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.
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...
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.
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 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.
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.
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 ...
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?
Putting human beings at actual risk is an order of magnitude worse and I don't know why that's even debatable.
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.
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.
No one reasonably expected Fyre Festival to turn out the way it did.
Just saying that if you invest money in a stock you should expect that you may lose that money.
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.
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.
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.
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.
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.
https://www.vice.com/en/article/nza8yq/that-photo-of-the-fyr...
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)