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Comment by BigCatStuff | Hacker News Reader

I agree that it should be fraud, but I'm not sure how the SEC defines fraud.

To me, the whole NKLA situation feels like a giant Kickstarter scam.

Everything everywhere is securities fraud.

> contributing to global warming is securities fraud, and sexual harassment by executives is securities fraud, and customer data breaches are securities fraud, and mistreating killer whales is securities fraud, and whatever else you’ve got. Securities fraud is a universal regulatory regime; anything bad that is done by or happens to a public company is also securities fraud, and it is often easier to punish the bad thing as securities fraud than it is to regulate it directly.

https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

The problem is, who was defrauded? The investors, I guess, but if they sue then they can only collect money from the company that they own anyway. It's not obvious that's a money-gaining proposition.

Not a money-gaining proposition, but that's why some CEOs should go to jail. We need to create an environment where fraud like this isn't profitable or sustainable.

The investors could bring a derivative suit against the officers of the corporation. They wouldnt be collecting from the corporation, but from the officers of the corporation (https://en.wikipedia.org/wiki/Derivative_suit).

Presumably it would not be feasible to collect large sums from the officers, but they frequently do have D&O insurance policies that could kick in (https://en.wikipedia.org/wiki/Directors_and_officers_liabili...)

Fyi, fraud is notoriously hard to convict on and even when large frauds are successfully prosecuted, the penalties are quite small. The SEC also can't be seen to be "hammering entrepreneurs" or let its conviction rates drop. So why get involved?

Apparently institutional investors are just Kickstarter backers with more money.

The major difference is that Kickstarter “investors” have no upside exposure.

I agree. It seems like the Theranos of the EV world.

This is currently the golden age of fraud. Jay Clayton has destroyed any set of teeth that the SEC once had.

This is why people have been so critical of Elon Musk. Elon Musk's flippant behavior engenders worse and worse.

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