The Theranos case clearly illustrates why. Fraud by the top executives of a company, who lied about what their technology can do to raise a bunch of money, and endangered patients in the process--that is a story you can explain to a jury. Even if you think there are "bankers" (curiously, you do not identify specific bankers) who broke the law, good luck explaining to a jury exactly what anyone did that was illegal.

I'd also posit that this is a very good thing. You shouldn't be able to put people in jail for a crime you can't explain to a group of a dozen ordinary people.

In a field like finance, once you make something illegal, doesn't the prosecution's argument pretty much come down to:

1. Under the US code, foo is illegal. That's the rule that everybody working in this field has to play by.

2. The defendant fooed, flagrantly and with relish, and in the process made umpteen zillion dollars.

3. At all times, the defendant made it clear that they knew fooing was wrong. For instance, when discussing fooing, they logged into each other's email accounts and wrote drafts rather than sending emails, and shredded their birth certificates after discussing foo.

4. As a result of all this reckless fooing, which we remind you is illegal in the US, 3,392 people lost their houses.

A jury can't follow this argument?

An argument I've read more frequently is that the laws around this stuff aren't clear enough, so that a defense attorney can hopelessly muddle up a case by arguing "we weren't fooing, we were clearly barring". We could make the laws a lot more clear! But in doing so, we'd potentially disrupt the economy, and so it's a tricky balancing act.

Prosecutors who investigated 2008 came away saying that there was no evidence of criminal intent, based on the fact that they didn't break or intend to break any laws in the process of making their really stupid bets. Preet Bharara, former US attorney in New York after the crisis, discussed this in his podcast fairly recently.

A second article mentions, "He argues the crimes themselves are simple matters such as embezzlement, merely with a complicated “wrapping” of financial jargon around them." https://www.ft.com/content/dcdb43d4-bd52-11e6-8b45-b8b81dd5d.... This shows that prosecutions and imprisonment are possible for bank actions related to the 2008 financial crisis. Iceland's special prosecutor also believes that similar crimes were carried out in many other countries so the opportunity for prosecution was therefore possible.

Perhaps we need better prosecutors who can credibly charge crimes that have broad networks of profiteers eagerly pushing dupes into committing crimes that are precisely arranged so that the profiting entity has no liability for the narrowly construed criminal act other than having engineered a situation where it was incredibly possible and only indirectly soliciting the act itself...

We could have such prosecutors were the system not already hopelessly captive to the interests of the criminals.

But what can you do when law is lawless.

It's massively unethical and it feels like people should be in jail, but proving actual crime took place during the lead-up to the recession would be a massive undertaking with little satisfaction as payout, and just as many run-of-the-mill home buyers going to jail as lender associates or executives.

No, you've committed the crime of solicitation at the moment you encouraged a particular person to commit a particular crime. And, if they agree and either of you takes any concrete step to implement the agreement (even short of completing the theft), you've both committed the crime of conspiracy.

If an expert tells you to break the law and insists it's fine, and you don't really know how all of this works, I don't think we can still call that merely "encouraging shady behavior".

I could be wrong here, so if you or anyone else with more legal background than I have can point to specific prosecutions related to this kind of situation I'd love to read more.

I'm not sure this is a hard case to make.

But is there explicit proof of this? I didn't think there was, but maybe I'm wrong. I thought at best the argument would be more like:

"Bank executives set up incentives for their employees that they knew would encourage fraudulent behaviour."

Which is part of the problem with bringing anyone to justice. The actual banks could pretend that they believed they were buying quality debt, which they diced up into CDO and whatnot.

This sounds so wrong. Why shouldn't people whose only virtue (related to the case) is being smart enough to come up with complex crimes go to jail? Are we forgetting just how, well, average the average person is?

There are several good analogies in both the book and the movie (ie. the chef and the fish) that greatly helped me understand the mechanics of it.

What the book and movie don't do (unless I'm forgetting something) is explain how anything involved with the 2008 crisis was illegal - the sole exception being that CDSs are very arguably insurance contracts and should be regulated by insurance laws.

Then again even people texting and driving are not swayed by fines. In my region of the world a $3,000 fine is not a deterrent to many people. I say jail time would change that attitude.

Putting people in jail costs money and is hence undesirable, so unless you're drag racing through a school zone or driving drunk/stoned, you're not going to jail.

The view of governments in the US toward traffic enforcement as revenue-source was made clear during the Great Recession. When a lot of folks were struggling with unemployemnt, pay cuts/freezes, etc., and morale was generally in the toilet, local governments began jacking up speeding fines in order to make up for lost tax revenue. And people wonder why the relationship between citizens and LEOs in this country has become so antagonistic.

It's the goal of the state policy authorizing them, even if it isn't the goal of the local government issuing them.

IANATaxLawyer, but I imagine gaming the system would require you to take out non-taxable loans using that company stock as collateral, and hope that your lawlessness is caught during the living-on-a-loan years rather than the liquidate-and-repay years.

Really though a ~0.1% speeding ticket fine is not going to be an issue even if the press is impressed by a very large number fine.

This leads down a very slippery slope.

Is there really an epidemic of rich people committing crimes at a higher rate than the non-rich? It doesn’t seem like criminality rates are higher among the rich, thus the premise that rich people should have a larger deterrent doesn’t seem to have much support in terms of evidence.

How much opportunity cost those days have, or how much money you lose as a result of your jail time, is irrelevant. The punishment is taking away your personal freedom.

Jail time is a fair punishment: Nobody likes having their freedom taken from them. There is no need to scale it.

But its different for fines. If you drive a 100k€ car, you're not going to give a shit about a 50€ fine for speeding. And my personal experience seems to suggest this is true: Drivers of expensive cars often ignore speed limits and "no parking" signs.

So one thing we could do is add a mandatory jail sentence for speeding. You drive to fast, you go to jail for a day. But that seems a bit harsh, so maybe we stick with the fine, but make it so that it also hurts people who make a lot of money.

In fact, the finnish fining above is a system of day-fine: the sentence is expressed in day-fine, each "day" of the fine is multiplied by the offender's day-fine factor (baseline is about half the daily disposable income — daily income after taxes & basic living allowance) and that yields the fine's actual amount.

For court-ordered fines of sufficient size they can also be converted to a prison sentence at a ratio of 3 day-fine to 1 day in prison (rounded down).

If the goal is deterrence, then we need care about how subjectively costly the punishment will be to each person. Having a high income doesn't make your time subjectively more valuable, but it does mean that you can trade it for more money. A rich and a poor person would likely value a day of their own time quite similarly, but they would each value $100 quite differently.

Jail has both the purpose of deterrence and rehabilitation. Since the method is essentially depriving criminals of their time and freedom then wealth has nothing to do with it. Either way it's probably equally painful for a CEO as a factory worker.

As for driving licenses, they are administrative expenses not fines. I assume you already know this so I'm not sure what your point is.

I'm not sure how it works in your country but in the UK too many speeding tickets and you will loose your license. The exact number depends on the severity of each offence, but we get max of 12 points over 3 years [1] so they stick with you - repeat offenders are given even stricter rules after getting their license back.

I get a sinister smile when observing rich people in those big shiny 4x4s on some stretches of motorway I know are littered with speed traps... It's a funny equaliser - I do the limit, but those types of people always gota be in front of someone with a shitter car - but the regret is apparent in their latent brake lights after the flash.

[1] https://www.gov.uk/driving-disqualifications

It's a shame this type of law that equalises wealth isn't more common, for instance in a related matter - I've heard plenty of stories about rich people basically using parking fines as parking tickets, there doesn't seem to be a limit or anything beyond a monetary disincentive. It's also more common to see expensive cars parked in places they shouldn't be, and i'm convinced this is the reason.

A rich man can just get a driver, take an Uber, etc., and is not likely to be fired for being late, assuming he works.

For a rich person, it just means they can't enjoy the pleasure of driving themselves around. You were talking about equalized impact to start with, I really don't see how this is a good example.

> If they don't care about driving and they were being a shit driver

These are also pretty big assumptions. I assume because of my demographic category, the times I was driving, and my car, several years ago, I received nearly two dozen tickets in a five-year period. None of the offenses were for speeding, but for various infractions like not coming to a complete stop (I was absolutely positive in every case that I did, especially after #3 or so I got paranoid about it), failure to yield, etc.

The only reason I have a license today is because I had a professional job, which allowed me the free time to go to court every single time without losing money and fight the ticket. I won every single time. Most people don't even know you can do that, they think you have to pay the fine.

If I had lost my license, I ultimately would have lost even that job. I would have to work remotely.

I am _not_ talking about equalised impact i'm talking about equalised results... the OP was suggesting that speed tickets don't stop rich people from speeding, but if you loose your license it does - that is the purpose of these laws, not to try to figure out how much punishment to deal out in relation to your personal wealth, punishment is a means to an end, not an end in itself - the end being to stop you from doing something damaging to society, in this case endangering other people's lives.

Taking away licences is an equaliser in this respect, because being rich doesn't give you more points to spend.

Licenses are for individuals, if some rich person wants to pay some _other_ individual who can actually keep their license that is fine, the law won because a safer person is driving.

What is stopping someone who loses their license from just driving anyway? They've already shown not to give a shit, so they'll continue driving without a license.

My dad lost his license many years ago and never stopped driving. He gets arrested once in a while, doesn't stop him.

You live in a very strange country, in the UK your dad would have had his car taken away from him and crushed... and if he repeatedly found other cars to drive without a license he would probably end up in prison.

I don't know how many they actually crushed, but it was some.

My dad has gone to jail for driving without a license before, but he'll go out driving when he gets out of jail. But usually his lawyer finds some sort of technically that gets him out of major trouble. I don't know the exact details, I try to ignore him as much as possible.

Other family members I know who have lost their license, it's stopped extractly zero people from driving. If you don't care about the other laws enough to get caught breaking them enough to lose your license you don't care about breaking "no driving without a license" law.

I knew a rich person once with a drinking problem: he kept losing his license but his solution would be to just hire a private driver the next day.

A casual partier though or even someone heading out and thinking they will take the chance of driving home and getting there ok, then yes I agree.

This one's mine: Because it's more fun than sex.

But if you are a model driver AND find it more fun than sex, damn you are lucky.

People still drive when they lose their license. They have to.

So the fines are no big deal to the rich here, but the right to drive is incentive enough to stop being an asshat.

I believe that because of this, the fines were made significantly higher for companies that did not identify the driver.

He has an affair. They get a divorce. To get revenge, his ex-wife tells a journalist that he once cheated a speeding ticket. Investigation reveals she knows that because she helped him do it. They both go to prison.

This revenge idea was planned with a lawyer/judge friend of the ex-wife. When the plan backfired, the judge falsified documents to mislead investigators. The judge got the longest sentence of the three of them and was disbarred.

What a trainwreck.

I'm sure it'd come up if you get in an accident as well, but probably the bigger fine in that case is the insurance company will use it for fault.

The primary detterant of it is likely that, because its a fineable offense, its less accepted by the general public, and you'll do it less flagrantly.

Compare with white collar crime that involves defrauding minority home buyers, for example. Not only did the perpetrators there not get prosecuted, one of them is now our Treasury Secretary [1].

1. https://theintercept.com/2017/01/03/treasury-nominee-steve-m...

I don’t think she did it out personal greed (except perhaps greed for publicity) - I think she believed she would probably make the tech work and just never got there. But regardless of the reason, investors are out a ton of money as a direct result of material misrepresentations. You cannot “fake it ‘til you make it” at least where investors are concerned.

Because of the amount of money involved, these two defendants are looking at a stiff sentence. The federal sentencing guidelines would easily put them at the maximum (20 years), though they may get something like 10-12 years if they take a plea early in the process and don’t make prosecutors work too hard to prepare for trial. This will not be a Martha Stewart type of sentence.

It’s a sad day for everyone involved.

Regardless of what was going on in her head, she seems to have made provably false statements in order to induce massive investments in her company. That's fraud, and she'll pay a heavy price for it.

It doesn't seem that Holmes boyfriend is ready to plea, but even with 10-12 years, with all their fame and connections and financials behind, what do you think is final reality? Some 3-6 years for good behavior??

Edit: change of wording

At least 4 times I wrote about Holmes being charged by DOJ on HN -- now I predict within 3 months they will find victim(s) that are dead today because of improper results of Holmes' devices.

I don't think Shkreli was defrauding regarding his pharmaceutical practices. (though he has security charges). He was using shady practices that were totally legal. Completely different game.

Skherli said he gave the medicine free to those who have no insurance. I don't think by good heart but rather to avoid a major bad publicity from the inability of non-insured to pay.

AFAIK there were poor decisions and bad investments but not straight up fraud.

Nobody needed to be jailed; there were a few that needed to be allowed to fail.

[0] https://en.wikipedia.org/wiki/2010_United_States_foreclosure...

LIBOR rigging?

Speaking morally, rather than legally, the packaging of loans into CDOs was clearly fraudulent, basically the equivalent of tampering with the mile meter in your car before selling it. The fact that there is apparently no law to prosecute people under is a failure of our various legislatures and judicial systems.

Using your sketchy rationale, one could claim that you are threatening Paulson and have you charged with a threat to kidnap Paulson to put him in Guantanamo Bay.

And in any legal dispute between you and Paulson, you would be incidental roadkill, in view of his deep pockets.

That is why the legal system has semi-reasonable heuristics that govern the range of interpretations that are acceptable.

Edit: https://www.youtube.com/watch?v=oYrDtpAkppM

"Wall of Text" ~= "Probably an incoherent rant"

It is slightly more credible than the Onion.

And Congress-persons are slightly less credible than the Onion.