[usrusr]

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.

[fastball]

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).

[usrusr]

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.