15 ms·

Putting aside the circumstances specific to SBF/FTX (being in the Bahamas, involving crypto, SBF's political connections, etc), there's not much reason to expec

• thaumasiotes 4y ago
  > Martin Shkreli's MSBM collapsed by 2012; he wasn't indicted until 2015. This doesn't seem like a good example. The way I understood the story, Shkreli ran an effort that collapsed. Then, he ran another effort that was very successful. Then, he took money from the successful effort and used it to pay back everyone who invested in the flop. By that accounting, it doesn't really matter when the flop collapsed, because at that point he hadn't done anything wrong.
• quickthrower2 4y ago
  Thats the whole argument of the article, of course, but still I like your comment for adding some additional interesting supporting examples.
• Waterluvian 4y ago
  “The wheels of Justice turn slowly… but they turn.”
  • ALittleLight 4y ago
    They turn slowly for some crimes. If I was to find the prosecutor or judge who would one day be involved in indicting SBF and punch them in the face, I bet the wheels would turn pretty quick for me.
    • arcticbull 4y ago
      Well, in fairness, that's a very simple crime to prosecute :)
      • baandam 4y ago
        Exactly. This isn't really that difficult to figure out that untangling a giant ponzi and money laundering scheme is several orders of magnitude more complex than assault.
    • ajross 4y ago
      Right, because getting a judge to approve a warrant to arrest someone for assault is trivial if you have a witness, because that's the kind of thing that is clear and obvious. Even finding a lawyer capable of writing a warrant application for fraud like FTX is difficult, partly because the evidence is hard to find and hard to understand and frankly just because financial criminal law is a mess. Add to that that if you mess that part up you jeopardize the whole case (because any evidence that you collect with a bad warrant becomes subject to being thrown out, obviously). No one wants to get that wrong just to get a perp walk. Remember that what people are demanding here isn't punishment, it's just "an arrest". People who are arrested spend a few hours (maybe a day or two) being held before arraignment and then walk right back out of the jail.
      • dragonwriter 4y ago
        > Right, because getting a judge to approve a warrant to arrest someone for assault is trivial if you have a witness, because that's the kind of thing that is clear and obvious. And, more to the point: (1) its easy to convict on that kind of assault (delays are more often due to prosecutors not starting a case they dob’t feel adequate confidence they can win than prosecutors being unable to meet the much lower bar of probable cause), (2) prosecuting on such a case early is much less likely to foreclose other charges or obstruct attempts to identify and action on other crimes or recoverable property tied to them.
        • 4y ago
  • coldtea 4y ago
    Except when they don't, which generally is the case for the rich. They just need to arrest some schmuck every now and then to give they illusion that it turns for them too.
    • deleted 4y ago
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  • cm2187 4y ago
    The speed, torque and direction highly depend on which side of the political aisle are the DoJ and the defendant.
  • briantakita 4y ago
• madrox 4y ago
  This feels like the judicial equivalent of a product manager asking an engineer why hasn't the feature been shipped yet. Everyone's been talking about the PRD for over a week!
  • quickthrower2 4y ago
    To take the analogy further, violent criminals are arrested much more quickly, which is like a product manager asking for the pricing on the pricing page to be changed.
• jasonhansel 4y ago
  This is basically what the OP is saying: it's not something specific to SBF or related to his political connections, but a more general issue in prosecuting white-collar crimes.
  • dmix 4y ago
    OP is saying it's a natural side effect of this sort of complicated crime, it's not just an issue with how it's prosecuted. Although rerouting the massive amounts of money + human capital in non-violent crimes (drugs) to white collar would help... and probably pay for itself in recovered money (via tax revenue and reduced government corruption). That probably still wouldn't result in SBF-type criminals being arrested right away though.
    • ouid 4y ago
      it was all intentionally routed away after 9/11 under the guise of improving homeland security.
      • dmix 4y ago
        Reminds me of that old Immortal Technique clip: https://www.youtube.com/watch?v=4gGLI9ifEzw https://www.youtube.com/watch?v=4gGLI9ifEzw
    • jasonhansel 4y ago
      I also think it's a problem of underinvestment. The NYC police department alone has 5 times the budget of the SEC. That seems disproportionate. If we spent more money on enforcement and hired more investigators, I suspect these investigations would be able to proceed much faster.
      • dsfyu404ed 4y ago
        The SEC isn't tasked with being the nearly sole dispensary of state violence over a slice of territory containing millions of people. NYPD is. Occupying territory is expensive.
• jonas21 4y ago
  > Bernie Madoff is a notable exception: he was arrested 3 days after his Ponzi was revealed. But it's not comparable at all to SBF's situation: Madoff was arrested after he confessed privately to his own family; his sons immediately went to the police. Not only did he confess, saying it's "basically a giant Ponzi scheme," he also said that he planned to distribute the remaining $200-$300M in funds to family, friends, and employees in the next week.
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  • dreamcompiler 4y ago
    And -- as the article points out -- Madoff was in the United States when he confessed. I rather doubt SBF will ever voluntarily set foot on US soil again.
    • b112 4y ago
      Isn't there a statute of limitations for these types of crimes? (Not sure for the US here, but...) If all the data is spread to the winds, if everyone hits ground, can they even file charges? I suppose so, but if there is no evidence pointing to wrongdoing... To be honest, I'm not even sure what he supposedly did wrong. He took investments, in an unregulated sector, and backed those investments and lost? If he were a bank, that's 100% legit. No bank I know of, has 100% of investor funds backed by anything. Even in Canada, land of give-a-fuck-sorta, there used to be a requirement for banks to have hard currency (gold, cash) in a vault somewhere, 5% worth of account holder's value, which was inspected annually by the government. Yet the last time I read the bank act, it was removed as a requirement. If banks don't need any sort of banking for account holders in CAD, why would an unregulated exchange need that? (Again, I can imagine there are all sorts of things I'm missing... but?!)
      • grey-area 4y ago
        He bought a $16m house in his parents’ names with company funds (fraud). He transferred customer funds to an unrelated hedge fund company (fraud). He created fake accounting systems to hide the fraud (fraud). He claimed to be making lots of money just to help others (morally reprehensible and a huge red flag). That people are still making excuses for him tells you how rotten this entire ecosystem is.
• deleted 4y ago
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• ktorvald 4y ago
  Just another data point. Billy McFarland was arrested by FBI agents Monday following the Fyre Festival for defrauding investors. He did not confess prior to his arrest. Billy raised $20m with fake financials. SBF raised close to a $1B, and I’m sure he didn’t disclose the fact that customer deposits flowed to a hedge fund he controlled exclusively. Harm caused to consumers and investors is just as obvious, if not more obvious in SBF’s case, when compared to Billy’s festival. https://youtu.be/pNS1khHWTmI https://youtu.be/pNS1khHWTmI
  • deleted 4y ago
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  • _benedict 4y ago
    Didn’t Fyre Festival turn into a very public humanitarian crisis? I don’t know that the two situations are comparable as a result.
    • pessimizer 4y ago
      > I don’t know that the two situations are comparable as a result. Why or why not? Should the amount of publicity matter for the justice system? What distinguishes a "humanitarian disaster" from a bunch of rich kids having to sleep rough on a beach near a resort town for a few days?
      • nradov 4y ago
        Hey now. I heard the rich kids also had to eat sandwiches with just bread and cheese. It was a real humanitarian crisis I tell you, right up there with the Ethiopian famine! https://www.vice.com/en/article/nza8yq/that-photo-of-the-fyre-festival-sandwich-is-fake https://www.vice.com/en/article/nza8yq/that-photo-of-the-fyr...
      • csomar 4y ago
        We still operate as the primitive creatures we are. People are more terrified if they see some people potentially dying of hunger vs. many people losing digits in some computer. The first one can trigger panic. Prosecution being as primitive as we are will hurry for the first case. Another point: $10bn+ is a lot of money and probably caused lots of damage (ie: suicide). But if someone pulled a knife in Time Square, the police will be quick to apprehend him and the prosecution very willing to charge him. There was no harm done and yet resources will be deployed. But SBF might be even more dangerous yet no one is panicking yet (except some people here who might appreciate how dangerous he is)
• cabaalis 4y ago
  So it would seem safe to say that financial crimes can take a very long time to bring charges. Why is the smoking gun so buried?
• dragonwriter 4y ago
  > Madoff was arrested after he confessed privately to his own family Including stating his imminent intent to surrender to authorities, he also admitted to massive fraud when interviewed by the FBI immediately after that, and before the arrest. SBF ain't in the same place as Madoff.
• godmode2019 4y ago
  Martin Shkreli cant be placed with those other people, no one lost any money. He was convicted on a technically by telling early investors that he already had investors. When at that point his start up had none.
  • deaddodo 4y ago
    That’s not a technicality, that’s literally fraud. It doesn’t matter that an endeavor he followed through later paid back his initial investors, the act itself is literally fraud. Period. All you’re doing is petty-fogging the issue.
    • nostromo95 4y ago
      Charitably, I think what OP was getting at is that there was no pressure to arrest / prosecute Shkreli quickly because his actions hadn’t in actuality physically or monetarily harmed people, unlike, e.g., Theranos.
    • Dma54rhs 4y ago
      Investors were but complaining, it was the state that was after him. It's obviously different from owing billions of dollars that don't exist anymore like Bankman did.
    • godmode2019 4y ago
      Its a technically because that is not what brought him to public attention, he made himself a target so they went looking into his life for something to charge him with. If you look hard enough through anyone's phone and online history you will find something to put them away for - no exception. I say he should not belong on the list because his company was not scam company its still alive to this day - the ethics aside of hiking drug prices.
• tmaly 4y ago
  building a case takes long time, especially if SBF has good lawyers.
• loeber 4y ago
  That's not quite true, there's plenty of precedent for fast prosecution. As an unfortunate example, take the Aaron Swartz case: - September 25, 2010: Swartz begins using MIT network to pull JSTOR articles. - Throughout September through December, a cat-and-mouse game ensues where JSTOR blocks access to certain MIT IPs, and then downloading starts again from a different range. - January 5, 2011: MIT locates the laptop in a closet that Swartz had been using. - January 6, 2011: Aaron Swartz is arrested. - July 11, 2011: Swartz is indicted by a federal grand jury. Additional indictments followed in November 2011 and September 2012. In Swartz's case, the judicial apparatus moved swiftly. As far as I understand, law enforcement became involved in late December 2010 or early January 2011. The timeline to arrest and indictment was short. I would expect to see a reasonably quick (i.e. on the order of months) indictment of SBF. While other posters are correct to point out that there's a huge morass of complexity and murkiness around FTX/Alameda, my view is that this creates not one, but several cases -- some of them very straightforward and where I'd surely expect the DOJ to put a preliminary case together in a few months.
  • fomine3 4y ago
    too small to too big to immediate fail?
  • mikeyouse 4y ago
    Swartz wasn't arrested in January by the FBI for the downloading - but by MIT police for breaking and entering. He couldn't have been arrested by the Feds before the indictment or criminal complaint was filed, which didn't take place until 6 months later. I suspect you're right on the timing though, especially with all of the whining about how he hasn't been charged yet. It'll be a politically savvy move for the Feds to file something quickly here and then supersede it eventually when the full scope is clear.
    • toss1 4y ago
      >> It'll be a politically savvy move for the Feds to file something quickly here and then supersede it eventually when the full scope is clear. That's likely true. However, it may also be a more savvy move to let SBF and other execs think little is pending in order to gather more information. Other than reputation of the justice system (which already has a justified slow reputation; "The wheels of justice turn slowly, but they grind exceedingly fine."), this might be the greater consideration... If they don't rapidly indict, it'll be interesting to see if SBF ever voluntarily returns to US territory before an indictment.
• UweSchmidt 4y ago
  It would be nice if things could go a little faster. 3 years are a significant percentage of the average remaining life of an adult. The onus should be on the legal system to hurry up a little and streamline the process; these 3 years are quite unpleasant if you are accused of a crime, and have to wait and prepare for a trial, no? If you are guilty the time should be counted as served sentence (maybe at 50%), the innocent should be compensated for unreasonable extra waiting time.
  • shortstuffsushi 4y ago
    It would be great if these things were faster - in fact, we cared so much to make it so that it's included as part of our 6th amendment. In practice, it's almost exclusively not the case, even if higher profile cases. Two bits of personal anecdata, a death of a friend's brother due to fentanyl lead to the arrest of a drug dealer (with priors, and found in possession of illegal weapons). Open and closed case, right? Still took a year. Similarly, the exact same thing happened to my brother's friend - three years on, the trial just concluded. Several bigger cases in my area, the Rittenhouse and more recently Brooks cases also took a year. I'm not sure what you mean with your second half though, are you suggesting detaining people during this period and pro-rating their sentence and/or paying them? Or are you saying that they should wait outside of jail, but still have it counted towards their sentence? I don't quite follow exactly. Edit: seems the latter. I'm not sure my opinion, having a case looming over you seems potentially difficult, especially if you're later found innocent, but should the government (/citizens) foot the bill for that?
    • UweSchmidt 4y ago
      It's mostly a thought experiment but the general idea is to - consider the actual effects on someone to be involved in a legal process; for lawyers it's just a workday but for people it's heavy to be accused of a crime and to wait for something awful (jail) to happen. - define some time reasonable time constraints for everything, in order to give some incentives for the process to speed up. Prosecutors could be measured by how efficient cases go, and paying out some money could be an option.
• ShivShankaran 4y ago
  SBF will NOT go to jail. He is too politically connected and even his on/off gf is very deeply politically connected to MIT and other politicians. At this point its extremely naive to believe that he might get something more than a slap on the wrist, even if that. He was on the same event with Janet Yellen whose signature will be on all US currencies.
  • spfzero 4y ago
    Jeffrey Epstein was also very well connected. Sometimes those connections vanish into thin air to avoid guilt by association.
• jackmott 4y ago
• fatneckbeardz 4y ago
  And after Lehman brothers collapsed... nobody was arrested.
  • chollida1 4y ago
    What specific crime do you think was committed and who specifically do you think commuted said crime in Lehman?
    • fatneckbeardz 4y ago
      all of the whistleblowers and internal critics that they fired and blackballed, all the times they ignored anyone who pointed out flaws in their models, all the ways they ignored the conflict of interest for ratings agencies being paid to rate garbage securities as AAA, etc etc etc.
      • chollida1 4y ago
        > all of the whistleblowers and internal critics that they fired and blackballed Interesting, I'd never heard of Lehman firing a whistle blower. Can you provide a link? It seems like it would be tough to fire them given that Lehman went bankrupt. Also not sure how Lehman would blackball someone given that, again, they went bankrupt. Are you maybe talking bout a different company? > all the times they ignored anyone who pointed out flaws in their models This isnt' a crime. > all the ways they ignored the conflict of interest for ratings agencies being paid to rate garbage securities as AAA, etc etc etc. Again, not a crime committed by Lehman. I get that you are angry, but you really don't have any point here by the looks of things.
  • AnimalMuppet 4y ago
    Lehman wasn't fraud, though.
• deleted 4y ago
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• lazide 4y ago
  One thing about SBF and the FTX debacle is the record keeping and overall story seems incredibly confused and incomplete. That a crime occurred seems very certain, but which exact crime is a lot less clear, and until a lot of digging and cross referencing of records happens, that’s likely to continue to be the case. To arrest, they need to be able to identify a specific crime with identified specific elements in a specific jurisdiction. It seems like they have had an equivalent of a dump truck load of legos dropped in their lap, and it won’t be hard to assemble a Lego airplane out of it (probably), but yikes.
  • bandrami 4y ago
    Though this may be sloppiness as a legal defense. If you haven't actually jumped through the hoop of claiming that you won't just take the money and run, you really kind of can just take the money and run.
    • lazide 4y ago
      They specifically said they wouldn’t take the money and run in their TOS, so they’re well and thoroughly screwed on that front. As I said, dump truck of legos.
      • bandrami 4y ago
        Is failing to meet your TOS actually criminal and not just a tort? This is the whole thing with "what if a bank but without the regulations?"
        • lazide 4y ago
          If you promise one thing, take their money, and then do another thing and it ends up in your pocket somewhere (which seems to have happened), then that’s fraud or embezzlement, depending.