Hacker News Reader

Comment by OnlineGladiator | Hacker News Reader

> Remember: Red flags are very rarely outright fraud, and when they are, it’s often obvious only in hindsight...Look at Enron! Look at Madoff!

The author's two examples of obvious fraud were called out by many people as fraudulent years before it became public knowledge. It's possible to do your own research and conclude the zeitgeist is wrong before it becomes common knowledge. It would make the argument stronger to come up with examples where there weren't numerous experts screaming fraud for years.

https://www.theguardian.com/business/2010/mar/24/bernard-mad...

View on HN

If you look hard enough, there is always someone disagreeing/yelling fraud/etc about every topic that is big enough/mainstream enough.

It's only hindsight that shows whether your research showed something was obviously fraud.

Do you have any examples to back up your claim? Because I already debunked the examples the author gave.

there’s always somebody yelling fraud

look at herbal life as an example

or amway

Aren't those clearly frauds for the people participating, but as businesses they're just somehow structured in a way to be sound investments for those on the outside?

They are, and that's the joke.

Sadly, real people say stuff like that seriously. Without anything else to go on it would be unwise to assume the authors beliefs. /s is a helpful way to show that one is being sarcastic and not a serious ignoramus during online discussions that lack other communication channels like body language or inflection.

I agree. At least 1 person in this thread got it wrong and it could have been me.

If those were frauds, there would be ton of lawsuits by now given their history.

It may or may not be immoral for participants, but illegality is a much higher bar.

I mean, they might just be a class of frauds that are currently legal thanks to lack of will to close a particular loophole that permits their existence. And it's not as if they don't receive legal penalties all the time:

https://heavy.com/news/2020/08/herbalife/

https://www.cs.cmu.edu/~dst/Amway/AUS/hanrahan.htm

There were. Lots of them.

So much so that both Herbalife and Amway have been under numerous consent decrees with the US government for decades [1][2].

[1] https://www.ftc.gov/news-events/news/press-releases/2016/07/...

[2] https://www.govinfo.gov/content/pkg/FR-1994-03-23/html/94-67...

This sub-thread is very amusing. All you people saying if it was fraud there would be lawsuits. Guess what, there are tons of lawsuits against these companies and also settlements. And vc doesn't care! Look at the genius. Look at WeWork and Adam Neumann. Many people saw it was impossible to make money and meet their valuation.

This and small time fraud does not even make it to a police report..

yeah but nowadays everyone is constantly calling everyone out, everything is a shitcoin if it's not your favorite thing, etc, so too much noise in that

Harry Markopolos was calling out Madoff for nearly a decade, with accounting-based evidence on why it was impossible and an incredibly simple way to verify if Madoff was lying for the SEC or the DTCC. The SEC never bothered to check if he was lying about his trades (or simply decided to keep it quiet), the kind of thing that would likely take them minutes to find out.

It's really more like Hindenburg Research and Adani. Hindenburg Research is just better at making a splash. But the evidence was always damning.

Or... a completely brand new market with billions of dollars sloshing around, varying between completely unregulated and effectively unregulated, is actually rife with actual fraud.

I'm not saying there's no fraud, I'm saying people being unofficially "called out" doesn't mean much

Reply on news.ycombinator.com