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Comment by clairity | Hacker News Reader

it would be interesting to codify the known heuristics of forensic accounting into a software package (maybe even AI all the things!), then create a company out of it in partnership with prosecutors and regulators to root out fraud like this through both technological and legal means. i'm sure there have been some efforts to that end, though not commonly known.

it would help rebalance the legal system toward the service of people over corporations.

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If you can reliably determine what companies and securities are fraudulent more accurately than the rest of the market and faster than government entities, then you can use this to make rather a lot of money as a short-seller.

You may have problems when the fraudsters run the government.

You're absolutely right. This particular approach has limitations and potential shortcomings. Of course, the same might be said about any approach.

Do you have something else in mind? A discussion here could be very interesting!

Well, not really. As the saying goes, markets can remain irrational a lot longer than you can remain solvent.

something like https://linkurio.us/

built on Neo4J, that's how I know about them.

on edit: you might also like to read https://commons.erau.edu/cgi/viewcontent.cgi?article=1401&co...

That looks strikingly similar to what Palantir’s Gotham product looks like.

The problem is getting anyone to care while the fraud is still making money

that's the point of combining it with lawyers--you find clients, possibly grouped into class actions, to sue the fraudsters (and make money that way).

So an interesting fact about class action lawsuits:

There were initially created to combat civil rights cases. For a long time, minorities who were seeking legal relief against large companies could not afford to mount legal battles.

The class action lawsuit was created as way for plaintiffs to pool resources and incentivize lawyers to take these kinds of cases. Only later on was the class action lawsuit applied to regular civil cases.

Modern Business 101!

Suppose you've made the AI, it's running, and it tells you some company is fraudulent. You're going to be stuck investigating to figure out if it's correct, and if so, what the fraud is exactly.

Which probably isn't that much of a gain. Finding a company that seems shady doesn't appear particularly difficult.

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