad behavior before regulatory action happens, and then when it does happen, it's slow and the corporation usually continues to operate, and then when penalty comes, it's some ridiculously small fraction of the gains that came from the bad behavior, which the…

There's an incentive problem here because litigation is so expensive. If the fine is large enough, it becomes more and more worth it for the company to fight it in court - and therefore more expensive to the regulatory agency's legal budget. The only folks who benefit from it going to court are private lawyers.

Whereas, settling meets the company's incentives (eliminating uncertainty), meets the regulator's incentives (bad behavior is stopped locally). The moral hazard created by making fraud seem less risky (because the punishments aren't that bad) is born by the public.

The solution here would be to limit the possible legal shenanigans that companies can use to increase the cost of taking a case to trial.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#173

Post by davely »

ec109685 wrote: post #157
cool_dude85 wrote: post #152

Earlier quoted context omitted.

What tech companies do you allege have/had "minority" quotas to fill?

Google goes to great lengths to increase diversity: https://about.google/belonging/diversity-annual-report/2021/...

Not that you’re arguing for or against, but I thought I’d drop an interesting link to a 2020 McKinsey and Co study that shows more diverse companies generally outperform their peers. [1]

Is there any wonder that Google and other (not exclusive to tech) companies desire this?

[1] https://www.mckinsey.com/featured-insights/diversity-and-inc...

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#174

Post by solardev »

jswartz wrote: post #109
solardev wrote: post #72

Earlier quoted context omitted.

Is this a quote from somewhere? (Or maybe just an errant > symbol?) Just wondering if it's your own experience or I missed something

Sorry errant >. It was based on my own experience. Launch School has a unique model where it's $200/month for the core curriculum which you complete at your own pace, and then can complete an optional capstone curriculum/project which comes with an ISA (18K or 18% of first year salary). Their outcomes are great, the curriculum is top-notch, and the founder always conducted himself with integrity and transparency. I h…

Cool, thanks for sharing! Another commenter also liked them.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#175

Post by teeray »

MattGaiser wrote: post #124
abnercoimbre wrote: post #99

Earlier quoted context omitted.

Please contact the CFPB, it is worth your trouble. Everyone's blood should be boiling reading TFA, such as: > Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.

That should just be criminal fraud.

Yep, jail time should be on the menu

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#176

Post by ImPostingOnHN »

natpalmer1776 wrote: post #140
shkkmo wrote: post #93

Earlier quoted context omitted.

How doed charging executives in addition to fining a company an amount that puts the card company into unresolvable bankruptcy lead to "diffusion of responsibility"? Yeah, rich CEOs and investors are opposed to taking any responsibility for their actions, but that doesn't we shouldn't try to hold them responsible.

It doesn’t lead to a diffusion of responsibility, the diffusion exists independently by nature of how a business operates. A CEO will green light high level strategic direction, but the crimes described here could easily emerge from the implementation of that directive at lower levels of the company. “Plausible deniability”

The CEO in that case would be culpable for culturing a culture of criminality.

The buck stops at the top.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#177

Post by bee_rider »

avarun wrote: post #30
dylan604 wrote: post #18

Earlier quoted context omitted.

This is one of those situations lending support to the corporate death penalty. Allowing name changes like Worldcom, Spectrum, and so on to write off some liabilities while operating as if nothing happened.

Their name change was unrelated to this. Somebody else owned a trademark for Lambda and sued them over it, so they were forced to change their name.

It should be impossible to own the trademark to a letter.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#178

Post by natpalmer1776 »

ImPostingOnHN wrote: post #176
natpalmer1776 wrote: post #140

Earlier quoted context omitted.

It doesn’t lead to a diffusion of responsibility, the diffusion exists independently by nature of how a business operates. A CEO will green light high level strategic direction, but the crimes described here could easily emerge from the implementation of that directive at lower levels of the company. “Plausible deniability”

The CEO in that case would be culpable for culturing a culture of criminality. The buck stops at the top.

I mean, I agree with the sentiment but good luck codifying that in a law that won’t be abused to convict innocent people who were convenient patsies while letting guilty ones walk free due to the “subjective” nature.

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#179

Post by JumpCrisscross »

tedivm wrote: post #73
JumpCrisscross wrote: post #33

Earlier quoted context omitted.

> the corporate death penalty This is a silly idea lobbyists love because it sidesteps the actual corporate-destruction mechanism: liquidation to pay massive fines, license revocation and/or personal liability for senior management. Consider even the penalties here, which effectively ban Allred and Lambda from doing business. If you corporate death’d them, the contracts and assets would still exist. Allred would be u…

Everyone I know who speaks about a corporate death penalty includes liquidation to pay pack victims. I've never heard someone argue for the corporate death penalty without "liquidation" and "license revocation and/or personal liability for senior management." The difference between this and a big fine: * Lots of big fines aren't big enough to actually kill companies that deserve it, * Fines tend to go to the governme…

> includes liquidation to pay pack victims

Just do damages.

> Lots of big fines aren't big enough to actually kill companies that deserve it

Neither is a corporate death penalty. You’re just shuffling around assets and making work for lawyers.

> companies that deserve a "death penalty" often have victims who could use that money

Why the extra steps?

The closest we have to a death penalty is license revocation, e.g. Arthur Anderson [1]. Victims got screwed. Taking it further and the death penalty analogy seems appropriate--death penalties aren't about restitution. They’re an instrument of retribution.

> Bankruptcy doesn't prevent people from starting another company, or board members who failed at oversight to join another board

Neither does a corporate death penalty. That’s what bans are for.

Corporate death penalty is a gift to corporate America. It sets activists running in circles over a stupid idea that represents simpler, precedents punishments with the ambiguous baggage of extra steps.

[1] https://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_...

Re: CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

#180

Post by eadler »

JumpCrisscross wrote: post #158
reaperman wrote: post #114

Earlier quoted context omitted.

https://news.ycombinator.com/item?id=40071539 > I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save. It sounds like arbitration does not work, according to people who had their lawyer look into it for this exact case. What are your thoughts on it given this new information available to you?

> What are your thoughts on it given this new information available to you? Curious who that lawyer is. Because for financial arbitration, the win rates are ridiculously skewed in favour of borrowers and retail investors.

Do you have a source for that?

I'd like to read it and add it to this list: https://arbitrationinformation.org/docs/references/

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