Corporate defense lawyers have adopted a new strategy that not even the mob considered. When facing litigation from the government, file misconduct charges against the attorneys bringing the charges.
I can't tell you how often I have to make three attempts at reading Matt's articles. Usually I get about 20% in, and need to put it down for a day, because it is just too depressing.
How long are people just going to sit around and take this?
Need a performance art group that spends all their time navigating the bureaucratic process to embarrass, antagonize, and ban asshole judges and lawyers in their own domains such as Law360 and the ABA.
When we lost the old-school hard-hitting reporters who spent their days mercilessly taking down these kinds of cretins we lost something vital to the lifeblood of our country. The US is supposed to be a rough and tumble place where you are measured by your willingness to fight, your courage to stand alone and take risks. Now we have this odious PMC class who have absolutely no guts or character. No wonder people love Trump: he doesn't lie down for anyone.
After the first paragraph I was fully emotionally down under. I really want to see Civil War for some reason.
We don't have visibility into government and corporate corruption. Of course some is in plain sight - Biden spending 100's of billions on multiple war fronts while American 'citizens' don't have health care for all. Israel has health care for all. How on Earth do we care more for those on other borders and shores than for our citizens? Because we aren't citizens. We are consumers in a global rigged game of wealth and labor capture. The corporatocracy is the only story and it's too late to regulate. Khan can't save us - Amazon/Apple monopolies are horrible but government/corporation collusion backed by oligarchs proves they learned the lesson of the New Deal - Never let it happen again. It's impossible for a new deal because corporations write policies.
We are about to mint our first trillionaire with AI. There are tremendous IT job losses which aren't being covered. MS media still talks about the 70s era unemployment numbers. Tens or hundreds of millions (who's counting?) of mostly gig workers, without heathcare, are not counted in the numbers.
Here's what's really happening: Gen-AI is taking off beyond our imagination. Data centers are being built globally to house the computing needed. Every firm that can produce a chip is doing so. Saudi Arabia is building data centers in the desert to prepare. An analogy is, in Februrary 2020, when we first heard of a virus, China was building hospitals to house the sick. I thought, if pragmatic China is building hospitals, this is very serious.
While data centers and chips are being produced IT is laying off at ridiculous rates. (e.g. AWS laying off their trainers). Firms are preparing for massive layoffs so fire now under the radar.
I'm a big picture person and NO one is talking about this. While Bitcoin is now sanctioned by the banking industry (legal money laundering, how corrupt are we?), it is burning up the planet with data center usage. But it's estimated that AI will use 10 times the energy of Bitcoin. We've had 10 months of consecutive planet warming and oceans are at a tipping point.
So what billionaires are doing. Zuch is building a 20,000 sq ft bunker in Kauai, with a reservoir. Other billionaires are buying land and building their own retreats in NZ. Many cities will be underwater in < 50 years while scientist are 'stunned' because warming in every regard is happening faster than they predicted.
Meanwhile, in America, the electric car is almost dead as we have figured out that hybrid is the only sensible way to go cause - guess what - we don't have enough freaking charging stations. That's right. We can build military bases in months worldwide but charging stations has crippled America's challenge to solving climate change. Why aren't we building solar panels on every roof and parking lot (we have MORE than enough). The answer is ALWAYS it doesn't serve the corporatocracy/oligarchs.
A grossly oversized Baltimore tanker, with a power outage, took out critical infrastructure. (side story - because Biden is paying for it many US or PR projects are not receiving money promised). The point is we are extremely vulnerable while the great wealth transfer is taking place, and perhaps it's by design.
Occam's razor may indicate it's the human condition, focusing on the what affects us today and is easily understood. But that is what leaders are for. To look beyond today, understand complex situations, and implement solutions for the welfare of citizens and our ecosystem - the planet. Is that asking too much?
Since the financial fraud crisis I've thought the approach that Vietnam just took, execution of white collar criminals, is an appropriate solution. There's plenty of documentary evidence. There's no unreliable eye witness testimony here or questionable ballistics on weapons. But there's no justice in this oligarchy. 🤷♂️
My 8 comments (continued from my previous comment):
4. You didn’t mention the SEC, but they are, hands down, the biggest problem in this tragedy. Everyone thinks they’re doing something to defend us from financial crimes. But they are doing nothing to go after billion-dollar financial schemes, because they’re incompetent, plain and simple. The SEC missed the four biggest frauds in history, with the biggest of them all – the Madoff Ponzi scheme, which was brought to their attention as early as 1999 by the courageous whistleblower, Harry Markopolos. All the SEC had to do was open Harry's email. The proof was there, in facts and numbers. The U.S. Congress came this close to voting to disband the SEC and its army of 5,000 lawyers, whose comfortable salaries are paid by U.S. taxpayers. Shareholders and taxpayers would have been better off without the SEC, in my view. The SEC mostly doubles down on the FBI's investigations anyway. The FBI, in turn, has made deals with big banks, such as Goldman Sachs, to use their high-frequency technology to find crimes, which are typically small frauds, under $500,000. The SEC's "Market Intelligence" department has been anything but intelligent. If you ever receive a letter from the SEC, it's always signed by a lawyer who had nothing to do with the SEC action. You can never obtain the names of the people actually responsible for not doing their job. It's always "The Commission." No names. No responsibility.
There is a notable bond between the SEC and major Wall Street corporations. While it's hard to label it as corruption, there's certainly something suspicious. The SEC never pursues big banks unless there's a public outcry and someone hands them clear evidence on a silver platter, as in the Wells Fargo case. They would never independently initiate a case against a big bank due to the "code of silence" Harry Markopolos beautifully discusses in his book, "No One Would Listen." Executives of those corporations are aware of the code of silence, and they feel that they’re above the law, as you rightly pointed out.
5. You've praised the FTC, and rightfully so. But remember: the current FTC chair, Lina Khan, has a low bar to overcome. The FTC hasn't done much over the last 50 years.
Antitrust actions by the FTC have been incredibly weak. Lina Khan talks the talk on the Jon Stewart show and at every antitrust conference you can imagine, but she doesn't walk the walk. It's low-hanging fruit to target regional players, block impending mergers, and go after monopolies like Apple and Amazon. However, taking on the healthcare cartel headed by UnitedHealth is a completely different beast. The cartel has the best antitrust lawyers, both in quality and number, who argue, "Hey, look, we have five competitors, and they're all raising prices, not just us. It's still competition, so we're good, right?" Amazingly, the judges buy this "argument."
6. Another reason why Andrew Witty, CEO of UnitedHealth, thinks he is above the law and therefore can commit insider trading all day long, is because he has seen the worst case scenario play out in front of him: in 2007, the SEC (not the DOJ - so no jail time already) went after then-CEO of UnitedHealth, William W. McGuire, accusing him - you guessed it - of insider trading. To the SEC's credit, they went hard after him, but the case was still settled for a whopping $1 billion (with all the penalties and returned stock options), without admitting any guilt, of course. So yes, it was a tough day for Mr. McGuire, as roughly half of his wealth was wiped out, but, unlike those much less affluent defendants in similar cases, he doesn’t have a criminal record, can work anywhere, and his lifestyle didn’t suffer a bit. In fact, a few years later he bought a professional soccer team, Minnesota United FC. I don’t think people realize how crazy rich these executives have become from their companies' paychecks, mainly due to equity-based compensation: https://sergeiai.substack.com/p/cigna-pays-its-ceo-663318942-amid.
7. Andrew Witty is also a foreign national. He is British. Most people would ask: why would that matter? Well, as the Babylon Health case has shown (https://sergeiai.substack.com/p/the-madoff-of-digital-health-how), the SEC is already lazy the way it is. Going after foreign nationals requires additional paperwork that they are not willing to file, unless it’s absolutely necessary.
8. It’s not just corporate executives who are above the law for white collar crimes. U.S. federal judges and government officials seem to be above the law as well:
* A separate WSJ investigation found that "thousands of senior executive branch employees owned shares of companies whose fates were directly affected by their employers' actions." In other words, thousands of government officials across 8 agencies - the Treasury, EPA, Defense, IRS, SEC, Fed, HHS, and Interior - monetarily benefited from knowledge of material nonpublic information from 2016 to 2021. Not a single one of them was criminally or civilly charged. (https://www.wsj.com/articles/government-officials-invest-in-companies-their-agencies-oversee-11665489653)
Anyway, sorry for the long comment. All I want to say: I don't know what your sources are and how you’ve crafted this story, but bravo, Matt!
Matt: All I can say is, "Wow!" You wouldn't believe how close you've gotten to the truth about the two legal systems in the U.S. - one for the rich and one for the poor. In this day and age, it sounds like a conspiracy theory, but it's really not. Folks may be chuckling and smirking about your statement that there are a lot of people in the most democratic country in the world who not only feel that they are above the law but are being treated by the judiciary system as if they are above the law.
Having expressed all that, I have 8 comments that would hopefully add color to your story. (I had to split my comment into multiple comments. I didn't know Substack has a comment size restriction.)
1. The problem with prosecutors (not so much with defense lawyers) is that they definitely have a scorecard. They are bringing up the case, after all. So the pressure is on them to win. It's all about winning. As you pointed out, winning against rich defendants would give you exposure, but the risk is too high to not only lose, but to be counter-sued and waste time and your own money, and then have all that on your record.
2. That's why for white collar crimes prosecutors often target the less fortunate, as you highlighted. If you're the prosecutor, your probability of winning jumps dramatically for three reasons:
* Because defendants are financially constrained, they lack access to aggressive legal representation. They must rely on local attorneys who are likely acquainted well with both the prosecutor and the judge. They may share the same alma mater, frequent the same country clubs, and dine at the same restaurants. While this might initially seem advantageous for the defendant, it typically isn't. Their lawyers may avoid antagonizing the judge or the prosecutor even over trivial matters, often pushing for a guilty plea against their client's best interests.
* Many people are unaware that there are two distinct stages in the criminal process: the plea/pre-trial and the trial itself. Most law firms charge separate fees for each, with the trial phase potentially being five to six times more expensive than the plea/pre-trial.
* Suddenly, the so-called "guidelines" for sentencing double or more, when we talk about the trial. If agreeing to a plea deal might result in a 12-month jail sentence for, say, a $200,000 fraud, opting for a trial and losing after enduring months, or even years, of stress while also straining your family can lead to a 24-month sentence. Defense attorneys might dissuade their clients from going to trial to curry favor with the judge, as trials are seen as a waste of government resources.
It's fascinating how you've pointed out the vulnerability and risk prosecutors face when pursuing rich criminals. However, when dealing with poor defendants, they often exact revenge, confident that the defendants can do little to counter. They embellish their narratives in press releases with unproven allegations to make their cases more "believable." Despite the disgrace of wealthy criminals counter-suing, prosecutors are hardly better when it comes to incarcerating the poor.
For these reasons, the American constitutional right to a fair trial emerges as a profound hypocrisy within the U.S. legal system. Everyone involved—judges, prosecutors, and even one's own defense attorneys—are inclined to advise against taking a case to trial and to favor accepting a guilty plea because trials are significantly more expensive and the stakes after losing are drastically higher in terms of incarceration duration.
Most Americans recognize that U.S. prisons are disproportionately filled with Blacks and Hispanics. However, an increasing number of white-collar criminals are now being incarcerated for shorter terms of 6, 12, or 18 months.
Remember: the impact extends beyond just the defendants. Their families, children, coworkers, neighbors, and entire communities suffer as well. Few consider these wider effects. Moreover, due to their criminal records, these individuals are unlikely to find employment, and the SEC bans them for life from working in their industry.
Yes, they committed a crime. But they are also victims of a societal double standard: if they had higher social status, their treatment would be completely different.
Furthermore, wealthy white-collar criminals, particularly if they are executives, federal judges, politicians, or government officials, are rarely prosecuted criminally. Even when they are, they often "settle" without admitting guilt, allowing them to continue their careers and enjoy the benefits of their affluent lifestyle.
3. Most Americans don't realize that having a debt with the court is a hundred times worse than having a tax debt. You hear all these stories about IRS agents tracking people across the country, willing to throw people onto the street if they need to seize a house and evict its occupants (so much for property rights—when you owe the IRS, your property rights mean squat).
Now, consider the IRS, and compare it to the court system, which is much more stringent. If you've been convicted of a financial crime involving $200,000, you might think you can simply pay back the $200,000, serve your time, and be done with it. You're wrong. The judge decides the penalty, which could be up to five times the amount of the fraud. If there are victims involved, it may be even higher. Suddenly, you must pay, say, $1 million on a $200,000 fraud conviction, money you most likely don't have.
If you don’t pay, the court literally puts a hold on your life: every grocery purchase is monitored, your driver’s license is revoked (unless you convince the judge you need it for work), and your passport is definitely confiscated—you can’t travel. Every remaining asset you have is subject to liens. It’s a horrible life.
Whether it’s the federal court or the IRS, unlike other developed countries, nobody gives a damn about the families of the convicted. If you're putting a lien on someone’s property and evicting them because they can't pay the court penalty, do you realize there are other people in the house? They've done nothing wrong. Does the 5-year-old daughter deserve to suddenly live in a homeless shelter? Consider the lasting impact on her mental health.
For these reasons, convicted felons (and their families) have much higher rates of divorce, higher suicide rates, and roughly a decade shorter life expectancy.
You may say, "Why should we care? The father committed the fraud, so yes, he should have thought about the repercussions." That's true. He made a terrible mistake. However, the fact remains: his entire family, including his innocent children, are suffering. Many end up living on the streets or in homeless shelters. Those who have spent at least one night in a state-run homeless shelter will tell you that it hardly qualifies as “accommodation”—you fill out an insane amount of paperwork, and even if you're approved, you're crammed into very tight quarters with other families in barely livable conditions. This is the reality for hundreds of thousands of Americans every day.
Again, these are the less fortunate people whom prosecutors target, whereas the biggest and richest criminals continue to enjoy their life perks. As you’ve rightfully pointed out, this happens because prosecutors are terrified of prosecuting them, fearing retaliation. It’s truly a tragedy.
I am grateful for your pointing out the inner workings of the monopoly and big business in ways that those of us who are not involved in either might not know. Of course this effects us all. What is not clear to me from this article is what are we writing to our elected officials to get them to know that we want then to legislate against this. More severe consequences for defendants that frivolously go after prosecutors? More severe consequences for judges that allow these frivolous lawsuits? I am thinking of the case in Georgia where defendants in the election fraud mob action case led by Fani Willis attacked her. We know that is one of Trump's many modus operandi. That is why I was not angry with her or the defendants, but the judge gave me pause and drew my ire, because once it was established that she was not guilty he still put punishment on her making her choose to lose someone whom we can assume was trusted and up to speed on the case. Since Trump is such a dirty player I assume that any dirt that he throws on people is not true unless there is a lot of independent evidence to the contrary, which there is usually not. Instead there is evidence that he is the dirty one. You claim that things are starting to work better. Could you please be more specific about that?I know Lina Khan is a jewel in the Federal Trade Commission, at least the one we know about. She is a hero to me. May all little girls learn about her and the amazing work she is doing to save our democracy! I would love to see a show targeted at children (which is just about the level of the average Trump supporter) called Justice fighters, with Lina and others who are fighting to save democracy as the superheros. Of course we know who the many bad guy figures are. We can start with Trump and his MAGAs, but corporate heads and lawyers should be in the line up too. I love this interview by Jon Steward of Lina Khan. It makes so clear why she is a hero of democracy. https://youtu.be/oaDTiWaYfcM?si=VM-lSEN3583f3iTk
I think we should stop pretending that the US is some kind of glowing city on a hill where justice reigns and rule of law is sacrosanct. We became a 3rd world Banana Republic sometime in the 1970s when Tont Coelho, AL From and Bill Clinton decided to choose the silver even when there was no lead on offer. Democracy is now a blunt and useless tool to prise these rich parasites out of the rotting woodwork of our nation.
Vile. Trial attorneys don't face enough consequences for truly frivolous motions. Wasn't there some antitrust case where some vexatious senior partner was... called out in a footnote. Like oh my, *a footnote* saying the judge *nearly* sanctioned him. That will definitely hurt business and reform behavior!
Well Thank You Matt, for your time and sharing info. Just another example of the of what I call the Octopus, for some many Tenacles that has been put in place. For reason to overwhelm a person or group.
Why, I Advocate we need a new group agency, TOO simple all this to the voter.
Congress is where this is most needed. We need a rating system as to those elected. Just as like baseball rating-stats. For the voters!
Read all post here and agree with all but not so much on one. We can not give up, once and doing so, it will be just harder later, once gone.
Our Political divided got to end. We got con-men-persons into power now, They are cowards in most cases. To where Congress has the only power to declare WAR. To where, They cannot be trusted with that, for they cant even hold the Oath of Office even.
I can't tell you how often I have to make three attempts at reading Matt's articles. Usually I get about 20% in, and need to put it down for a day, because it is just too depressing.
How long are people just going to sit around and take this?
Interesting response. I think in today's hyper-polarized climate, it could work. Maybe the good prosecutors will adopt it, and successfully.
Need a performance art group that spends all their time navigating the bureaucratic process to embarrass, antagonize, and ban asshole judges and lawyers in their own domains such as Law360 and the ABA.
When we lost the old-school hard-hitting reporters who spent their days mercilessly taking down these kinds of cretins we lost something vital to the lifeblood of our country. The US is supposed to be a rough and tumble place where you are measured by your willingness to fight, your courage to stand alone and take risks. Now we have this odious PMC class who have absolutely no guts or character. No wonder people love Trump: he doesn't lie down for anyone.
After the first paragraph I was fully emotionally down under. I really want to see Civil War for some reason.
We don't have visibility into government and corporate corruption. Of course some is in plain sight - Biden spending 100's of billions on multiple war fronts while American 'citizens' don't have health care for all. Israel has health care for all. How on Earth do we care more for those on other borders and shores than for our citizens? Because we aren't citizens. We are consumers in a global rigged game of wealth and labor capture. The corporatocracy is the only story and it's too late to regulate. Khan can't save us - Amazon/Apple monopolies are horrible but government/corporation collusion backed by oligarchs proves they learned the lesson of the New Deal - Never let it happen again. It's impossible for a new deal because corporations write policies.
We are about to mint our first trillionaire with AI. There are tremendous IT job losses which aren't being covered. MS media still talks about the 70s era unemployment numbers. Tens or hundreds of millions (who's counting?) of mostly gig workers, without heathcare, are not counted in the numbers.
Here's what's really happening: Gen-AI is taking off beyond our imagination. Data centers are being built globally to house the computing needed. Every firm that can produce a chip is doing so. Saudi Arabia is building data centers in the desert to prepare. An analogy is, in Februrary 2020, when we first heard of a virus, China was building hospitals to house the sick. I thought, if pragmatic China is building hospitals, this is very serious.
While data centers and chips are being produced IT is laying off at ridiculous rates. (e.g. AWS laying off their trainers). Firms are preparing for massive layoffs so fire now under the radar.
I'm a big picture person and NO one is talking about this. While Bitcoin is now sanctioned by the banking industry (legal money laundering, how corrupt are we?), it is burning up the planet with data center usage. But it's estimated that AI will use 10 times the energy of Bitcoin. We've had 10 months of consecutive planet warming and oceans are at a tipping point.
So what billionaires are doing. Zuch is building a 20,000 sq ft bunker in Kauai, with a reservoir. Other billionaires are buying land and building their own retreats in NZ. Many cities will be underwater in < 50 years while scientist are 'stunned' because warming in every regard is happening faster than they predicted.
Meanwhile, in America, the electric car is almost dead as we have figured out that hybrid is the only sensible way to go cause - guess what - we don't have enough freaking charging stations. That's right. We can build military bases in months worldwide but charging stations has crippled America's challenge to solving climate change. Why aren't we building solar panels on every roof and parking lot (we have MORE than enough). The answer is ALWAYS it doesn't serve the corporatocracy/oligarchs.
A grossly oversized Baltimore tanker, with a power outage, took out critical infrastructure. (side story - because Biden is paying for it many US or PR projects are not receiving money promised). The point is we are extremely vulnerable while the great wealth transfer is taking place, and perhaps it's by design.
Occam's razor may indicate it's the human condition, focusing on the what affects us today and is easily understood. But that is what leaders are for. To look beyond today, understand complex situations, and implement solutions for the welfare of citizens and our ecosystem - the planet. Is that asking too much?
Organized crime.
Since the financial fraud crisis I've thought the approach that Vietnam just took, execution of white collar criminals, is an appropriate solution. There's plenty of documentary evidence. There's no unreliable eye witness testimony here or questionable ballistics on weapons. But there's no justice in this oligarchy. 🤷♂️
My 8 comments (continued from my previous comment):
4. You didn’t mention the SEC, but they are, hands down, the biggest problem in this tragedy. Everyone thinks they’re doing something to defend us from financial crimes. But they are doing nothing to go after billion-dollar financial schemes, because they’re incompetent, plain and simple. The SEC missed the four biggest frauds in history, with the biggest of them all – the Madoff Ponzi scheme, which was brought to their attention as early as 1999 by the courageous whistleblower, Harry Markopolos. All the SEC had to do was open Harry's email. The proof was there, in facts and numbers. The U.S. Congress came this close to voting to disband the SEC and its army of 5,000 lawyers, whose comfortable salaries are paid by U.S. taxpayers. Shareholders and taxpayers would have been better off without the SEC, in my view. The SEC mostly doubles down on the FBI's investigations anyway. The FBI, in turn, has made deals with big banks, such as Goldman Sachs, to use their high-frequency technology to find crimes, which are typically small frauds, under $500,000. The SEC's "Market Intelligence" department has been anything but intelligent. If you ever receive a letter from the SEC, it's always signed by a lawyer who had nothing to do with the SEC action. You can never obtain the names of the people actually responsible for not doing their job. It's always "The Commission." No names. No responsibility.
There is a notable bond between the SEC and major Wall Street corporations. While it's hard to label it as corruption, there's certainly something suspicious. The SEC never pursues big banks unless there's a public outcry and someone hands them clear evidence on a silver platter, as in the Wells Fargo case. They would never independently initiate a case against a big bank due to the "code of silence" Harry Markopolos beautifully discusses in his book, "No One Would Listen." Executives of those corporations are aware of the code of silence, and they feel that they’re above the law, as you rightly pointed out.
5. You've praised the FTC, and rightfully so. But remember: the current FTC chair, Lina Khan, has a low bar to overcome. The FTC hasn't done much over the last 50 years.
Antitrust actions by the FTC have been incredibly weak. Lina Khan talks the talk on the Jon Stewart show and at every antitrust conference you can imagine, but she doesn't walk the walk. It's low-hanging fruit to target regional players, block impending mergers, and go after monopolies like Apple and Amazon. However, taking on the healthcare cartel headed by UnitedHealth is a completely different beast. The cartel has the best antitrust lawyers, both in quality and number, who argue, "Hey, look, we have five competitors, and they're all raising prices, not just us. It's still competition, so we're good, right?" Amazingly, the judges buy this "argument."
6. Another reason why Andrew Witty, CEO of UnitedHealth, thinks he is above the law and therefore can commit insider trading all day long, is because he has seen the worst case scenario play out in front of him: in 2007, the SEC (not the DOJ - so no jail time already) went after then-CEO of UnitedHealth, William W. McGuire, accusing him - you guessed it - of insider trading. To the SEC's credit, they went hard after him, but the case was still settled for a whopping $1 billion (with all the penalties and returned stock options), without admitting any guilt, of course. So yes, it was a tough day for Mr. McGuire, as roughly half of his wealth was wiped out, but, unlike those much less affluent defendants in similar cases, he doesn’t have a criminal record, can work anywhere, and his lifestyle didn’t suffer a bit. In fact, a few years later he bought a professional soccer team, Minnesota United FC. I don’t think people realize how crazy rich these executives have become from their companies' paychecks, mainly due to equity-based compensation: https://sergeiai.substack.com/p/cigna-pays-its-ceo-663318942-amid.
7. Andrew Witty is also a foreign national. He is British. Most people would ask: why would that matter? Well, as the Babylon Health case has shown (https://sergeiai.substack.com/p/the-madoff-of-digital-health-how), the SEC is already lazy the way it is. Going after foreign nationals requires additional paperwork that they are not willing to file, unless it’s absolutely necessary.
8. It’s not just corporate executives who are above the law for white collar crimes. U.S. federal judges and government officials seem to be above the law as well:
* A WSJ investigation identified 61 federal judges who didn’t just own stock in companies that were litigants in their courtrooms. They, or their family members, or their brokers traded these shares as the suits were progressing. (https://www.wsj.com/articles/federal-judges-brokers-traded-stocks-of-litigants-during-cases-walmart-pfizer-11634306192)
* A separate WSJ investigation found that "thousands of senior executive branch employees owned shares of companies whose fates were directly affected by their employers' actions." In other words, thousands of government officials across 8 agencies - the Treasury, EPA, Defense, IRS, SEC, Fed, HHS, and Interior - monetarily benefited from knowledge of material nonpublic information from 2016 to 2021. Not a single one of them was criminally or civilly charged. (https://www.wsj.com/articles/government-officials-invest-in-companies-their-agencies-oversee-11665489653)
Anyway, sorry for the long comment. All I want to say: I don't know what your sources are and how you’ve crafted this story, but bravo, Matt!
Matt: All I can say is, "Wow!" You wouldn't believe how close you've gotten to the truth about the two legal systems in the U.S. - one for the rich and one for the poor. In this day and age, it sounds like a conspiracy theory, but it's really not. Folks may be chuckling and smirking about your statement that there are a lot of people in the most democratic country in the world who not only feel that they are above the law but are being treated by the judiciary system as if they are above the law.
Having expressed all that, I have 8 comments that would hopefully add color to your story. (I had to split my comment into multiple comments. I didn't know Substack has a comment size restriction.)
1. The problem with prosecutors (not so much with defense lawyers) is that they definitely have a scorecard. They are bringing up the case, after all. So the pressure is on them to win. It's all about winning. As you pointed out, winning against rich defendants would give you exposure, but the risk is too high to not only lose, but to be counter-sued and waste time and your own money, and then have all that on your record.
2. That's why for white collar crimes prosecutors often target the less fortunate, as you highlighted. If you're the prosecutor, your probability of winning jumps dramatically for three reasons:
* Because defendants are financially constrained, they lack access to aggressive legal representation. They must rely on local attorneys who are likely acquainted well with both the prosecutor and the judge. They may share the same alma mater, frequent the same country clubs, and dine at the same restaurants. While this might initially seem advantageous for the defendant, it typically isn't. Their lawyers may avoid antagonizing the judge or the prosecutor even over trivial matters, often pushing for a guilty plea against their client's best interests.
* Many people are unaware that there are two distinct stages in the criminal process: the plea/pre-trial and the trial itself. Most law firms charge separate fees for each, with the trial phase potentially being five to six times more expensive than the plea/pre-trial.
* Suddenly, the so-called "guidelines" for sentencing double or more, when we talk about the trial. If agreeing to a plea deal might result in a 12-month jail sentence for, say, a $200,000 fraud, opting for a trial and losing after enduring months, or even years, of stress while also straining your family can lead to a 24-month sentence. Defense attorneys might dissuade their clients from going to trial to curry favor with the judge, as trials are seen as a waste of government resources.
It's fascinating how you've pointed out the vulnerability and risk prosecutors face when pursuing rich criminals. However, when dealing with poor defendants, they often exact revenge, confident that the defendants can do little to counter. They embellish their narratives in press releases with unproven allegations to make their cases more "believable." Despite the disgrace of wealthy criminals counter-suing, prosecutors are hardly better when it comes to incarcerating the poor.
For these reasons, the American constitutional right to a fair trial emerges as a profound hypocrisy within the U.S. legal system. Everyone involved—judges, prosecutors, and even one's own defense attorneys—are inclined to advise against taking a case to trial and to favor accepting a guilty plea because trials are significantly more expensive and the stakes after losing are drastically higher in terms of incarceration duration.
Most Americans recognize that U.S. prisons are disproportionately filled with Blacks and Hispanics. However, an increasing number of white-collar criminals are now being incarcerated for shorter terms of 6, 12, or 18 months.
Remember: the impact extends beyond just the defendants. Their families, children, coworkers, neighbors, and entire communities suffer as well. Few consider these wider effects. Moreover, due to their criminal records, these individuals are unlikely to find employment, and the SEC bans them for life from working in their industry.
Yes, they committed a crime. But they are also victims of a societal double standard: if they had higher social status, their treatment would be completely different.
Furthermore, wealthy white-collar criminals, particularly if they are executives, federal judges, politicians, or government officials, are rarely prosecuted criminally. Even when they are, they often "settle" without admitting guilt, allowing them to continue their careers and enjoy the benefits of their affluent lifestyle.
3. Most Americans don't realize that having a debt with the court is a hundred times worse than having a tax debt. You hear all these stories about IRS agents tracking people across the country, willing to throw people onto the street if they need to seize a house and evict its occupants (so much for property rights—when you owe the IRS, your property rights mean squat).
Now, consider the IRS, and compare it to the court system, which is much more stringent. If you've been convicted of a financial crime involving $200,000, you might think you can simply pay back the $200,000, serve your time, and be done with it. You're wrong. The judge decides the penalty, which could be up to five times the amount of the fraud. If there are victims involved, it may be even higher. Suddenly, you must pay, say, $1 million on a $200,000 fraud conviction, money you most likely don't have.
If you don’t pay, the court literally puts a hold on your life: every grocery purchase is monitored, your driver’s license is revoked (unless you convince the judge you need it for work), and your passport is definitely confiscated—you can’t travel. Every remaining asset you have is subject to liens. It’s a horrible life.
Whether it’s the federal court or the IRS, unlike other developed countries, nobody gives a damn about the families of the convicted. If you're putting a lien on someone’s property and evicting them because they can't pay the court penalty, do you realize there are other people in the house? They've done nothing wrong. Does the 5-year-old daughter deserve to suddenly live in a homeless shelter? Consider the lasting impact on her mental health.
For these reasons, convicted felons (and their families) have much higher rates of divorce, higher suicide rates, and roughly a decade shorter life expectancy.
You may say, "Why should we care? The father committed the fraud, so yes, he should have thought about the repercussions." That's true. He made a terrible mistake. However, the fact remains: his entire family, including his innocent children, are suffering. Many end up living on the streets or in homeless shelters. Those who have spent at least one night in a state-run homeless shelter will tell you that it hardly qualifies as “accommodation”—you fill out an insane amount of paperwork, and even if you're approved, you're crammed into very tight quarters with other families in barely livable conditions. This is the reality for hundreds of thousands of Americans every day.
Again, these are the less fortunate people whom prosecutors target, whereas the biggest and richest criminals continue to enjoy their life perks. As you’ve rightfully pointed out, this happens because prosecutors are terrified of prosecuting them, fearing retaliation. It’s truly a tragedy.
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I am grateful for your pointing out the inner workings of the monopoly and big business in ways that those of us who are not involved in either might not know. Of course this effects us all. What is not clear to me from this article is what are we writing to our elected officials to get them to know that we want then to legislate against this. More severe consequences for defendants that frivolously go after prosecutors? More severe consequences for judges that allow these frivolous lawsuits? I am thinking of the case in Georgia where defendants in the election fraud mob action case led by Fani Willis attacked her. We know that is one of Trump's many modus operandi. That is why I was not angry with her or the defendants, but the judge gave me pause and drew my ire, because once it was established that she was not guilty he still put punishment on her making her choose to lose someone whom we can assume was trusted and up to speed on the case. Since Trump is such a dirty player I assume that any dirt that he throws on people is not true unless there is a lot of independent evidence to the contrary, which there is usually not. Instead there is evidence that he is the dirty one. You claim that things are starting to work better. Could you please be more specific about that?I know Lina Khan is a jewel in the Federal Trade Commission, at least the one we know about. She is a hero to me. May all little girls learn about her and the amazing work she is doing to save our democracy! I would love to see a show targeted at children (which is just about the level of the average Trump supporter) called Justice fighters, with Lina and others who are fighting to save democracy as the superheros. Of course we know who the many bad guy figures are. We can start with Trump and his MAGAs, but corporate heads and lawyers should be in the line up too. I love this interview by Jon Steward of Lina Khan. It makes so clear why she is a hero of democracy. https://youtu.be/oaDTiWaYfcM?si=VM-lSEN3583f3iTk
I think we should stop pretending that the US is some kind of glowing city on a hill where justice reigns and rule of law is sacrosanct. We became a 3rd world Banana Republic sometime in the 1970s when Tont Coelho, AL From and Bill Clinton decided to choose the silver even when there was no lead on offer. Democracy is now a blunt and useless tool to prise these rich parasites out of the rotting woodwork of our nation.
Vile. Trial attorneys don't face enough consequences for truly frivolous motions. Wasn't there some antitrust case where some vexatious senior partner was... called out in a footnote. Like oh my, *a footnote* saying the judge *nearly* sanctioned him. That will definitely hurt business and reform behavior!
Is there hope, with the current cultural overhaul happening in the industry? With college students getting excited about working for government.
Well Thank You Matt, for your time and sharing info. Just another example of the of what I call the Octopus, for some many Tenacles that has been put in place. For reason to overwhelm a person or group.
Why, I Advocate we need a new group agency, TOO simple all this to the voter.
Congress is where this is most needed. We need a rating system as to those elected. Just as like baseball rating-stats. For the voters!
Read all post here and agree with all but not so much on one. We can not give up, once and doing so, it will be just harder later, once gone.
Our Political divided got to end. We got con-men-persons into power now, They are cowards in most cases. To where Congress has the only power to declare WAR. To where, They cannot be trusted with that, for they cant even hold the Oath of Office even.
My Name is NoBody, (1vs 160)
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