Martin Shkreli has been sentenced to seven years in prison
theverge.com
theverge.com
But nearly no bankers responsible for the 2008 financial crisis ever went to jail:
https://www.theatlantic.com/magazine/archive/2015/09/how-wal...
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 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.
If you waste their time by trolling them and drawing excessive attention, it consumes their resources responding to comments from the media. Instead of y'know, performing their investigatory/judicial functions.
1) guy who lied to investors, still made them money (ie. Shkreli)
2) guy who lied to investors, lost 90% of their money (for example, ironically, Clinton's son in law [2], who has lost more money than the GDP of about 70 countries, and yet [3] happened)
They would have a strong preference for 2). But the SEC is a HUGE example of selective justice. Harsh "correct" treatment for whomever offends the elite, just for insulting and rejecting them (Shkreli IS an idiot, VERY publicly rejecting and insulting one of the elites WHILE she was running an election for president AND giving her an excuse ("threatening her") to send the law after him), or just by being poor. But nothing ever gets done about members of the elite, even if they're very low level.
And I get it, what Mr. Mezvinsky did was probably in a panic, and it was political decisions of someone else that did him in, nothing he could have done (as I'm sure is true for 90%+ of criminals of course, it never seems to count as an excuse). And it did do serious damage to his career. But he should be in prison, and owe hundreds of millions of dollars to people.
The issue I have with that is, if you or I, or probably anyone who may read this did what he did, we'd be locked in a maximum security prison for 40+ years, as well as being destitute.
[2] https://en.wikipedia.org/wiki/Marc_Mezvinsky
[3] https://www.recode.net/2017/5/18/15660060/social-capital-hir...
Add revolving doors to this and everything makes sense.
On top of this, Shkreli brought a seedy but commonplace practice in the mighty pharma industry to the front page during a presidential campaign and made powerful enemies, including public opinion.
He wasn't sentenced for that, just like Al Capone wasn't sentenced for gangsterism.
https://www.nbcmiami.com/news/local/Penelope-Soto-Woman-Who-...
I think it’s troubling that judges have the ability to hand down sentences far above some established norm, even if those sentences are legal.
I agree, but that's not what happened in Shkreli's case. The crime he committed really does have a very long sentence.
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.
The judge didn't create the law regarding securities fraud, nor did she instigate the charges of fraud, nor did she even have a voice when it came to deciding to convict (it was a jury trial). So how does this all boil down to a judge's feelings being hurt?
All crimes will be inconsistently enforced until we've built a policing apparatus that operates like the equivalent of red-light cameras but for every crime [0]. Hopefully we never get to that point, which means enforcement will continue to be resource-limited and inconsistent, so are you arguing for no enforcement at all?
[0] I'm being rhetorical of course. I don't mean to suggest at all that the enforcement of red-light violations, even when caught on camera, is anywhere near consistent: http://www.chicagotribune.com/news/watchdog/redlight/ct-met-...
The way I read the parent is that this conviction would almost certainly not merit seven years in a typical non-Shkreli case.
But the judge handed down seven years, not because of his crime, but because of his attitude. The OP even suggested as much, suggesting if he had just "kissed the ring", the sentence would have been substantially less.
I read the parent's outrage as being that justice isn't blind - it metes out sentences based on the feelings of a judge toward a defendant's attitude. The crime itself only matters insofar as judges must abide by minimum and maximum sentencing guidelines. Within those guidelines, how you feel about a defendant is fair game.
edit: I would also add that, for those of us with less than stellar social skills, it's easy for social incompetence to be misinterpreted by other people as being an asshole. For us, this aspect of the justice system is at least mildly worrying.
I guess the statute text has embedded minimum and maximum sentencing guidelines in a sense, but the term Sentencing Guidelines in the US federal judicial context means something specific.
I agree that feelings are inextricably involved when human judges and juries make decisions. And all initiatives to correct for this — such as the 3-strikes law and mandatory sentencing guidelines — are likewise imperfect. I’m personally surprised at the severity of Shkreli’s sentence, but that’s because I don’t know this area of law or its precedent. And in the arguments I’ve seen asserting the sentence is too severe, I haven’t seen citations and evidence that contradict the precedent she used in her judgment.
Yes, much of Shkreli’s situation has no precedent. But we should consider that judges can act cautiously in extremely publicized trials, especially ones involving defendants who are rich enough to mount an appeal. You think the judge faces no risk if she decides to draw up a sentence without defensible legal basis?
I agree that we should worry if justice is meted out by judges who aren’t aware or empathetic toward defendants who are socially incompetent or otherwise social/psychological outliers. But just because popular media/opinion seems to hate Shkreli doesn’t necessarily mean we can ascribe such bias to the judge without empirical evidence.
Because other, similar cases seem to have lesser sentences, not greater. This case has a larger sentence compared to other actual practical cases, though clearly it wasn't as large as it could legally have been.
> You think the judge faces no risk if she decides to draw up a sentence without defensible legal basis?
What are the risks that judges face? My understanding is that Federal judges are appointed for life, with no chance of removal outside of impeachment. Is this not the case?
Similarly, cops don't spend all their time giving out tickets to every single jaywalker or every single speeder. That would be a waste of their time. But they need to give out some tickets every once in a while or else the law becomes meaningless. Given a choice between giving a ticket to a random person spotted jaywalking, vs. giving a ticket to someone who took out a full page ad the day before declaring the time and place in which they plan to jaywalk and taunting the police for being unable to do anything about it, the police will choose to give the ticket to the latter person, and that totally makes sense to me.
That's very different from going after socially awkward people who don't know when they're being assholes.
This has actually been shown to be a very bad idea. It is way better to punish immediately, even if lightly, every single transgression than to do it randomly but more severely. (Probably because we're all thinking "it won't happen to me".)
What you're saying afterwards is "the mundanes should not taunt their rulers". True in the world-as-is, but that reinforces a caste system. No. The cops and the judges are NOT nobility. They should NOT be treated as superior to the little people.
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.
An American writes this and doesn't shriek in anger. 2018.
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.
https://www.justice.gov/opa/pr/bank-america-pay-1665-billion...
As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts. Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects - including as many as 55 percent in a single pool. In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools. Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective. This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”
Disclaimer: I was privy to this having known several mortgage underwriters who identified this fraud, and despite reporting it with extensive documentation (which I personally collated and delivered via FedEx) to the SEC, DOJ, and OCC, were ignored.
What you're describing in the paragraph above is even one step removed from the sandwiches. Knowing that "loans had material underwriting and compliance defects" doesn't prove that Merrill Lynch lied when it said "the borrowers ... were likely and able to repay their debts." It might lead to an inference to that effect, but it's not indisputable proof. Likewise, the fact that it "rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools" might lead to an inference of negligence, but is not indisputable proof of fraud.
Everything described in that paragraph is classic civil fraud and negligence, not criminal fraud.
Is it purely a matter of partial delivery, or does magnitude matter? What if it's "they sold me 10 tons of gold as 12 tons of gold?" Because that's a big difference.
Then again, 10 inch sandwhiches sold as 12 inch sandwhiches allows you to save over 15% of materials, which if you're a nationwide chain could be quite a lot of money as well.
The mortgages are even harder. The banks are accused of lying about whether borrowers could pay. The fact they couldn’t pay doesn’t prove that. The fact that the banks ignored warning signs doesn’t prove that. The fact they knew about underwriting failures doesn’t prove that. Not beyond a reasonable doubt.
The article is garbage.
The author's theory is that Dimon is liable under SOX Section 906, because he certified that JP Morgan has "adequate internal controls" under SOX Section 404, but admitted that their controls need some work a month later.
But Section 404 is addressed to "internal control structure and procedures for financial reporting." I.e. do you have controls in place to address the Enron-style situation of people using creative accounting to cook the books. What Dimon was talking about, in the context of the London Whale, were risk management controls. The author tries to lump them together, but the statute clearly addresses accounting controls, not risk management controls. See 15 U.S.C. 7262(a). There's lots of different kinds of "controls" in a company. E.g. there are controls to make sure employees don't pay bribes in foreign countries so as to expose the company to FCPA liability. SOX only addresses controls in connection with financial reporting.
Even if you got past that hurdle, the article is wrong to suggest that you could bring a SOX 906 prosecution for violation of a SOX 404 requirement.
SOX 906 states:
> The statement required under subsection (a) shall certify that the periodic report containing the financial statements fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer. That's the result of the Enron debacle, where the company and its auditors were misrepresenting the financial status of the company (revenues, liabilities, etc.).
Securities Exchange Act Sections 13(a) or 15(d) don't say anything about adequate internal controls. That's part of SOX Section 404. By the plain terms of the statute, Section 906 liability doesn't attach to misrepresentations directed to Section 404 requirements.
There is a separate certification provision that covers the Section 404 requirements, SOX Section 302.[1] But to bring a criminal action for violation of the Section 302 certification, you have to get a little creative, applying the other securities criminal statutes: http://dodd-frank.com/u-s-brings-criminal-charges-for-false-....
The problem is, those other criminal statutes are directed to protecting people who own or are considering buying JP Morgan stock, not people who bought financial products from JP Morgan. They're designed to prevent Dimon from misrepresenting JP Morgan's financial health to JP Morgan's investors, not to prevent JP Morgan employees from lying to transactional counterparties.
[1] https://www.mofo.com/resources/publications/sec-requires-ceo...
> A single act of fraud can be prosecuted as a criminal fraud by prosecutors, and also as a civil action by the party that was the victim of the misrepresentation.
> It might lead to an inference to that effect, but it's not indisputable proof.
Again we're back to the lack of evidence not implying innocence if the supposed crime wasn't adequately investigated. That's what an investigation is for, to find and assemble evidence for a suspected crime.
Its a common belief that no serious effort to incriminate top bankers was initiated. To me it is beyond argument at this point. Do you still believe that is a questionable supposition?
[1] http://bochettoandlentz.com/criminal-fraud-vs-civil-fraud-wh...
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?
Fraud isn't purchasing a house that's advertised as "clean" only to discover that there was asbestos in the basement. Fraud is advertising as such after a legal definition for the word "clean" has been established to include "asbestos-free" and yet the house has asbestos anyway.
There aren't any strict legal definitions for what "BB" and "BBB" and "A" and etc. mean, and that's why the ratings agencies could rate them as AAA, because the subjective expectation (as unfounded as it was) was for the housing market to keep booming forever, which was enough to slap a AAA rating without it being fraudulent.
(note I'm not trying to excuse or justify the ratings agencies behavior, only to explain)
But, yeah. The agencies didn't really have much incentive to be skeptical of their models.
> 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...
A lot of people being stupid does not equal fraud.
The bottom line is, for the 2007/8 crisis, there are hundreds if not thousands of people guilty of fraudulent misrepresentations, and for inventing their own laws, with no reprecussions. I think the most egregious case is the "robo-signing" and MERS case (which are intertwined), which appear to involve thousands of cases of perjury, non of which were prosecuted, or even investigated -- but the publicly available evidence is damning enough, even if no justice official decided to investigate.
But why go back so far? So far, the recent wells fargo fraudulent account opening case [0] has resulted in a slap on the wrist and no one being charged. I don't know who committed fraud specifically, and it seems no one who can find out wishes to find out either. In 8 years, someone like you is going to ask "but who specifically committed fraud? this always comes up". There are clear examples of fraud; if there aren't clear examples of who committed that fraud, it is only because the powers that be decided they do not want to know.
[0] https://en.wikipedia.org/wiki/Wells_Fargo_account_fraud_scan...
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-...
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.
https://www.thestar.com/news/world/2017/08/05/lack-of-remors...
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."
So.. If I try to rob a bank and fail and no money is stolen, then the sentence should be reduced?
Whether that's how we would like the system to function is, of course, up for debate.
And as the parent commenter said, he was charging insurance companies alone, and claimed the drug was only used by a few hundred 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....
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.
Also, the drug he raised the price on was a horrible 50-year-old drug. Shkreli raised the price with the explicit aim of getting funds to research a new drug, with less terrible side-effects.
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.
If it was billed to insurance, they would pass those costs over to the people paying the premiums.
Some insurance policies are self-funded: Meaning they have plans, but the insurance company is really just the administrator. The actual costs are paid by the company employing the people buying the insurance. They can both pass the costs onto the employees paying health insurance premiums plus add in that cost to the goods they sell.
A great deal of insurance plans have a co-payment for drugs. If you had to pay 20% of the cost of this drug, that is still quite an increase for the patient.
Not everyone needing these drugs has insurance. Luckily, some charities exist to try to pay the bills for these folks and sometimes there are other discounts available for the uninsured.
Some people are on government insurance plans, both in the US and in places with state health care. In these cases, the costs are passed onto tax payers.
Sorry, but pretty much everyone pays for this sort of thing.
The whole idea of employer-paid insurance in the U.S. is an artifact of some tax law jiggery pokery back in (if I'm remembering right) the Depression/WWII era. Before that people paid for their own health insurance.
Who takes them out of the total amount they are willing to pay for labor, so it still comes from the insured.
See also: the way that most people view a tax refund as "free money" that the government is "giving" them, rather than them having given the government an interest-free loan of that money (which is the actual case).
When they get a (partial) refund of the taxes withheld, they're happy, rather than being disappointed that they've had too much withheld (as homo economicus would).
If, instead, no taxes were withheld and they were forced to come up with the (non-refunded) portion in a lump sum payment once a year they'd be outraged.
Human psychology and math don't really overlap that much.
In one sense, yes, the money the employer pays would be available for wages, but the problem is that any savings would come out of a pool of potential wages for all employees. There is no direct incentive for an individual employee to save money on health care, because those savings will make zero impact on his paycheck.
One way of trying to get around this is, of course, the "copay". If the employee saves money, he does, in most cases, have a somewhat smaller copay. But the incentive isn't nearly as high as it would be if all the savings accrued directly to the employee.
It's the difference between a $10 co-pay for a generic drug, a $25 or $50 co-pay for a non-generic drug, and a 30-percent co-pay for a specialty drug.
This is the fallacy. He didn't get rich from increasing the amount of misery in the world. He didn't give people toxoplasmosis. He got rich from not doing something he could do (i.e. sell drugs more cheaply) to decrease the amount of misery. Which is the exact same thing you do when you buy a Macbook Pro instead of donating the money to save a life from malaria: you forgo the opportunity to decrease the amount of misery in the world in return for your own personal benefit.
That seems to be a stretch to me...
In both scenarios there is a tradeoff between personal gain and someone else's wellbeing.
If I never existed to give charitable donations, those people in Africa are not in a worse situation because I am not here. My existence, and my possible charity can only improve this situation.
If Martin never existed, those poor people would possibly be much better off, getting a more fair price for their medication instead of paying the theoretical maximum.
The difference is One Thing is pushing a ball up a hill, and the Second Thing is pushing a ball down a hill. You can say, they are the same... both have balls and hills... but you have simplified out the most important distinction.
You are not obligated to make someone else's life better. But you ARE obligated not to make it worse.
Well maybe. One of the reasons that drugs get invented is because people are willing to buy the rights to manufacture and distribute them. If Shkreli, and other people like him, didn't exist the drug might not be there in the first place.
But you ARE obligated not to make it worse.
I can think of lots of places that people make my life worse[1] and that's fine. People raise prices on things I want to buy. I've been fired before. I've been dumped by romantic partners. I've been spurned in various personal or business dealings.
I honestly think that people have a very unusual set of rules that they think should apply to medicine and health care services. They don't see these goods as typical products but as moral totems worthy of special rules.
1. This is not to say that my life is unusually bad. I think these things are pretty typical for most people.
Right, and the law grants a limited term monopoly for novel pharmaceutical compounds to encourage innovation. In this case, the patent for Daraprim had long since expired.
What Martin Shkreli did was acquire the marketing and distribution rights for Daraprim, raise the price to $75,000/month, and then withdraw all pharmacy distribution, instead relying on a direct distribution model specifically to prevent other generic drug manufacturers from obtaining the drug for comparison purposes in FDA-required bioequivalence studies.
Is it legal? Sure. But he basically weaponized FDA regulations to reap a substantial profit.
And, exactly as you’d expect the market to work, after the price hikes a company did release a generic alternative.
Harm is purposely spilling nails and glass on the public road so that you can sell people more tires.
If you are trying to take the pure libertarian stance, that whatever the free market dictates is ok, I am actually fine with that. But you can't grant Patents to companies in that situation and give them special legal protection.
When the public grants you a legal monopoly and special protection, whether it is through a patent, or your local power company, they are only required to act responsibly and not take advantage of that protection.
I actually think the most just punishment for Shkreli's actions would have been to open source all the medications he abused. So any person or business with the tools to combine the chemicals would be allowed to do so, and sell them for whatever price they wanted.
In many ways Shkreli showed us the flaws and hypocrisy in our system, and helped show us what we need to do to create a better one. But I don't think that was his intended purpose.
And it doesn't change my original argument.... Not giving to charity, is not the same thing as profiting from the exploration of vulnerable people, even if both things are technically legal.
Edit: Rayiner, I can't reply to your comment but your analogy is completely wrong.
It's like a Fire Department used to put out house fires for $50. And Martin identified one street on the outskirts of town that vulnerable, and he purchased the contract to protect that street from the Fire Department... and now charges them $10,000 for putting out fires.
It's not 'the same' as the guy who does nothing. He didn't INVENT helping them, like every one of these crazy analogies suggest. They were being helped much better before he got there and he made the situation a lot worse for them. You can't ignore that context and set it up as a choice between "Not being helped" or "Being helped for an exorbitant price".
You’re begging the question: what is “exploitation?” Is it “exploitation” to make money from helping someone? If so, why is that worse than not helping someone at all?
It’s like saying the guy who charges $10,000 to put the fire out on your house is worse than the guy who doesn’t do anything.
* I mug you, compared to being a bystander while you are mugged.
* I hit you with my car, compared to being a passenger in the car ahead of the one that hit you.
* I price-gouge you on a medication you need to live, compared to buying a laptop for my job instead of sending that money to buy food for someone half a world away.
Do you really not see the difference?
The relevant inquiry isn't "positive action" versus "inaction" but causation. The bystander doesn't cause you to get mugged; he simply declines to prevent it. Likewise, raising the price on Daraprim doesn't cause you to get toxoplasmosis, it simply changes the terms on which the third party is willing to prevent the harm.
So the proper analogy is standing by while someone gets mugged, charging him $10 to stop the mugging, and charging him $1,000 to stop the mugging. The guy who does nothing is still the worst.
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.
Malaria person: please wpietri, help me.
wpietri: No
Sick person: please shkreli, help me.
shkreli: Sure, for $500
Sick person: please moderately profitable pharma company, help me.
moderately profitable pharma company: Sure, for $50
Sick person: please insanely profitable pharma company post shrekli, help me.
insanely profitable pharma company post shrekli: Sure, for $5000I know a lot of people see this differently but I don't think they have an ethical leg to stand on. When it gets down to it they have no particular rule for fair pricing other than "that feels too high to me."
1. https://en.wikipedia.org/wiki/Reasonable_and_non-discriminat...
Well, nobody was forcing him to sell goods or services for any particular price. He set the price and now he has to face the consequences.
Do you have some special definition of "force" that you are using which doesn't involve you deciding for someone else which course of action they will take and then making them take it at risk of "consequences"?
Fair pricing can be tricky to determine. However, in Shkreli's case, his entire strategy was to take drugs where a fair price had already been determined by the market and then take advantage of supply constraints to raise the price drastically, by 20-50x.
If you really can't tell the ethical difference between his behavior and normal business, I think you aren't trying hard enough.
In the case of Shkreli and Daraprim the price change induced Imprimis to bring a new drug online which added strength and diversity to the marketplace which is what we expect to happen in a well functioning marketplace when parties work to maximize their own self interest.
Sure, one of Shkreli's attempts to gouge was partially thwarted by a competitor. Were all of them? Is there any guarantee that all future gouging attempts would be equally pointless? Of course not. Because, your free-market fundamentalism aside, markets fail all the time. That's why to get well-functioning marketplaces we outlaw a great variety of market-harming behaviors. Including things like price gouging for things people need to survive.
Markets are not ends in themselves. They exist, with extensive societal support, because they're a useful mechanism to provide a reasonable distribution of goods and services to humans in those societies. When parasitic actors use those mechanisms to cause societal harm, it's entirely reasonable to tinker with the mechanism.
dwild: no
2017 - Malaria person: please dwild, help me.
dwild: no
2012 - Sick person: please Daraprim, help me.
Daraprim: Sure, for US$13.5
2017 - Sick person: please Daraprim, help me.
shkreli: Sure, for US$750
You see the difference? With me, they stayed at the same level of help, none. In the second, he purposefully profited from the help they were getting from Daraprim. He removed something they had beforehand.
Shkreli is charging more. What still better than dwild though.
So maybe dwild should go to jail
>Imprimis Pharmaceuticals, a specialty pharmaceutical company that creates compounded drugs, released a $1 a pill alternative to , a toxoplasmosis treatment whose price skyrocketed by over 5,000% in recent months.
>While the new pill is a boon for patients in need of treatment for the food-borne illness, especially those with weak immune systems like HIV/AIDS and cancer patients, the alternative drug is not an exact copy of Daraprim.
>Imprimis’ pill is a combination of pyrimethamine—the sole ingredient in Daraprim—and leucovorin, a medicine that helps reverse the negative effects on bone marrow caused by the way pyrimethamine works in the body. The two medicines work synergistically and are recommended to be taken in tandem by the Centers for Disease Control. Leucovorin is often prescribed alongside Daraprim.
Not only was the replacement cheaper, it was daraprim coupled with another drug to fight side effects of daraprim.
The judge in this case has a history of using her bench as a bully pulpit. She claims that outside factors had 0 influence on her decision. I find that pretty hard to believe especially with her history.
As for the cost increase I believe they were funding a non side effect version of the drug, which would probably be nice for alot of people. Bone marrow is something thats hard to live without.
This will be overturned. So what if he's a trolling douchebag.
[1] Actually, slightly more than 6 years because Congress is completely incompetent: http://famm.org/wp-content/uploads/2013/08/FAQ-Federal-Good-....
There's very little chance of the case being overturned, but I'm guessing he'll go for a sentence reduction by trying to emphasize that his sentence is based on a hypothetical loss number.
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.
1) The law is what a very small group of people decides it should be, and
2) Slippery slopes in law are a very real thing. Just listen to Supreme Court oral arguments. That's (supposedly) why it takes so much forethought and time to enact them.
American law for example reflects views and interests of small group of oligarchy, and not general public. It's been like that for quite a long time, to quote [1]: "The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy"
[1] https://www.theatlantic.com/magazine/archive/2018/03/america...
My favorite in my current industry is how codified insurance costs are built into the system. You can't charge below X, because that would undercut the big players. So you have price floors, for no reason other than regulatory capture and payoffs.
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.
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.
[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.
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...
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.
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?
> ask yourself if mean-spiritedness really matters in this context
Yes?
I suggest that says more about you than about anything else.
He really needed to learn when to stop talking, and where to draw the line with his actions, sadly.
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.
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 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...
I have. He's seemingly a intelligent guy with some personality issues that have gotten him into trouble. I hope he takes time during his sentence to seek help because he seemingly has more to offer the world than trolling and unethical professional behavior.
Beside that, I don't care about Shkreli himself or the silly trolling (Wu Tang, Hillary Hair, etc). I have a fascination with fan club that feels the need to hand wave his behavior every time their is a discussion about him.
Yes, it's awful that we forgot about the pharmaceutical industry's price gouging schemes.
Yes, it's awful that people get away with worse financial crimes than Shkreli has been convicted of.
Yes, there are much worse people in the world than this small-time pharma player turned troll/media sensation.
None of that excuses the fact that he committed fraud and the handwaving of his behavior doesn't do anything to highlight the other injustices.
People that defend him may think that they are being profound by sticking up for him and possibly highlighting injustice. In reality, they appear to be diminishing the seriousness of unethical behavior and justifying self-indulgent and childish behavior.
Good point. Let's leave it at that because him helping the world is all that really matters.
Wouldn't you agree that his childish behavior is a response to the unfair reporting he received? Some people can actually see through that behavior and find more about the truth[1][2]. Would you like to receive thousands of calls every day? death threats? being told that you are are responsible for killing children in Africa? You see that he's smart and mature yet you focus on his OBVIOUS childish acting.
Yeah. A little hand waving is fine by me.
[1] https://www.youtube.com/watch?v=WLP-2jD1eH0
[2] https://www.forbes.com/sites/matthewherper/2018/03/09/you-ha...
That entire line of reasoning is itself childish.
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.
Or perhaps it merely attracts them.
When you're dealing with professional egos sometimes it pays to tread lightly. Shkreli learned this the hard way.
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...
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.
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
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...
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).
To put this another way, if Shkreli received what he thought he would get -- which is 0 days in prison (when considering time served up to now) -- then how is that less a mockery of the justice system than the other cases people complain about, when smart, clean-cut, cultured white-collar executives don't get what they purportedly deserve? I bet if Enron's Jeffrey Skilling (who received an initial sentence of 24+ years) had a YouTube channel, he too would come off as a relatable intelligent and clever human, which is what you'd expect of someone who worked his way up to CEO.
I'd wager Enron's CEO would come off as an actor or a sociopath reading press releases or prepared scripts for money, whereas Shkreli still exhibits genuine human emotions, quirks (genuinely passionate about rap/hip hop because it got him through tough times growing up), compassion (gave drugs away for free to those who couldn't afford, taught a youtube series on chemsitry/pharma for younger generation of investors), etc. It seems like it's not all about money for Shkreli, he wants to impact the culture and give back in unselfish ways.
I put myself in his shoes, and I feel bad for the guy having 7 years of his life taken from him, especially when many other white collar crimes of seemingly greater magnitude go unpunished
1. Companies were cornering certain drugs, then hiking their prices up significantly. Shkrelli did the same thing (but stated he was willing to give it free for anyone who asked). Note, that this is not illegal in any way, but news was all over it and citizens were pissed.
2. Shkrelli, being outspoken, became the focus of this issue. He dug a hole for himself, but concerning drug prices, he did nothing illegal.
3. Prosecutors, needing to do something got him on fraud charges where he misstated information on an investment but still tripled their money.
4. Shkrelli goes to jail, news and citizenry quelled. Companies still free to continue cornering the market and jacking up prices with impunity.
That's how you get away with this stuff. News made money with the story. Companies made money with their drug hikes, politicians and prosecutors look good because they took action, Shkrelli investors made money. Shkrelli lost, patients lost, taxpayers lost. Rinse, repeat. Systemic corruption.
Here's a Newsweek article from September 2015, when the Turing Pharmaceuticals story broke: http://www.newsweek.com/martin-shkreli-drug-manipulation-dar...
> Since at least in January, Shkreli has been under criminal investigation by the United States Attorney’s Office for the Eastern District of New York, court records show. And Shkreli is not alone—some of his business associates have also received grand jury subpoenas in the case.
Shkreli was the just the lowest hanging fruit who a) didn't have the backing of a major pharma company to mask him and b) he also happened to enjoy the attention he get from playing the "villain" character, ironically or not, in an outrage driven (social) media culture.
I also don't think it's possible to separate his identity within pharma nor his politics with the Clinton drama, from his sentencing in this case.
Nearly every single headline has started with "Pharmabro" and judges always consider external factors and personal behaviour during sentencing.
Aaron Swartz was eligible for 50 years in prison and a million dollar fine based on his computer crimes. That's fair too, right?
Y'all need some empathy and compassion. People are human, and make mistakes. The punishment should fit the crime.
https://en.wikipedia.org/wiki/Aaron_Swartz#Arrest_and_prosec...
The allowance for empathy, compassion and mistakes are what lead to the (to you) unfair punishment that was given.
Poor judgment with minimal damage should not cost you a tenth of your life, or in Aaron's case, his entire life.
You're using the absolute maximum prosecutors were threatening Swartz with in order to extract a plea deal. They would not have brought anything near that to trial had it gone to trial, much less convicted him on it. In fact, in your link, this is what he was offered: "During plea negotiations with Swartz's attorneys, the prosecutors offered to recommend a sentence of six months in a low-security prison".
The statute Swartz was charged under has also widely been recognized as flawed. Not the case with what Shkreli was charged with.
Isn't that exactly what the justice system is in place to prevent?
This is spot on. That gives a heck of a lot of power to news organizations. That's scary when thinking of the quality and journalistic integrity of many, if not most news organizations. People react much more strongly to what they read/watch/listen to on the news. If the news can get them hyped up on a topic (opioid crises is the latest) then the politicians react, typically just enough to get the news off their back. We're left with ham-fisted solutions that make the problem worse. x30 years.
[0] a “republic” in the sense of a regime where government is notionally an institution for the interest of the public rather than a private property interest of a ruler or distinct ruling class; in non-republics, the non-public “owners” are the persons of whose offense consequences are institutionalized by the criminal justice system.
Constitutions and codes of laws in a republic are intermediate tools to the effect discussed.
> Maybe some ex post Latin?
You mean, more than “republic” is ex post Latin?
Until being offensive is illegal, it should hold no bearing in a just trial. Fortunately, we have the first amendment, which makes being an obnoxious asshole in and of itself perfectly legal.
https://www.thebalance.com/role-of-derivatives-in-creating-m...
He later managed to come up with money from another source to pay them back, but that doesn't erase the fraud that he previously committed.
I don't think the outcome should matter. Lying to investors should land you in jail. It shouldn't become okay "if investors still made money"
According to the article, "prosecutors had pushed for at least 15 years, saying Shkreli had not shown remorse for his actions"
How come the jury is allow to consider his alleged lack of remorse but is not allowed to consider the outcome? Both are current events
Also, I don't agree with GP, but arguably the outcome is less relevant to the risk to society posed by reoffense than is genuine remorse or the lack thereof.
In this case, his crime had no negative impact on anyone, and the unduly harsh sentence sure looks like a sentence for the unlikable (but perfectly legal) price hikes he did.
That's not really how it works.
https://www.bloomberg.com/view/articles/2018-02-28/big-compa...
"The government's argument is that those investors did lose money; it's just that Shkreli eventually paid them back after they started complaining. If your fraud loses money for investors, and they catch you, and you pay them back, then the losses still count. And while Shkreli has an argument that that's not what happened here -- that he gave Retrophin stock to the funds out of the goodness of his heart after they suffered honest losses, rather than to settle legal claims from disgruntled investors accusing him of fraud -- it is frankly not a very good one. And so he is getting tagged with the full amount that investors put into his funds, even though those investors all ultimately got paid back.
That seems analytically correct, though also a bit rough on him. Shkreli is obviously an unpopular character but he is not, as these things go, a particularly bad fraudster. His lawyers were seeking a sentence of "perhaps just 16 months or less," and that actually sounds about right to me for this sort of fraud. If he gets much more than that, I suppose it can be technically justified by legal arguments about the amount of loss that he caused, but I suspect it will really be driven more by his all-around dreadfulness."
It was a white collar crime. NO monetary damages. And 8 years?? Clearly they sentenced him for 8 years for political reasons
speaks to me of a culture problem here.
Like a lot of sociopaths, he has figured out that most people are nicer than him and he can get away with a lot of outrageous behavior because most people are simply better behaved than him, so he is unlikely to be crapped on to the degree that he is all too happy to crap on others.
Hopefully the long sentence will clue him that betting that way stops working if you push it far enough. No, you don't get to disregard social norms in how you treat others, then bank on them protecting you. Life is a two way street. Social contracts involve two parts. You don't get to endlessly abuse social norms because your wiring is outside the norm and being mean is perfectly comfortable to you.
[0] https://www.ussc.gov/guidelines
[1] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-...
>He would still be out and doing his thing if he didn't commit a crime.
Yes, this is the biggest point I was trying to push. He would still be doing it because it's perfectly legal. Other companies continue to do this because it's perfectly legal. Nothing has been done to fix this.
1. Shkreli lied to investors. Regardless of whether the investors eventually made money, Shkreli put them needlessly at risk, and broke the law.
2. He could have gone away for 15 years, or walked away with a slap on the wrist. The judge sentenced him for 7 years in prison, given the fact that this guy showed no remorse, and thought it made him likely to reoffend, perhaps with more serious consequences.
Sadly, It's still perfectly legal to corner a drug and hike the prices. That was the bigger crime, and it continues to go on, costing taxpayers and patients millions if not billions of dollars, and sometimes costing their health.
Yes, hiking drug prices isn't what you should be looking at. Look at Shkrelli! He's in jail; problem solved. Politicians are now off the hook with this conviction. No problem here, justice served. /s
Not only are these companies jacking up prices with monopolistic practices, but they are eroding the legitimacy of the FDA (also to their benefit).
This is how all patents work. Are you against patents?
I may or may not agree with the justness of the sentence, but that wasn't the thrust of my argument, therefore the distraction.
And thus the "here's what happened" attitude is exactly false; what happened was a petulant fraudster got a middle-of-the-road sentence for exactly the crime he was on trial for.
I'm including all the "Pharmabro" chapters over the last couple of years. Google his name. He isn't famous for fraud.
The original replier (9889095r3jh) had an issue with (3), which is not really an accurate summarization (I don't think the prosecutors acted because he was hated; using the word misstate makes it seem like a mistake rather than outright lying; and it's totally irrelevant whether he tripled their money).
I agree we should change the regulation structure to prevent drug price hiking: any suggestions on how to do it? I for one would love to donate money to this cause if it's actionable.
Also, I'm sorry you're getting a lot of flak for that comment. It's mostly nitpicking, so safe to ignore once you see the point the nitpickers are making (including me).
...the fund was managing $35 million in assets and had an independent auditor.
He said he later learned both of those claims were false
https://www.reuters.com/article/us-usa-crime-shkreli/investo...
That is a lie and therefore fraud, but the 7 year sentence seems out of line with the actual fraud committed (there are degrees).
Shkreli lied to him repeatedly, although he eventually made millions of dollars from the investment.
He made the defrauded investors money. In this crazy country, I'm not sure that giving someone shares in another company to cover other losses is illegal (Retrophin Inc). It seems like a Ponzi, but who knows. Fund managers are given a hell of a lot of leeway.
So to summarize, 7 years seem harsh for lying about the size of the assets and an independent auditor, given the fact that the investors made money. To me this seems more in line that he was punished for the press he got, and embarrassing Congress when they called him in for his perfectly legal monopolistic practices. I would much rather him be convicted for that.
Shkrelli is a scapegoat in reagards to the drug price hiking. It's still going on; it's still perfectly legal; and it seems the politicians are getting paid to keep it that way.
It's more of a thought of how the citizenry can get manipulated. Shkrelli was the face of this practice; Shkrelli is in jail; justice served. Or so the narrative seems to be.
Shkrelli still made a perfect scapegoat. The news has seemed to move on from the monopolistic practices thing like it never happened.
haha no... he LOST their money (All of it), LIED about it (fraud), and paid them back with OTHER funds.
Get the facts right first. Misstated - information, the only misstatements are in your post.
(Reuters) - One of the investors former drug company executive Martin Shkreli is accused of defrauding testified on Wednesday that Shkreli lied to him repeatedly, although he eventually made millions of dollars from the investment.
This was apparently the guy who alerted investigators to the fraud. He made millions.
If I lose your money, lie to you, but then I give you 10X your money because I had that in a bank account somewhere because I won the lottery doesn't mean that I didn't commit fraud in relation to your original investment.
Just because your "investment" was repaid at a greater amount doesn't mean you weren't defrauded. He made money because of a settlement, NOT because the investment was in pharma. From your own source article:
...largely through an agreement in which Shkreli gave him shares in his drug company Retrophin Inc.
Shkreli committed fraud, got caught, investors realized they were defrauded, Shkreli then settled privately and paid them above their initial investments with funds completely unrelated to their investments.
He made millions because Shkreli got lucky and was able to settle with them privately. That does not absolve him from the criminal actions he committed just because he settled the civil cases. If Shkreli didn't get lucky with his pharma scheme those investors would not get paid back because their original investment funds were all gone long ago, and again, were not involved in the pharma scheme.
You seem to lack the understanding of the facts in this case.
Show me where I said he didn't commit fraud. Tell me which facts are wrong. I cited where he made his investors money. You just threw insults. Jackass.
His investors only eventually made money after Shkreli paid them in stock and cash from Retrophin.
Prosecutors, on the other hand, have argued that Shkreli should not get any credit for what they described as stealing from Retrophin to pay off the investors.
source: https://www.cnbc.com/2018/03/09/pharma-bro-shkreli-to-be-sen...
Edit: Not sure if you guys are aware of this, but sentencing is actually completely separate from the part of the trial where they decide whether you're guilty or not.
If the Feds want you in prison, they'll find a way.
That's not "the government is out to get you", that's "the government punishes crooks".
Federal felonies (and federal crimes more generally) are defined by the US Code, and almost entirely Title 18 of that Code, not the Federal Register.
The Federal Register is the regular publication of regulatory process documents, most of which is notices and procedural background information; the operational material from the Federal Register is codified in, for the most part, the Code of Federal Regulations (which is much smaller than the Federal Register; while not a perfect analogy, you could think of the Federal Register as the Git repository for the Code of Federal Regulations, with commit messages that usually far exceed the size of code changes.)
The CFR itself is occasionally relevant to defining the parameters of crimes (not all of which are felonies), in that in certain cases Congress has made violation of certain regulatory orders criminal. But it's only a very small share of the CFR (itself much smaller than the Federal Register) that is relevant to that.
It feels like you and others here are suggesting that we should not discuss sentencing policies in general because Shkreli was guilty, that seems insane to me.
Civil damages mostly addresses the harm caused, criminal punishment is less about the harm caused by a particular act and more about the risk to society of normalizing the behavior.
The US federal criminal justice system has no parole; other than Presidential pardon or commutation, or the sentence being overturned judicially, you stay in prison for the full term of your sentence, reduced by a maximum of 54 days per year of sentence by good conduct credits. So, best case for a seven year sentence is just under six years.
https://www.sentencingcouncil.org.uk/wp-content/uploads/Frau...
Look at "Fraud by false representation", "fraud by failing to disclose information", "fraud by abuse of position", "Conspiracy to defraud", and "False accounting" (because some of these feel useful and the sentencing is similar).
When looking at culpability I'd say he matches all of these except targeting vulnerable people:
A – High culpability
A leading role where offending is part of a group activity
Involvement of others through pressure, influence
Abuse of position of power or trust or responsibility
Sophisticated nature of offence/significant planning
Fraudulent activity conducted over sustained period of time
Large number of victims
Deliberately targeting victim on basis of vulnerability
When looking at harm there are 2 categories: he probably meets the highest level for the first category:
Category 1 £500,000 or more Starting point based on £1
With culpability level A and harm level 1 you'd start with a 7 year sentence. Then you'd look at aggravating factors (did he try to hide the crime; did he try to prevent people reporting it) and mitigating factors (did he show remorse; was it a doomed enterprise; did he have a serious medical condition requiring intensive imminent treatment; etc) to increase or decrease.
In Shkrelis case the judge dismissed this argument specifically because he only paid his investors back after they had already became suspicious, had he done so before that his behavior would have almost certainly been viewed differently.
It is absolutely normal to take things like this into account during sentencing.
And since it seems to be terribly difficult for some people here to understand, I'm not defending Shkreli and nor do I think there's anything wrong with his sentence.
That is why Bernie Madoff, who caused billions in damages, got a very harsh sentence.
Source: I just asked my girlfriend, a third year law student. Also, you know, the judge for Shkreli's case: https://www.reuters.com/article/us-usa-crime-shkreli/pharma-...
"[U.S. District Judge] Matsumoto said in Monday’s order that under federal law, all of the money that investors put in Shkreli’s funds as a result of his fraud, about $6.4 million, must be considered loss. She also said he should get no credit for paying investors back because he only did so after they became suspicious. "
Shkreli’s real crime was not donating to the appropriate PACs. (Friend of Schumer, etc...)
I don't like Shkreli's obnoxiousness, yet tried listening to his reasoning in why he raised the daraprim price versus other drugs. His talk last year at Harvard ( https://www.youtube.com/watch?v=n3bpXHMP4ww ) dives a bit into the thought process.
Or maybe he's literally a horrendous human being who is rightfully hated for the horrible things he's done.
https://www.npr.org/sections/thetwo-way/2018/03/05/590980850...
if he still owned the album, and it is seized by the government, it would go up for auction, at which point whoever pays for it gets it. and they'd be under no more obligation to release/sell it than shrekli was.
I have a child who is not innately good at the social thing. When he was 8, he spent weeks torturing me for giggles because he knew I was not an abusive parent, so he felt like he could get away with it. That stopped when I told him "The point at which you are going to care about my feelings is when you want something from me and my answer is Fuck You."
Apparently, Martin's mom should have had a similar conversation with him at some point. Cuz now it hurts and he thinks we supposed to care about his feefees when he never cared about anyone but him.
Turn about's fair play. Think on that while rotting in your cell.
Did the fact that he was universally hated by the whole country make his sentence for his crimes worse? It's entirely possible. Does that mean the judge was corrupt? No, that's not what that word means.
What should you learn? If you're ever convicted of a serious crime, apologize profusely, then shut up, and maybe don't offer a bounty of a presidential candidate's hair.
31 minutes in:
ttps://soundcloud.com/user-695156563/043-cocaine-nights
Elsehwere in the thread I've linked to the UK version, and it seems he'd have got a similar sentence over here. Although we do have parole, so he'd be out a lot sooner.
https://www.reuters.com/article/us-usa-crime-shkreli/pharma-...
1. https://www.reuters.com/article/us-usa-crime-shkreli/pharma-...
There's obviously plenty of dispute between where particular situations fall on the guidelines, but his own lawyers argued that he should get 12-18 months (plus other penalties), as a downward deviation from 27 years calculated under the guidelines. [0]
So, I'm curious how you arrived at a guideline sentence of 0-12 months. That would seem to imply Shkreli’s lawyers were grossly incompetent.
[0] https://www.reuters.com/article/us-usa-crime-shkreli/pharma-...
You know, as opposed to jailing good people that do "bad" things to themselves.
The world need more good role models and less bad ones.
The world needs to stop rewarding purposefully angering people just for attention.
The public (including many people, unfortunately, in this thread) will now be convinced that there is no more price gouging in pharmaceuticals, which is patently false. It is still legal, it is still one of the primary business models, and still no justice is served to the sick and uninsured.
Shkreli is going to jail because he almost (whether intentionally or not is to be determined) brought regulation to an entire industry that thrives off of raising prices on drugs needed to treat chronic conditions.
He is sentenced not for drug prices but for this: he started a hedge fund which lost money, used some of the funds to start a pharma co, the pharma co did well went public and he returned the investors their money at a huge profit for them.
Who sufffered? No one.
But he misrepresented his funds performance and did not inform them of the pharma co investment.
This man is an entrepreneur.
This is still fraud. The fact that it paid off isn't relevant to the fact that it's fraud.
His investors got lucky that he had the funds to repay them due to his other company. Had he gotten away with this, he likely would have done it again, and those investors might not have been so lucky.