Things going badly for investors is not in and of itself fraud even if it causes a crisis. That's why the hedge fund Alameda losing investors money is not by it

Things going badly for investors is not in and of itself fraud even if it causes a crisis. That's why the hedge fund Alameda losing investors money is not by itself a fraud. FTX taking customer money and spending it is however fraud. That's just like if you put money in a bank and they just spend it that's fraud. Fraud has a specific meaning [1] but you could think about it as being a negligent misrepresentation of some fact for unjust financial enrichment. So if I say to you I'm a billionaire[2] that's just a lie not a fraud. But if I say to you "I'm a billionaire, invest with me and I'll make you a billionaire" and I take your money and just go spend it or whatever, that's a fraud because you were relying on a fact I negligently misrepresented and you were harmed. The complexity comes because there are lots of seperate laws under which fraud is illegal. So if you lie on a loan application that's a different type of crime to if you tell someone they are buying shares in a potato farm and the potato farm doesn't exist and you just spend their money on blow instead. They're both fraud but they are different kinds of fraud. If I honestly get your cash for an investment, make that investment and lose all your money because it just doesn't work out, that's not a fraud. Hope that's clear. The meaning of the word fraud doesn't change from a capitalist vs a Marxist perspective. It's just "fancy lieing for financial gain" either way. [1] Here's a US-specific summary https://www.law.cornell.edu/wex/fraud https://www.law.cornell.edu/wex/fraud [2] I'm not. As far as I know at least.