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Comment by danso | Hacker News Reader

Putting aside the circumstances specific to SBF/FTX (being in the Bahamas, involving crypto, SBF's political connections, etc), there's not much reason to expect that SBF should have been arrested 5-6 weeks after FTX's collapse:

- Enron blew up in Dec. 2001. It wasn't until mid-July 2004 that Jeffrey Skilling and Kenneth Lay were finally arrested.

- The WSJ expose on Theranos was in 2015, Holmes wasn't indicted until 2018.

- Martin Shkreli's MSBM collapsed by 2012; he wasn't indicted until 2015.

Bernie Madoff is a notable exception: he was arrested 3 days after his Ponzi was revealed. But it's not comparable at all to SBF's situation: Madoff was arrested after he confessed privately to his own family; his sons immediately went to the police.

Whether SBF is getting exceptionally soft treatment will be easier to discern in retrospect, but it might be many months or even years before he's indicted.

View on HN

Just another data point. Billy McFarland was arrested by FBI agents Monday following the Fyre Festival for defrauding investors. He did not confess prior to his arrest.

Billy raised $20m with fake financials. SBF raised close to a $1B, and I’m sure he didn’t disclose the fact that customer deposits flowed to a hedge fund he controlled exclusively.

Harm caused to consumers and investors is just as obvious, if not more obvious in SBF’s case, when compared to Billy’s festival.

https://youtu.be/pNS1khHWTmI

Didn’t Fyre Festival turn into a very public humanitarian crisis? I don’t know that the two situations are comparable as a result.

> I don’t know that the two situations are comparable as a result.

Why or why not? Should the amount of publicity matter for the justice system? What distinguishes a "humanitarian disaster" from a bunch of rich kids having to sleep rough on a beach near a resort town for a few days?

I am sure if there was a camp full of SBFs victims sleeping in tents after their crypto losses they would be acting much faster.

I’m not sure it’s the publicity that matters so much as the immediate threat to human life & safety. In society that tends to be prioritized over financial misdeeds with more ambiguous long term consequences.

I think pessimizer is implying that spending a night or two on the beach in the tropics within walking distance of a town is perhaps not actually that risky.

There were no threats to human life. Safety? A bit, but nothing major.

It's just money. Investment income at that.

Putting human beings at actual risk is an order of magnitude worse and I don't know why that's even debatable.

Everything is relative. "just money" is how it is for any one not homeless or below the poverty line.

Who was at actual risk during Fyre Festival? I watched one of the docs. It was an absolute shit show and people were super uncomfortable for a while. Actual risk that's an order of magnitude worse seems like an overreach.

People kill themselves over “just money”. People find their circumstances markedly reduced. Retirements ruined, health suffering due to stress, working longer, being unable to afford good care…

It’s likely this affects tens or hundreds of thousands of people around the world. It’s a different sort of crisis, but it’s still a crisis.

As a professional investor, if you invested money in FTX it is expected that you know the risks.

No one reasonably expected Fyre Festival to turn out the way it did.

That might be a reasonable expectation if FTX only allowed deposits by accredited investors, but I don’t think “professional investors” were the target audience of their Super Bowl ads starring Tom Brady.

https://youtu.be/uymLJoKFlW8

Wow. What does being "in" even mean in this context?

Investing in cryptocurrencies via FTX / participating in the get rich quick scheme

Same can be said of all Ponzi scheme, that doesn’t make the crimes less severe or the harm caused to the innocent any less painful, and it certainly doesn’t mean that the criminals should be able to escape justice.

I never said that criminals should escape justice.

Just saying that if you invest money in a stock you should expect that you may lose that money.

my impression of prosecutors is that they are a narcissist bunch who are in that role because tough-on-crime reputation they earn by putting ppl in prison gives them a leg up in future political career. so more publicity a case gets and less resources the defendant has, more attractive the case is to prosecutors i would think.

State attorneys general and district attorney offices are much, much more mired in politics than the comparable Federal offices. The former are more often staging points for moving up the political ladder; whereas the Federal positions are more often filled by career legal lifers, and act as staging points for moving to the private sector, to judicial appointments, or retirement.

That said, the SEC, which AFAIU would normally take the lead, is poorly staffed. The SEC leans heavily on automation, intimidation, and rapid plea deals in order to avoid resource intensive investigations and prosecutions; much more so than run-of-the-mill criminal cases that more immediately can benefit from the huge staffs at the FBI, ATF, DoJ, etc. So when prosecution and a prerequisite comprehensive investigation is clearly warranted and necessary, there seems to be considerable inconsistency in process and outcome. And that's before accounting for the fact that financial crimes can be very difficult to prove at trial, both factually and legally--just ask Donald Trump or the Church of Scientology, white whales renowned for beating countless financial related prosecutions and civil suits.

The SEC collects billions of dollars in fines every year, typically with several individual fines of over $100M.

While some actions (like a minor player doing thousands of dollars in insider trading) may be paint-by-numbers, my impression is that substantial resources go into the types of investigations that can lead to massive settlements.

Although, in a case like FTX, it’s hard to get blood from a stone.

They’ll be able to rake back some of the paid-out funds though. Should be able to pay some big fines/penalties.

I suspect something similar is going on with the quadriga bankruptcy in Canada. CRA (Canadian IRS) did an audit and shared its results with the creditors’ lawyers months ago but nobody has heard anything about it yet: they probably didn’t like the penalties they’re being asked to pay.

> That said, the SEC, which AFAIU would normally take the lead

The SEC only has civil enforcement authority, ie lawsuits. Criminal complaints must be referred to DOJ. They also tend to be much less creative than Justice at finding jurisdiction over non-US entities.

The entire reason crypto companies incorporate outside the US is to avoid SEC jurisdiction. But crimes against US persons are crimes wherever the company is located.

But still the SEC is usually in the lead initially, before referral to the DoJ, and thus the SEC would be the gatekeeper and pace setter, especially this early on. They're in the best position to begin gathering and analyzing evidence, afterall, as well as determining impact and priority. (But please correct me if I'm wrong. The closest I've ever been to such types of investigations is hearing war stories from a law professor who had worked either at the IRS, or at the DoJ on some cases referred from the IRS. Other than that, I just follow the news and interesting legal cases.)

Perhaps the DoJ has already starting formally looking at FTX, et al, on their own. OTOH, I actually had never heard of FTX or Bankman-Fried before recently, and honestly still don't get what the hubbub is about. I'm skeptical how impactful the collapse truly is, beyond the rarified world of crypto enthusiasts, wealthy tech investors, etc. And given that its overseas, I really wouldn't expect (either pragmatically or idealistically) the SEC or DoJ to rapidly shift significant resources and attention to FTX; certainly not on the order of days or weeks.

Hey now. I heard the rich kids also had to eat sandwiches with just bread and cheese. It was a real humanitarian crisis I tell you, right up there with the Ethiopian famine!

https://www.vice.com/en/article/nza8yq/that-photo-of-the-fyr...

We still operate as the primitive creatures we are. People are more terrified if they see some people potentially dying of hunger vs. many people losing digits in some computer. The first one can trigger panic. Prosecution being as primitive as we are will hurry for the first case.

Another point: $10bn+ is a lot of money and probably caused lots of damage (ie: suicide). But if someone pulled a knife in Time Square, the police will be quick to apprehend him and the prosecution very willing to charge him. There was no harm done and yet resources will be deployed. But SBF might be even more dangerous yet no one is panicking yet (except some people here who might appreciate how dangerous he is)

not at all: swindled people had to rebook flights home, sleep in an airport or maybe on site for maybe a day?

They were not, however, at risk of starvation or diseases commonly seen only in undeveloped parts of the world that lack sanitation infrastructure.

Having to eat Kraft Singles on Wonderbread when you were promised Michelin star catering is not exactly a humanitarian crisis.

Right? I was starting to think I missed a big chunk of that story.

i suspect sarcasm

That's a great data point, especially because it reaffirms (at least for me, personally) how easy it is to lose track of even recent infamous history.

Just skimming the Wikipedia entry, so maybe I'm missing something, but wasn't McFarland arrested 2 months after Fyre? This May 2017 [0] article, about a month after, describes McFarland still running his company as the first civil lawsuits are filed. This June 30 article [1] is about his arrest. It sounded like the civil suits against McFarland helped push along the wire fraud charge; AFAIK, SBF is named in a couple of investor suits so far, so it'll be interesting what things look like next month.

[0] https://www.nytimes.com/2017/05/21/arts/music/fyre-festival-...

[1] https://www.nytimes.com/2017/06/30/arts/music/billy-mcfarlan...

If you read the indictment, they also had McFarland dead-to-rights: two investors and an employee cooperated to demonstrate specific instances where McFarland knowingly misrepresented basic facts, including forged ScottTrade statements, to get investment for the festival.

McFarland had an investor call him and asked for a percentage of his investment back or things would be over of McFarland. It’s believed this investor turned him in.

The harm may be obvious, but that’s not the same thing as proving criminal guilt beyond a reasonable doubt. Not sure why anyone would think FTX/Alameda would be as easy to investigate as the Fyre Festival.

People don’t get arrested when they’ve done something bad. People get arrested (for federal crimes) when a prosecutor gets a grand jury to believe there’s probable cause they’ve committed a crime.

By all accounts, convicting grand jury is super easy. They will stamp whatever prosecution wants. But, getting ready for actual court takes time and early arrest don't always matter

Grand juries don't convict. But yes, there's the old "I can indict a ham sandwich" line. Even so, the process still takes time, and even then, you don't get an indictment unless you think you've got a case you can win. What evidence does DOJ have at the moment?

>What evidence does DOJ have at the moment?

Only the DOJ knows the answer to that.

I find indictments fascinating, in part, because they pull back the curtain on what is frequently an impressive investigation and body of evidence.

I wonder if this collapse didn't happen, which happened exclusively by being found out, that once his books were eventually audited that the criminal handling of deposits would have caughth up to him eventually.

I tell my gambling friends that if they bet the farm and win big, their wives will be horrified at the risk they tool even though it worked out. It's a moral loss regardless of the outcome.

The thing is, if you bet big and win people get over it real f-ing quick.

Who only gambles once?

If you be once and win you then can roll the money into lower return legitimate enterprises and sail off into the sunset.

I'd wager that most businesses that start as a single person doing something (be it investing money or detailing cars) start as off the books, under the table, zero regard for regulatory compliance type businesses. It's only when they've made enough on that initial investment outside the rules that they turn around and incur the cost of compliance.

I used to work in risk management at an investment bank. When things went wrong, and the result was a gain, we incorporated it into our models as if it was a loss of the same magnitude.

> their wives will be horrified at the risk they tool even though it worked out.

Whenever we participated in auctions for housing sites, my wife would stop me at a certain number. The number of times we were the second highest bidder ...

The sellers thank you!

https://en.wikipedia.org/wiki/Winner's_curse

Well, I never bought the sites, but one of the winners did give very dirty looks for jacking up his purchase price.

That's not quite true, there's plenty of precedent for fast prosecution. As an unfortunate example, take the Aaron Swartz case:

- September 25, 2010: Swartz begins using MIT network to pull JSTOR articles.

- Throughout September through December, a cat-and-mouse game ensues where JSTOR blocks access to certain MIT IPs, and then downloading starts again from a different range.

- January 5, 2011: MIT locates the laptop in a closet that Swartz had been using.

- January 6, 2011: Aaron Swartz is arrested.

- July 11, 2011: Swartz is indicted by a federal grand jury.

Additional indictments followed in November 2011 and September 2012. In Swartz's case, the judicial apparatus moved swiftly. As far as I understand, law enforcement became involved in late December 2010 or early January 2011. The timeline to arrest and indictment was short.

I would expect to see a reasonably quick (i.e. on the order of months) indictment of SBF. While other posters are correct to point out that there's a huge morass of complexity and murkiness around FTX/Alameda, my view is that this creates not one, but several cases -- some of them very straightforward and where I'd surely expect the DOJ to put a preliminary case together in a few months.

Swartz wasn't arrested in January by the FBI for the downloading - but by MIT police for breaking and entering. He couldn't have been arrested by the Feds before the indictment or criminal complaint was filed, which didn't take place until 6 months later. I suspect you're right on the timing though, especially with all of the whining about how he hasn't been charged yet. It'll be a politically savvy move for the Feds to file something quickly here and then supersede it eventually when the full scope is clear.

>> It'll be a politically savvy move for the Feds to file something quickly here and then supersede it eventually when the full scope is clear.

That's likely true.

However, it may also be a more savvy move to let SBF and other execs think little is pending in order to gather more information. Other than reputation of the justice system (which already has a justified slow reputation; "The wheels of justice turn slowly, but they grind exceedingly fine."), this might be the greater consideration...

If they don't rapidly indict, it'll be interesting to see if SBF ever voluntarily returns to US territory before an indictment.

That's correct, though federal law enforcement was involved perhaps earlier than that account suggests. Swartz was initially arrested by the MIT Police and a member of the Secret Service. The United States Attorney Office was in touch with JSTOR almost immediately afterwards. (http://docs.jstor.org/summary.html)

I agree with the final comment; I think the DOJ would be well-served by filing something (and that should be pretty tractable, seeing the staggering scope of apparent misdeeds) to extradite SBF as quickly as possible, and then to file amended/superseded charges in the following 12-24 months.

To add to what u/mikeyouse comment, I tried to limit comparisons to incidents involving financial/wire fraud, since they often require a longer/wider investigative scope, and, unfortunately, seem to have a much-too high standard when it comes to actual prosecution (e.g. 2008 financial crisis)

Who do you think should have been prosecuted in relation to the 2008 financial crisis, and on what charges?

The major difference being that Swartz wasn't rich.

Having been born into an affluent family, a well-known programmer and entrepreneur who at the time had no job because he was able to live off the sale of his company (Reddit) to Condé Nast "wasn't rich".

too small to too big to immediate fail?

> Bernie Madoff is a notable exception: he was arrested 3 days after his Ponzi was revealed. But it's not comparable at all to SBF's situation: Madoff was arrested after he confessed privately to his own family; his sons immediately went to the police.

Not only did he confess, saying it's "basically a giant Ponzi scheme," he also said that he planned to distribute the remaining $200-$300M in funds to family, friends, and employees in the next week.

And -- as the article points out -- Madoff was in the United States when he confessed. I rather doubt SBF will ever voluntarily set foot on US soil again.

Isn't there a statute of limitations for these types of crimes? (Not sure for the US here, but...)

If all the data is spread to the winds, if everyone hits ground, can they even file charges? I suppose so, but if there is no evidence pointing to wrongdoing...

To be honest, I'm not even sure what he supposedly did wrong. He took investments, in an unregulated sector, and backed those investments and lost?

If he were a bank, that's 100% legit. No bank I know of, has 100% of investor funds backed by anything. Even in Canada, land of give-a-fuck-sorta, there used to be a requirement for banks to have hard currency (gold, cash) in a vault somewhere, 5% worth of account holder's value, which was inspected annually by the government. Yet the last time I read the bank act, it was removed as a requirement.

If banks don't need any sort of banking for account holders in CAD, why would an unregulated exchange need that?

(Again, I can imagine there are all sorts of things I'm missing... but?!)

> Isn't there a statute of limitations for these types of crimes?

For non-capital federal crimes, the basic rule is 5 years, but there are exceptions.

Such as fleeing prosecution?

Yes: https://www.nolo.com/legal-encyclopedia/question-tolling-sta...

He is only fleeing prosecution, if he is unavailable.

For example, he can easily be contacted for interviews, with an email or phone call, or even by visiting te Bahamas. Thus he is not fleeing, or hiding from contact, and I even presume he has a lawyer, whom the police can contact.

So nothing is suspended here.

The clock stops the minute that you step overseas, so as long as he's in the Bahamas there is no statute of limitations.

This is not true, see my other response.

Also, isn't FTX a Bahamian company? Why wouldn't he be there?

And what US crime did he commit, as all the accounting stuff didn't happen in the US, but the Bahamas?

> Also, isn't FTX a Bahamian company?

The FTX network of companies (see the consolidated bankruptcy filings) includes more than 100 companies, some of which are American, all of which were ultimately controlled by SBF, most of which had what records they had commingled, and most of which seem to have been tools in the same set of international frauds.

100 companies, heh. Well no wonder investigating takes time.

Just tracking down them all, the board of directors, etc...

He bought a $16m house in his parents’ names with company funds (fraud).

He transferred customer funds to an unrelated hedge fund company (fraud).

He created fake accounting systems to hide the fraud (fraud).

He claimed to be making lots of money just to help others (morally reprehensible and a huge red flag).

That people are still making excuses for him tells you how rotten this entire ecosystem is.

SBF is so so bad. But,

When does it become criminal to skip the step of establishing an accounting system....prior employees say they didn't even know their cash, liability, or trading positions.

FTX customer deposits went into Alameda bank account. Could be that they stayed there and somebody just kept a spreadsheet of deposits?

My point is that the astounding lack of records and systems may make it very difficult to prosecute him. For example, trades and payments were executed just on verbal orders so it will be hard to pin specifics on SBF.

Probably testimony of insiders will be the most compelling evidence against him.

Oh I suspect he had lots of records for himself (just as one example each real estate transaction had records) and the ‘stunning lack of records’ is yet another lie (along with his lies about not understanding anything), in an attempt to cover up fraud with perceived incompetence. Suddenly, it seems nobody knew anything, how convenient!

He stole money and enriched himself and his family at the expense of others. He and everyone else involved including his parents, higher up employees and investors should feel deep shame.

That’s what the US-Bahamas extradition treaty is for.

Edit: The treaty itself: https://www.state.gov/wp-content/uploads/2019/05/94-922-Baha...

> what the US-Bahamas extradition treaty is for

Which may also be why we aren't seeing a warrant. Maybe SBF is playing for sympathy. But maybe he's just delusional. If the latter is the case, there is no need to tip him off with a performative warrant.

Sympathy or presidential pardon. It is astonishing the sort of kid gloves he has been treated with so far in the liberal media. I am no conspiracy theorist but this is suspicious.

> presidential pardon

I’ve seen a lot of stupid conspiracy theories on HN, but the SBF political influence meme has to be one of the funniest.

Right thing to do would be to start the extradition process ASAP so he can’t jump the island.

There are allegations that SBF "ingratiated" himself with the Bahamian government.

Wouldn't expect him to stay somewhere with extradition. Wasn't there a rumor that he tried to flee to Dubai?

Morality aside, that's probably his best move, assuming he has enough of that $3B loan left to grease the exit.

Fleeing to Dubai might mess with his "it was just an honest mistake" PR tour.

At least he's not (yet) borrowing Do Kwon's argument about being the victim of an unjustified witch hunt.

Unless the PR tour is some weird plan to buy time while he gets his ducks in a row to arrange his escape and amass his assets. Could also be playing himself off as dumb/broke naive guy until local police get lazy and then trivially board some random yacht.

> Fleeing to Dubai might mess with his "it was just an honest mistake" PR tour.

Not in any way that would matter. If it was an honest mistake, fleeing to Dubai (or anywhere) is still the right thing to do. Which means doing so doesn't undermine the idea that it was an honest mistake.

Yep. Thus the word "voluntarily."

This feels like the judicial equivalent of a product manager asking an engineer why hasn't the feature been shipped yet. Everyone's been talking about the PRD for over a week!

To take the analogy further, violent criminals are arrested much more quickly, which is like a product manager asking for the pricing on the pricing page to be changed.

One thing about SBF and the FTX debacle is the record keeping and overall story seems incredibly confused and incomplete.

That a crime occurred seems very certain, but which exact crime is a lot less clear, and until a lot of digging and cross referencing of records happens, that’s likely to continue to be the case. To arrest, they need to be able to identify a specific crime with identified specific elements in a specific jurisdiction.

It seems like they have had an equivalent of a dump truck load of legos dropped in their lap, and it won’t be hard to assemble a Lego airplane out of it (probably), but yikes.

Though this may be sloppiness as a legal defense. If you haven't actually jumped through the hoop of claiming that you won't just take the money and run, you really kind of can just take the money and run.

They specifically said they wouldn’t take the money and run in their TOS, so they’re well and thoroughly screwed on that front.

As I said, dump truck of legos.

Is failing to meet your TOS actually criminal and not just a tort?

This is the whole thing with "what if a bank but without the regulations?"

If you promise one thing, take their money, and then do another thing and it ends up in your pocket somewhere (which seems to have happened), then that’s fraud or embezzlement, depending.

This is basically what the OP is saying: it's not something specific to SBF or related to his political connections, but a more general issue in prosecuting white-collar crimes.

OP is saying it's a natural side effect of this sort of complicated crime, it's not just an issue with how it's prosecuted.

Although rerouting the massive amounts of money + human capital in non-violent crimes (drugs) to white collar would help... and probably pay for itself in recovered money (via tax revenue and reduced government corruption).

That probably still wouldn't result in SBF-type criminals being arrested right away though.

it was all intentionally routed away after 9/11 under the guise of improving homeland security.

Reminds me of that old Immortal Technique clip: https://www.youtube.com/watch?v=4gGLI9ifEzw

I also think it's a problem of underinvestment. The NYC police department alone has 5 times the budget of the SEC. That seems disproportionate. If we spent more money on enforcement and hired more investigators, I suspect these investigations would be able to proceed much faster.

Worth noting the SEC is a civil regulatory agency, not a criminal one.

We could send many more Strongly Worded Letters to criminals and they would be on much nicer paper.

The NYC police can't file criminal charges either; they just investigate and then send cases off to the local DA. The SEC does the same thing; the SEC does the investigative work, but they refer criminal cases to the Justice Department for prosecution.

The SEC isn't tasked with being the nearly sole dispensary of state violence over a slice of territory containing millions of people. NYPD is.

Occupying territory is expensive.

They are both extremely important.

There’s far more waste in other federal agencies if you need to find one, NYPD is probably not a good one to point fingers at.

The SEC is basically captured at this point. Who is going to vote to give the SEC more funding and power? Our leaders who are insider trading themselves?

Raphael Bostic insider trading as president of the Atlanta Fed was practically a non-story.

Most people just don't care.

> Madoff was arrested after he confessed privately to his own family

Including stating his imminent intent to surrender to authorities, he also admitted to massive fraud when interviewed by the FBI immediately after that, and before the arrest.

SBF ain't in the same place as Madoff.

It would be nice if things could go a little faster. 3 years are a significant percentage of the average remaining life of an adult. The onus should be on the legal system to hurry up a little and streamline the process; these 3 years are quite unpleasant if you are accused of a crime, and have to wait and prepare for a trial, no? If you are guilty the time should be counted as served sentence (maybe at 50%), the innocent should be compensated for unreasonable extra waiting time.

It would be great if these things were faster - in fact, we cared so much to make it so that it's included as part of our 6th amendment. In practice, it's almost exclusively not the case, even if higher profile cases. Two bits of personal anecdata, a death of a friend's brother due to fentanyl lead to the arrest of a drug dealer (with priors, and found in possession of illegal weapons). Open and closed case, right? Still took a year. Similarly, the exact same thing happened to my brother's friend - three years on, the trial just concluded. Several bigger cases in my area, the Rittenhouse and more recently Brooks cases also took a year.

I'm not sure what you mean with your second half though, are you suggesting detaining people during this period and pro-rating their sentence and/or paying them? Or are you saying that they should wait outside of jail, but still have it counted towards their sentence? I don't quite follow exactly. Edit: seems the latter. I'm not sure my opinion, having a case looming over you seems potentially difficult, especially if you're later found innocent, but should the government (/citizens) foot the bill for that?

It's mostly a thought experiment but the general idea is to

- consider the actual effects on someone to be involved in a legal process; for lawyers it's just a workday but for people it's heavy to be accused of a crime and to wait for something awful (jail) to happen.

- define some time reasonable time constraints for everything, in order to give some incentives for the process to speed up. Prosecutors could be measured by how efficient cases go, and paying out some money could be an option.

That danger with that is prosecutors rushing cases through, messing something up, and letting the defendant go free on a technicality.

Or steam rolling cases and imprisoning defendants who are innocent.

The latter isn’t rare already, wait until some prosecutor has to get a few fast cases done so their bosses don’t cut their pay check.

I think living wherever you want and spending millions of other people's dollars for three years is not 50% as bad as being in prison. It's better than most innocent people get to do out of prison.

“The wheels of Justice turn slowly… but they turn.”

They turn slowly for some crimes. If I was to find the prosecutor or judge who would one day be involved in indicting SBF and punch them in the face, I bet the wheels would turn pretty quick for me.

Well, in fairness, that's a very simple crime to prosecute :)

Exactly. This isn't really that difficult to figure out that untangling a giant ponzi and money laundering scheme is several orders of magnitude more complex than assault.

Right, because getting a judge to approve a warrant to arrest someone for assault is trivial if you have a witness, because that's the kind of thing that is clear and obvious.

Even finding a lawyer capable of writing a warrant application for fraud like FTX is difficult, partly because the evidence is hard to find and hard to understand and frankly just because financial criminal law is a mess. Add to that that if you mess that part up you jeopardize the whole case (because any evidence that you collect with a bad warrant becomes subject to being thrown out, obviously).

No one wants to get that wrong just to get a perp walk. Remember that what people are demanding here isn't punishment, it's just "an arrest". People who are arrested spend a few hours (maybe a day or two) being held before arraignment and then walk right back out of the jail.

> Right, because getting a judge to approve a warrant to arrest someone for assault is trivial if you have a witness, because that's the kind of thing that is clear and obvious.

And, more to the point:

(1) its easy to convict on that kind of assault (delays are more often due to prosecutors not starting a case they dob’t feel adequate confidence they can win than prosecutors being unable to meet the much lower bar of probable cause),

(2) prosecuting on such a case early is much less likely to foreclose other charges or obstruct attempts to identify and action on other crimes or recoverable property tied to them.

> (2) prosecuting on such a case early is much less likely to foreclose other charges or obstruct attempts to identify and action on other crimes or recoverable property tied to them.

Please go into this more.

Lets say an omniscient person can come up with 40 charges that could be brought against SBF. You the prosecutor only know of 3 of them right now. Why can't you charge SBF for the 3 you have, convict them, and while SBF is in prison figure out the other 37? While SBFs in prison I bet its 1000% times harder for him to hide stuff from you too.

With programming, it's commit early and commit often. Why is the prosector trying to make a giant pull request over 3 years to shove through in a year? Target the low hanging fruit for a quick commit and get the restitution process going.

Programming doesn't have a fifth amendment double jeopardy clause. Imagine if your debugger locked you out if you failed to fix the bug on your first try.

Prosecutors are conservative because our justice system is (for very good reasons) tilted strongly against the state, in favor of the accused. We've collectively decided that it's better on the whole to have some criminals go without punishment than to tolerate innocent people in jail. (Pause while everyone points out that innocent people get locked up all the time, which is true, but it's still something the constitution is trying to prevent)

> You the prosecutor only know of 3 of them right now. Why can’t you charge SBF for the 3 you have, convict them, and while SBF is in prison figure out the other 37?

If any of the 3 would be lesser included offenses of any of the 37, those of the 37 for which that would be true could not later be charged, because the application of the federal Constitutional prohibition against double jeopardy forecloses this.

For state charges, this is may be even more restrictive, as many states exclude not only conviction in the same or separate prosecutions for “nested” offenses, but also preclude separate prosecutions after a conviction for the same conduct, or in some jurisdictions even for distinct conduct that forms part of the same transaction.

> With programming, it’s commit early and commit often

Criminal justice is very much not programming, and even to the extent they are loosely analogous, initiating a criminal prosecution isn’t analogous to a commit.

EDIT: To make the reasoning more explicit, since even initiating such a prosecution impacts liberty interests, there a very significant reasons for rules against repeated add-on prosecution that states have, and there are even stronger reasons (because criminal penalties for greater offenses necessarily encompass any lesser included offenses) for the federal rule (also applicable to the states) preventing cumulative punishment for both a lesser included offense and an offense within which it is included.

This is almost off-topic. Skip if that bugs you.

It is interesting to think about the effect that coalitions of criminals have had on the criminal justice system.

Impulsive face-punchers don't tend to have sophisticated attorneys, and at least many of them probably agree that face-punching should be illegal in general, even if they had their reasons in this case.

Contrast with finance criminals. Many of them probably convince themselves they're in the right, and they have access to the best justice money can buy. So over time they've managed to raise the costs of prosecution so high that we see this - it takes multiple years to nail down a solid prosecution.

There are other aspects of course - some financial crime really is difficult to prove. But what I mean is that if all the accounting frauds before Ken Lay had depended on overworked public defenders, prosecuting him would have been much simpler.

>This is almost off-topic. Skip if that bugs you

No, you're completely on topic : the phenomenon you describe of privatised systematic perpetrator defensive hurdles is called self regulation, which is precisely what SBF was most avidly lobbying for.

Except when they don't, which generally is the case for the rich. They just need to arrest some schmuck every now and then to give they illusion that it turns for them too.

The speed, torque and direction highly depend on which side of the political aisle are the DoJ and the defendant.

> Martin Shkreli's MSBM collapsed by 2012; he wasn't indicted until 2015.

This doesn't seem like a good example. The way I understood the story, Shkreli ran an effort that collapsed. Then, he ran another effort that was very successful. Then, he took money from the successful effort and used it to pay back everyone who invested in the flop.

By that accounting, it doesn't really matter when the flop collapsed, because at that point he hadn't done anything wrong.

Thats the whole argument of the article, of course, but still I like your comment for adding some additional interesting supporting examples.

So it would seem safe to say that financial crimes can take a very long time to bring charges. Why is the smoking gun so buried?

building a case takes long time, especially if SBF has good lawyers.

And after Lehman brothers collapsed... nobody was arrested.

Lehman wasn't fraud, though.

What specific crime do you think was committed and who specifically do you think commuted said crime in Lehman?

all of the whistleblowers and internal critics that they fired and blackballed, all the times they ignored anyone who pointed out flaws in their models, all the ways they ignored the conflict of interest for ratings agencies being paid to rate garbage securities as AAA, etc etc etc.

> all of the whistleblowers and internal critics that they fired and blackballed

Interesting, I'd never heard of Lehman firing a whistle blower. Can you provide a link?

It seems like it would be tough to fire them given that Lehman went bankrupt. Also not sure how Lehman would blackball someone given that, again, they went bankrupt.

Are you maybe talking bout a different company?

> all the times they ignored anyone who pointed out flaws in their models

This isnt' a crime.

> all the ways they ignored the conflict of interest for ratings agencies being paid to rate garbage securities as AAA, etc etc etc.

Again, not a crime committed by Lehman.

I get that you are angry, but you really don't have any point here by the looks of things.

SBF will NOT go to jail. He is too politically connected and even his on/off gf is very deeply politically connected to MIT and other politicians. At this point its extremely naive to believe that he might get something more than a slap on the wrist, even if that.

He was on the same event with Janet Yellen whose signature will be on all US currencies.

Jeffrey Epstein was also very well connected. Sometimes those connections vanish into thin air to avoid guilt by association.

Martin Shkreli cant be placed with those other people, no one lost any money.

He was convicted on a technically by telling early investors that he already had investors. When at that point his start up had none.

That’s not a technicality, that’s literally fraud.

It doesn’t matter that an endeavor he followed through later paid back his initial investors, the act itself is literally fraud. Period.

All you’re doing is petty-fogging the issue.

Charitably, I think what OP was getting at is that there was no pressure to arrest / prosecute Shkreli quickly because his actions hadn’t in actuality physically or monetarily harmed people, unlike, e.g., Theranos.

Investors were but complaining, it was the state that was after him. It's obviously different from owing billions of dollars that don't exist anymore like Bankman did.

Its a technically because that is not what brought him to public attention, he made himself a target so they went looking into his life for something to charge him with.

If you look hard enough through anyone's phone and online history you will find something to put them away for - no exception.

I say he should not belong on the list because his company was not scam company its still alive to this day - the ethics aside of hiking drug prices.

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