Like it or hate it, this is what the SEC does. You think Martha Stewart deserved jail time for making 50k in an insider trading scheme she didn't really care about?
The SEC finds very public cases and then brings the hammer down in order to act a deterrent. Martin Shkreli broke the law, something he didn't have to do. It isn't like it was mob justice and some hugely biased jury convicted him of all the crimes he was committed of without thought. The jury by all accounts fairly deliberated his actions and convicted him of crimes that he did, while letting him off for crimes he didn't do.
Then all Shkreli had to do was show some remorese and kiss the ring a little bit, but he continued to be a troll and mock the justice system. He downplayed his crimes literally minutes after being convicted of them, which showed a lack of remorse (and maybe honestly so, but the justice system doesn't like that). He continued to be a troll, including the whole Hillary Clinton incident, many of these statements used against him in sentencing.
This isn't a case of the tall blades of grass getting cut first. It's a case where we have a subjective justice system that doesn't want to be mocked while it is doing it's job. Shkreli went out of his way to mock it, he went out of his way to mock the SEC, all the while he actually did commit a crime. Yes, it is a witch hunt in that the SEC will throw the book at some people while letting other people who committed worse crimes off the hook (Phil Mickelson vs Martha Stewart), but that how any limited investigative body works. If you don't want to be a target of a witch hunt, don't break the law. And if you do, kiss the ring. I'm not convinced it is a huge indictment of our society that people who break the law all the while trolling everybody get unfairly harsh punishments, though I admit it is unfair in the sense that life as a whole is unfair.
Well put. Just because O.J. was found not guilty and no big bankers went to jail in 2008 doesn't mean judges in other courtrooms are going to relax their standards when you flip them off
> I'm not convinced it is a huge indictment of our society
The indictment of our society is that hundreds of millionaires can enrich themselves further via dishonest and illegal means, wreck world economies, and suffer no consequences, while a regular joe can be chocked to death for selling cigarettes on the street (disruptive!)
This isn't an impossible problem to fix. We just start voting for politicians willing to execute white collar criminals.
The interesting thing about this casae, if I recall the facts correctly (I'm sure someone will fact check this, I'll attempt to and update this in a bit), is that in this case the breaking of the law was mostly an attempt to make sure his investors were left whole.
Here's the facts as I understand them:
1) He ran a hedge fund, and lost a lot of money.
2) He didn't disclose to his investors that he lost the money, and falsified reports.
3) In an effort to make sure people didn't lose money (whether to protect himself or to make sure his investors were made whole) he took profits from another company he ran and used them to pay these investors.
4) Almost all investors in the hedge fund ended up making a profit because of this.
It's fairly easy to interpret this as someone that screwed up bad, and then broke the law to cover it up and try to make it right, and by lucky happenstance was actually able to get people's money back, but still ended up breaking the law. That's a fairly good story to have, and I would think lends itself towards a mitigated sentence.
On the other hand, he repeatedly presented himself in an unsympathetic way that antagonized the judge and the regulatory bodies involved.
It is, to put it mildly, a fairly complex and (to my layman eyes) unique situation, compounded by the fact that his behavior may or may not have to do with being socially inept (is it right to punish someone for a social disability, if that is indeed the case here?)
There was a discussion about this when the guilty verdict was announced[1]. Much of my info comes from that article and this other one[1] from the same time period.
Punishment seldom if ever fits the crime. There's a strong case that punishment exists to give society a chance for collective catharsis. Otherwise it makes little sense to imprison someone for 7 years. If they can be rehabilitated then do so; if they need to be removed from society permanently then do that. Public ostentatious punishment is really a form of vicarious group sadism directed at the unpopular.
> But nearly no bankers responsible for the 2008 financial crisis ever went to jail
That is a myth. Dozens of bankers were arrested and put in prison over crimes related to the 2008 financial crisis. That includes a number of bankers at large enterprises. It excludes the very top tier bankers, at the systemically important financial firms, who all managed to skate.
It's not illegal, generally speaking, to make dumb investment decisions, and or to take a lot of risk, and lose money. The responsibility for the 2008 financial crisis is spread across both the public and private sector, from Congress & multiple Presidents to the Federal Reserve to hundreds of banks, thousands of bankers, and tens of thousands of mortgage brokers and realtors. Spurred on by low interest rates, it was collective financial insanity that millions of people willfully, cheerfully, participated in.
"The idea that no bankers went to prison for crimes related to the financial crisis is a myth, according to the watchdog overseeing the federal government's bailout fund. There have been 35 bankers sentenced to prison, said Christy Goldsmith Romero, the special inspector general for the Troubled Assets Relief Program (SIGTARP), in a report to Congress released Thursday."
"There have been 59 bankers convicted of crimes, including two executives at NOVA Bank in Philadelphia who were convicted on Wednesday of fraud conspiracy related to TARP funds. An additional 19 bankers have been charged with crimes, with many awaiting trials."
I'm no expert on the financial crisis, most of my knowledge comes from The Big Short. But wasn't there actual fraud also being perpetrated? E.g. the ratings agencies that knowingly assigned A grades to bundles of decidedly low-grade debt just to keep clients happy?
Yes, some small-time traders were put away. The odd CEO or CFO of a bank that's decidedly not TBTF. The poor shmuck who gambled outside his capital allowances with house money.
But if you are Jon Corzine - well, you can abscond with $1.2B of your customers' money, tell Congress you just don't know where it went, and then pay $5MM to avoid an embarrassing and inconvenient trial, all the while throwing that sucker Edie O'Brien under the bus for being dumb enough to miss that "getaway" at the Hamptons last year. (yes, this was a bit later than the 2008 blowup, but the cause and effect were the same)
Or you can be Lloyd Blankfein, who testified to knowing full well that their MBS desk was shorting the very products they were selling to their clients with sales pitches containing materially false claims. But Lloyd is a great guy, and he's had a rough go if it what with losing his hair and all. So we're not even going to prosecute, er, actually, we won't even bother to investigate the captain of who was privvy to the fraud on his ship, but didn't technically commit the fraud himself. So we'll go after that dumb trader Fabrice Tourre instead. $800k is a pretty stiff fine for someone who earns double that in a year. I'm sure he'll learn his lesson.
Or you could be Dick Fuld....
Perhaps you see a pattern here?
In the 1980s, when regulators and prosecutors didn't regularly get together for drinks with each other at Valentino, over ONE THOUSAND bankers were convicted, with roughly a third going to prison, with an average sentence of 3.2 years for the crimes. Not only including, but ESPECIALLY the captains of the ships.
And they went after EVERYTHING - even violations of campaign contributions laws unrelated to the S&L crisis itself.
Fast-forward to today. For a crisis arguably MORE fraught with fraud, with substantially worse fallout for the country: 59 convictions. Most were traders, in security sales, or ran tiny local banks. ZERO of them were Wall Street C-suite, directors, vice presidents, or anyone else who signed off on the fraud at a higher-than-upper-management level.
In most cases, regulators and prosecutors are hesitant to even INVESTIGATE.
This is to say nothing of the fact that nearly all large Wall Street banks are regarded by Federal regulators as recidivist banks, meaning that they keep breaking the law, getting fined less than the profits made from the crime, and doing it again. And again. And again.
Nobody at HSBC went to prison for facilitating the murder of thousands of Mexicans by cartels. And nobody ever will. There are plenty of statutes on the books to criminally prosecute the bankers responsible. But we won't. Because some people are more equal than others.
These constant apologetics for the parasites are, frankly, sickening.
Same with the constant apologetics for arbitrary enforcement of law. What exactly is the point of having laws if the existential importance of the criminal to a bank is a critical deciding factor in whether or not to investigate, charge, prosecute, or convict?
As far as I can make out from that article all the executives were jailed for tarp-related crimes. Since tarp post dates the crisis, it's not really accurate to cure it in response to a claim about bankers responsible for the crisis. They admit most of those jailed were low level. Certainly the one top executive using cited was tarp related. Which makes sense, since there were quite good anti fraud controls in tarp.
> It's not illegal, generally speaking, to make dumb investment decisions, and or to take a lot of risk, and lose money
You're not going to find criminals if you don't look for them. Bill black:
> All right so you have massive fraud driving this crisis, hyperinflating the bubble, an FBI warning and how many criminal referrals did the same agency do, in this crisis. Remember it did well over 10,000 in the prior crisis. Well the answer is zero. They completely shut down making criminal referrals
He was also obnoxious and crude in a manner that made it near impossible for the judge to be generous in mitigating his sentence with regards to acceptance of responsibility. He couldn't even wait for an hour after being convicted before going on YouTube and bragging about how he thought he wouldn't face any prison time: https://www.marketwatch.com/story/martin-shkrelis-lawyers-fa...
The 2008 financial crisis was very complex and had many bad actors on many sides, but the majority of outright fraud was committed by small time mortgage originators (or employees of large originators) and the individual homeowners who lied to get loans.
I like how absolutely critical little 'details' like this get missed on HN so easily, by people speaking with extreme confidence. Thanks for the reality check!
To give some background on how his sentencing increased so dramatically, initially he was convicted but since no one lost any money his sentencing guidelines were 0-12 months(most likely no jail time since it was his first offence). As a general rule of thumb in federal fraud cases sentencing is primarily determined by the what's called the "loss amount" of the crime in question. But a couple weeks ago the judge decided to come up with a HYPOTHETICAL loss and base the sentencing on that! And that hypothetical loss was set at $10.4M! Meaning he just went from no jail time 7 years overnight. This seems beyond absurd and as far as I know has no precedence.
> To give some background on how his sentencing increased so dramatically
It didn't increase. His sentence was never anything else.
> initially he was convicted but since no one lost any money his sentencing guidelines were 0-12 months(most likely no jail time since it was his first offence).
False again. When the sentencing phase began, his lawyers argued there were no legal losses caused by his fraud, and prosecutors argued that losses were in the $9-20 million range. Both sides presented evidence and legal argument to support their position.
> As a general rule of thumb in federal fraud cases sentencing is primarily determined by the what's called the "loss amount" of the crime in question.
This much is correct.
> But a couple weeks ago the judge decided to come up with a HYPOTHETICAL loss and base the sentencing on that!
False; it was not a hypothetical loss amount. The court applied existing legal precedent that “loss in fraud cases includes the amount of property taken, even if all or part has been returned.” [0]
"The Second Circuit repeatedly has held that “loss in
fraud cases includes the amount of property taken, even if all
or part has been returned.”"
"(Rejecting the defendant’s argument that the value of his fraud victim’s equity in his partnership should be subtracted from the loss amount, and holding that “[t]he ‘loss’ was the money that the investors were fraudulently induced to invest ...irrespective of the value of the [property].”)"
"The Sentencing Guidelines provide for specific “Credits Against Loss,” whereby loss calculations may be reduced by, inter alia, “[t]he money returned . . . by the defendant to the victim before the offense was detected.” The Guidelines define “time of detection” for purposes of credit against loss as “the earlier of (I) the time the offense was discovered by a victim or government agency; or (II) the time the defendant knew or reasonably should have known that the offense was detected or about to be detected by a victim or government agency."
Where are your sources that he was only facing 0-12 months when he was initially convicited? There are stories from the time of his conviction (in 2017) that say he could potentially face decades in prison:
It does say something depressing about our laws that he got sent to prison for the thing where he lied to rich people while still making them money rather than the thing where he extorted sick poor people...which is still fully legal even if the majority of society thinks it shouldn't.
Not it doesn’t. Our legal framework doesn’t oblige you to save someone’s life just because you have the means to do so. If it did, we’d all be in big trouble—for the cost of a fully loaded MacBook Pro, you could save someone from malaria in Africa.
The fact that people think a particular unpopular thing shouldn’t be legal doesn’t change that. There are a lot of things people believe should be illegal that aren’t illegal, because that would conflict with higher principles of law. People are easily swayed by emotion; the law at least attempts to be rational.
You mistakenly compare a failure to act ("save someone from malaria") with a clear purposeful action ("extorted sick poor people").
And there's no particular "higher purpose" of the law here that prevents us from making Shkreli's behavior illegal. Price gouging is illegal under other circumstances [1]; as far as I can tell his actions were legal just because nobody thought someone would be this awful.
If you'd like to defend this sociopath, please at least try to make your argument relate to the actual situation.
Regulating the price of medication isn't a slippery slope to outlawing MacBook pros. What a preposterous thing to say.
The law is whatever society decides it should be. There is nothing inherently rational about it. You'd have to accept some pretty messed up things as rational if you actually believed that.
hmmh, sounds like you agree that it says something about laws, but that jacking up prices on drugs is something you don't think the law should prohibit.
well, everything that's undesirable shouldn't be illegal.
but the system isn't working very well if Shkreli's desire to make millions trumps someone's desire to live.
democracy and markets only work if people are decent. you don't have an efficient outcome if one guy has a monopoly, or if one guy has to buy or die.
and the purpose of property rights is a system that works and has good outcomes, if property rights as construed mean everyone dies or is immiserated, the nature of those rights is going to be renegotiated.
So, you would argue that directly profiting from raising the price of a necessary life-saving medication is equivalent to making charitable donations to foreign countries?
I don't think the outrage was ever about Shkreli not saving someone's life. It was about Shkreli making lots of money from people's suffering, after artificially inflating the price of a drug that he controlled. In other words, getting rich from increasing the amount of misery in this world.
Another way to look at this is that he got a harsher sentence than he should have on the "stealing from the rich" part which is a crime, because he was so unpopular on the extorting the poor part which (sadly) isn't.
Whether that's how we would like the system to function is, of course, up for debate.
You do realize that insurance companies have to charge people more money than they spend in order to be profitable, right? Exorbitant drug costs is just another one of the factors that price poor people out of insurance, which is actually a much worse outcome than simply denying access to that specific drug.
Insurance premiums are pricing more and more people out of the market and that trend is driven by this sort of behavior.
I'm glad that Shkreli felt obligated to help the people who could directly attribute their suffering to him, but he's still a jerk who extorts sick people.
I suspect that will be an unpopular fact although true.
He was made an example of by Insurance companies and politicians. You have to remember Shkreli is very connected on Wall St and can call Soros et al friends.
I am of the opinion that the Judge was also biased in this case. She had a disdain for him from the beginning.
If you make it punishable by prison time to charge more than some unknowable fair amount of money to make drugs, then nobody will make drugs.
If you make it not a crime to deceive investors and misuse their money, then rich people won't invest their money, they will keep it in vaults.
I consider "a world in which people who don't want to risk prison are still able to make drugs" and "a world in which capital is invested instead of hoarded" to be noble goals.
> If you make it punishable by prison time to charge more than some unknowable fair amount of money to make drugs, then nobody will make drugs.
That's not true. First because price gouging laws already exist, so it's not entirely unknowable - especially if this rule became a law. Second, because once it's known, it's like any other existing limit. If you pay people lower than minimal legal wage, you're liable - that hasn't stopped everyone from hiring.
Cruel and unusual given the crime. Half the sentence of Jeffrey Skilling who destroyed thousands of families. No question in my mind that the judge had it out for him from the get-go.
He really screwed himself over while he was on bail. He probably could have gotten off with what his attorneys wanted (around a year) if he just shut up until after the sentencing was over. But he kept trolling on livestream and twitter and acting like it was a given that he would get off easy. Obviously he was joking around with the Clinton "threat" but he should not have given prosecutors anything to use against him. I like the guy overall, his educational streams were pretty good, but trolling very powerful people while you are facing potential 20 years in prison is insane.
As a quick first pass at this, it looks like Shkreli was convicted of 2 counts of securities fraud (15 USC § 78j) and 1 count of conspiracy to commit wire fraud (18 USC § 1343) [0][1]. According to the US Sentencing Guidelines[2] §2B1.1, each offense of securities fraud carries, conservatively, 6 points, plus let's say 4 additional points under §2B1.1(19) for being an officer or broker, which it's my understanding he was. Let's ignore the fact that this fraud deals with potentially millions of dollars, and how that increases the number of sentencing points. Let's just say the conspiracy conviction carries the same penalty (although it seems like it could actually be higher, but not sure).
This all adds up to 30 sentencing points, which carries a recommended sentence of 97 to 121 months in federal prison under the US sentencing table [3].
A 7 year sentence (84 months) in prison doesn't seem cruel or unusual by any stretch of the imagination, and if anything seems like he got off easy. The judge didn't have it out for him, he committed a serious crime, was found guilty by a jury of his peers, and is now going to serve serious federal time for it. He broke the law and knew what he was doing. Maybe the guidelines are harsh, but that's way our laws our written. Take it up with congress.
The judge forced him to actively troll people, including goading his large audience into physically harassing a presidential candidate? I don't have a position either which way, but judges can consider whether the defendant shows a measure of responsibility and understanding [0] (e.g. remorse). Shkreli was bragging post-conviction on livestreams [1] and interviews that he wouldn't be spending time in prison. Whether people like Skilling deserved more punishment or not is orthogonal to Shkreli giving the court plenty of room to doubt he had recognized what he had been found guilty of.
I used to watch some of his investment tutorials on youtube as well as other videos. For someone called the "most hated man in America", he actually seemed like a nice person. I also enjoyed his trollish sense of humor.
His video series on investing and chemistry are like an adult version of Khan Academy. Martin literally sat on-air for weeks on end with a Chemistry textbook and went chapter-by-chapter explaining each topic in pretty good detail.
I think that makes the title that much easier to understand. I'm an old-fuddy-duddy (for example, I say things like 'fuddy-duddy'), but to me there are two forms of trolling.
One where you're doing it to get their reaction and entertainment when they get it. I find this usually fun - the person doing it has fun, any audience has fun, and the person has that anguish-relief-joy cycle. When you do this to someone, you aren't gaining joy from the first emption your stoking, you get joy when it's found out and that emotion changes. The trolling itself is building anticipation. An example: My wife bought me a PalmPilot (back when those were a thing) but secretly took it out of the package to charge it, then gifted the surprisingly-not-much-lighter box to me. After my moment of feeling like I'd have to wait longer for my new toy (to try and return it) she revealed it fully-charged, and we had a laugh.
The second way is subtly different. The trolls are still poking at a person's emotions. They can SAY the target should get it and enjoy it ("relax, it's just a joke"), but really the goal is to entertain the troll and any audience. The targets of this trolling don't get a laugh. They get anxiety/hate/fear/dread/panic/anger or whatever, and the troll gains satisfaction from that, not from when that ends. Example: Posting political/moral thoughts that you don't have, but that are deliberately chosen to invoke outrage within the forum you are posting to, then moving on to the next once that's gotten enough reaction.
I'm obviously biased, but while I can appreciate the first kind, the second kind just seems to be increasing the misery in the world for a laugh. Laughs aren't so hard to get in other ways. Misery is miserable, by definition.
So if someone is described as a "troll" I tend to be leery rather than eager. When I encounter someone, it's very easy to find EITHER kind of trolling annoying. Perhaps because your brain is trying to fit people into a context/schema and trolling disrupts that. Brains don't tend to react well to that sort of thing. Known friends and family don't cause that reaction.
I don't know anything about Shkreli other than what I've read, but if you say "most hated man in America" and "trollish sense of humor", my instinct is to nod knowingly.
Love this. Glee from seeing somebody else suffer belongs in the 17th century, not today, and whatever "humor" value it may have does not give cause to dissociate it from its very nature of cruelty.
The second is really the original essence of trolling. Evoking a reaction from people by pretending to be something you're not. Ken M is a classic example of this.
I don't mind it that much because I think it is a good reminder to people that they shouldn't take the internet too seriously.
> For someone called the "most hated man in America", he actually seemed like a nice person.
Not to be an ass, but many horrible people are skilled at manipulating an audience and crafting a particular persona. This man couldn't have defrauded his investors without a great degree of charisma and the ability to appear trustworthy and likable.
The funniest comedy routines I have ever seen by the most prominent comedians are almost always disparaging of a person, group, or idea held dear by many people. Simmer on that and ask yourself if mean-spiritedness really matters in this context.
The majority of comments here being sad about Shkreli kinda reaffirms my views about HN, I have to say.
Shkreli always seemed like a personified 4chan teenager "memelord" with money. Good to see that playing out your delusions of grandeur and arrogance toward the justice system is met with consequences.
I think you're going for the low hanging fruit by judging HN that way. The more interesting thing is that the majority of comments are shocked by the 7 year sentence rather than the minority who think he was "an ok guy."
I keep seeing this naive understanding of the law over and over again in tech circles. The justice system is made up of several people with a ton of leeway on how laws are applied. The letter of the law is just a small part of what "illegal" means. Being clever or cute about only breaking the spirit of the law will not save you in court, in fact many times trying to only break the spirit is what will get you convicted on the letter of the law. I hate to say it but I think Aaron Schwartz fell victim to this fallacy and in recent memory so did those flight sim guys who put a keylogger in pirated software.
I've spent a lot of time around lawyers and judges and I can tell you they have absolutely no tolerance for the kind of "well, actually" smart-asses that the tech community excels at churning out.
edit: I just want to add this exchange from the movie Blow which I think really sums up how I feel about the whole thing.
>Judge: George Jung, you stand accused of possession of six hundred and sixty pounds of marijuana with intent to distribute. How do you plead?
>George: Your honor, I'd like to say a few words to the court if I may.
>Judge: Well, you're gonna have to stop slouching and stand up to address this court, sir.
>George: [stands] Alright. Well, in all honesty, I don't feel that what I've done is a crime. And I think it's illogical and irresponsible for you to sentence me to prison. Because, when you think about it, what did I really do? I crossed an imaginary line with a bunch of plants. I mean, you say I'm an outlaw, you say I'm a thief, but where's the Christmas dinner for the people on relief? Huh? You say you're looking for someone who's never weak but always strong, to gather flowers constantly whether you are right or wrong, someone to open each and every door, but it ain't me, babe, huh? No, no, no, it ain't me, babe. It ain't me you're looking for, babe. You follow?
>Judge: Yeah... Gosh, you know, your concepts are really interesting, Mister Jung.
>George: Thank you.
>Judge: Unfortunately for you, the line you crossed was real and the plants you brought with you were illegal, so your bail is twenty thousand dollars.
> I've spent a lot of time around lawyers and judges and I can tell you they have absolutely no tolerance for the kind of "well, actually" smart-asses that the tech community excels at churning out.
It sounds like the smart-asses' only mistake is thinking that the same clever lawyering that protects the rich and powerful will work for them as well. The guys who put a keylogger in pirated software were in the wrong, but after seeing Sony do basically the same thing and get away with it[1], I can see how they might think that courts will give you a free pass if you come up with some loophole or something.
Martin Shkreli, like the rest of us, has no-doubt seen the rich and powerful flout the law and walk away clean after invoking some ridiculous legalism. Then he got rich, and figured he could do the same. Turns out that he's either not rich enough yet, or power flows from something other than money.
> I've spent a lot of time around lawyers and judges and I can tell you they have absolutely no tolerance for the kind of "well, actually" smart-asses that the tech community excels at churning out.
It's really satisfying when someone articulates so well that nagging sensation that you've had for a long time but failed to expressed. Like scratching an itch. Thank you.
Seems like a pretty even split to me. I'm glad the community is healthy enough to have this kind of debate even though I'm very much on the anti-Shkreli side.
Nobody is actually following him as you describe. Most of people that side with him do so because they are amazed at the unfounded witch hunt that he received and at the amount of people who demonize him 95% because of the Daraprim drama and 5% for his actual conviction. And of that 5% - 0.5% might have an idea of what they are talking about.
See his videos. You wouldn't stand a chance debating him unless you were a lawyer or pharmaceutical exec.
You are coming from emotions rather than facts. Really. His troll persona is only a small portion of his character.
He already is quite mature. The media brought him to the stage and he gave a little show. You should see one of his videos shutting down people like you who read 3 or 4 articles and formed an opinion based on that.
For every Shkreli that gets locked up there are hundreds of others that walk free. They wanted to make an example of him - it doesn't help that his character is almost a cartoon-villain of sorts.
Really recommend watching Shkreli's interview with The Breakfast Club where he's attacked for all the things he's become infamous for in the public sphere (drug price hikes, wu-tang album, etc.)
The guy gets it, and played the game the way it was presented to him. He actually comes across as a very smart, thoughtful, and respectful guy that can roll with the punches and dish back when needed. Sure he's a bit of a troll, but can you blame him when some of the most public figures/role models currently in the US are paid and rewarded for extreme trolling? Feel he's been very misunderstood, and it's a shame he got the book thrown at him
I agree he's very smart. But you argue that, besides being a boy genius, he is a very thoughtful and respectful guy -- yet he's too dumb and ignorant to recognize the consequences of extreme trolling? Even when he was warned repeatedly against such trolling, and that it was clear to everyone that such trolling would be absolutely a detriment to his own welfare?
If we agree that he is very smart, how does being thoughtful and respectful play into his trolling behavior post-conviction?
He understands the justice/social system and its absurdity and decides to have a bit of fun subverting the system and stirring up drama, even if it has detrimental effects on his ongoing case, because he enjoys giving the middle finger to authority and the established order/system.
He's respectful to the interviewers, but he seems to absolutely detest authority (especially authority which seems arbitrary or archaic).
Sure, he had the spotlight on him after the "pharma bro" stories came out and everyone started to hate him unequivocally without considering how perverse incentives within the pharma/insurance system have allowed countless other drug manufacturers to take advantage of the same loopholes and price gouging techniques.
Unfortunately for him he has a hateable face, fit into the "young rich person flying too close to sun" story arc, and was dumb enough to continue his trolling activities instead of fading from the limelight and allowing the mob to pass on to the next social media pariah.
Think about it...his crime was that he lied to a few rich people who gave him money, then ended up making these rich people even more money in the end, ending positively for them. Then ask yourself why prosecutors have failed to go after any of the bankers responsible for the great financial crisis, which affected hundreds of millions of people and their families, causing many people to lose their homes, jobs, etc. Is that really a fair system? Or are people just gloating about this guy going to jail as some type of proxy for justice being served somewhere, in some fashion for white collar financial crime that many have been indirectly victimized by, but have never received due compensation/justice.
Really, nobody on HN should care that he's going to prison, drug price gouging will still continue on unabated, and 20 more snake oil ICOs will pop up tomorrow to steal investors money. This conviction is hardly a sign that the system is working as intended.
Readit News
But nearly no bankers responsible for the 2008 financial crisis ever went to jail:
https://www.theatlantic.com/magazine/archive/2015/09/how-wal...
The SEC finds very public cases and then brings the hammer down in order to act a deterrent. Martin Shkreli broke the law, something he didn't have to do. It isn't like it was mob justice and some hugely biased jury convicted him of all the crimes he was committed of without thought. The jury by all accounts fairly deliberated his actions and convicted him of crimes that he did, while letting him off for crimes he didn't do.
Then all Shkreli had to do was show some remorese and kiss the ring a little bit, but he continued to be a troll and mock the justice system. He downplayed his crimes literally minutes after being convicted of them, which showed a lack of remorse (and maybe honestly so, but the justice system doesn't like that). He continued to be a troll, including the whole Hillary Clinton incident, many of these statements used against him in sentencing.
This isn't a case of the tall blades of grass getting cut first. It's a case where we have a subjective justice system that doesn't want to be mocked while it is doing it's job. Shkreli went out of his way to mock it, he went out of his way to mock the SEC, all the while he actually did commit a crime. Yes, it is a witch hunt in that the SEC will throw the book at some people while letting other people who committed worse crimes off the hook (Phil Mickelson vs Martha Stewart), but that how any limited investigative body works. If you don't want to be a target of a witch hunt, don't break the law. And if you do, kiss the ring. I'm not convinced it is a huge indictment of our society that people who break the law all the while trolling everybody get unfairly harsh punishments, though I admit it is unfair in the sense that life as a whole is unfair.
https://www.nbcmiami.com/news/local/Penelope-Soto-Woman-Who-...
The indictment of our society is that hundreds of millionaires can enrich themselves further via dishonest and illegal means, wreck world economies, and suffer no consequences, while a regular joe can be chocked to death for selling cigarettes on the street (disruptive!)
This isn't an impossible problem to fix. We just start voting for politicians willing to execute white collar criminals.
Deleted Comment
An American writes this and doesn't shriek in anger. 2018.
That's basically what this comes down to.
Imagine if jay walking was punishable by death but it was only ever enforced against people who mocked Trump.
Inconsistent enforcement just allows the people in power to go after their political oponents for the "real" crime of hurting their feelings.
Here's the facts as I understand them:
1) He ran a hedge fund, and lost a lot of money.
2) He didn't disclose to his investors that he lost the money, and falsified reports.
3) In an effort to make sure people didn't lose money (whether to protect himself or to make sure his investors were made whole) he took profits from another company he ran and used them to pay these investors.
4) Almost all investors in the hedge fund ended up making a profit because of this.
It's fairly easy to interpret this as someone that screwed up bad, and then broke the law to cover it up and try to make it right, and by lucky happenstance was actually able to get people's money back, but still ended up breaking the law. That's a fairly good story to have, and I would think lends itself towards a mitigated sentence.
On the other hand, he repeatedly presented himself in an unsympathetic way that antagonized the judge and the regulatory bodies involved.
It is, to put it mildly, a fairly complex and (to my layman eyes) unique situation, compounded by the fact that his behavior may or may not have to do with being socially inept (is it right to punish someone for a social disability, if that is indeed the case here?)
There was a discussion about this when the guilty verdict was announced[1]. Much of my info comes from that article and this other one[1] from the same time period.
1: https://news.ycombinator.com/item?id=14931004
2: https://www.nytimes.com/2017/08/04/business/dealbook/martin-...
That is a myth. Dozens of bankers were arrested and put in prison over crimes related to the 2008 financial crisis. That includes a number of bankers at large enterprises. It excludes the very top tier bankers, at the systemically important financial firms, who all managed to skate.
It's not illegal, generally speaking, to make dumb investment decisions, and or to take a lot of risk, and lose money. The responsibility for the 2008 financial crisis is spread across both the public and private sector, from Congress & multiple Presidents to the Federal Reserve to hundreds of banks, thousands of bankers, and tens of thousands of mortgage brokers and realtors. Spurred on by low interest rates, it was collective financial insanity that millions of people willfully, cheerfully, participated in.
"The idea that no bankers went to prison for crimes related to the financial crisis is a myth, according to the watchdog overseeing the federal government's bailout fund. There have been 35 bankers sentenced to prison, said Christy Goldsmith Romero, the special inspector general for the Troubled Assets Relief Program (SIGTARP), in a report to Congress released Thursday."
"There have been 59 bankers convicted of crimes, including two executives at NOVA Bank in Philadelphia who were convicted on Wednesday of fraud conspiracy related to TARP funds. An additional 19 bankers have been charged with crimes, with many awaiting trials."
http://money.cnn.com/2016/04/28/news/companies/bankers-priso...
But if you are Jon Corzine - well, you can abscond with $1.2B of your customers' money, tell Congress you just don't know where it went, and then pay $5MM to avoid an embarrassing and inconvenient trial, all the while throwing that sucker Edie O'Brien under the bus for being dumb enough to miss that "getaway" at the Hamptons last year. (yes, this was a bit later than the 2008 blowup, but the cause and effect were the same)
Or you can be Lloyd Blankfein, who testified to knowing full well that their MBS desk was shorting the very products they were selling to their clients with sales pitches containing materially false claims. But Lloyd is a great guy, and he's had a rough go if it what with losing his hair and all. So we're not even going to prosecute, er, actually, we won't even bother to investigate the captain of who was privvy to the fraud on his ship, but didn't technically commit the fraud himself. So we'll go after that dumb trader Fabrice Tourre instead. $800k is a pretty stiff fine for someone who earns double that in a year. I'm sure he'll learn his lesson.
Or you could be Dick Fuld....
Perhaps you see a pattern here?
In the 1980s, when regulators and prosecutors didn't regularly get together for drinks with each other at Valentino, over ONE THOUSAND bankers were convicted, with roughly a third going to prison, with an average sentence of 3.2 years for the crimes. Not only including, but ESPECIALLY the captains of the ships.
And they went after EVERYTHING - even violations of campaign contributions laws unrelated to the S&L crisis itself.
Fast-forward to today. For a crisis arguably MORE fraught with fraud, with substantially worse fallout for the country: 59 convictions. Most were traders, in security sales, or ran tiny local banks. ZERO of them were Wall Street C-suite, directors, vice presidents, or anyone else who signed off on the fraud at a higher-than-upper-management level.
In most cases, regulators and prosecutors are hesitant to even INVESTIGATE.
This is to say nothing of the fact that nearly all large Wall Street banks are regarded by Federal regulators as recidivist banks, meaning that they keep breaking the law, getting fined less than the profits made from the crime, and doing it again. And again. And again.
Nobody at HSBC went to prison for facilitating the murder of thousands of Mexicans by cartels. And nobody ever will. There are plenty of statutes on the books to criminally prosecute the bankers responsible. But we won't. Because some people are more equal than others.
These constant apologetics for the parasites are, frankly, sickening.
Same with the constant apologetics for arbitrary enforcement of law. What exactly is the point of having laws if the existential importance of the criminal to a bank is a critical deciding factor in whether or not to investigate, charge, prosecute, or convict?
> It's not illegal, generally speaking, to make dumb investment decisions, and or to take a lot of risk, and lose money
You're not going to find criminals if you don't look for them. Bill black:
> All right so you have massive fraud driving this crisis, hyperinflating the bubble, an FBI warning and how many criminal referrals did the same agency do, in this crisis. Remember it did well over 10,000 in the prior crisis. Well the answer is zero. They completely shut down making criminal referrals
http://neweconomicperspectives.org/2011/09/william-black-why...
I think Shkreli was obnoxious and crude; the sentencing should've aligned with the crime. But America, so vengeance porn.
https://www.nytimes.com/2014/05/04/magazine/only-one-top-ban...
The 2008 financial crisis was very complex and had many bad actors on many sides, but the majority of outright fraud was committed by small time mortgage originators (or employees of large originators) and the individual homeowners who lied to get loans.
Shkreli broke the law. The financiers causing the financial collapse did not. Perhaps the laws should be changed.
They weren't prosecuted. That doesn't mean they didn't break the law.
It didn't increase. His sentence was never anything else.
> initially he was convicted but since no one lost any money his sentencing guidelines were 0-12 months(most likely no jail time since it was his first offence).
False again. When the sentencing phase began, his lawyers argued there were no legal losses caused by his fraud, and prosecutors argued that losses were in the $9-20 million range. Both sides presented evidence and legal argument to support their position.
> As a general rule of thumb in federal fraud cases sentencing is primarily determined by the what's called the "loss amount" of the crime in question.
This much is correct.
> But a couple weeks ago the judge decided to come up with a HYPOTHETICAL loss and base the sentencing on that!
False; it was not a hypothetical loss amount. The court applied existing legal precedent that “loss in fraud cases includes the amount of property taken, even if all or part has been returned.” [0]
[0] http://www.courthousenews.com/wp-content/uploads/2018/02/Shk...
"The Second Circuit repeatedly has held that “loss in fraud cases includes the amount of property taken, even if all or part has been returned.”"
"(Rejecting the defendant’s argument that the value of his fraud victim’s equity in his partnership should be subtracted from the loss amount, and holding that “[t]he ‘loss’ was the money that the investors were fraudulently induced to invest ...irrespective of the value of the [property].”)"
"The Sentencing Guidelines provide for specific “Credits Against Loss,” whereby loss calculations may be reduced by, inter alia, “[t]he money returned . . . by the defendant to the victim before the offense was detected.” The Guidelines define “time of detection” for purposes of credit against loss as “the earlier of (I) the time the offense was discovered by a victim or government agency; or (II) the time the defendant knew or reasonably should have known that the offense was detected or about to be detected by a victim or government agency."
https://www.thestar.com/news/world/2017/08/05/lack-of-remors...
So.. If I try to rob a bank and fail and no money is stolen, then the sentence should be reduced?
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The fact that people think a particular unpopular thing shouldn’t be legal doesn’t change that. There are a lot of things people believe should be illegal that aren’t illegal, because that would conflict with higher principles of law. People are easily swayed by emotion; the law at least attempts to be rational.
And there's no particular "higher purpose" of the law here that prevents us from making Shkreli's behavior illegal. Price gouging is illegal under other circumstances [1]; as far as I can tell his actions were legal just because nobody thought someone would be this awful.
If you'd like to defend this sociopath, please at least try to make your argument relate to the actual situation.
[1] https://en.wikipedia.org/wiki/Price_gouging
The law is whatever society decides it should be. There is nothing inherently rational about it. You'd have to accept some pretty messed up things as rational if you actually believed that.
well, everything that's undesirable shouldn't be illegal.
but the system isn't working very well if Shkreli's desire to make millions trumps someone's desire to live.
democracy and markets only work if people are decent. you don't have an efficient outcome if one guy has a monopoly, or if one guy has to buy or die.
and the purpose of property rights is a system that works and has good outcomes, if property rights as construed mean everyone dies or is immiserated, the nature of those rights is going to be renegotiated.
That seems to be a stretch to me...
Whether that's how we would like the system to function is, of course, up for debate.
I'm glad that Shkreli felt obligated to help the people who could directly attribute their suffering to him, but he's still a jerk who extorts sick people.
He was made an example of by Insurance companies and politicians. You have to remember Shkreli is very connected on Wall St and can call Soros et al friends.
I am of the opinion that the Judge was also biased in this case. She had a disdain for him from the beginning.
Junk away ...LOL....
If you make it not a crime to deceive investors and misuse their money, then rich people won't invest their money, they will keep it in vaults.
I consider "a world in which people who don't want to risk prison are still able to make drugs" and "a world in which capital is invested instead of hoarded" to be noble goals.
That's not true. First because price gouging laws already exist, so it's not entirely unknowable - especially if this rule became a law. Second, because once it's known, it's like any other existing limit. If you pay people lower than minimal legal wage, you're liable - that hasn't stopped everyone from hiring.
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This all adds up to 30 sentencing points, which carries a recommended sentence of 97 to 121 months in federal prison under the US sentencing table [3].
A 7 year sentence (84 months) in prison doesn't seem cruel or unusual by any stretch of the imagination, and if anything seems like he got off easy. The judge didn't have it out for him, he committed a serious crime, was found guilty by a jury of his peers, and is now going to serve serious federal time for it. He broke the law and knew what he was doing. Maybe the guidelines are harsh, but that's way our laws our written. Take it up with congress.
[0] http://money.cnn.com/2017/08/04/news/martin-shkreli-verdict/...
[1] https://www.scribd.com/doc/293530336/1-main
[2] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-...
[3] https://www.ussc.gov/sites/default/files/pdf/guidelines-manu...
[0] https://en.wikipedia.org/wiki/Acceptance_of_responsibility
[1] https://www.marketwatch.com/story/martin-shkrelis-lawyers-fa...
Its also why contempt of court and malfeasance in public office has such harsh panties
This is exactly the same thing as when Kings used to kill people because they insulted their honor or something.
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https://www.youtube.com/channel/UC8gjB1PSXv_oAUSAQ16S0fA/vid...
I think that makes the title that much easier to understand. I'm an old-fuddy-duddy (for example, I say things like 'fuddy-duddy'), but to me there are two forms of trolling.
One where you're doing it to get their reaction and entertainment when they get it. I find this usually fun - the person doing it has fun, any audience has fun, and the person has that anguish-relief-joy cycle. When you do this to someone, you aren't gaining joy from the first emption your stoking, you get joy when it's found out and that emotion changes. The trolling itself is building anticipation. An example: My wife bought me a PalmPilot (back when those were a thing) but secretly took it out of the package to charge it, then gifted the surprisingly-not-much-lighter box to me. After my moment of feeling like I'd have to wait longer for my new toy (to try and return it) she revealed it fully-charged, and we had a laugh.
The second way is subtly different. The trolls are still poking at a person's emotions. They can SAY the target should get it and enjoy it ("relax, it's just a joke"), but really the goal is to entertain the troll and any audience. The targets of this trolling don't get a laugh. They get anxiety/hate/fear/dread/panic/anger or whatever, and the troll gains satisfaction from that, not from when that ends. Example: Posting political/moral thoughts that you don't have, but that are deliberately chosen to invoke outrage within the forum you are posting to, then moving on to the next once that's gotten enough reaction.
I'm obviously biased, but while I can appreciate the first kind, the second kind just seems to be increasing the misery in the world for a laugh. Laughs aren't so hard to get in other ways. Misery is miserable, by definition.
So if someone is described as a "troll" I tend to be leery rather than eager. When I encounter someone, it's very easy to find EITHER kind of trolling annoying. Perhaps because your brain is trying to fit people into a context/schema and trolling disrupts that. Brains don't tend to react well to that sort of thing. Known friends and family don't cause that reaction.
I don't know anything about Shkreli other than what I've read, but if you say "most hated man in America" and "trollish sense of humor", my instinct is to nod knowingly.
I don't mind it that much because I think it is a good reminder to people that they shouldn't take the internet too seriously.
Not to be an ass, but many horrible people are skilled at manipulating an audience and crafting a particular persona. This man couldn't have defrauded his investors without a great degree of charisma and the ability to appear trustworthy and likable.
He really needed to learn when to stop talking, and where to draw the line with his actions, sadly.
I see where you're coming from and don't want to get pedantic, but isn't as trollish sense of humor by definition at least a little mean-spirited?
Shkreli always seemed like a personified 4chan teenager "memelord" with money. Good to see that playing out your delusions of grandeur and arrogance toward the justice system is met with consequences.
Maybe in prison he will mature a bit.
I keep seeing this naive understanding of the law over and over again in tech circles. The justice system is made up of several people with a ton of leeway on how laws are applied. The letter of the law is just a small part of what "illegal" means. Being clever or cute about only breaking the spirit of the law will not save you in court, in fact many times trying to only break the spirit is what will get you convicted on the letter of the law. I hate to say it but I think Aaron Schwartz fell victim to this fallacy and in recent memory so did those flight sim guys who put a keylogger in pirated software.
I've spent a lot of time around lawyers and judges and I can tell you they have absolutely no tolerance for the kind of "well, actually" smart-asses that the tech community excels at churning out.
edit: I just want to add this exchange from the movie Blow which I think really sums up how I feel about the whole thing.
>Judge: George Jung, you stand accused of possession of six hundred and sixty pounds of marijuana with intent to distribute. How do you plead?
>George: Your honor, I'd like to say a few words to the court if I may.
>Judge: Well, you're gonna have to stop slouching and stand up to address this court, sir.
>George: [stands] Alright. Well, in all honesty, I don't feel that what I've done is a crime. And I think it's illogical and irresponsible for you to sentence me to prison. Because, when you think about it, what did I really do? I crossed an imaginary line with a bunch of plants. I mean, you say I'm an outlaw, you say I'm a thief, but where's the Christmas dinner for the people on relief? Huh? You say you're looking for someone who's never weak but always strong, to gather flowers constantly whether you are right or wrong, someone to open each and every door, but it ain't me, babe, huh? No, no, no, it ain't me, babe. It ain't me you're looking for, babe. You follow?
>Judge: Yeah... Gosh, you know, your concepts are really interesting, Mister Jung.
>George: Thank you.
>Judge: Unfortunately for you, the line you crossed was real and the plants you brought with you were illegal, so your bail is twenty thousand dollars.
It sounds like the smart-asses' only mistake is thinking that the same clever lawyering that protects the rich and powerful will work for them as well. The guys who put a keylogger in pirated software were in the wrong, but after seeing Sony do basically the same thing and get away with it[1], I can see how they might think that courts will give you a free pass if you come up with some loophole or something.
Martin Shkreli, like the rest of us, has no-doubt seen the rich and powerful flout the law and walk away clean after invoking some ridiculous legalism. Then he got rich, and figured he could do the same. Turns out that he's either not rich enough yet, or power flows from something other than money.
[1] https://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootk...
Or perhaps it merely attracts them.
It's really satisfying when someone articulates so well that nagging sensation that you've had for a long time but failed to expressed. Like scratching an itch. Thank you.
I don't think delusions qualify as crimes. However, bending laws to judge someone on actions outside of the scope of a trial is a crime.
See his videos. You wouldn't stand a chance debating him unless you were a lawyer or pharmaceutical exec.
You are coming from emotions rather than facts. Really. His troll persona is only a small portion of his character.
https://www.forbes.com/sites/matthewherper/2018/03/09/you-ha...
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The guy gets it, and played the game the way it was presented to him. He actually comes across as a very smart, thoughtful, and respectful guy that can roll with the punches and dish back when needed. Sure he's a bit of a troll, but can you blame him when some of the most public figures/role models currently in the US are paid and rewarded for extreme trolling? Feel he's been very misunderstood, and it's a shame he got the book thrown at him
https://www.youtube.com/watch?v=JTNOWSKMS10
If we agree that he is very smart, how does being thoughtful and respectful play into his trolling behavior post-conviction?
He's respectful to the interviewers, but he seems to absolutely detest authority (especially authority which seems arbitrary or archaic).
Unfortunately for him he has a hateable face, fit into the "young rich person flying too close to sun" story arc, and was dumb enough to continue his trolling activities instead of fading from the limelight and allowing the mob to pass on to the next social media pariah.
Think about it...his crime was that he lied to a few rich people who gave him money, then ended up making these rich people even more money in the end, ending positively for them. Then ask yourself why prosecutors have failed to go after any of the bankers responsible for the great financial crisis, which affected hundreds of millions of people and their families, causing many people to lose their homes, jobs, etc. Is that really a fair system? Or are people just gloating about this guy going to jail as some type of proxy for justice being served somewhere, in some fashion for white collar financial crime that many have been indirectly victimized by, but have never received due compensation/justice.
Really, nobody on HN should care that he's going to prison, drug price gouging will still continue on unabated, and 20 more snake oil ICOs will pop up tomorrow to steal investors money. This conviction is hardly a sign that the system is working as intended.
https://www.theatlantic.com/business/archive/2016/08/why-are...