New York State Attorney General Investigating WeWork | Hacker News Reader

New York State Attorney General Investigating WeWork

reuters.com

241 pointsaaronbrethorst129 comments

Nothing he did was hidden though. His board knew what he was doing when WeWork leased his properties, his board knew about all these things. Journalists have been writing about this weird arrangement for years. If anything I could see investors sue the board and the company on civil grounds, but if everything is above board is it a crime? I could see it being a crime if he had been doing this in secret. His actions definitely seems wrong and stupid, but is it fraud?

Being above board about your self dealing doesn’t absolve you of it though, and it is even worse when you control a majority of the voting stock.

It’s not even clear to me that lots of above board self dealing reduces the chance of unseemly self dealing. My guess is, if anything, they’re positively correlated.

All of this is more or less fine while the company is valued at billions of dollars. But you're right, I'm not exactly sure about the legal angle. The biggest loser, besides the unfortunate employees, is SoftBank. I don't think there is a case to be made by SoftBank, as they encouraged Neumann's behaviour, but the employees may have strong grounds for a case.

Imagine working at a company, that has these gigantic valuations, and you hold stock in this company. Since you probably don't have the insights to the actual finances of the company you, like everyone else, base the company's valuation on the private market. Then only to find out that your shares you thought were worth $100, are now worth $15 (except much worse).

In the meantime, your CEO walks away with over a billion dollars in his pocket on a handshake deal to basically shut up and leave.

I would be furious if I was an employee that dedicated time and energy to this company.

> I would be furious if I was an employee that dedicated time and energy to this company.

And those employees probably have justification for a civil case, which doesn't require the SEC to be involved.

Those employees definitely ended up in a shitty situation, but there are no grounds for a lawsuit.

I guess it's a lesson. Never personally invest yourself into any company, since - as just a foot soldier - you have zero control over the events.

Even if you have a chance to get your walkaway money, it's just a job. They pay you for your skills and your talent, not your personal life. Be involved, be professional, care, but do not get personally attached.

What you bring from a job is learning experience and new friendships, but the job itself should be viewed as a pretty ephemeral concept. Never fall for the "we are a family" line - it's incredibly hard to be fired from a "family".

If your a shareholder you can get the financials of the company assuming wework was a Delaware Corp. Exercise 1 share of your options to become a shareholder.

Sometimes you have to forfeit these rights in order to receive your shares.

What about those employees that did sell some stock at high valuations though?

Some employees were indeed able to sell shares twice along the way, just like Neumann was. The most recent sale opportunity, in January 2019, offered employees $54 per share if they sold their equity to SoftBank, WeWork’s largest outside shareholder, according to WeWork’s financial prospectus, at an overall valuation of around $23 billion.

Not everyone was eligible to sell, nor did everyone take that opportunity. Those who did are, with the benefit of hindsight, thankful.

https://www.vox.com/recode/2019/9/30/20887656/juul-wework-em...

Plus i m not sure how sympathetic judges are going to be for employees' anger that they didn't become overnight millionaires

> All of this is more or less fine while the company is valued at billions of dollars.

It's still valued at billions of dollars. The absolute valuation is irrelevant. As another article I read said, building an $8 billion company out of $10 billion of investment is not an especially great achievement. In particular, it is not similar to building an $8 billion company out of $10 million of investment.

Sure. Could have clarified that what I meant was "It is more or less fine while it is working." When the valuation goes under the amount invested, I'd say that is no longer the case. That is, while everything is going well no one thinks to file a lawsuit. Appreciate your correction nonetheless.

Regardless of anything; isnt theere a literal wealth of real-estate knowledge to be had from what wework accomplished...?

Surely there will be some serious real-estate developments to come from this to the massive profit of those who have access to that knowledge...

(Are they the martin skreli of real-estate?)

I'd be interested to know your reasons for supposing We might or may have amassed proprietary insight into RE markets or even something like how to improve office layouts, or even how to optimize the fluid dynamics of beer taps.

The meatless movement can finally put an end to Marsha cooking fish in the microwave.

This was the one comment I wanted to reply to, and only because it makes no sense to me lol

Square footage cost realities, contract negotiations, market norms in price, such things...

Im not saying they DO have such insight, but if they have zero, or negative insight - well, then it goes more to say about those who invested in them doesnt it?

Commercial real estate is a very active, competitive and generally well-understood business. Not sure WeWork would have insights over and above say Regus given that WeWork were not able to build a sustainable business at the pricing levels they had. So while we have a price point for flexible co-working rental it's not a level which allows for profitable unit economics. We don't (publicly) know whether the clearing price does or what that price is and neither do WeWork. Someone like CBRE or Regus might though.

good points, thank you.

Adam Neuman should go to jail. The self-dealing was well publicized - certainly - and illegal. Since the securities markets were involved, the govt can step in and read him the riot act (and hopefully more)

And I think that is important. That kind of scrutiny puts a check on rampant misbehavior by investors or entrepreneurs.

As much as I want to see him punished, I’m not sure I agree there’s a case here. Which part of his self-dealing was illegal? Obviously the investigation may reveal things, but based on what we know now I can’t think of any “certainly illegal” self-dealing.

I think what we’re all saying is that while what he did wasn’t illegal, it should have been, and probably once was but we’ve allowed corporations to pay off our politicians to make laws legalizing actions like his.

But who is precisely harmed as a result that wasn't already well informed of the risk that was posed to them?

I don't think that many people think that the Saudi Sovereign Wealth Fund losing money (SoftBank's largest LP) is harming any American citizens. The only thing I can think of is that some of WeWork's investor LP's might be public pension funds, but even then, the individuals who are responsible for deploying that capital (LP representatives) should be held accountable then.

The company itself and most importantly WeWork employees were harmed (some of them won't have a job soon, and were promised a huge IPO)

As an employee it sucks, but an IPO was never a garantee, and it's not grounds for a suit.

As for job security, as long as any contractual severance package is honoured, there's also no grounds for a suit.

The way the system works is not in favour of an employee, and it ain't gonna be changing any time soon unfortunately. This is why working for yourself is the best option, and only use employers as a stepping stone towards that.

See https://mtlynch.io/why-i-quit-google/ - it's not different in Google or Facebook, and certainly going to be the same in WeWork.

> As an employee it sucks, but an IPO was never a guarantee, and it's not grounds for a suit.

Why not? Returns in any company are not a guarantee. Yet, you are allowed to sue as a shareholder. Owning shares in a company when it is private does come with less privileges, but certainly does not prevent a shareholder from suing the company.

> I don't think that many people think that the Saudi Sovereign Wealth Fund losing money (SoftBank's largest LP) is harming any American citizens

"Hey Chief, I know the band of robbers hit 30 houses last night, but they were all Chinese people here on visas; no American citizens were harmed, so we shouldn't investigate."

Fortunately, that's not how the American legal system works. And if it worked that way, it would harm the US tremendously. Generally, investors are more ready to invest in places where there is a rule of law and functioning judicial system. Sure, the American justice system is not perfect, but it is better than many places. Foreign investors can confidently put their money into American companies, including through VC funds, and know there are some protections. If those protections only applied to American citizens or US public pension funds, we would face a large reduction in investment of foreign capital in the US.

> "Hey Chief, I know the band of robbers hit 30 houses last night, but they were all Chinese people here on visas; no American citizens were harmed, so we shouldn't investigate."

Big difference, I'm not sure how that's relevant.

> and know there are some protections.

To my knowledge, the only protection the SEC provides for private investment is when the seller provides deliberately fabricated documents.[0] To my knowledge, this has not happened with WeWork - everything was pretty much out in the open.

> We would face a large reduction in investment of foreign capital in the US.

This isn't just any foreign capital, but a sovereign wealth fund, which had a foreign GP (SoftBank) that poorly executed its due diligence. The US doesn't need this type of capital - it's not the norm. In fact, it's probably better that the US doesn't promote investors who act recklessly and potentially mislead non-accredited US persons who have a stake in a private business (e.g. WeWork employees).

[0] - https://www.bloomberg.com/opinion/articles/2018-05-17/securi...

It is difficult to express precisely how distressing the attitudes in this comment are. You propose we abandon all pretense of enforcing the law as a neutral arbiter, in favor a world where the executive branch uses selective enforcement as a crude political cudgel against parties who they disfavor (or should disfavor).

Taking this approach is a great way to corrode society, to make sure that politics and enforcement of the law are power games centered about punishing the regime's political enemies, without any regard to justice whatsoever. It is the dark ooze of pure corruption, and you are advocating for it.

If you want an honest ban of Saudi investment money, here is what you do: you bring it to Congress, and get them to pass a law that makes the investment illegal. Then, until the moment that the last of their money is returned to them, you give them fair and equal treatment under the law and the same access to justice you would give your best friends. The alternative is monstrous.

> I think what we’re all saying is that while what he did wasn’t illegal

I don't think that's what anonu was saying:

> Adam Neuman should go to jail. The self-dealing was well publicized - certainly - and illegal

It'd be interesting to know where the lines get drawn here. Private businesses are set up with a primary purpose of being self dealing (looking at what Adam Neumann did, and it's hard to argue that from the outset at least, it doesn't look that dissimilar to how a lot of private equity companies run).

It gets into obscure territory... private equity & various types of "corporate structure" can end creating (or be drawn specifically to create) serious conflicts of interest. They are not a single, uniform interest group and "self dealing" means screwing (fiduciary failure) someone.

In Germany you can basically go to jail for "stealing" money from a company you own to 100% (in some cases). Self-Dealing can be allowed for managing directs who are also majority owners (e.g. I'm allowed in certain limitis to sign contracts between me and my own company representing both "parties"). But still there are limits. No idea how this works in the US, but I can imagine that there are limits.

Of course, you can basically go to jail for "stealing" money from a company you own to 100%. Being able to do so makes a creditor unable to recover their money in limited-liability companies (a clear majority).

Which also makes perfectly sense, if you ask me!

Private businesses are primarily setup to be of the benefit to shareholders.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

If management is making decisions to enrich themselves first before the shareholders then they could run afoul if regulators.

Adam was likely not a target of this so long as valuation went up. Now that it’s fallen his shareholders are arguably potentially hurt by his actions and regulators can swoop in.

Did he do everything to maximize the position of the corporation and the shareholders or did he act mainly in his own interests as a shareholder?

There are no overt acts, I agree, but that also means a good DA can convince a judge that certain actions of his were primarily for self interest. The fact that he walked away with 1Bn dollar when other shareholders lost money does not look good.

It is hard to argue that your actions were not primarily for self enrichment when you walk away with a ton of money and everyone else at the table loses. In a way his lawyers would have an uphill battle convincing the judge that his actions were primarily to further the enterprise and that through a series of unfortunate events he is the only one who ended up with a lot of money.

Since he had outside investors, he was a fiduciary and had obligations under many US security laws to meet certain duties.

https://en.m.wikipedia.org/wiki/Fiduciary

  A fiduciary is a person who holds a legal or
  ethical relationship of trust with one or more
  other parties (person or group of persons).
  Typically, a fiduciary prudently takes care of
  money or other assets for another person.

And I would argue that it doesn't matter if SoftBank was the only investor and/or they weren't "harmed" in the situation.

You are correct about fiduciary duty, even in private companies.

Cases I'm aware of violating fiduciary duty, however, have all involved actions the board wasn't aware of.

WeWork seems fairly unique in that Adam Neumann's actions all seem to have been highly transparent.

I'm certainly not a lawyer, so I'm actually quite curious about the ramifications of fiduciary responsibility here. That responsibility is to the other investors... but if they are equally assenting, then I don't see how there's a crime here. On the other hand, if this is, say, Adam Neumann with SoftBank harming other dissenting investors who have small minority stakes, then there's quite possibly a case here -- that might include SoftBank as well for some kind of negligence, no?

I could easily see them finding that the board was mislead about the process involved in selecting himself as the best option to lease building from which would remove the 'but the board knew about it' wrinkle.

That's what the court's for, I guess. He was obviously nearing the boundaries of illegal self dealing. Whether or not clear legal lines were probably crossed... we'll see.

Is self dealing illegal for private companies? What security markets were involved? I never heard of any prosecution of gross mismanagement of VC funds even with companies like Clinkle.

WeWork has a lot of debt, and there are a lot of fraud scenarios if risks were misrepresented to bond holders.

Given the scale of recklessness and insanity here, I’m sure there are all sorts of problems with the firm.

Self-dealing is a breach of fiduciary duties and can apply to work for all companies, not just publicly traded ones. In fact it does not just apply to work within a company.

See: https://www.investopedia.com/terms/s/self-dealing.asp

This is a slight oversimplification. Self-dealing can create a presumption of unfairness, but it's rebuttable under certain circumstances. For example, if Adam had disclosed the transaction to the board and the board authorized it, it wouldn't be a breach. Likewise, if Adam can demonstrate the complete fairness of the transaction (a high bar), then he could be in the clear. It will largely depend on the AG's investigation.

See Delaware General Corporate Law § 144: https://codes.findlaw.com/de/title-8-corporations/de-code-se...

I agree, but I'm not sure there's a legal basis for it. Lampert gutted Sears with similarly public self-dealing. The only avenue that seemed open to address it was civil suits from shareholders.

Adam Neuman is bound to be canonised in our capitalist society. When his grand grandchildren donate to Harvard and waltz in high class ballrooms, nobody knows or cares about how their ancestor made that wealth and even for those who do, the story would have already been glamorised.

The board was under his complete control, wasn't it? He had a majority voting state in WeWork.

> but is it fraud?

I'm Korean and the law system is very different from America, but I think he will be likely accused of embezzlement rather than fraud if he were Korean

Even if the board and shareholders bought his grift for years and were ok with his self-dealing at the time?

If board members were complicit then I'm convinced we have plenty of room in prison for them as well.

But then who are they stealing from?

Could be the company's money. It doesn't need to be specifically which investor's money.

Technically once you invest it's not your money anymore and using it improperly can put you in legal jeopardy.

> Nothing he did was hidden though

A crime committed publicly is still a crime tho.

> His board knew what he was doing with the leasing his own spaces, his board knew about all these things.

For all we know the board could be accessory to the crimes. The board could have gone along with it if they were directly or indirectly getting something they wanted.

According to the article, Adam Neumann indulging in self-dealing to enrich himself is "among the issues". We don't know the full scope of the investigation.

The NYAG doesn't generally go after people just to see what happens. They have a reason to think this is a case that needs investigation that might not be public.

> Nothing he did was hidden though

Nothing we know of was. I wouldn’t assume we know the whole picture.

There is also at least a case to be made that the Board derelicted its duty to minority shareholders and so, though probably not criminally liable, needs to at least e.g. not sign off on nine-figure consulting fees to Adam.

> but if everything is above board is it a crime?

If he and the board conspired to deceive investors, then it's probably criminal fraud. That's just one potential reason why the AG would be looking into WeWork.

> Nothing he did was hidden though.

I think that it's entirely possible one can do things which may turn out to be criminal in the eyes of the regulator even while the board may approve. Or be dazzled by the person who held most of the cards, perhaps.

They are focusing on self dealing by Neumann. Can’t wait to read about it from Matt Levine. It’s amazing to see this story keep on developing apparently after it was all supposed to be said and done when he left the company.

I'm sure this would have never been brought up if a bunch of powerful people didn't lose a lot of money. They all would have happily ignored it as they dumped their billions of dollars worth of stock on the general public to deal with. Now that they've been burnt they're out for retribution.

Can't help thinking of the Showtime show Billions, especially since it's the NYAG's office.

The latest season of Billions was a bit, well, silly I guess, but damned if I don't enjoy it. Fun show!

I stopped midway at the wrestling match.

Watch Succession instead. Its way stronger and has what I liked about Billions Season 1 while also being better

Conspiracy theories everywhere. While simple explanations exist: it's on top of NYAG's list just because this case is famous. NYAG is a law enforcement officer, but also a politician. He/she will prioritise cases based on the eyeball count, and WeWork is killing the eyeball count.

Exactly. Smacking down a rich billionaire who did something dirty is a political win you can present to the voters in NY and recovering money for other billionaires who got fleeced is a win you can present to the moneyed elite. Incentive alignments like that are fairly rare. There is nothing to lose here because even if you lose it can become a rallying cry for preventing it in the future.

Even if there were no legal basis for the investigation it would likely still happen because it is such a massive political win that even if the AG was too dumb to take it up on their own accord the AG's boss would strongly suggest an investigation be opened.

Just to be clean I'm not defending Neuman/WeWork definitely did wrong and I think the statutes around securities fraud are broad enough to nail them, just that the technical legality is a footnote compared to the other motivators here. It should be obvious why this kind of prosecution is a politician's wet dream (and make no mistake, a state AG is a politician, just not an elected one) regardless of whether there's clear law violation or not.

Government doesn't swing into action like this because it's morally right or whatever (it may be morally right, but that is tangential). It swings into action because there are stakeholders to please and it's rare to have two big stakeholder groups aligned like this.

> and recovering money for other billionaires who got fleeced

WeWork has employees in New York. Many exercised stock options. Many are about to be laid off and start filing for unemployment benefits.

>Many of them are about to be laid off and start filing for unemployment benefits.

Make that three groups the AG can potentially please.

Win^3 is way better than win^2

Too bad we don't get all around wins like this more often.

I never understood people exercising options on locked-up shares on any company. If at least they hedged by going short on the WeWork bonds which are the only publicly traded security. It's so risky! Do not do this! The tax advantage is not worth it!

> Can’t wait to read about it from Matt Levine.

And from Scott Galloway ( https://www.profgalloway.com ) :)

Very interesting as what I understood was that, technically (SEC, SOX, whatever...), nothing of what Neumann did went against the rules, but maybe in this case the actions will be compared to the "spirit" of the (aggregated) rules?

EDIT: and I guess that Softbank would be happy if Neumann would somehow lose shares/votes.

> Very interesting as what I understood was that, technically (SEC, SOX, whatever...), nothing of what Neumann did went against the rules

What have you read that gave you that impression?

I say this in jest but whatever he does, don’t talk to them without a lawyer and become another Martha Stewart.

Matt Levine has been crushing this story, as well as dealbreaker and ftalphaville.

This will be interesting. If he did even the most basic work to cover his ass, like memorializing these agreements, getting some kind of board approval, nominally recusing himself from the decisions, etc, it’s going to be almost impossible to prosecute him.

Which is a bit of a shame, of course, but the business judgment rule is pretty much a cornerstone of our laws at this point.

Now if he falsified records or hid things on the other hand, it could get fascinating to watch.

Why is it a shame? The people hurt had ample opportunity not to enable it and were sophisticated investors.

It’s a shame that we allow people no enrich themselves by ransacking investor money while others in the organization suffer hardships and layoffs and life disruptions. The business culture that enables this is unhealthy and this type of behavior is shameful.

> enrich themselves by ransacking investor money

Isn't this entirely the point of running a business?

> others in the organization suffer hardships and layoffs and life disruptions

I feel like you know what you're getting into working for this sort of company.

>> Isn't this entirely the point of running a business?

No, the point of running a business is not to ransack investor money, but to grow it. Why would investors invest otherwise?

>> I feel like you know what you're getting into working for this sort of company

This sounds like victim-blaming to me.

> Isn't this entirely the point of running a business?

Economically, the point of commerce is for us to create more value for each other than we could create on our own. Anything that extracts money without creating value is parasitic.

> I feel like you know what you're getting into working for this sort of company.

Nope. Surely most of the people who understood the problems didn't take jobs there. WeWork was actively hyped, and one of the functions of that hype was to make it seem like an attractive place to work.

> Isn't this entirely the point of running a business?

This is news to me. I thought businesses were supposed to create value, especially shareholder value.

For the workers comrade!

The people he really hurt are rank-and-file employees - salespeople, janitors, receptionists, engineers - who are now getting laid off while he made billions.

Aren't all the employees who are now being laid off also hurt?

Empty WeWork booth at KubeCon today was... amusing to say the least. Great opportunity for photos.

They could have sublet it.

It became a free coworking space

> Neumann bought properties which he then leased back to WeWork, borrowed against his own stake in the company,

Sounds familiar... Enron?

Is Neumann the smartest guy in the room?

I can't wait to read the bestseller that eventually gets written about WeWork

WeRead (sorry, had to....)

The Art of the Self-Deal.

Ironically, it's only going to make Neumann richer, along with the movie sequels.

Would it? I’m not familiar with laws around representing people, but if someone unrelated to Neumann wrote it with no input from him, would royalties still be owed?

i m confident he has all the time in the world to write it himself now

He might already be in Israel. Investors wouldn't want judges to start investigating and breaking up the tons of deals that are similar to this and that we don't know about. At best he'd be accused of some kind of fraud, settle with the company and move on.

There’s little question WeWork was a train wreck from a corporate governance and oversight standpoint.

Less clear if anything criminal happened but let’s wait and see what the AG comes up with.

> Less clear if anything criminal happened

The NY AG’s domain is not limited to criminal law; there are plenty of civil laws with public causes of action enforced by the AG’s office.

I know there’s a Wework office in Hong Kong in Central. I wonder if it’s still open?

So, Chuck Rhoades is after them?

The article should have started with:

“A company, who weeks after attempting to cash out low-value shares with the dollars of future investors by attempting to IPO under hand-wavy numbers,”

Then continued with the real article:

Is now “expected to lay off thousands of employees beginning this week as it faces ballooning losses”

You forgot the part where they delayed the layoffs because they didn’t have enough cash in hand to pay severance.

Neumann deserves to have the book thrown at him for this. Although, I wish a more severe fate for Elizabeth Holmes.

I'm hoping that they all get laid off and he voluntarily gives 90% of his money to them. It's what I would do. People would be astounded to what would happen tax time.

Why am I being so hardcore voted down for this?

There's no case against Adam. You bicker on the ethics of his operations, but he did not violate any law. In fact, he took advantage of poor corporate laws, which is not a crime either.

Be bitter with him, fair enough, but be intelligent still

It's in the same bracket with the whole "Amazon pays $0 in taxes". Taking advantage of poor laws is not a crime. You can accuse them all you want, but we all do it albeit at a microscopic scale.

Punishing circumventers is not the answer, reviewing the law is.

Neumann did what was best for him. It was legal. That's all.

Your expectation of a person doing what is good for the greater good is your own weakness. I'm not telling you to stop, just don't cry foul when folks from other schools of thought do what they do best. Maximize returns.

You write like you're his lawyer.. or even worse, him.

Most HN-posted stories about big gubmint looking into startups will have at least a few comments that seem eager to advocate on the behalf of the company in question. Perhaps they imagine themselves as one day being in a position to get paid $6m as a trademark fee for the name "We".

I’m not one of these people, but maybe they just don’t understand the purpose of this and think it’s a “shakedown,” a “help me get re-elected” thing, etc. Not everything is a conspiracy.

> You can accuse them all you want, but we all do it albeit at a microscopic scale.

I've always found this argument fascinating. I certainly don't, with the specific example of taxes (within my country, Australia). Is it that rampant in the US? Or is it really more that people who break the law assume everyone else does too?

If you claim the maximum you can claim, take advantage of negative gearing, property depreciation, tax free capital gains on primary residence, one of the many parental rebates/handouts that are or have been available to middle class on good incomes, various arrangements to get around paying tax on shares from your company, etc. etc. then yes you are probably getting away with paying less tax by knowing the rules, whereas the uninformed wont. Where the line is drawn between this and say domiciling elsewhere to avoid tax, going to work in Singapore for a few years and bringing the money back or whatever, all the way to doing what the big corps do to systematically avoid billions in tax - who knows?

I, personally, don't do any of that: I don't own property, which the bulk of those schemes require, and I don't have children, which the other set usually does. No trusts or anything involved to reduce my tax burden. I pay what I pay, basically, because I fall into the slightly weird edge-case of having a decent salary but none of the other things that would give me access to these sorts of systems for better or worse. Doesn't really worry me though, I earn more than enough for a happy life!

Good for you, but unless you are avoiding these situations on purpose, or promise to pay above what's legally required for taxes, you can't claim ethical superiority than those that do.

Where did I claim “ethical superiority”? I was accused of doing something, I explained that I did not. No need to be rude about it either, thanks.

Claiming the home sale exemption is not exploiting the tax code any more than claiming the standard deduction.

If you don't claim depreciation on your rental property, the IRS will still recapture when you sell it- even though you didn't take it. So how is taking it an exploitation?

Well how do you define exploiting? For example well-off person buys a house, improves the value, sells it tax free, makes a couple years salary in profit tax free, repeats it again and again. Property ladder on steroids.

The intent of no CGT tax on your primary property is IMO security for families, but it can be exploited to make a regular alternative source of income tax free.

The point of the home sale exclusion is to allow you to move. The presumption is that when you sell your primary, you are likely using the proceeds to buy another primary- which has probably gone up in value just as much as your old house.

Exploiting would be more like renting a house out for twenty years and then claiming it as your primary just long enough to sell & claim the exclusion, maybe without even renting out your original-primary.

The resident-renovator isn't something I worry about. You might be getting a tax break on your sweat equity but improving a house is hard work and when you run the numbers it's often not much more profitable than working a day job.

It's not particularly rampant. It's just that, as you say, bad actors are sure everybody else is equally bad and just lying about it.

>> In fact, he took advantage of poor corporate laws, which is not a crime either.

Taking advantage of poor code by breaking into systems is a crime.

Why isn’t it a crime to take advantage of poorly written laws?

Because the whole point of law is to create an objective definition of what is a crime and what is not a crime.

That may be the point, but it’s not what happens in practice. In reality, laws are vaguely worded on purpose with the promise that “we won’t enforce it in instance x”

because then it wouldn't be laws

Because what if that law is poorly written as well?

hmmm good

There's no way of knowing whether or not he violated laws or whether there's a case against him at this stage. The purpose of the NY AG investigation is literally to establish whether there's a case and the purpose of a hypothetical subsequent trial would be to establish whether in fact he violated laws.

You don't get to just say that as a postulate.

> It was legal. That's all.

You are making some awfully strong assumptions about the legality of Neumann's actions. How could you possibly know that everything he did was perfectly legal? The very fact that this investigation was opened strongly implies that you should be less certain in that assumption.

Whether or not something is legal serves as a great moral compass...

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