The SEC revealed today that it charged VMware with fraud
techcrunch.com
techcrunch.com
https://news.ycombinator.com/item?id=32818402 (205 points/66 comments)
fine > min(money gained, damage caused)
It was a crime after all. They should be required to disgorge any gains, and then be penalized.
I worry how hard it would be to calculate these numbers though. Especially with creative accounting. That could be another part of the fine though: the cost of the forensic accountants to determine profits.
People should go to jail, the company should lose any gains it made from the action and there should be a fine on top. They should unequivocally be worse off because of it.
I have heard the argument that being overly punitive will force businesses to be too conservative in their dealings for fear of accidentally breaking the law, but I just don't buy that.
A corporation isn't its own class of entity. Its basically a a repurposed concept of a person. "Corporate personhood" is the term. They are and aren't people at the same time. They are because the law says so. They aren't because reality says so.
You end up with weird consequences like how do you punish a corporation thats broken the law? Well you cant jail one really. So the only recourse most of the time are fines. People didn't break the law, the corp did. Which is also a person because we said so.
What we need is a constitutional amendment that defines a corporation as a separate entity from people and sets the standards for who is criminally responsible for a corp. Personally I feel it should be some combination of the owners and the executives running it. Usually its the executives that are the cause for evil but the owners often incentivize them to do so.
That is awfully hard to calculate, and even harder to calculate fairly. Hollywood accounting, "unrealized gains/losses", and the way film companies calculate every individual digital copy of a pirated movie as a separate monetary loss all indicate that there is no way such a law would not be abused.
“ During his tenure as chief executive, the company defrauded Medicare, Medicaid and other federal programs. The Department of Justice ultimately fined the company $1.7 billion in what was at the time the largest health care fraud settlement in U.S. history.”
> I have seen a lot of requests coming across about testing if my company can assist in some very large corporations [...] moving large numbers of VMs (100,000-500,000) over to Linux based virtualization in very short time frames.
EDIT: But, having read the article, seems probably unrelated.
This seems very similar to what became known as "fiscal pedaling" in Brazil¹ when the government delayed repayment from Treasury to state-owned bank to hide increase in government expenses. This became the legal argument for the impeachment of the Brazilian president in 2016.
https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
I’m not saying it was okay, it did present investors with in accurate information, but over a slightly longer period of time it wouldn’t really impact total revenue reported. Basically I’m having a hard time feeling much outrage for this, and the $8 million fine seems an appropriate penalty for a relatively low impact bit of fraud.