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> As per the article, the FTC alleged that some customers waited weeks to get their money back. Now I know that this is bad, but I have seen worse behavior fro

> As per the article, the FTC alleged that some customers waited weeks to get their money back. Now I know that this is bad, but I have seen worse behavior from banks like Wells Fargo. Why is it that those banks just get monetary fines, but this new startup is forced to shut down ?

ineedasername 6y ago
Wells fargo committed fraud in a few different flavors, but was probably never at risk of losing customers' money (unintentionally). Reading between the lines of Beam's long withdrawal times, it sounds like they had fundamental liquidity problems and at risk of insolvency already, and the backing bank would have to cover things (or invoke FDIC insurance? I'm not sure if this situation would apply) That's just a pragmatic explanation though: I'm not claiming there was any equivalency of fairness between the two. It seems to me that Beam should be dismantled, and also that Wells Fargo should have suffered some equivalent fate. But again, consider the pragmatics involved: Forcing Wells Fargo to be sold off piecemeal would just mean there were even fewer massive banks controlling that market.
elliekelly 6y ago
I’m honestly kind of shocked to see the FTC is shutting down anyone. They are a notoriously weak regulator thanks to decades of special interest lobbyists convincing congress consumer protection is bad for business. It makes me wonder what on earth the FTC (and perhaps other federal agencies?) had on Beam that they would agree to this settlement.
- refulgentis 6y ago
  RTFA! :) They were guaranteeing insanely high interest rates, it was designed to fail
  - justinclift 6y ago
    Maybe a pyramid scheme that was caught early?
    - blunte 6y ago
      Ponzi which predictably collapsed when the rate of new funding couldn’t keep pace with the compounding interest payouts.
arbitrage 6y ago
Wells Fargo at no point was unable to cover its customers' withdrawals.

ineedasername 6y ago

Wells fargo committed fraud in a few different flavors, but was probably never at risk of losing customers' money (unintentionally). Reading between the lines of Beam's long withdrawal times, it sounds like they had fundamental liquidity problems and at risk of insolvency already, and the backing bank would have to cover things (or invoke FDIC insurance? I'm not sure if this situation would apply) That's just a pragmatic explanation though: I'm not claiming there was any equivalency of fairness between the two. It seems to me that Beam should be dismantled, and also that Wells Fargo should have suffered some equivalent fate. But again, consider the pragmatics involved: Forcing Wells Fargo to be sold off piecemeal would just mean there were even fewer massive banks controlling that market.

elliekelly 6y ago

I’m honestly kind of shocked to see the FTC is shutting down anyone. They are a notoriously weak regulator thanks to decades of special interest lobbyists convincing congress consumer protection is bad for business. It makes me wonder what on earth the FTC (and perhaps other federal agencies?) had on Beam that they would agree to this settlement.

refulgentis 6y ago
RTFA! :) They were guaranteeing insanely high interest rates, it was designed to fail
- justinclift 6y ago
  Maybe a pyramid scheme that was caught early?
  - blunte 6y ago
    Ponzi which predictably collapsed when the rate of new funding couldn’t keep pace with the compounding interest payouts.

arbitrage 6y ago

Wells Fargo at no point was unable to cover its customers' withdrawals.