I think you misunderstood the point of this article. It's not that the prosecutors are "afraid" of losing a case, it's that they are demonstrably losing these cases. And the reason appears to be that the circumstances are too complex for juries to understand. That is a systemic problem, one which we don't have a good solution for.

The response from the Justice Department seems to be, instead of failing at doing the same thing over-and-over, let's do a different, simpler thing. I agree that is not a good thing. But I don't think it's reasonable to argue they should keep doing the same thing over-and-over, expecting failure. And I don't have enough insight into the problem to say how they could successfully prosecute these complex cases.

>> That is a systemic problem, one which we don't have a good solution for.

There is a pretty straightforward solution. I'll leave to the reader whether or not it is a good one.

Redefine the crimes so they are easier to prove. In many cases that is going to involve moving from a mens rea (guilty mental state) of intentionally to recklessly, negligently or even eliminating mens rea altogether and just requiring an actus reus (guilty act). In some cases that might mean criminalizing more acts of omission instead of requiring proof of an overt bad act.

I want to be clear that this wouldn't be costless. It goes against much our existing framework for what makes people criminals. It would increase the chance that someone who made honest mistakes would be criminally punished. But remember Blackstone said that it is better for ten guilty men to go free than one man suffer, not one hundred, not one thousand and certainly not all the guilty men. And he was writing in an era when all felonies were capital crimes.

A small percentage of murderers getting off on technicalities is something a society can live with, even be proud of in a strange way, but when the exception swallows the rule that society is playing with fire.

You're asking that we overturn centuries of jurisprudence just because you don't like bankers.

I think that's a much bigger crime than anything financiers have supposedly committed.

What exactly in what I wrote suggests throwing out centuries of jurisprudence? There are already strict liability crimes, much less recklessness or negligence crimes, as well as crimes of omission.

Also what crime were you accusing me of having committed? Unlawful proposing of legislation Morgante doesn't like?

Strict liability crimes are a travesty against justice. They really shouldn't exist; we should be looking to remove the ones we have rather than adding any more.

(GP wasn't claiming that you were literally committing a crime, rather suggesting that making it easier to convict innocent people would be a "crime" in a rhetorical sense)

If financial institutions can commit complex theft on a massive scale without prosecution then the economy will fail. What value does money have if theft occurs on that scale regularly? Why invest in industry when it's more profitable to invest in theft?

Are those centuries of jurisprudence still valuable in these scenarios if they're not working?

How do we know they're not working?

Maybe it's working perfectly to protect financiers from being prosecuted for immoral but legal acts.

That would be what most people mean when they say they laws are not working. Similar to how, if our laws allowed highwaymen to get away with murder, we'd say they were failing us even though they were working perfectly to protect armed robbers.

If an act isn't actually illegal, your problem isn't with the courts. It's with the legislative branch.

Interesting idea, sort of a strict liability approach.

If I'm a superqualified, incredibly careful, good-guy explosives chemist, I still don't get to whip up a batch of Octol in my garage. The law deems explosives manufacture an inherently dangerous activity subject to strict liability. No mens rea needed, intent is irrelevant, conduct is all.

Strict liability principles have worked fairly well. Maybe they're worth trying in the financial sphere. I wonder how we would define an inherently dangerous financial activity?

The question should be are those cases really that complicated or does the defense makes them overly complicated because they can afford too?

People who steal millions or billions can hire an army of lawyers that can bring so many expert witnesses that can make the jury doubt in the existence of the Sun beyond a shadow of a doubt.

Several years ago there was a case that a guy got caught speeding, he petitioned the laser speedometer thingie to be sent to a impartial lab for testing on his own dime and got enough expert witnesses to rip that thing to shreds claiming that the device was inherently flawed and that the police didn't calibrate it and maintain it properly including leaving it locked in the car where the high temperatures could affect it's accuracy. He then also went own and brought evidence that other police equipment like the speed tracking radar might not be accurate on his car because of it's design and the fact that it was build of composite materials and not metal which what the speed tracking radars they use are calibrated for.

This case and several like it combined lead to a sweep of people appealing every speeding ticket which eventually got a law passed that every speed enforcement system which gets certified by the local standards institution cannot be brought to question in court.

When you drive a car with 5 or 6 zero's in it's price tag you probably have 10 more zero's in your bank account, which means you can spend allot of money on casting doubt on everything from the devices that the polices uses to the competency of their operators.

If you are a guy who got speeding in a 2006 Jetta? well pay the fine.

So while I can understand how a case involving complex financial fraud can be complicated I'm also quite aware just how easy it is to complicate things, I work for a consultancy which means I work with people who's their definition is to shuffle shit out of their mouth until the case gets complicated enough to warrant the hefty price tag they want to charge for that work, 10,000$ an hour lawyers should be able to bring that to a whole new level.

Well if the laser speedometer isn't accurate enough or isn't maintained properly then it shouldn't be enough to convict. If the evidence really is solid, throwing money at it won't make it go away.

It was plenty accurate, experts can cast doubt on most evidence, nothing is ever iron clad.

A long time ago I had a job a consultant, preparing an internal report on a police force's LiDAR calibration department. Can't say that I share your confidence.

--- Edit for clarity.

The same juries that are selected using an adversarial process where each side can only remove jury members?

Yeah, color me surprised that this results in weak juries.

> That is a systemic problem, one which we don't have a good solution for.

Change the jury system/procedure to something better designed to generate trustworthy outputs. It seems simple enough in concept and there are many improvements that can be trivially suggested to improve the system even if we retained the idea of picking N people from the general population.

It's not that hard to understand. It's a framing issue. You could pull off the most complicated, Oceans 11 heist in history, and the prosecutor will dumb it down to you being, in the end, a "common thief."

These people are common thieves on an epic scale. They steal money, yes, but stability, security, futures, homes, and so on. But defense attorneys take the opportunity to make things seem complicated.

Just dumb it down for them.

Dumbing down the law is how we ended up with the war on drugs and "zero-tolerance" (policy not law) in schools.

Lol, they aren't even trying, how can they lose if they don't even begun the suit. Lol, apologist failure.

The former top justice official is on record stating they don't prosecute becuase they fear systemic risk, ie too big to jail, too big to fail, all just mottos and lies to let your fellow country club members off the hook.

The article talks about specific cases where they did try.

Half hearted at best. The flimsy article mentions three cases, one of which was a witch trial brought by Goldman Sachs.

Libor fraud? Pass. Money laundering for drug cartels? Pass.

Would you believe it just if someone robbed you, was caught and had a pay a fine of half the amount they took?

The government essentially allows criminal fraud by the powerful and then takes their cut of the profits, meanwhile the weak and poor continue to suffer, but luckily we got intellectuals who can explain away how its all too complicated.

Complete and utter bullshit.

> jury doesn't understand it?

Everytime I hear a finance person use the excuse of 'you wouldn't understand' to a complex, I can't help but correlate it to a developer who's obfuscated code tell another developer they wouldn't understand, without acknowledging that they obfuscated the code.

I'm sure I understand, you just don't want me to because then it would be obvious you are just ripping people off to make more money for yourself / company. Kind of like how the government has used 'enhanced interrogation' rather than the common definition of torture to get around breaking the law.

First off, this is coming from the prosecutorial side, who has every incentive to make the case as understandable as possible.

Frankly, it's not surprising that the average person can't understand complex finance and thus complex financial litigation.

> Everytime I hear a finance person use the excuse of 'you wouldn't understand' to a complex, I can't help but correlate it to a developer who's obfuscated code tell another developer they wouldn't understand, without acknowledging that they obfuscated the code.

The difference is that a jury is not other finance people. I don't expect jurors to understand financial crimes any more than I expect a random member of the public to understand a complex computer bug.

It's been my experience that this is very generally true, and you don't need the "finance" qualifier: people hate having their roles demystified to the point that they often don't even try to improve their own understanding of it.

Even if the person isn't greedy, they'll resent the loss of status that comes with, "wait, all you do is add entries on the CMS interface?" or "all you do is make the risks less obvious to auditors?"

As Mal says, "50% of the human race is middlemen, and they don't take kindly to being eliminated."

We should make a up a spurious tale about an enormous stargoat eating the sun and send them on ark to colonize another planet.

Watch out, you don't want to die of a public telephone transmitted virus.

Even good, clear, code is inscrutable complexity to a lay-person. Finance is no different.

To me, it's more than a little ironic how often software professionals look at what finance professionals do and ask the equivalent of "why the hell does Twitter need all this code? It's just 140 character messages!"

a fifteen minute conversation with a layperson about a particular code base will do just fine. "You know how a car is simple to operate, right? But you understand it has an engine and many moving parts? Well.. Twitter is just like that, and there are actually lots of small engines making sure the characters get from your keyboard to other people's eyes."

> ... you just don't want me to because then it would be obvious you are just ripping people off to make more money for yourself / company.

Agree. If your car pollutes more than other cars and runs on the blood of innocent consumers, hiding that in the explanation of how a regular car works is not an excuse.

Anyone who says "You wouldn't understand" is hiding something. If you can't explain it to me, do you even know what the fuck you're talking about?

So a guy is charged with tax accounting fraud for basically not putting some number into some entry in a spreadsheet when some external event happened, and instead putting that number into a different entry in the spreadsheet. You can't just say "you know how cars are complicated? Well so are spreadsheets. That's why this guy is guilty." Your analogy has to capture some legally-relevant dynamic of the system you are trying to explain.

Imagine your case depends on proving that only a guilty person would have failed to shard a particular database. It's not enough to just explain at the highest possible level the concept of splitting up a database. You gotta get the jury to understand it enough to know why you do it, and why it would be so out of the norm to not do it in a particular situation that the person must have had a nefarious motive.

I am not sure you can explain a buffer overflow bug that easily to a layman. That's still a trivial bug for a developper. Most of the products involved in recent financial scandals are relatively simple to finance professionals. The problem was rather pretty much always a gross under estimation of the underlying risk combined with excessive leverage.

"Imagine if I told you to go to the file cabinet and remove the 8th folder in the Mason file. Well, it turns out that the Mason file only has five folders, and neither of us were careful to think about the boundaries. So you go and count off seven folders after the first Mason, but then end up grabbing a folder that's three into the Mitchell file.

"The data on a computer is organized into ordered bytes like the file cabinet, and telling a program to go to some byte's location plus some offset can result in it accessing data that it shouldn't touch, if other safeguards aren't in place."

And that lets you Hax0r the computer because?

That's a great analogy, by the way.

"Ok, so say I need you to go and put this note of death at the end of the Mason file; that would be the 20th folder. You go to the drawer, count up to 19 from the first Mason folder and put the note there. You just ended up declaring Mr. Moriarty dead. Mr. Łeldon here will be processing credit card applications later in the afternoon; I'm pretty sure that Mr. Moriarty isn't going to get his now.

This is the way one uses the 'buffer overflow' problem in computers to manipulate data. With a little skill you can use it to do serious damage. Consider, for instance, what would happen if we were at an engineering company and slipped in a new blueprint for a machine instead of a personell note. Later someone else would pick up the design and the factory, none the wiser, would proceed to build our machine, instead of the one they wanted.

I don't buy the "you wouldn't understand" either. Here are simple explanations of a buffer overflow:

- We agree I'll give you max 1L of water, so you prepare a 1L bucket. Then I pour 2L of water into your bucket - you end up with a mess. (exploit version: We agree that if any water hits the ground, I can force you to do anything.)

- I give you card with typical form to fill in (squares for every letter). First 5 squares are for first name, next 5 are for last name. You fill in "Michael" as your first name overflowing into last name space.

- etc...

Sure, it doesn't capture all intricacies of the mechanism, implementation, side effects of the overflow, etc. But don't tell anyone they wouldn't understand the concept.

> Twitter is just like that, and there are actually lots of small engines making sure the characters get from your keyboard to other people's eyes."

That's an abstract explanation of what Twitter's code is, it doesn't get you anywhere closer to being able to actually understand the code.

Just like I wouldn't expect a layperson person to be able to find and fix a bug in a codebase, I don't think they can reliably evaluate the nuances of the financial system.

Your analogies don't help at all when it comes time to understand the details of said system, and evaluate whether or not a correct decision was made. When you need to reason about the details about a complex system, all analogies fall apart. The juries need to reason about details in a complex system and comparing Twitter to a "car engine" won't help a lay person understand why Twitter's fictional database layer is deadlocking and why the repair function shouldn't run during a transaction.

>If your car pollutes more than other cars and runs on the blood of innocent consumers, hiding that in the explanation of how a regular car works is not an excuse.

I think the takeaway here, is in the real world cars don't visibly run on the blood of innocent consumers. The means of procurement of gasoline is wrapped up in many different corporations, industries and nation-states which makes it incredibly difficult to ascertain blame.

I could make the argument that your volkswagen runs on the blood of innocent servants in Saudi Arabia. Who is at fault? Mercedes, Chevron, The Royal House of Saudi, A select few in that group, The American Government, or you?

I don't know about you particularly but I'm certain that there are a great many people who think that the financial system is ripping them off somehow when they really don't understand what's going on. Just look at High Frequency Trading & the Michael Lewis book. It comes up on HN every month or three and there are always people convinced that somehow these traders are "jumping in front of" other people's orders to steal their money when this is definitely not the case.

This sort of plausible deniability depends on there being financial instruments which are genuinely difficult to understand. I'm sure you would agree that there are in fact mechanisms and systems in computer programming which would be fairly difficult to explain quickly. Especially in terms which are anything approaching accuracy.

As software professionals we (some of us take) pride in trying to build stable systems that are decoupled and not overly complex. Financial systems seem to be build the opposite way.

Yet think of surviorship bias, isn't the code most likely to end up in front of a jury the hackiest, most complicated, least understandable, least documented stuff out there?

Think of the VW "scandal" at what point does a piece of code go from being a really effective emissions blocker to being an illegal emissions blocker? If they implemented and trained up a neural net then what piece of code is the violator, the guy who wrote the unit tests the neural net trained on, or the evolved coefficients in the network that humans never wrote, or the manager who told them to write an emissions routine using a NN or the regulators who entrapped them by knowingly writing bad regs with the intention of the .gov selecting winners and losers by selective prosecution?

Richard Bookstaber makes very similar points about the financial system in 'A Demon of Our Own Design', highly recommended.

When the investment banks were partnerships, the partners had plenty of 'skin in the game', and favored stable systems. Going public took the pressure off of the leadership's individual fortunes... and stability seems to have suffered.

They only seem that way to you because you do not deal in finance. A system can only be as simple as the business needs it's supporting whether than be a piece of code or a financial product. Some pieces of code are VERY complex because the business demands it. Same goes for financial instruments.

Is there a real reason for them to be so complex though? "Buisness demands it" isn't really a reason for me. It clearly affects the stability of the system, so shouldn't we look at ways of improving it overall?

Well you can't just say "them." That would be like saying "is there a reason that all that software is so complicated?" There are lots and lots and lots of different reasons for all the different pieces of code in the world. Same thing for financial products.

A finance person would probably say the exact opposite - most deals are just stacking two or three obvious, properly factored/decoupled abstractions together, whereas software people seem (to a finance person) to deliberately complicate things.

Keep in mind that in this circumstance, it's not the finance people who are claiming complexity. It appears to be the reaction from the jurors based on the case made by the prosecutors.

I wonder if a form of activism here might be to seek out Jury duty as a way to make sure the Jury does understand. To be honest I have never even thought about walking down to the Superior Court building and saying "Hi, I'm here to volunteer to be on a jury, what do you have today?"

This raises an interesting point, but neglects the fact that it's not possible (for good reason if you think about it) to simply volunteer for jury duty. In order to be eligible in most (all?) jurisdictions one must simply register to vote.

Neglecting the fallacy of the presumption that one can just volunteer, it is interesting to think about the way the world might be shaped should "more educated" individuals be the ones who solely shape public policy and case law. It's not very democratic in the pure sense of the meaning, but certainly interesting as a thought experiment.

>In order to be eligible in most (all?) jurisdictions one must simply register to vote.

I've seen states at least claim that being registered to vote is not necessary to be called for jury duty. It gets a bit hand-wavy after that but supposedly they also draw from, at least, driver licenses as well.

Simply filing state income taxes as a resident is enough to get you in the (potential) jury pool for your locality, at least in NY.

In my experience appearing too excited about performing jury duty is a sure way to not be selected.

Check out the book "The Bankers' New Clothes," which addresses the intentionally obscure language of finance

Just like drug offenses are insignificant compared to "small" time white collar crime, small time white collar crime is insignificant compared to what's going on in the financial sector. It brought the world as we know it to the brink of collapse. Some people in the financial sector were stocking up on food, water, fuel and firearms in case society would experience a meltdown. Not only did no one get convicted, but it's back to business as usual.

There seems to be a rule here. The punishment is inversely proportional to the scale of the crime.

It's also disgusting that there are only two states where inmates can vote. More disgusting that there are states where felons can't vote, ever, for the rest of their life. Making a mistake shouldn't remove your ability to be represented.

The racial aspect of this is perhaps the most concerning. In my home state of Virginia we have one of the worst problems with this and somewhere around 20% of black individuals cannot vote. (http://www.naacp.org/page/-/advocacy%20papers/Silenced%20in%...) while more than 7% of all individuals cannot vote. It amounts to a modern day 3/5ths clause and the worst part of it is that it's part of our constitution. Only the Governor himself can restore voting rights to an individual after they have been lost and while recent persons to hold office have been in favor of amending this part of the constitution, it's not a trivial process and in the mean time you have to get the felons themselves to apply to have their rights restored.

Great point...please don't get me started on this I've already embarrassed myself enough here today with my f-bomb tirade.

The problem is that the jury is made up of average people but they are expected to sit in judgement on something very complex and specialised. Instead I think that complex fraud cases should be made up of people that have expertise in that area. Or alternatively have a panel of three judges with expert knowledge sit in judgement.

You knew carrying heroin was risking jail time. Bankers and white collar business men do not think they are risking jail time in their daily decision making.

This is by design. As a crime, heroin possesion provides an easy way to assess guilty/not-guilty; the perpetrator either possesses heroin, or not. In contrast, white collar crimes do not provide an easy way to assess guilty/not-guilty. Clear fundamental truths (yes/no), beget clear legislation, beget clear enforcement.

How do you sentence someone as guilty of a white collar crime? You need to rely on legislation to define the law, because the law is what businessmen consider on a day-to-day basis. If the law allows them to make a decision, they should have every right to make that decision without fear of later prosecution for it.

The problem is not enforcement, it's legislation. If clearer laws defined the decision making affecting "white collar" crimes, then agencies like the SEC could implement clearer enforcement.

Unfortunately the world changes faster than the regulatory environment, so this conundrum is unlikely to ever change.

(sentencing length is another story)

That's unfortunate about your drug conviction. Was the heroin really so attractive that you knowingly risked your career, livelihood and a year of your life for it or did you not understand the risks? I can appreciate you're angry but even if you don't like the law, you still have to follow it to keep yourself safe. Just as you would still have to pay off a protectionism gang to keep yourself safe.

The individuals who lost money most directly in the financial crisis are the people who gambled with their money trying to make more free money without doing any work. They're as much to blame, even more so that they're continuing to make the same gambles without even blinking! If your retirement fund is invested with a Wall St firm, you're part of the problem. Go put it with a company that isn't known to repeatedly rip off its customers. If you can't find one, then put it in a savings account. If the interest is too low, then accept that it's OK to have the occasional financial crisis as long as you make money all the rest of the time.

Agree.

The only reason the juries "don't understand it" is because the prosecutor doesn't want them to understand. Remember that recent cop Grand Jury indictment where the prosecutor had to "explain" for 3 weeks how...I guess the cop wasn't guilty? While in non-cop indictments, they somehow manage to indict people much sooner.

> While in non-cop indictments, they somehow manage to indict people much sooner.

What does that have to do with TFA at all?

I'm 100% certain that the prosecutors of financial crimes are absolutely trying to get the jury to understand. A win in this space is great for your career and they have every reason to hope for it.

You sincerely think that the prosecutors in the cases mentioned in the article purposefully made the case hard for the jury to understand, for the explicit purpose of losing the case?

No, for the explicit purpose of making some good money off the table.

I don't follow. How are the prosecutors making money by losing a case that they decided to prosecute?

I'm not coldtea but the implication appears to be that they are being bribed

Yes. Don't know about those specific cases but I know places where this happens a lot, and especially when it comes to white collar crime, but also mafia-with-a-legit-front kind of affairs.

>This is a conversational dead-end because there is both no evidence for it in this case, and no way to disprove it.

Doesn't that make it a conversational endless road?

Being able to prove or disprove it would make it a dead-end, getting the conversation to stop :-)

This is a conversational dead-end because there is both no evidence for it in this case, and no way to disprove it.