5 ms·

I watched the full NYT interview today and he's either an amazing well-coached liar (very possible) and or he really is a kid in way over his head, who got to t

by dmix 4y ago

I watched the full NYT interview today and he's either an amazing well-coached liar (very possible) and or he really is a kid in way over his head, who got to take advantage of reputation circles (VCs, media, politicians, etc) to make reckless massive gambles without any adult risk-adverse old-school finance guys in the room. Basically demonstrating zero personal responsibility for the the money he had control over. Maybe more will come out to show he's is in fact a modern Bernie Madoff, with a grand hidden scheme at work to directly enrich himself, but that's not 100% obvious yet. I'm looking forward to what comes out in the future.

p1necone 4y ago
"I was too ignorant to run a giant investment company/pseudo-bank correctly" shouldn't get you off though. He needs to face the same charges regardless of whether he was malicious or stupid.
- mikeyouse 4y ago
  And he absolutely will... People are ridiculously acting like he got away with something because he's not in Federal prison yet. It hasn't even been a month since it all blew up.
- BobbyJo 4y ago
  The day the "too dumb" defense works is the day we can open all the cell doors and close down the prisons, because that's everyone's defense.
  - chx 4y ago
    There's more to it being a defense: > Delinquents and criminals average IQ scores 8 to 10 points lower than noncriminals, which is about one-half a standard deviation. IQ and criminal behavior are negatively correlated at about r = -. 20 (Hirschi and Hindelang; Wilson and Herrnstein).
    - noduerme 4y ago
      Did they adjust for dumber criminals being more likely to be caught?
      - bigDinosaur 4y ago
        How does one adjust for uncaught criminals?
        bombcar 4y ago
        Get a control group of smart people and have them start doing crimes and see if they get caught. We call this “financialization”.
        totalZero 4y ago
        Elapsed time between crime and capture might be a good regressor.
        Nasrudith 4y ago
        Chronic unsolved crimes gets some of it at least. If say, thirty percent of murders are cold cases then you know they aren't all getting caught. Other constraints would hint at the possible count potential murderers. If two people are killed on the same day two days of travel apart then you have at least two murderers. That doesn't help with estimating levels of non-detected crimes of course.
    - oblio 4y ago
      > Bankman-Fried attended Canada/USA Mathcamp, a summer program for mathematically talented high-school students. He attended high school at Crystal Springs Uplands School in Hillsborough, California. From 2010 to 2014, Bankman-Fried attended the Massachusetts Institute of Technology. There, he lived in a coeducational group house called Epsilon Theta. In 2014, he graduated with a bachelor's degree in physics and a minor in mathematics. There's no way he can plead stupidity.
- sillysaurusx 4y ago
  That’s not a given. The #1 criteria of fraud is intent. If you can’t prove intent, there was no fraud. We may not like it, but that’s how the system is set up.
  - HarryHirsch 4y ago
    Yes, it's intentionally set up like that to facilitate crime.
    - DiggyJohnson 4y ago
      The “intentional” part of your claim is extremely dubious, even if I agree with it if you omit that word. I don’t think there’s an unintentional relationships which facilitates and under-punishes fraud, but I don’t think there’s a conspiracy afoot.
  - rootusrootus 4y ago
    The gov't says 'reckless indifference to the truth' qualifies as intent.
    - myself248 4y ago
      Reckless indifference to the truth, then, should condemn both SBF and his aggrieved. All involved knew what they were doing, or took extraordinary measures to blind themselves to knowing.
      - deleted 4y ago
        [deleted]
- throwawaysleep 4y ago
  Fraud requires intent.
- dsfyu404ed 4y ago
  >He needs to face the same charges regardless of whether he was malicious or stupid. We're not gonna invalidate a huge amount of legal precedent spanning centuries for one dude. Intent matters. (That said I think he's lying and knew what was going on the whole time)
- dmix 4y ago
  Being dumb never got anyone off of a crime. I'm pretty sure he will face serious consequences regardless. The "bumbling kid" narrative won't help him there. But it's relevant in discussions when I've seen him called worse than Madoff who engaged in a very overt crime. Again we don't know exactly how much SBF tried to directly profit off the business yet and how much it was a concerted plot to scam people. ...And since the internet requires you to be extremely obvious, that is not saying he's not a bad guy or absolved of responsibility or whatever.
  - landemva 4y ago
    > Again we don't know exactly how much SBF tried to directly profit off the business The article has some large numbers. "Bankman-Fried received an incredible $1 billion in personal loans, as well as a $2.3 billion loan to an entity called Paper Bird in which he had 75% control."
- SilasX 4y ago
  Even if true, wouldn't that mean he was defrauding the VCs by representing that he could run a pseudo-bank correctly? Out of the frying pan...
notch656a 4y ago
MIT grad, ex Jane Street trader, comes from lawyer-professor family, garnered VC capital from big names like Kevin O'Leary and lead the pitches. Dude knew what he was doing and if he didn't it was done out of such criminal negligence that he's still to blame.
- jstx1 4y ago
  To be fair, he has said some things about risk and finance that are completely idiotic - like always valuing EV over utility regardless of stakes. It's the kind of detached-from-reality crap that a teenager whose brain hasn't developed yet would say. So he might be a scammer and a complete idiot regardless of where he went to school and where he worked.
  - sgerenser 4y ago
    Or something someone getting high on Parkinson’s medication that is known to cause extreme risk taking behavior might say.
    - notch656a 4y ago
      I wonder if he started taking emsam after he knew his goose was cooked several months ago. Might be the only way to keep going with a straight face while you bet the farm on red hoping to get the deposits back.
jstx1 4y ago
Not segregating customer funds isn't a gamble.
fatneckbeardz 4y ago
the proof would be to find how many people he fired and blackballed because they disagreed with him or told him he was wrong.
- dmix 4y ago
  Agreed. That was a huge part of the Theranos story. Balwani fired anyone who was critical of him or the idea (he was even worse than than Holmes and IMO deserves a longer sentence). The book talked about a security guard who would be responsible for the daily firing, walking the person out of the building with their box of belongings was as normal as lunch.
hnews_account_1 4y ago
I’m a year older than him and in finance without an Ivy League education or any pedigree and I can swear to you that innocence act fools no one except people outside the field. This is like a programmer saying he drowned the company because he didn’t realize how much he was spending on cloud costs as he left the auto scaler on. It is the stupidest excuse, except the autoscaler was running on infra the programmer created and owned so he just took all the money. Which is just basic fraud. It is such basic fraud that it happened even in 2008 and it’ll keep happening. Cherub faced little fucks will evolve to fool you out of your money until the end of all time. Don’t fall for it.
- bscphil 4y ago
  I think the thing that confuses a lot of people is that if he's actually savvy, why on earth has he agreed to do so many damaging interviews? He's either (a) naive in at least some respects, (b) actually doesn't care about his legal liability - what he told the NYT today, or (c) is playing some sort of long game where he parlays his apparent innocence into a shorter prison sentence. But I think a lot of savvy people don't see (c) working out for him.
  - unionpivo 4y ago
    Because he thinks, that he can get away with it, thanks to political donations. After all unlike Holmes and Madoff he didn't steal from the rich.
    - dmix 4y ago
      Huh? A ton of rich people got burned by this. Probably way more than Madoff or Holmes ever dealt with.
  - JumpCrisscross 4y ago
    > why on earth has he agreed to do so many damaging interviews It seems to be working, at least on some margins. Even here he has his defenders.
  - 4y ago
hula_lula 4y ago
Its easy to look like a sheep when you have not internalised any sense of responsibility. It was literally a game to him
deleted 4y ago
[deleted]

by dmix 4y ago

p1necone 4y ago

"I was too ignorant to run a giant investment company/pseudo-bank correctly" shouldn't get you off though. He needs to face the same charges regardless of whether he was malicious or stupid.

mikeyouse 4y ago
And he absolutely will... People are ridiculously acting like he got away with something because he's not in Federal prison yet. It hasn't even been a month since it all blew up.
BobbyJo 4y ago
The day the "too dumb" defense works is the day we can open all the cell doors and close down the prisons, because that's everyone's defense.
- chx 4y ago
  There's more to it being a defense: > Delinquents and criminals average IQ scores 8 to 10 points lower than noncriminals, which is about one-half a standard deviation. IQ and criminal behavior are negatively correlated at about r = -. 20 (Hirschi and Hindelang; Wilson and Herrnstein).
  - noduerme 4y ago
    Did they adjust for dumber criminals being more likely to be caught?
    - bigDinosaur 4y ago
      How does one adjust for uncaught criminals?
      - bombcar 4y ago
        Get a control group of smart people and have them start doing crimes and see if they get caught. We call this “financialization”.
      - totalZero 4y ago
        Elapsed time between crime and capture might be a good regressor.
      - Nasrudith 4y ago
        Chronic unsolved crimes gets some of it at least. If say, thirty percent of murders are cold cases then you know they aren't all getting caught. Other constraints would hint at the possible count potential murderers. If two people are killed on the same day two days of travel apart then you have at least two murderers. That doesn't help with estimating levels of non-detected crimes of course.
  - oblio 4y ago
    > Bankman-Fried attended Canada/USA Mathcamp, a summer program for mathematically talented high-school students. He attended high school at Crystal Springs Uplands School in Hillsborough, California. From 2010 to 2014, Bankman-Fried attended the Massachusetts Institute of Technology. There, he lived in a coeducational group house called Epsilon Theta. In 2014, he graduated with a bachelor's degree in physics and a minor in mathematics. There's no way he can plead stupidity.
sillysaurusx 4y ago
That’s not a given. The #1 criteria of fraud is intent. If you can’t prove intent, there was no fraud. We may not like it, but that’s how the system is set up.
- HarryHirsch 4y ago
  Yes, it's intentionally set up like that to facilitate crime.
  - DiggyJohnson 4y ago
    The “intentional” part of your claim is extremely dubious, even if I agree with it if you omit that word. I don’t think there’s an unintentional relationships which facilitates and under-punishes fraud, but I don’t think there’s a conspiracy afoot.
- rootusrootus 4y ago
  The gov't says 'reckless indifference to the truth' qualifies as intent.
  - myself248 4y ago
    Reckless indifference to the truth, then, should condemn both SBF and his aggrieved. All involved knew what they were doing, or took extraordinary measures to blind themselves to knowing.
    - deleted 4y ago
      [deleted]
throwawaysleep 4y ago
Fraud requires intent.
dsfyu404ed 4y ago
>He needs to face the same charges regardless of whether he was malicious or stupid. We're not gonna invalidate a huge amount of legal precedent spanning centuries for one dude. Intent matters. (That said I think he's lying and knew what was going on the whole time)
dmix 4y ago
Being dumb never got anyone off of a crime. I'm pretty sure he will face serious consequences regardless. The "bumbling kid" narrative won't help him there. But it's relevant in discussions when I've seen him called worse than Madoff who engaged in a very overt crime. Again we don't know exactly how much SBF tried to directly profit off the business yet and how much it was a concerted plot to scam people. ...And since the internet requires you to be extremely obvious, that is not saying he's not a bad guy or absolved of responsibility or whatever.
- landemva 4y ago
  > Again we don't know exactly how much SBF tried to directly profit off the business The article has some large numbers. "Bankman-Fried received an incredible $1 billion in personal loans, as well as a $2.3 billion loan to an entity called Paper Bird in which he had 75% control."
SilasX 4y ago
Even if true, wouldn't that mean he was defrauding the VCs by representing that he could run a pseudo-bank correctly? Out of the frying pan...

notch656a 4y ago

MIT grad, ex Jane Street trader, comes from lawyer-professor family, garnered VC capital from big names like Kevin O'Leary and lead the pitches. Dude knew what he was doing and if he didn't it was done out of such criminal negligence that he's still to blame.

jstx1 4y ago
To be fair, he has said some things about risk and finance that are completely idiotic - like always valuing EV over utility regardless of stakes. It's the kind of detached-from-reality crap that a teenager whose brain hasn't developed yet would say. So he might be a scammer and a complete idiot regardless of where he went to school and where he worked.
- sgerenser 4y ago
  Or something someone getting high on Parkinson’s medication that is known to cause extreme risk taking behavior might say.
  - notch656a 4y ago
    I wonder if he started taking emsam after he knew his goose was cooked several months ago. Might be the only way to keep going with a straight face while you bet the farm on red hoping to get the deposits back.

jstx1 4y ago

Not segregating customer funds isn't a gamble.

fatneckbeardz 4y ago

the proof would be to find how many people he fired and blackballed because they disagreed with him or told him he was wrong.

dmix 4y ago
Agreed. That was a huge part of the Theranos story. Balwani fired anyone who was critical of him or the idea (he was even worse than than Holmes and IMO deserves a longer sentence). The book talked about a security guard who would be responsible for the daily firing, walking the person out of the building with their box of belongings was as normal as lunch.

hnews_account_1 4y ago

I’m a year older than him and in finance without an Ivy League education or any pedigree and I can swear to you that innocence act fools no one except people outside the field. This is like a programmer saying he drowned the company because he didn’t realize how much he was spending on cloud costs as he left the auto scaler on. It is the stupidest excuse, except the autoscaler was running on infra the programmer created and owned so he just took all the money. Which is just basic fraud. It is such basic fraud that it happened even in 2008 and it’ll keep happening. Cherub faced little fucks will evolve to fool you out of your money until the end of all time. Don’t fall for it.

bscphil 4y ago
I think the thing that confuses a lot of people is that if he's actually savvy, why on earth has he agreed to do so many damaging interviews? He's either (a) naive in at least some respects, (b) actually doesn't care about his legal liability - what he told the NYT today, or (c) is playing some sort of long game where he parlays his apparent innocence into a shorter prison sentence. But I think a lot of savvy people don't see (c) working out for him.
- unionpivo 4y ago
  Because he thinks, that he can get away with it, thanks to political donations. After all unlike Holmes and Madoff he didn't steal from the rich.
  - dmix 4y ago
    Huh? A ton of rich people got burned by this. Probably way more than Madoff or Holmes ever dealt with.
- JumpCrisscross 4y ago
  > why on earth has he agreed to do so many damaging interviews It seems to be working, at least on some margins. Even here he has his defenders.
- 4y ago

hula_lula 4y ago

Its easy to look like a sheep when you have not internalised any sense of responsibility. It was literally a game to him

deleted 4y ago

[deleted]