[jnbiche]

It's sketchy because the alleged actions are basically tax fraud. It's also unethical because Hampton Creek were taking money from the pocket of the contractors because they were making them pay income taxes on money they didn't actually earn.

Did you actually read the parent comment? This goes way beyond any deceptive marketing practices.

For the record, I'm one of HN's many (oft mocked) libertarians, but even as a hands-off kinda guy, this is a step too far. They "laundered" the money through their contractor's pay, because they didn't want it to show up on their financial statements.

So it's not the deceptive marketing (you're right that this is more or less par for the course), it's the lies and fraud they allegedly committed to hide the deceptive marketing.

[marme]

it is not tax fraud, it is fraud on the employees and investors. What they did was allowed by the IRS but they lied to the employees and investors about doing it. If a company forces you to buy a uniform with your own money that is legal, if they then decide to give you bonus for the exact amount the uniform costs that is also legal. The fraud is that it was not told to employees that it would be done that way, it was told they would be reimbursed for the expense and they did this to hide the reimbursement which should be investigated by the SEC

[brazzledazzle]

It probably largely depends on the state but I wouldn't be surprised if it's not legal to require an employee (contractor or otherwise) to make purchases like that out of pocket. There's a world of difference between requiring a uniform or professional tools and buying hundreds or thousands of dollars worth of your product.

[bluejekyll]

It's not really clear that anyone was criminally defrauded. The investors could opt to sue in civil court though.

[isubkhankulov]

Not the SEC's jurisdiction. Probably the DOJ.

[mbreese]

Likely also the FTC