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> Out of a political desire get the big bad rich people we have in the process turned every executive of a sufficiently complex operation into an unwitting crim
by PragmaticPulp 6y ago
> Out of a political desire get the big bad rich people we have in the process turned every executive of a sufficiently complex operation into an unwitting criminal.
Yet we only saw a small number of arrests come out of the 2008 housing crisis, despite widespread fraud. The few cases that were successfully prosecuted involved 9 and 10 figure fraud operations.
At the core of the issues is the idea that ignorance of the law is no excuse. It may sound unfair that everyone can be bound by the law regardless of whether or not they understand every line, but the alternative requires that we let people off the hook for simply claiming they didn't understand the law.
In this case, the crime wasn't a simple mistake. The Michelle character in this story thought it was a creative loophole in the law that allowed her to fudge the accounting numbers in favor of the company by arbitrarily using the lowest share price of the month instead of the share price at time of issue.
This isn't the type of decision that one accidentally makes. It requires deliberate effort to search out and use the monthly low share price instead of the share price at time of issue. Ben Horowitz was fortunately skeptical, and consulted the general counsel for a proper reading of the law.
- throwaway8581 6y agoIgnorance of the law is indeed not an excuse. But all that means is that it’s not a legal excuse, as in it’s literally not a defense you can raise. It says nothing about the morality of criminalizing innocent conduct. Many regulatory crimes require no mens rea at all. And even more criminalize things that no reasonable person would expect to be a crime. Criminal punishment is supposed to be for despicable conduct, not morally innocent behavior.
- rodone 6y agoThe story in the linked article details despicable conduct.
- Meekro 6y ago"Ignorance of the law is no excuse" is not a just principle when the laws are so numerous and incomprehensible that everyone is always ignorant of the law. Plenty of people just end up getting bad legal advice, even when they thought they were paying top dollar for a good quality law firm.
- chki 6y agoIn some jurisdictions (I can only speak for Germany with some authority) if you've made a serious effort to get legal advice on a complicated topic and the legal advice was wrong this will (probably) mean that you're not guilty of a crime caused by the bad legal advice. Civil liability is a different topic obviously. (But the "probably" is there for a reason: it really does depend on the specific topic at hand and whether you actually tried hard enough to comply with the law)
- novok 6y agoIsn't it at that point, the legal / accounting firm that gave you bad advice become liable instead?
- tablespoon 6y agoIs there some kind of good-faith test or controls to penalize bad legal advice? Because I could totally imagine some grey-area tax avoidance outfit partnering with some shady lawyer that will tell the client everything's legit in order to protect them.
- nradov 6y agoIf you think you have found a legal loophole or gray area then the correct course of action is to send a letter to the responsible federal agency (like the IRS) and request a formal opinion letter as to the legality of your scheme. Once you have it in writing then you're in the clear and won't be prosecuted.
- throwaway8581 6y agoI don’t think they’re in the business of giving formal opinion letters.
- nradov 6y agoThey actually are. This is standard practice and they do it all the time. You can find thousands of such letters. Here's one example. https://www.sec.gov/Archives/edgar/data/1360951/000119312506137856/dex52.htm https://www.sec.gov/Archives/edgar/data/1360951/000119312506...