6 ms·
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
by ktorvald 4y ago
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 https://youtu.be/pNS1khHWTmI
- deleted 4y ago[deleted]
- _benedict 4y agoDidn’t Fyre Festival turn into a very public humanitarian crisis? I don’t know that the two situations are comparable as a result.
- pessimizer 4y ago> 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?
- ericmcer 4y agoI am sure if there was a camp full of SBFs victims sleeping in tents after their crypto losses they would be acting much faster.
- ineedasername 4y agoI’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.
- pcl 4y agoI 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.
- skinnymuch 4y agoThere were no threats to human life. Safety? A bit, but nothing major.
- legitster 4y agoIt'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.
- skinnymuch 4y agoEverything 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.
- Nursie 4y agoPeople 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.
- threeseed 4y agoAs 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.
- ladon86 4y agoThat 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 https://youtu.be/uymLJoKFlW8
- seattle_spring 4y agoWow. What does being "in" even mean in this context?
- rvba 4y agoInvesting in cryptocurrencies via FTX / participating in the get rich quick scheme
- runarberg 4y agoSame 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.
- threeseed 4y agoI 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.
- empraptor 4y agomy 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.
- wahern 4y agoState 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.
- deleted 4y ago[deleted]
- fshbbdssbbgdd 4y agoThe 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.
- nradov 4y agoHey 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-fyre-festival-sandwich-is-fake https://www.vice.com/en/article/nza8yq/that-photo-of-the-fyr...
- csomar 4y agoWe 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)
- jjtheblunt 4y agonot at all: swindled people had to rebook flights home, sleep in an airport or maybe on site for maybe a day?
- ineedasername 4y agoThey were not, however, at risk of starvation or diseases commonly seen only in undeveloped parts of the world that lack sanitation infrastructure.
- rippercushions 4y agoHaving to eat Kraft Singles on Wonderbread when you were promised Michelin star catering is not exactly a humanitarian crisis.
- ShamelessC 4y agoRight? I was starting to think I missed a big chunk of that story.
- 2-718-281-828 4y agoi suspect sarcasm
- danso 4y agoThat'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-billy-mcfarland-ja-rule-criminal-investigation.html https://www.nytimes.com/2017/05/21/arts/music/fyre-festival-... [1] https://www.nytimes.com/2017/06/30/arts/music/billy-mcfarland-fyre-festival-arrested.html?_r=0 https://www.nytimes.com/2017/06/30/arts/music/billy-mcfarlan...
- tptacek 4y agoIf 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.
- theturtletalks 4y agoMcFarland 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.
- jonstewart 4y agoThe 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.
- watwut 4y agoBy 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
- jonstewart 4y agoGrand 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?
- SpelingBeeChamp 4y ago>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.
- andirk 4y agoI 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.
- dsfyu404ed 4y agoThe thing is, if you bet big and win people get over it real f-ing quick.
- cmdrk 4y agoWho only gambles once?
- dsfyu404ed 4y agoIf 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.
- SpelingBeeChamp 4y agoI 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.
- SanjayMehta 4y ago> 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 ...