There seems to be a misconception regarding what Shkreli was found guilty of. The legal case here has very little to do with the pharmaceutical pricing controversy - it is a separate case based on a separate hedge fund that he managed. The gist of it is that he took people's money to start a hedge fund, lied to investors that the fund was doing fine when the hedge fund went belly up, but ended up returning everyone's money plus a sizable return when his separate pharmaceutical venture went well.
When fraud happens those affected don't usually get their money back much less a return on that money. However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.
>When fraud happens those affected don't usually get their money back much less a return on that money.
That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater. Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty.
In other words, the fact that his investors lost no actual money will have little bearing on his sentence. I don't know what the actual amount he took in was, but he will be sentenced for a multimillion dollar fraud scheme, and because he went to trial and lost, he'll get nowhere near the minimum. The government likes to punish people for making them expend the time and effort of a trial (in 2012, 97% of federal cases ended with a guilty plea instead of a trial [1]). He's probably looking at 5 years at best.
I disagree. I think it will be a major factor at sentencing. First the fact that he did give them their money (with a significant return on it) back to the people well before the government got involved (meaning it wasn't a PR show) to me means there was never any intent for them to actually lose money. I think the judge will see it the same way. Because if that weren't true, he would never have repatriated the money back to pay them out. He would have just said "oops, I lost it" and continued about his regular business. As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money. He just chose a deceptive, illegal manner in which to do it.
Also, harm/damage is a big consideration in sentencing. He broke the law, yes. But usually a violation of the law in this regard results in substantial losses. Because it did not here, the only damage is his violation of his contractual obligation to provide money back to those who said they wanted to cash out. By holding the money, he deprived them of their rightful property as per the contract they signed when they invested with him. And considering they would have a real hard time beating his returns, proving any sort of tort injury is essentially impossible. This leaves only the statutory violation, meaning he amazingly didn't necessarily harm anyone or their property but rather just broke the law. Given the lack of injury to the victims of his crime, I think he's likely to see a very light sentence.
Let me start by saying that what you are saying probably should be the way it plays out in this case. Everyone seems to have made money. I was just stating how it actually plays out in the vast majority of federal cases, and will likely play out here.
In this case, because of the amount involved, the guidelines will call for a substantial prison sentence (well over 5 years). There is actually a loss table (again, we're talking about the "intended loss") that determines a certain number of points for the loss [1] (plus 7 points for the "base offense level"), and that number of points is then used with the sentencing table [2] to determine the sentence. The judge is of course free to depart up or down from the guideline sentence, but the sentencing range determined by those tables will be the starting point. The odds that he will receive no prison time at all after having gone to trial and lost are effectively zero. The judge will likely cut him some kind of break because nobody actually lost anything - his lawyers will argue that he showed remorse after the fact by eventually making his victims whole - but that will have a minor effect at best. My best guess, having watched many of these things play out, is 4-6 years.
I should point out too that his being able to pay them back with profit really had nothing to do with his original taking of money. It is tantamount to pure luck that he was able to, entirely separately from the fraud, recoup their losses. Had it not been for that separate channel of money available to him, he wouldn't have had the opportunity to undo the damage done by his harm. And THAT is why this is a punishable crime. If you stab someone and then treat the wound and it heals entirely - even if you find, say, a tumor while you're treating the wound and end up unintentionally saving the person's life, you have still committed the crime of assault. It was only by coincidence that you helped the person out after the crime was committed.
Yes, exactly. Look at Madoff. Early on, it's entirely possible that he could have gotten lucky trading and made the money back. That still doesn't change the fact that he committed fraud. If we only punish the people who lose money, we create a huge incentive for more fraud, because it encourages yet more "double or nothing" behavior on the part of people who screw up.
I believe it is the SEC suing him for fraud, not investors trying to recoup losses. If you commit fraud in the financial industry, whether with or without harm, the regulator will come after you.
Not bad, merely ignorant. You're celebrating the incarceration of someone you presumably know very little about, all while searching for "true" victims ("perhaps the public?") to fuel your indignation.
No, I think you actually mean bad. (That's not to say I don't understand your sentinment towards me, but really... I haven't hiked prices on life-saving medicines by upwards of 1000%, etc., so at least I win on moral relatisivm points?)
This man has harmed quite a few people... or their insurance companies... which of course means harming of their customers, i.e. "us" (who can even afford insurance).
I know enough about Shkreli to consider him an awful, awful person. Do I need to know how much he loves his children, or something equally conceited and pointless?
No, no I don't.
EDIT: Oh, wait, you're one of those extremist libertarian types, aren't you? (At least judging by your most recent 5 comments).
EDIT: Look, if he hadn't been convicted of securities fraud, I would still be defending his rights as a... defendant, but now that he has been convicted, I don't feel sorry for him. (For ultimately unrelated reasons, as it turns out. I'm guessing I'm a bad person for that.)
> I know enough about Shkreli to consider him an awful, awful person.
That isn't what this trial is about. Just because you don't like someone because of one thing, doesn't mean they should be getting a harsh sentence for a separate crime (which apparently had no victims).
Perhaps instead of vilifying characters who break the not at all free market pharmaceutical industry, and name-calling people who espouse ideologies that conflict with your pre-existing beliefs, you should instead consider why a single guy was able to stir up so much trouble in your heavily regulated medical industry. Was it because there wasn't enough government to protect people? Or was it more likely due to an extremely high barrier to entry to the pharmaceutical industry imposed by the FDA? (And in other cases, excessive IP protections play a significant role).
> Look, if he hadn't been convicted of securities fraud, I would still be defending his rights as a... defendant, but now that he has been convicted, I don't feel sorry for him.
Unfair sentencing is just as much judicial malfeasance as is prosecutorial misconduct, unfair court trials or allegations. As citizens of America (which I assume, but do not know you to be) we should all champion fairness at ever level of the judicial process at all times, lest we ever find ourselves or our friends in the crosshairs of a court that we've allowed to give punitive sentencing to.
There are undoubtedly very good debates to be had on what might be considered a fair sentence for a crime of this nature, but if you're damning him for crimes completely disconnected from this case, then by definition you are championing an unfair sentence. That's the sort of thing that has allowed our judicial system to get away with so much unfair treatment in the past, and for all our sakes, we should root against it at every level.
> Oh, wait, you're one of those extremist libertarian types, aren't you?
This counts as personal attack and we ban people for that. In addition, it's not legit to use HN for ideological battle. (Irrespective of which flavors you're for or against.) So would you please not post like this again?
Glee at the suffering of others hardly marks a man as more evolved.
From where I sit, I do not see much difference between the man this article is about, and those enjoying schadenfreude at his expense. All are trapped in the same place.
Very interesting. I certainly hope he gets more time than I am expecting. Personally, my gut is saying 1-2 years. I'd be happy if he gets 4-6 like you expect.
Definitely going to be interesting to hear the judges words during sentencing. I was listening to the Michelle Carter sentencing yesterday, as I was following that relatively closely. Now I'm waiting to see what happens here, but this is much more cut and dry than that case. I'm only interested because it's Shkreli.
As a hedge fund manager, losing money is not illegal. The only illegal thing he did was lie about it so that he could get them their money back.
It would've been perfectly legal for him to lose all his clients money in the hedge fund, make them aware of this fact, and reap the profits from his pharma business without dishing it out to his hedge fund clients.
As far as I can tell, Shkreli turned a technically legal "I fucked up and lost your money scenario" into a technically illegal I fucked up, lost your money, but got it back to you scenario.
If I was part of Shkreli's hedge fund, I would much prefer to be involved in the latter scenario than the former.
Sure, I could sue Shkreli to recoup some of my hedge fund losses, but this way they didn't need to.
> The only illegal thing he did was lie about it so that he could get them their money back.
You're missing the point; giving his investors 'their' money back was the thing he did that was unethical and illegal. If you're a fund manager and the value of your portfolio goes down after making bad bets, you can't just inject your own money into the fund to make it look like you have a positive track record so that you can solicit more outside funds.
You're grasping for ways to punish this guy because you don't like him. The fact is, he made a mistake and wanted to pay back the people he made a mistake with.
I'd say it's exactly the opposite. The guy blatantly broke the law, but you seem to he very attached to him because you see him as some kind of noble do-gooder.
At the heart of it Shkreli was robbing Peter to pay Paul.
He took some of Retrophin investors profits and used it to pay back his investors in MSMB. Those profits should have gone to Retrophin investors.
From the perspective of the hedge fund, this is a pretty bad spot to be in. Retrophin investors will be looking to be made whole for the money Shkreli gave to MSMB investors.
I would imagine that this is how Ponzi schemes start.
If you lie about the nature of an investment your fund is doing it is fraud, even if the investment you have secretly been doing turns out to be successful.
Most ponzi schemes and unauthorised trading start with someone trying to make up for a loss they made and hoping they will fix things and everyone will be made up. That doesn't make it less serious.
It may look surprising given the hatred of bankers here, but it's a profession based on honesty. A guy got banned from the city in London for regularly frauding on his train tickets.
Yes, this is why - regardless of the outcome - he needed to be charged. People shouldn't be able to think they can get away with a thought process that equates to "I can defraud people and if my plan doesn't work out I'll find some other way to make it right." Fraud is fraud, and if you make it "right" via some other channel you haven't really made it right. You've gotten lucky and made your fraud look better.
> As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money.
I think his behavior in both this case and in his "pharmaceutical" endeavor clearly demonstrate his willingness to rip people off.
I'm pretty sure the "no harm no foul" defense doesn't hold water in a fraud case. A Ponzi scheme is illegal the entire time (because it's fraudulent) even though the early investors receive returns.
I'm pretty sure it does. A ponzi scheme absolutely does harm people through fraud, namely everyone left holding the potato. Sure, it doesn't harm everyone involved, but many people are harmed because of fraud.
In Shkreli's case, he didn't actually harm anyone through fraud, because although he committed fraud, he got them their money back through entirely legal, non-fraudulent means.
Getting money back is just one point in the probabilistic set of possible outcomes. Investment is all about risk, therefore you really cannot ignore that part.
Completely over the top illustrative example: you give me money for ten years to invest in real estate, because your investment portfolio is lacking in that sector. I blow it all on cocaine and hookers, then when the money is due I get nervous, buy lottery tickets and win. You get your money back, with a nice profit attached in the upper parts of what could be expected by a real estate investment. Was I a faithful manager of your money? Hell no! If you wanted lottery tickets you would have bought them yourself.
Yeah, except Shkreli's handling of the HF money was not fraudulent (he didn't blow people's money on cocaine and hookers, or blow it on anything really, the hedge fund just did poorly).
A coverup is a coverup. If he cannot stand up to his investments doing poorly he has no place in the institutional investment business. If you fake (or hustle) good results to lure in the next batch of investors, yes, that is fraud. It would be an entirely different case if he would have let his funds tank but compensated the losses of his investors with large put nominally unrelated personal donations (assuming that the investors are the actual owners of the money invested, not some middlemen fiduciaries). The illustrative purpose of my example was not how bad cocaine is, it was how bad being deceptive about the nature of an investment could be even when it turns out to be successful.
> The government likes to punish people for making them expend the time and effort of a trial
While I understand why this is true, I hate it about our legal system. If you're not guilty then you shouldn't be coerced into a plea because of the draconian maximum punishment they hold over your head.
This is evident nowhere more clearly than drug convictions, where they can lock you up for the rest of your life because you're doing something they don't like.
It's probably even simpler - the conviction is the deliverable produced by a prosecutor, and the thing that moves their career forward. So they are incentivized to always go for the harshest possible punishment, in the same fashion that a company chooses profits over everything else.
The system isn't malicious, it's just not designed to counteract this sort of thing.
Prosecutors don't charge people if they aren't fairly confident that the evidence will result in a conviction. However they will also be willing to bargain for a plea to save the effort and expense of a trial. This lets them get more cases through the system in less time. They (or the police) might also try to pressure a suspect to confess, just to see if he will. That saves them even more time.
So bottom line, you should never admit or confess to anything. If the prosecutor has enough evidence, he'll probably start with an offer of a plea deal. If his evidence is marginal, he might try to get a plea but likely won't bring charges if he thinks his chances in court are iffy.
If you go to trial anyway, in the face of strong evidence against you, then you've probably lost your chance at a light sentence, modulo how good a defense you can afford.
However often that may happen in non-computer cases, it doesn't appear to have happened in this case; you can read the whole indictment in less than 4 minutes.
> In other words, the fact that his investors lost no actual money will have little bearing on his sentence
AFAICT, the Retrophin investors lost actual money. The losses came out of gains and reduced them, and they still had net gains from Retrophin, but they lost money to the fraud.
Isn't Mr. Shkreli one of those Retrophin investors, too? Like, he could have made his defrauded hedge fund clients whole out of his stake in Retorphin, rather than from Retrophin as a whole.
This is what really confuses me. I haven't found a source that actually specifies what specifically he was found guilty for. At least one of the charges was about defrauding Retrophin investors, but he was found not guilty on several charges, so it's hard to tell. Quotes like this make me think that he was found not guilty on that charge:
> Shkreli said during a press conference after the jury's announcement that he was "delighted by the verdict" since he was found not guilty on a key charge regarding his former drug company Retrophin.
I could see that he was expecting something like that based upon his press conference outside the courthouse. I think he's in for a very rude introduction to the concept of "intended loss" and the federal sentencing system in general.
Not claiming any knowledge on the subject, just wanted to back up suggestions of his expectations with evidence. We'll see what happens. Personally I'm rooting for him, I think he's misunderstood.
I just think he's generally misunderstood and undeservedly hated. While I don't dispute he committed crimes and should be punished for that, it's compounded with his existing bad reputation over the completely legal and unremarkable Retrophin move. There's been a massive smear campaign against him and he has been unjustly dragged through the mud over that.
Granted his social awkwardness and attention seeking threw a lot of fuel on that fire, so he's partially at fault for encouraging it. But if you look past those immature antics he's a smart and productive member of society. It would be a shame, in my opinion, if he winds up in prison for several years. I think a fairer sentence would be a big fine and parole.
What's the definition of "intended" here? I would not normally say that someone desperately covering up business failures as they keep running it intends there to be any loss.
> When fraud happens those affected don't usually get their money back much less a return on that money.
He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims.
> However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.
Criminal cases have separate prosecution and victims, but not plaintiffs. It's the victims (well, one of two sets of them) that are potentially less sympathetic for the reason you describe.
> He defrauded and stole money from the investors in the pharma company to repay the people he defrauded and stole money from in the hedge funds. The one set of victims getting a return only happened by stealing returns belonging to the other set of victims.
That is not at all what I read. It seemed like he personally made a lot of money from his pharma business, and used that to repay the investors of the fund?
True. It'd be like robbing a bank, using the money from that robbery to, say, start up a successful business, and then discreetly give the money and interest back. Money taken on false pretenses, regardless of what you end up doing with it or if you end up getting lucky and being able to pay it back, is still a crime.
There was a joke floating around somewhere (Matt Levine I think?) that one strategy to avoid a jury trial proceeding was to become so publicly infamous that it would be impossible to select an unbiased jury. Clearly didn't work out for Shkreli in this case.
Well, that and he actually was guilty. Just like being nice shouldn't be enough to get you off the hook when you're guilty being an asshole shouldn't be enough to get you to be declared guilty when you're not. In this case the system simply worked as it was designed to.
Nah that's stupid. It might delay your trial but do you really think they would just say "oh ok we won't bother"? Of course not - they'd just go ahead with the least biased jury they could find.
You mean, if criminal charges against Trump go to trial, which is far less likely than impeachment (which is tried by the Senate and has no requirement for impartiality) going to trial.
The issue with this is that I often think of a people, that are not following media (so would not know him at all), to be usually more on a conservative note with strong values. If such a people would meet Shkreli, they would send him straight to the jail.
Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are).
I don't live in the US, but being convicted by a "jury of your peers" is frankly, ridiculous. When has the average person been able to grasp complex matters relating to say, securities fraud? Most people aren't even able to stay out of debt.
A panel of judges with specialised experience often makes a lot more sense than a jury.
Edit: and for those voting me down, at least explain why you don't agree.
Relying exclusively on bench trials seems unappealing to me (and I guess to James Madison, who enshrined the right of trial by jury in the Constitution) because it creates a much easier environment for an arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification. You could look at Japan, which tried to solve its problem of innocent people going to jail by introducing a lay-judge system (kind of like jurors who can ask questions during the trial), for a real-life example of some of the problems you might have.
Clearly the US system is far from perfect but I don't think getting rid of juries would make it better.
Also, in practice, judges make rulings on things outside their expertise too.
"because it creates a much easier environment for an arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification. You could look at Japan, which tried to solve its problem of innocent people going to jail by introducing a lay-judge system (kind of like jurors who can ask questions during the trial), for a real-life example of some of the problems you might have."
Practically, united states of america have biggest incarceration rate in the world, one of the most expensive legal systems (if not most expensive) and quite long sentences compared to other western countries. Jury nullification is basically never used and majority of jury members don't know about it.
I am not saying that other countries have flawless awesome court system, definitely not. But I have yet to read something that would convince me that jury is better or at least worth additional expenses.
You're right the US has a huge incarceration rate, but jury trials have nothing to do with this, since in the US trials functionally do not exist. I don't remember the numbers exactly (and they are changing and they differ by state/federal) but something like 1-5% of people thrown in jail actually go to trial.
But wouldn't the fact that trials might be favoring conviction (I'm not saying they do, but just as a hypothesis) also drastically change the outcome of those non-trial cases (mainly plea bargains, I guess)? If I expect to be convicted, I'm more likely to agree to a worse plea bargain.
That might be true but it was not my point. I was merely arguing that not seeing many cases actually go to trial is not an argument that can be made in this case.
Juries convict, but judges sentence. The incarceration rate is high because of strict sentencing guidelines written in the law and voters electing tough-on-crime judges. Eliminating jury trials would change none of that.
and Legislatures legislate. The strict sentencing guidelines are the result of "Law and Order" laws (both sides of American politics have their favorite targets). I too agree, eliminating jury trials would change none of that.
And you think getting rid of juries would help, or at least not make things worse? One of the reasons it's so high is that most cases are resolved as part of the plea system and never go to trial.
Isn't the main issue with a jury that is inherently unpredictable, and some people would prefer taking a decent plea over a bad verdict? People that aren't guilty shouldn't be forced to take a plea because the alternative could be worse. That is just wrong in every single way.
I agree that the use of plea bargains in the system today is deeply troubling. But getting rid of juries doesn't help. You still have a situation where the prosecutor can tell you your choices are going to jail for two years or taking your chances in court and maybe going away for decades, and you still have the inadequacies of the public defender system. The jury system is one of the parts of the system least in need of reform.
Which happens because of power prosecutors have (ability to decide charge which makes all the difference - plea can make difference between a year and risk of 30 years in prison) which has little to do with jury vs judge. Majority of defendants deciding that they don't want to risk (or cant afford) a day in court is not an argument for that system.
His argument was that juries prevent "arbitrary court system to throw people in jail who are innocent and removes other protections like jury nullification". There is nothing observable that would confirm that.
They don't do that, they prevent pretty much nothing.
It says nothing one way or the other because the system isn't being used in those cases.
Put simply, if you want to make claims about whether jury trials or bench trials put more people in jail wrongfully by citing US incarceration data you have to somehow contend with the fact that the vast majority of cases don't go to a trial of any kind. Or at least have an argument as to why switching to bench trials would change that circumstance.
The rate in not because of juries (most cases end up in guilty pleas anyway). It is 90% war on drugs and 10% "tough on crime" mentality which emphasizes punitive aspects and produces thing like mandatory minimal sentences which do not allow to treat things on by case basis. But mostly it's war on drugs.
I think at the very least there should be some kind of juror training process. You'd still tap people from the general public, but these people could maybe serve up to 5 year terms where being a juror is their full time job for that time period, they're trained in advance, they go through some kind of testing period, maybe shadow a couple other juries, and then they go on to serve on real juries. Obviously this would be a paid position much like a postal employee.
Besides being extremely disruptive to jurors' lives, you also have many of the same problems of an all-judge system (people becoming too close to prosecutors and wanting to the rule the "right" way, etc.) without the mitigation provided by the bar and full legal training.
Seemingly free and "just" governments have done much more "disruptive" things in the past, so there is precedent. E.g. Conscription and mandatory military training.
I'm a Libertarian, so I'd say No. But my point was that government has in the past done things that have been highly disruptive to their citizens' time.
> People shouldn't be able to be convicted because they're assholes (even if they are).
He wasn't convicted because he was an asshole. He was convicted because he broke the law. I think the fact that he was acquitted on 2 of the 5 counts is evidence that the jury made a determination based on facts, rather than their feeling towards him.
That being said, in a trial in the US, the judge applies the law, and the jury determines the facts, especially as they pertain to the credibility of testimony. If the defendant is an outrageous asshole, it's possibly more likely that the jury would interpret inconclusive evidence less favorably. I don't think that's necessarily the worst thing in the world, and it's also not clear that a panel of judges wouldn't be subject to similar biases.
Shkreli was first investigated by the SEC in 2003, and had two multimillion dollar judgements against his two bankrupt hedge funds for failing to cover puts and short sales.
So when he shows up running a new company, it's not unimaginable that he was on some people's radar.
It's a check/balance against state power, i.e. the judicial system. Many countries have used this method for centuries. It's not ridiculous because the idea is that (the diverse selection of) your peers are equal to you in most ways, so are able to fairly judge you. A judge still has a lot of power and usually ultimately the decision goes to them as far as sentencing etc.
Right. But thing is, they are not actually equal on specialised matters? I understand that it works when you're dealing with things like murder. That can be relatively clear.
But how about hacking? Securities fraud? Money laundering? Tax fraud? These are all highly specialised issues that the average person knows nothing about. No average person, unless they have an interest in it, will be able to make a good call on such a case.
There is a significant role for judges in trials as well, especially on complex technical issues. It's up to the judge to decide all "matters of law", for example which conduct would (if it happened) violate a law and which wouldn't. A judge can even throw out the indictment entirely, finding a defendant innocent as a matter of law, if they determine that the conduct alleged isn't actually a violation of any laws, even if it did happen. In complex fraud cases indictments being thrown out (or overturned on appeal) by judges isn't all that uncommon either.
Where it goes to a jury is when there's a dispute of fact rather than law: the judge has determined that whether the defendant violated the law or not depends on a fact disputed between the prosecution and the defense (e.g. whether the defendant actually did or didn't do something, or what the defendant's intent was). The jury then decides whether the facts support conviction, although even then they're typically guided by very specific instructions from the judge about what they would have to find in order to convict.
Just some clarification for those readers not in the U.S.. You as the defendant do not have to select have your case tried by a jury. You can select to have a bench trial instead. There is a presumption of innocence for the defendant, so the prosecutor has to show "beyond a reasonable doubt" that the defendant committed the crime in question. Juries find defendants not guilty more often then judges do. So if you want a society that better reflects the maxim, "better 10 guilty men go free, than 1 innocent man go to prison", then juries are empirically better.
Even if you ask for a bench trial, the state can request a jury trial on your behalf since the presumption in law is that juries are objectively better.
These things can be (and are) explained. Trials that contain complex technical violations tend to take longer, sure. Judges, expert witnesses, lawyers all spend a huge amount of time learning about/explaining these issues. It's especially incumbent upon the prosecutor to explain complicated issues -- if the jury can't understand someone's guilt, they are less likely to consider someone guilty beyond a reasonable doubt. Which is very, very good: it sets the bar higher for conviction, and it encourages the state to, if it wants to convict, make simpler clearer laws. Complex morasses of incomprehensible laws are not necessary and only serve the interests of those who can pay to create or avoid them.
Also, none of these subjects are so difficult and complicated ordinary people cannot understand them. I've never heard of a trial requiring any real deep knowledge, like requiring jurors to have a serious understanding algebraic geometry or quantum mechanics or phenomenology. Hacking can be explained to ordinary people. People are not dumb. People do their own taxes and understand taxes. Trained professionals are not elite superheroes who are the only ones who can understand the world well enough to understand the difference between right and wrong. Untrained people can't do a professional's job, but they can definitely (with some help and background) tell when a professional has committed a crime. This case is easily understandable. I'm not a securities expert but I can make a fine assessment here just from reading an article, even without hours and hours of doing nothing but learning about the specific case and law (which is what jurors get); we all know what fraud is.
Honestly, aren't you underestimating your own intelligence?
Plenty of things can be simplified for non professionals, but the nuance of certain topics is then often lost. A single word in a written law can matter a lot.
No disrespect to anyone, but can an average career teacher understand the nuances of securities law? Can (s)he understand the actual difference between tax avoidance and tax evasion? Some can, absolutely. Others definitely can't and are operating way out of their league.
Lawyers and prosecutors are great at creating stories, but isn't what matters or not whether the law has been broken?
As an example; I had a tax issue (different interpretation of a certain law) but retained an amazing tax lawyer. He was _great_. The way they juggle the story around without lying, yet drawing the line very close, is amazing. Based on personal experience, I just don't think it can work without subject experts.
Amazing charismatic lawyers (or prosecutors) will be able to bend an outcome, and that is just not right.
>No disrespect to anyone, but can an average career teacher understand the nuances of securities law?
Yes they can, that's exactly the position I outlined. After a week of doing nothing but learning about securities law every teacher I've met is capable of this no problem. Teachers are perhaps a bad example here though, they are highly educated (many have masters' degrees, most have bachelors) and interested in learning. But to make your argument stronger, take a minimum wage fast food worker with a GED, yes I think they are capable as well.
>Lawyers and prosecutors are great at creating stories, but isn't what matters or not whether the law has been broken?
Kind of. In fact in the US legal system this is not all that matters, because the law is often vague and abstract and sometimes obviously morally wrong. The purpose of the jury is exactly this, it's a check on a cold soulless system destroying lives robotically; not only must a law be broken, but you also have to convince a group of fairly normal human beings that what you've done is horrible enough you deserve to be punished for it before you are punished.
>Amazing charismatic lawyers (or prosecutors) will be able to bend an outcome, and that is just not right.
I agree with you here, and this essentially means the rich get away with things the poor are punished for. This will always happen, will it not? People who are able to present a more convincing argument in their defense are less likely to be convicted in any legal system? I think things can be done to mitigate this, yes, and they start with a simpler criminal code (fewer crimes) and more equal access to legal talent, like better funded public defenders.
Yeah, but judges are no better at interpreting the law many times. If you don't believe me, go read some of the decisions by americas Supreme Court. For example they said a man was black therefore no a man therefor he had no right to sue in court, which basically means no rights at all. How they missed the part about due process I don't know.
The judge/jury distinction is basically orthogonal. Judges who hear a case are not necessarily experts. And by the same token, one could easily imagine a system where a jury had to be composed of experts in the field. I'm not convinced that would be a good thing to do, though.
You can always request a bench trial (which must be approved by the prosecutor), and you probably should for any sufficiently complex matter, where bench trials have a 55% acquittal rate vs 80-something % for jury trials (if someone wants a source, I'll try to find it; these figures came from a study). Jury trials work when there are emotional and subjective aspects, especially around intent. The jury in Shkreli returned to the judge for a formal definition of fraudulent intent, and then he was not convicted on wire fraud, meaning that they didn't find for specific intent. If the jury was not properly instructed on the elements of the crime and the issue was raised, it may be a reversible error and I'm anxious to see how the appeal is argued.
Sure, the point is there is no perfect system. This is just the best we've been able to come up with over a few millennia, and no we don't execute wonderfully and certainly our voting/jury population is full of interesting ideals, but it's what we have and it's _mostly_ worked over time. I'm not sure where you are but I'm curious to know of other systems considered "better"
I’m based in Belgium. Definitely not perfect, but different countries use different systems. In general, juries are only used when dealing with murder cases. All other issues are ruled upon directly by judges, who makes a direct interpretation of the law. If you’re dealing with a tax case, you will generally be assigned a judge somewhat familiar with tax law. Same if you’re dealing with a contract or a commercial issue, etc.
One can expect any judge to be an individual with above average intellectual ability.
>Which, all things considering, is ridiculous. People shouldn't be able to be convicted because they're assholes (even if they are).
Why not? This is basically what the law does as well: codifies what society considers punishable assholery (e.g. murdering people or stealing or etc...).
So convicting him because he has been as asshole (even if it's in an unrelated case) is not that different to convicting him for being guilt on this or that legally defined behavior -- it's just not written down in a law book.
> A panel of judges with specialised experience often makes a lot more sense than a jury.
This would make sense in a country where trust in authorities is high, and people generally believe that the judges and the justice system is impartial and fair, without too much personal and hidden agendas.
But in a country where the trust in the system is lower, a jury of peers provides a safety mechanism so that the justice system cannot diverge too far from the point of view of the "common man".
That's the kind of claim for which it's useful to have a citation. Because it's not generally true. This is an old study ('76), but they found that the jury selection processes biases against both high and low educational attainment, for example: https://www.jstor.org/stable/3053202?seq=1#page_scan_tab_con...
One of my friends just served on the jury for a murder trial. He's got a Ph.D.. From my recollection, at least two of the other jurors also had postgraduate degrees.
Remember that the jury selection process is managed jointly -- which somewhat naturally leads to the clipping off of people at either end of the extremes that the defense and prosecution are concerned about.
Then I guess it is fortunate that neither the defense nor the prosecution get to just select whichever jurors they want without input from the other side.
The "jury of your peers" exists to provide a contextual moral component to the law. If your peers think you did no wrong, it doesn't matter what the letter of the law says: a crime that is justifiable to society deserves no punishment.
Conversely, if what you've done is not justifiable to society, you should be punished for it even if it is not a crime. The easiest way to understand this is when first-mover advantages run amok. If you're the first person to think of some dastardly evil, you should not be permitted to do it just because nobody has yet written a law prohibiting it. Like, say, the Coca-Cola Corporation is not innocent for putting addictive substances in their drinks simply because it wasn't illegal at the time. And Shkreli's price gouging doesn't sit well with anybody either. A person's ignorance about some harm does not constitute permission to commit that harm against them.
>When has the average person been able to grasp complex matters relating to say, securities fraud?
The defendant has an attorney whose job it is to explain these matters to the jury.
First, a judge can usually give a "directed verdict" of the person is obviously innocent.
Secondly it is much easier to pay off a judge and keep it quiet than a bunch of random jurors.
Thirdly judges can become calloused by virtue of their continued sentencing people to prison. They won't have the empathy that the jury will feel for both the accuser and the accused.
Fourth, the jury can ignore an outrageous law. For example oftentimes they refused to convict escaped slaves in the north.
Putting your freedom in the hands of one person who may very well be corrupt is much more dangerous than puttIng it in the hands of regular people.
Additionally I can't remember where, but I heard that 10 people or so working together usually come up with as good a solution as an expert anyways.
Try taking a attitude with a judge and see how much Contempt of Court you can rack up.
In modern times we've arrested plenty of performers, Lenny Bruce, various rock musicians for being "lewd" or other retarded reasons. It only gets worse farther back you go.
As a society we love to lock up those who make us feel uncomfortable or are "weird".
Did he make the investors their money back (plus a return) by vastly increasing the price of a drug(s)?
That seems to me morally evil and also very suspect. Although I'm sure the rigidity of the legal system would not allow this kind of inference to be made or pursued legally.
It would just seem to me as a legal/pharma layman that basically a bunch of sick people got screwed so that some investors (gamblers imo) could get their money back.
In the financial service industry there is very little tolerance for fraud. Fraud with or without losing money will get people in trouble. A trader with a massive unauthorised position is as likely to be sanctioned if this position has a positive P&L than if it is a loss.
Similar to OJ's recent parole that had nothing to do with the murder he was accused of committing. MSM, the previous victim's families, etc, seem to be conflating the two.
That's different, though. The goal of a parole suitability hearing is to determine whether an inmate poses an unreasonable risk of danger to society if released from prison. A data point like "this prisoner murdered some people" is very relevant to that determination.
OJ's parole was fair, and done by the book. OJ's sentencing for the armed robbery (30 years - his friends who brought the guns, and had a number of prior felonies all got probation) unfairly reflected his murder trial. The judge and jury were almost certainly out to get him.
OP is pointing out that because Shkreli initially became infamous for his drug price raising, many members of the public are probably seeing ‘Shkreli found guilty’ and assuming it was because of that incident, which many felt was wrong and immoral. This article (And other coverage of the trial) doesn’t make any such claim.
When fraud happens those affected don't usually get their money back much less a return on that money. However, it's pretty clear what he did is also fraud (false documents, not returning people's money when they asked for it) even if the fact that investors came out better makes the plaintiffs less sympathetic.