Felix Salmon

Annals of white-collar crime, James Altucher edition

Felix Salmon
Feb 28, 2011 16:51 UTC

Rupert Murdoch is one of the most successful businessmen in the world. But his company is being buffetted hard by ethics scandals — phone hacking in the UK, and Roger Ailes allegedly suborning perjury in the US. It’s right and proper this should be the case: the allegations are extremely serious, and involve people very high up in the corporate structure. News Corp might still carry its founder’s aggressive and entrepreneurial DNA, but that’s no excuse, and in any case there are lots of aggressive entrepreneurs who never commit these kind of crimes.

James Altucher isn’t one of them. An admitted criminal, he posted “10 Confessions” yesterday, including these:

6) In a year I won’t specify but more than five years ago I had a surefire technique for breaking into just about anyone’s email. Anyone who was potentially a threat to my business at the time had their emails read by me. And if they were really disruptive to my business I would disrupt their emails enough that they never bothered me again.

8 ) I had a car accident when I was 18 years old. I ran a redlight and almost killed someone. In the court case the lawyer encouraged me to lie and say the brakes didn’t work. So I did.

9) When I was at HBO I was helping to decide which companies would do which websites within the company. I had started a company on the side that was making websites for entertainment companies. I hired my own company in almost every instance.

These crimes are just as serious as those being alleged at News Corp. Hacking email is worse than hacking voicemail: Altucher didn’t just read his rivals’ email but also “disrupted” it, whatever that means. Perjury is worse than suborning perjury. As for self-dealing, it turns out that Murdoch has been accused of that, too, again in a less egregious manner.

If I were ever found to have hacked someone else’s email in an attempt to gain an advantage over the competition, Reuters would quite rightly fire me on the spot. And my crime would in no way be absolved if Reuters found out through me confessing to such a thing in public. Someone who’s honest about his criminal behavior is still a criminal.

In the comments to his post, Altucher says that his crimes “helped me ultimately to look forward and be a better person,” whatever that’s supposed to mean. His readers are lapping it up: one of them writes that “Your blog has skyrocketed to among my top 10 within 3 weeks of subscribing. Mostly because of how insanely honest you are.” Altucher replies, without any visible sense of irony, “thanks. I’m afraid that honesty is a scarce quality in the financial community.”

Oh, and he helpfully informs another commenter what the statute of limitations is “for most federal crimes.”

It’s common to see people like Altucher fall back on the “everybody does it” argument in cases like this — Altucher’s basically saying that all entrepreneurs behave this way, and he’s just being more honest about it. I don’t believe him.

There’s also the “let he who is without sin” defense — essentially saying that no one can criticize what Altucher did unless they have never committed any kind of crime themselves. That’s just silly — but I do feel comfortable saying I’ve never done anything like this. Run a red light on my bike? Yes, I’ve done that from time to time. Lied under oath? Hacked into e-mail? No. Maybe that helps explain why I’ve never started a company, but I wouldn’t want to ever start a company if such flexible morals were in any way necessary.

The fact is that white-collar criminals are, in general, incredibly good at deluding themselves that they’re good people, even when they clearly aren’t. The classic example being Bernie Madoff:

He can’t bear the thought that people think he’s evil. “I’m not the kind of person I’m being portrayed as,” he told me…

He said to me, “I am a good person.” …

“Does anybody want to hear that I had a successful business and did all these wonderful things for the industry?” he continued. “And got all these awards? And so did my family? I did all of this during the legitimate years. No. You don’t read any of that.” …

He sees himself at this stage as a kind of truth-teller…

Bernie Madoff is still keeping his own moral ledger, adding things up in his own way, telling himself that someday, he’ll come out ahead.

The point here is that self-forgiveness is incredibly close to self-delusion. Altucher is currently basking in the attention of people who are reading his confessional blog entries in a fascinated manner, much as they might read a crime-filled memoir. But that doesn’t mean he’s forgiven.

In one of Altucher’s last FT columns, he wrote this:

My friend told me: “Sometimes you confuse friendships and business. You need to stop that.” Then he added: “Look into the mirror and ask yourself if you are a trustworthy person. If you can do that three days in a row then let me know and we’ll get together.”

We haven’t spoken since.

The obvious message here is that Altucher isn’t trustworthy. But the subtler message is that so long as you’re trustworthy in friendship, you don’t need to be trustworthy in business. I will never believe that to be true. And I certainly wouldn’t ever trust Altucher if he proposed doing business with me.

Update: Altucher responds in the comments. After calling this post “grossly inappropriate and unprofessional”, he adds:

All of these things I wrote about, mentioned in Felix’s article, are 15-35 years ago or more. Not sure where your anger is at, Felix. You would be hard-pressed to find anyone professionally or personally who has a single complaint against me.

Update 2: As a tipster reminds me, Altucher reckons that maybe insider trading should be legal. Which would be handy indeed for anybody with the ability to hack into others’ email accounts.

Update 3: Altucher has now taken the post down.

Update 4: Commenter Bill Andivey presents the James Altucher rap.


“Just Enough” by Fitty Dollar J:

I’m Fitty Dollar J, gonna teach ya how to rap my way,
I don’t sling no rock, I just push a bunch o’ crock,
Been a crook from the get go, though I took down my say so,
I’m a master self dealer, not so good a self squealer.

Stevie Cohen changed my life, mind if I ring up yo wife?
Hit ya wiff a Pacifi-ca, now I wield a hedge fund, duh!
Don’t need no skillz ya jerk, got tole how da cell fone work,
‘Course I’m contro-versial, you let me hold the purse, y’all.

Runnin’ red lights, sleeping good at nights
Cuz, I read your email, popo knows I’m a big whale
Laughing at my large pay, I’m gonna save a life today,
I’m rappin’ bout the small stuff, to ease my conscience just enough.

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18 questions for Martin Erzinger

Felix Salmon
Dec 31, 2010 00:44 UTC

M Schuler of Colorado leaves a blistering comment on my post about Martin Erzinger, the Morgan Stanley broker who bought his way out of a felony charge. It’s required reading for anybody who is inclined to believe Erzinger’s defense, that he fell asleep at the wheel, drifted off the road, and never had a clue that he’d hit anybody.

It’s also required reading for anybody who still lets Martin Erzinger or Morgan Stanley manage their money. Erzinger’s behavior is unconscionable, and Stanley’s continued employment of him is a massive blot on the firm’s reputation.

In any case, here’s the meat of the comment: 18 questions for Martin Erzinger. I very much doubt he’ll ever attempt to answer them.

1. Is it reasonable to believe that less than 10 minutes after completing a workout at your club you would fall asleep in the middle of the afternoon while driving your car?

2. Is it reasonable to believe that you would be suffering from sleep deprivation caused by sleep apnea to such an extent that this deprivation would cause this mid-afternoon narcolepsy?

3. Is it believable that this malady was not “diagnosed” until a week after the accident?

4. Is it believable that the “diagnosis” itself says “the patient “may have developed sleep apnea around the time of the accident”?

5. Is it believable that a qualified doctor would allow the patient to continue driving (thus risking his own liability and medical license) after such a serious accident?

6. Is it believable that you would remain asleep after hitting a cyclist, leaving the road, driving over two hundred and sixty feet through terrain rough enough to tear the bumper off your brand new car?

7. Is it believable that you were (as you testified in court) aware that the car came to rest on a steep angle and yet still be “dazed or asleep”?

8. Is it believable that upon coming to rest your body would not be hyperaware due to the over whelming amount of adrenaline coursing through your veins?

9. Is it believable that upon becoming aware that you had driven off the road over rough terrain in a brand new $100,000 plus Mercedes Benz, you would not get out of the car to inspect it for damage prior to driving out of the ditch and onto the road?

10. Is it believable that you would try to reenter the highway without looking behind you for oncoming traffic?

11. Is it believable that such a glance over your shoulder would not reveal the cars stopped across the highway at the point of your departure from the road and the body of the cyclist you hit lying in the road less than 90 yards behind you?

12. Is it believable that “an honest man” would not have any concern for damage he might have caused while “asleep” while driving”?

13. Is it believable that if you were going to call for a tow for your disabled car, that you would not call while the car was in the ditch, but would drive it out of the ditch, risking further damage, and proceed to drive over three miles to hide behind an abandoned Pizza Hut before calling for a tow?

14. Is it believable that an “honest man” would say he had called police when there is no record of such a call in the police call log nor on his cell phone records?

15. Is it believable that an “honest man” would tell Onstar not to use the email address they had on file for him (which was correct) but to use his wife’s email address?

16. Is it believable that an “honest man” would have his company’s employment attorney contact the District Attorney in order to attempt to influence the entering of a felony “due to the effect on his job”?

17. Is it believable that, knowing you had severely injured the son-in-law of a friend, you never visited the injured cyclist, never admitting hitting him? (In court you said “I’m sorry this happened to you”.)

18. Is it believable that an “honest man” would not notify the Security and Exchange Commission, as required by law, that he was charged with a felony until ordered to do so by a judge over 180 days after the accident?

Writes Schuler:

These are only a few of the questions that should have plagued the District Attorney prior to unfairly reducing a felony charge against Marty Erzinger to a couple of misdemeanors.

If you find the answers to these questions as unbelievable as I do, you must conclude that neither the District Attorney nor Mr. Erzinger could meet the reasonable standard of an honest man.

I, for one, would never want this man in charge of my money, nor any firm which happily continues to employ him.


Morgan Stanley couldn’t care less about the behavior of its employees.

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Why Martin Erzinger’s victim doesn’t need his money

Felix Salmon
Dec 22, 2010 16:33 UTC

Remember Martin Erzinger, the Morgan Stanley broker who bought his way out of a felony charge? He’s been sentenced now—a year’s probation, and 45 days of charity work. (Some people do that kind of thing voluntarily, and don’t consider it a punishment at all.) And Al Lewis has a magnificent column on the case, which uncovers an interesting twist: Erzinger’s victim, Steven Milo, is the son-in-law of Tom Marsico. Yes, that Tom Marsico, the one with $55 billion in assets under management.

Mutual fund magnate Tom Marsico was at the Vail Valley Medical Center on July 3, tending to his son-in-law, Dr. Steven Milo, who’d been hit by a black, 2010 Mercedes while bicycling…

Into the ER rolls Martin Erzinger, a wealth adviser who oversees more than $1 billion in accounts at Morgan Stanley Smith Barney in Denver.

Erzinger says hi to [Marsico's wife] Cydney.

“Marty and I have been acquaintances for some 20 years,” Marsico explained. “I said, ‘Geez, Marty, is there anything I can do for you? He said, ‘Oh, no, I’m just in for some preliminary tests.’”

Erzinger was in and out in 20 minutes, Marsico recounted: “He checked out just fine.” But Marsico’s mind raced. Black Mercedes? Erzinger? “I was putting two and two together and I thought, ‘Oh, God. No. This can’t be.”

The Marsico connection underlines why Milo was naturally more interested in justice than in money, and why it’s unconscionable that DA Mark Hurlbert would ever suggest—as he did, when he dropped the felony charges—that “justice in this case includes restitution and the ability to pay it.”

Milo is going to suffer greatly for the rest of his life as a result of Erzinger’s actions, but Erzinger’s future income isn’t going to help him. Instead, Milo will have to life with the knowledge that his assailant, who left him to die on the side of the road, not only avoided jail, but even blamed “new-car smell” in his attempt to duck responsibility for his actions.

Erzinger should be in jail right now, rather than managing hundreds of millions of dollars of other people’s money. I hope his clients drop him—and that other Morgan Stanley clients, too, move their money elsewhere. Perhaps to Marsico Capital. I can’t see how anybody would want to park their money with a firm which continues to pay Martin Erzinger millions of dollars.


Felix do you work for TMZ or Reuters? I can’t tell after this article. This is not a quality article about the public markets. I can’t believe Reuters let you publish this. This a joke! Why are you writing about some broker in Denver? This is a ‘hack’ article and you know it. You are looking for another Wall Streeters are bad guys article and this is what you found.

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How to buy your way out of a felony charge

Felix Salmon
Nov 8, 2010 13:38 UTC

One of the main contributing factors to the financial crisis was the feeling of impunity and omnipotence which pervaded Wall Street. No matter how egregious their behavior, financiers knew that they would end up wealthy and comfortable. That, in turn, made it much easier to overcome their natural risk aversion.

Jon Hendry now points me to a very shocking real-world (non-financial) example of this. Martin Joel Erzinger is a star broker at Smith Barney, overseeing over $1 billion in assets for “ultra high net worth individuals, their families and foundations”. On July 3, Erzinger was driving his black Mercedes in Eagle, Colorado, and ran over a cyclist — New York physician Steven Milo — from behind:

Milo suffered spinal cord injuries, bleeding from his brain and damage to his knee and scapula, according to court documents. Over the past six weeks he has suffered “disabling” spinal headaches and faces multiple surgeries for a herniated disc and plastic surgery to fix the scars he suffered in the accident.

“He will have lifetime pain,” Haddon wrote. “His ability to deal with the physical challenges of his profession — liver transplant surgery — has been seriously jeopardized.”

Erzinger immediately drove away from the scene of the crime, eventually stopping in a parking lot on the other side of town, where he called the Mercedes auto assistance service and asked that his car be towed.

This kind of egregious hit-and-run is, obviously, a very serious crime. Milo is incredulous at the suggestion from Erzinger’s attorneys “that Erzinger might have unknowingly suffered from sleep apnea”, and wants Erzinger to be charged with a felony. Justice must be served: the case “has always been about responsibility, not money”, he wrote to DA Mark Hurlbert.

Yet Hurlbert, looking at Erzinger’s wealth, decided that the case really was about the money after all:

“The money has never been a priority for them. It is for us,” Hurlbert said. “Justice in this case includes restitution and the ability to pay it.”

Hurlbert said Erzinger is willing to take responsibility and pay restitution.

“Felony convictions have some pretty serious job implications for someone in Mr. Erzinger’s profession, and that entered into it,” Hurlbert said. “When you’re talking about restitution, you don’t want to take away his ability to pay.”

In other words, Erzinger has bought his way out of a felony charge, over the strenuous objections of his victim; it’s very unlikely that online petitions will do any good at this point. Just another thing to add to the list of things that money can buy, I suppose.


I don’t get it… even from a cold-hearted market perspective, would I trust my investment in the hands of someone who (if we dare give him the benefit of the doubt), was too unobservant/distracted/careless to notice that he caused an accident and left someone for dead on the side of the highway. Heck no! Lock the bugger up and through away the key–his usefulness to society is over.

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Ben Stein’s employer breaks the law

Felix Salmon
Apr 5, 2010 21:27 UTC

April 2 was meant to be a great day in the history of sleazy free-credit-report websites like Ben Stein’s employer Freescore. A new FTC rule came into effect (read all 22 pages of it here), forcing all such websites to have a huge notice across the top of every web page, saying that AnnualCreditReport.com is the ONLY authorized source for credit reports under federal law, and providing a prominent link to this page.

Yet here we are on April 5, and Freescore.com has no such disclaimer. Neither does CreditReport.com. And the biggest site of them all, FreeCreditReport.com, has no such notice either — but instead of simply ignoring the law, like its competitors, it’s trying to find a loophole. Instead of the notice, there’s a box saying this:

Why isn’t my Credit Report free?

Due to federally imposed restrictions it is no longer feasible for us to provide you with a free Experian Credit Report. So for now we’ll be charging you $1 for your Report. But instead of keeping your $1, we’ll donate 100% of the proceeds to Donorschoose.org, an online charity providing funds to classrooms in need.

Underneath that text is the DonorsChoose logo; it’s worth noting that the underlined text, which looks like a hyperlink, isn’t one, and that it’s impossible to click away from FreeCreditReport.com to DonorsChoose.org. I’d also be astonished if DonorsChoose approved of this despicable stunt.

The idea here is that if FreeCreditReport charges $1 and immediately donates that money to charity, then the report isn’t free any more, the name of the site notwithstanding, and therefore the site doesn’t need to carry the FTC-mandated notices. I do hope that the FTC doesn’t allow that kind of nose-thumbing.

But in any case it’s pretty clear that both Freescore.com and CreditReport.com are simply in outright violation of the new laws. I look forward very much to seeing them slapped with some huge fines.


How many consumers are even aware that this free disclosure law only covers the major Consumer Reporting Agencies (Experian, Equifax, and TransUnion) but not the dozens of smaller “nationwide specialty consumer reporting agencies” (as defined by FCRA Section 603(w))?

For example, the Medical Information Bureau Inc. (MIB) is a cooperative data exchange formed by the North American insurance industry more than 100 years ago. Today, the MIB operates the most extensive database of medical information on individuals who have previously applied for health, life, disability income, critical illness and long-term care insurance. The Federal Trade Commission warns that, “in addition to an individual’s credit history, data collected by Medical Information Bureau, Inc. may include medical conditions, driving records, family history, criminal activity, drug use, sexual orientation, and participation in hazardous sports, among other facts.”

https://www.annualmedicalreport.com/deni ed-insurance-because-of-a-medical-coding -error-in-her-mib-report-video/

Likewise, most consumers and even many insurance agents are unaware that insurers such as Humana, UnitedHealth Group , Aetna (AET), and Blue Cross plans, have ready access to applicants’ prescription histories. These online reports, available in seconds from a pair of little-known intermediary companies, typically include voluminous information going back five years on dosage, refills, and possible medical conditions. The reports also provide a numerical score predicting what a person may cost an insurer in the future.

https://www.annualmedicalreport.com/pres cription-analytics-corporate-databases-t rack-whats-in-your-medicine-cabinet/

An investigation last year by the Federal Trade Commission found that the two companies supplying these pharmacy profiles—Ingenix Inc. and Milliman Inc.—violated federal law for years by keeping the system hidden from consumers. But the FTC has merely required disclosure if prescription information causes denial of coverage or some other adverse action; the agency imposed no penalties. Disturbingly, the new laws do not require the Medical Information Bureau Inc., Ingenix Inc., or Millliman Inc. to offer consumers a safe, online source to request their medical report files; they only have “1-800″ numbers.

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Inside a not-bailed-out bank

Felix Salmon
Mar 22, 2010 15:19 UTC

People have many legitimate reasons to have a grievance against their bank. In fact, it’s rare to find someone who hasn’t been extremely angry at their bank at some point. But rarely is there a case as clear-cut as this one, from Aaron Elstein:

Last November, Martin Cadillac, a prominent New York area car dealer, sued Mr. Antonucci and Park Avenue Bank, claiming the bank made “extortionate demands” and engaged in “predatory lending.”

Martin Cadillac alleges that Mr. Antonucci threatened to terminate its credit line, which would have put the dealer out of business, unless it agreed to provide cars to the bank and members of Mr. Antonucci’s family. The dealer gave Mr. Antonucci’s son a $33,000 Land Rover for no charge, two Cadillac SRXs worth around $50,000 each to his wife, and a $75,000 Cadillac Escalade to the bank, according to court documents…

The feds say they began investigating Mr. Antonucci last October, and he resigned as CEO the same month. Earlier this month, regulators seized Park Avenue Bank and transferred its accounts to Valley National Bank.

A banker has a huge amount of power over his borrowers: he can end their credit line and their banking relationship at any time, and since it takes a long time to build up that kind of trust and relationship, such an action can mean the business is forced to fail. If these allegations have any truth to them, Antonucci deserves to go away for a very long time indeed.

Antonucci stands out for another reason, too: he’s one of the very few bankers who was so far beyond the pale that Treasury wouldn’t even give him the $11.3 million of TARP funds that he asked for. It seems that the bailout machine wasn’t completely a rubber stamp, after all.


I am not sure that the majority of banks who formally applied for TARP received TARP. But even if that were true, banks were advised privately whether or not to apply. All TARP applications were pre-screened by the bank’s primary regulator; that regulator actively and systematically advised banks whether or not their applications would be successful. One obvious “don’t bother” whisper was to banks on the FDIC’s problem bank list. And there were other “don’t bother” categories including banks in certain market areas with significant real estate price declines–Arizona, Nevada, Florida. I am not placing a value judgment here. The regulators were trying to be stewards of taxpayer funds and didn’t want to give TARP to bank that might fail.

What is clear here is that the criteria for a small bank to receive TARP was “absence of regulatory blowback risk,” i.e. the regulators picked only the banks that really didn’t need the capital now or in the foreseeable future. This was not a bailout. In contrast, the large bank qualifications for TARP were based on an almost diametrically opposed concept–the pressing need for capital now in order to be bailed out from receivership.

So to my earlier comment: If only the best small banks got TARP, how could it be that ANY of those “best of the best” small banks can’t now pay their TARP dividend? I think that there are several possible answers here: (i)misrepresentation of books and records during the TARP process (like Park Avenue Bank and UCBH); (ii)relatively lenient bank examiners, or(iii)some significant post-TARP event like unexpected CRE/SFR declines, unnoticed internal control failures or the like.

So…not getting TARP was a common occurrence (90% of the banks didn’t get TARP). However, the bank that now can’t pay its TARP dividends is flying a blazing red flag of something terribly wrong.

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Dead Bankers

Felix Salmon
Feb 16, 2010 17:53 UTC

I was off the grid for most of the long weekend, which allowed me to curl up with a pulpy thriller for the first time in many, many years. I’m by no means an expert on the genre, but if you’re a reader of this blog and you like such things then there’s a good chance that Dead Bankers, a novel by Philip Delves Broughton, might be exactly for you; there’s a paperback version here if you don’t have a Kindle.

The thing that makes this book so great to read right now is not the fact that it’s full of the usual thriller ingredients — glamorous protagonists, jet-set lifestyles, money and sex and death and all that. Rather, it’s the thrill of seeing the whole financial crisis fictionalized, with thinly-veiled real-world figures (Hank Paulson, Steve Schwarzman, Nat Rothschild, Chris Hohn, Henry Kravis, Roman Abramovich) being caught up in intrigue and murder and blackmail for stakes in the billions of dollars. I don’t want to give too much away, but suffice to say that no matter how bad your view of these figures is right now, the chances are that Broughton’s is much, much worse. And that the walk-on role given Schwarzman’s crab claws is particularly delicious.

If anything, the problem with this book is that it’s almost got too much real-world material in it: it’s harder to forgive a couple of the more extreme financial contrivances when you know that the author went to Harvard Business School and knows his material so well. But there’s no doubt that the book is fun to read and extremely timely. If you’ve ever fantasized about what would happen if the people who helped create the global financial crisis started getting serially murdered, you should give this book a go.


Rad Dead Bankers last night. Definitively a page turner; I finished reading at 1 am.

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Why harsh white-collar sentences make sense

Felix Salmon
Dec 21, 2009 16:52 UTC

Matthew Kelley asks whether the 14-year sentence for the former head of El Paso Corp.’s natural gas trading business isn’t excessive; my feeling is that it makes a certain amount of sense.

For one thing, there are lots of excessive sentences in US jurisprudence, and there’s no reason why white-collar crimes should be exempted from that phenomenon. Indeed, the opposite is arguably the case: in the case of most crimes, it’s pretty obvious in the wake of the crime that a crime has taken place, and as a result a police investigation is immediately launched. Much of the attraction of white-collar crime, by contrast, lies in the fact that if it works, there’s a very good chance that no one will ever know that a crime ever happened at all.

As a result, a much lower proportion of white-collar crimes is investigated than of crimes as a whole — and that’s before you get to the question of whether or not they can be successfully prosecuted. After all, these are complex things, and hard to prove beyond reasonable doubt, as the prosecutors of Ralph Cioffi know full well.

Given (a) the low probability of being investigated, then, along with (b) the far-from-certain probability of being successfully prosecuted even if you are investigated, and (c) the enormous potential rewards, it’s easy to see how white-collar crime is very attractive. And the government has very few tools against it beyond very stiff sentences for those criminals who are investigated and tried and found guilty.

Against all of that one has to put the strong principle that the punishment should always fit the crime — and in this case, which is arguably victimless, a 14-year sentence does seem harsh. Still, it’s important to remember the amount of money involved in these cases. Few Texans would object to a 14-year sentence for a simple thief who stole $1 million, and I’m sure that James Brooks ended up making much more than that in excess bonuses tied to his fraudulent reporting.

More generally, it’s easy to lose sight, in the high-speed world of trading, of the fiduciary responsibility shouldered by people moving billions of dollars of other people’s money. A huge amount of the anger directed at Wall Street, especially in the wake of the financial crisis, is a result of the fact that this is real money we’re talking about here, and a lot of the brash young traders on the Street seem to have no conception of the value of a dollar. If sentences like this help to sober them, that’s undoubtedly a good thing.


“For one thing, there are lots of excessive sentences in US jurisprudence, and there’s no reason why white-collar crimes should be exempted from that phenomenon.”

So because one sentence is excessive all sentences should be excessive? What logic! Kind of along the lines that since you broke one arm, you should break the other just for parity’s sake.

How about levying sentences that are appropriate to the offender’s role, culpability, etc. and that meet the purposes of punishment. That means amending overly harsh sentences. It also means sentencing white collar criminals to fines and prison terms that refelct culpability and is informed by societal demand for punishment, rehabilitation, etc.

I know I’m late to comment on this post. But for goodness sake…

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Lawless Russia

Felix Salmon
Dec 16, 2009 22:58 UTC

Just in case you were feeling all happy about the book giveaway, let me bring you down to earth by pointing you to Law and Order in Russia, a website set up by Hermitage Capital Management in memory of their noble Russian lawyer, Sergei Magnitsky. Do read his story, it’s horrific, and I hope it shames the Russian government to do more than simply fire major general Anatoly Mikhalkin of the Moscow Interior Ministry (although that’s a good start).

It’s quite amazing, the way in which the Russian police — with full impunity — managed to steal a whopping $230 million which Hermitage had paid in taxes in 2006. Magnitsky seems to have been unexpected collateral damage. Do spread this story: it shows in the most visceral way just how lawless Russia really is.

(Many thanks to Jesse Eisinger for the heads-up.)


What happened to Sergey Magnitsky is an unimaginable tragedy. The rampant lawlessness in Russia is truly unconquerable if even lawyers are not safe from the reprisals of crooked politicians. Hopefully the steps by the Hermitage foundation to shed light on this sad situation will bring some awareness and possibly some change which is desperately needed.


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