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Easily disproven. The 2008 crash is full of executives who did not comply with the law, and did not take the threat of prison seriously. I think to this date

Easily disproven. The 2008 crash is full of executives who did not comply with the law, and did not take the threat of prison seriously. I think to this date you can count the number in prison on two hands, and most of those were more foot soldiers than masterminds.

PunchTornado 8y ago
well that's because it wasn't enforced properly. we need prison time and to enforce it.
XorNot 8y ago
Huh? Doesn't this prove the point? None of the people went to prison in the end, and the message remained clear: you won't go to prison. That's why it's not taken seriously.
- anonuser123456 8y ago
  So why pass a law if it can't or won't be enforced? And do you realize how political prosecutors offices are? Also, laws like this become patronage to the drafters when they're out of office. "Well you REALLY should hire our compliance services." Laws only work when cultural norms already do 99% of the heavy lifting.
  - dvfjsdhgfv 8y ago
    > Laws only work when cultural norms already do 99% of the heavy lifting. And this is the aspect where a lot remains to be done in the USA. Many people who buy, sell or plain steal personal data don't perceive it as something negative. Some of these people are high-level executives and get praise as "disrupting the industry", some do their job quietly, and very often their victims don't even realize the extent of the harm done to them.
tareqak 8y ago
Maybe there needs to be consequences for selective law enforcement and/or selective prosecution?
- ajmurmann 8y ago
  That sounds somewhat naive, but on the other hand it also might help in getting all these unenforced, legacy laws of the book that result in anyone at all times being with one foot in prison if someone decided to enforce every law.
  - tareqak 8y ago
    I agree with it sounding naïve. The thing is, we’ve tried a lot more things that attempt to pragmatic and reasonable with limited success: innocent people get hurt, while bad actors weasel out. I know the standard is supposed to be to allow a hundred guilty people go free rather than allow one innocent person be imprisoned, but given how many people are in prison, there might be more innocent people in there than we’d like to admit.
- mLuby 8y ago
  I smell a blockchain pitch… :P
  - tareqak 8y ago
    That would end up using money against law enforcement or prosecution as a proxy for lack of fairness/effectiveness, and we already know that money is a bad proxy for morality. That’s why this law has prison time. If the blockchain could send people to prison, then we’d probably have other problems.
- Nasrudith 8y ago
  That reminds me of itself a highly dysfunctional old system of private prosecutors. Especially with double jeopardy given that not having it turns it to a clear way to harass anyone. One obvious flaw is that trivially the best defense strategy isn't to hire a good defense attorney - it is to hire the absolutely worst prosecutor - against yourself. Infamously prosecutors with conflicts of interest - often seen in cases of outrage over police misconduct. The prosecutors proceed to obviously present the worst possible case in what is an /unopposed/ hearing for a crime. There is a reason why the saying is 'they could indict a ham sandwich' - the standard is low enough that they just need to be able to present a very initial case to begin the process of proving guilt officially.
Sir_Vival 8y ago
I hear this a lot and have never had anyone explain what laws were broken by those executives.
- criddell 8y ago
  Fraud. The ratings agencies lied about the credit worthiness of the mortgages that they bundled.
  - JumpCrisscross 8y ago
    > The ratings agencies lied They published opinions about the future performance of certain securities. Those opinions were incorrect. Lying would mean misrepresenting the present state of those securities, which they didn’t do. Everyone know they were buying subprime mortgages. They just expected them to trade like prime mortgages.
    - wu-ikkyu 8y ago
      So is the only difference between lying and knowingly misleading the point in time of the subject in question?
      - JumpCrisscross 8y ago
        > the only difference between lying and knowingly misleading the point in time of the subject in question? If I say “this stock will rise in value” and then it doesn’t, that isn’t lying. If I say that while knowing the CEO is committing felonies, it still wouldn’t be lying, but it would be problematic. If I say “this is a share of Apple” when it’s actually Twitter, that’s lying. Bad forecasts aren’t lies, they’re mistakes. The rating agencies’ role in the crisis is interesting and nuanced, and it is difficult to fault anyone other than the investors who over-relied on (and arguably misinterpreted) their guidance. If you look at every security the agencies rated AAA, they performed as expected in cash flows. The underlying mortgages were mostly garbage, but some kept paying. That meant the top tranche of those structures, the tranches that got a high rating, kept paying. If you held to maturity, the securities performed as promised. (Cf: if the government hadn’t bailed out AIG, they may not have.) The problem was they crashed in value in the interim because people began doubting if they would perform. That was a problem for liquidity-constrained investors, which was almost everyone in 2008. Rating agencies don’t say “this bond won’t trade at 50¢ on the dollar.” They say “this bond will probably pay you back.” And in the latter assessment, they were surprisingly accurate. The problem was people took the second to mean the first.

PunchTornado 8y ago

well that's because it wasn't enforced properly. we need prison time and to enforce it.

XorNot 8y ago

Huh? Doesn't this prove the point? None of the people went to prison in the end, and the message remained clear: you won't go to prison. That's why it's not taken seriously.

anonuser123456 8y ago
So why pass a law if it can't or won't be enforced? And do you realize how political prosecutors offices are? Also, laws like this become patronage to the drafters when they're out of office. "Well you REALLY should hire our compliance services." Laws only work when cultural norms already do 99% of the heavy lifting.
- dvfjsdhgfv 8y ago
  > Laws only work when cultural norms already do 99% of the heavy lifting. And this is the aspect where a lot remains to be done in the USA. Many people who buy, sell or plain steal personal data don't perceive it as something negative. Some of these people are high-level executives and get praise as "disrupting the industry", some do their job quietly, and very often their victims don't even realize the extent of the harm done to them.

tareqak 8y ago

Maybe there needs to be consequences for selective law enforcement and/or selective prosecution?

ajmurmann 8y ago
That sounds somewhat naive, but on the other hand it also might help in getting all these unenforced, legacy laws of the book that result in anyone at all times being with one foot in prison if someone decided to enforce every law.
- tareqak 8y ago
  I agree with it sounding naïve. The thing is, we’ve tried a lot more things that attempt to pragmatic and reasonable with limited success: innocent people get hurt, while bad actors weasel out. I know the standard is supposed to be to allow a hundred guilty people go free rather than allow one innocent person be imprisoned, but given how many people are in prison, there might be more innocent people in there than we’d like to admit.
mLuby 8y ago
I smell a blockchain pitch… :P
- tareqak 8y ago
  That would end up using money against law enforcement or prosecution as a proxy for lack of fairness/effectiveness, and we already know that money is a bad proxy for morality. That’s why this law has prison time. If the blockchain could send people to prison, then we’d probably have other problems.
Nasrudith 8y ago
That reminds me of itself a highly dysfunctional old system of private prosecutors. Especially with double jeopardy given that not having it turns it to a clear way to harass anyone. One obvious flaw is that trivially the best defense strategy isn't to hire a good defense attorney - it is to hire the absolutely worst prosecutor - against yourself. Infamously prosecutors with conflicts of interest - often seen in cases of outrage over police misconduct. The prosecutors proceed to obviously present the worst possible case in what is an /unopposed/ hearing for a crime. There is a reason why the saying is 'they could indict a ham sandwich' - the standard is low enough that they just need to be able to present a very initial case to begin the process of proving guilt officially.

Sir_Vival 8y ago

I hear this a lot and have never had anyone explain what laws were broken by those executives.

criddell 8y ago
Fraud. The ratings agencies lied about the credit worthiness of the mortgages that they bundled.
- JumpCrisscross 8y ago
  > The ratings agencies lied They published opinions about the future performance of certain securities. Those opinions were incorrect. Lying would mean misrepresenting the present state of those securities, which they didn’t do. Everyone know they were buying subprime mortgages. They just expected them to trade like prime mortgages.
  - wu-ikkyu 8y ago
    So is the only difference between lying and knowingly misleading the point in time of the subject in question?
    - JumpCrisscross 8y ago
      > the only difference between lying and knowingly misleading the point in time of the subject in question? If I say “this stock will rise in value” and then it doesn’t, that isn’t lying. If I say that while knowing the CEO is committing felonies, it still wouldn’t be lying, but it would be problematic. If I say “this is a share of Apple” when it’s actually Twitter, that’s lying. Bad forecasts aren’t lies, they’re mistakes. The rating agencies’ role in the crisis is interesting and nuanced, and it is difficult to fault anyone other than the investors who over-relied on (and arguably misinterpreted) their guidance. If you look at every security the agencies rated AAA, they performed as expected in cash flows. The underlying mortgages were mostly garbage, but some kept paying. That meant the top tranche of those structures, the tranches that got a high rating, kept paying. If you held to maturity, the securities performed as promised. (Cf: if the government hadn’t bailed out AIG, they may not have.) The problem was they crashed in value in the interim because people began doubting if they would perform. That was a problem for liquidity-constrained investors, which was almost everyone in 2008. Rating agencies don’t say “this bond won’t trade at 50¢ on the dollar.” They say “this bond will probably pay you back.” And in the latter assessment, they were surprisingly accurate. The problem was people took the second to mean the first.