I'm so confused reading the comments here. How in the world is anyone defending this?
He was acting without any special knowledge, so the only thing he was taking advantage of was the gullibility of the general public. That's usually legal, no?
Like every conman, snake oil salesman, scammer, and fraudster. Why treat him any differently? He should be tarred, feathered, and run out of town.
I can't imagine what this could possibly mean. What should actually happen to him for posting messages on message boards?
If the problem was "posting messages on message boards" we'd all be just as guilty, but obviously that's not the case. That's like saying that someone who stabbed a person to death got punished for "using cutlery". People who intentionally hurt others for profit should be treated as such, no matter if they're mugging their victims or scamming them. He's no better than a Nigerian prince who uses email or the "pig butchers" who use SMS/MMS/social media.
Mugging and scamming are definitely not the same. Being robbed is not the same as giving your money away voluntarily. But I also don't think muggers should be "tarred and feathered and run out of town" either. They should be tried for theft, because the money/goods weren't handed over voluntarily.
> He's no better than a Nigerian prince who uses email
I'm not saying he's better or worse than anyone. I'm asking what tarring and feathering should actually mean.
"2 a : to deprive of something due, expected, or desired" https://www.merriam-webster.com/dictionary/robbed
You can argue semantics, but if I convince you that the beans I have for sale are magic and you voluntarily pay me for them only to find out that they aren't magic, it'd be fair to say you've been robbed.
> But I also don't think muggers should be "tarred and feathered and run out of town" either. They should be tried for theft
The specifics don't matter all that much. I'd also prefer that justice be handled in courtrooms, but what actually matters is that victims are made whole where possible and criminals who prey on others are punished. Society has always had ways to deal with parasites that hurt people by scamming them.
Yes - absolutely. Semantics is about meaning, and meaning is central to discussion.
> if I convince you that the beans I have for sale are magic and you voluntarily pay me for them only to find out that they aren't magic, it'd be fair to say you've been robbed
Colloquially yes, but not really robbed. Possibly a victim of false advertising. But to establish that you'd have to prove they aren't magic, first. The problem would be that if you think beans can be magic, or stock picks can be guaranteed, then things will go wrong. No one can protect you from yourself as well as you can.
> Society has always had ways to deal with parasites that hurt people by scamming them.
This is an odd and unnecessary thing to say, though. Just like the tarring and feathering.
Suppose you're an ordinary trader who likes high risk bets. You find a stock you like, you buy some. Now you go on message boards telling everyone you think the stock is going to the moon straight away. This is your sincere belief. Soon the stock goes up 300%. You thought it was going to go up 1000%, that's what you said before, but hey, it still went up 300%, that's still a tidy profit, so you sell.
Whether this is fraud or not basically hinges on whether you were being intentionally dishonest, right? But now how do you distinguish between malice and stupidity?
No.
Do you mean legally? or morally?
Legally the offenses include things beyond what might strictly be "fraud" (see "fraud or deceit" as one example, but there are more [1]). IANAL, but failing to mention that your posts are with the hope of raising the price because you have a vested interest in that... seems like a material omission, if nothing else.
Morally (and I'd expect legally based on the text, but IANAL) what matters is what he expected to happen as a result of his posts on the message board. If he knew people would likely buy the stock in response to his posts, and he intended to take advantage of that influence to make money off those sales, that's the end of the story. Whether he sincerely believed the stock would actually rise regardless is beside the point.
> But now how do you distinguish between malice and stupidity?
I'll assume you mean good faith because stupidity isn't in the picture here. Someone who's genuinely predicting the stock market correctly isn't stupid.
Do you sincerely believe this person didn't expect his messages to raise the stock price, or that he didn't intend to take advantage of such a rise to make money off the stock sales? I sure don't.
And if you run around telling people that you just bought some of the stock you think is going to the moon, is that supposed to make them less inclined to buy it, or do they now just think you're putting your money where your mouth is?
> what matters is what he expected to happen as a result of his posts on the message board.
Which is the problem. How do you prove what's inside of someone's head? Especially if they are malicious and know what not to say out loud.
> Someone who's genuinely predicting the stock market correctly isn't stupid.
If you think the stock is going up 1000% and it only goes up 300%, you were wrong, and your pick was wrong, and the people waiting for it to go up 1000% before selling are the people who lost money when it went back down. But as far as I know, being initially wrong and then changing your mind before you lose your money isn't illegal.
It's not clear why telling people you think a stock is going to go up after you've already bought it would require altruism, and more than that you would benefit by building a reputation as someone who makes accurate predictions if you turn out to be right, independent of whether anyone acts on your statement by buying the stock.
You'd be very shocked...
... but that's essentially what criminal defence is about :-/ In a sense half the value of having a defence lawyer is having somebody to remind you not to say stupid things to the police/investigators/prosecution.
Of course it's not really as simple as that, but you'd be surprised at the number of convictions where the prosecution relied on something stupid the defendant said. If (say) 50% of convictions "turns on whether you had a lawyer ahead of time to tell you what not to say", is the law ridiculous? Because that's what it generally is like (not just for securities fraud cases).
PS: for cases where it's particularly easy to feign ignorance/innocence, sometimes the law specifically states that the mens rea requirement is waived (i.e. the intent/knowledge does not matter, or does not need to be proved beyond reasonable doubt). This in turn gives opportunity for defence lawyers to argue this infringes on the right of the defendant to be presumed innocent..
Yes.
It's entirely believable that at least 50% of laws are ridiculous.
> for cases where it's particularly easy to feign ignorance/innocence, sometimes the law specifically states that the mens rea requirement is waived (i.e. the intent/knowledge does not matter, or does not need to be proved beyond reasonable doubt).
But that's not the issue.
If you go out to the parking lot and your key fob unlocks someone else's car of the same make and model, e.g. because the manufacturer screwed up and made any of the keys open any of the cars, and then you claim that you thought that car was yours when you drove off in it, the prosecution now has to prove that you intended to steal someone else's car. Which they may yet even be able to do, if there is other evidence that implies you knew what you were doing, but it's completely reasonable that they have to prove it.
Whereas if you went out into the parking lot and broke the window of a car and then hot wired it, your actions are evidence of your intent. And, importantly, it's generally difficult to avoid actions that signal your intent while perpetrating a car theft.
The actual problem for this type of securities laws isn't just that the prosecution has to prove your intent, it's that their only means to do that is effectively a confession. There is no plausible way to operate a chop shop such that hiring a lawyer ahead of time would keep you out of prison when you get found out, but for parts of the financial industry that's what happens, which is absurd. There is no justice in a law that can only be enforced against people without effective counsel.
This could be interpreted as (and/or variously written to indicate) "this person is just talking up his/her book" or "they like it so much they have skin in the game".
Plus the factor of how much noise there is to any signal in the social media & message boards, how much attention can one reliably actually get for your shilling?
Wrong vs provably wrong are often different
That doesn't make it right, though, at least in my mind. There's accountability on both sides in these cases. People reading message boards and treating the contents as financial advice are not taking sufficient care, particularly when they click past / agree to the statement on their trading platform that says that their money is at risk. Their money was at risk, and they did it anyway.
My impression is this would come down to the jury's bias in either direction, when it should be pretty clear cut: you buy random stuff hoping to get rich, be it stocks picks from an Instagrammer, or NFTs, or whatever, and it is you choosing how to gamble your money.
If I were in a casino and a guy was holding a sign saying I should put all my money on number 8 on Roulette, it wouldn't matter if he were the casino owner, and stood to gain, or was just a random guy. It's up to me to decide what to do with the advice.
https://en.wikipedia.org/wiki/Mens_rea
FWIW, there are other examples of where securities laws where intent (which is difficult to prove) is needed in order to demonstrate a law has been broken. e.g. Spoofing.
The problem here is that the innocent behavior and the prohibited one are basically identical and neither of them is particularly implausible.
"Tell me the difference between stupid and illegal and I'll have my wife's brother arrested."
(based on the book of the same name by Michael Lewis, a name I've seen elsewhere in these comments: go figure)