[rahimnathwani]

I'm curious to know:

- Does the firm and/or the individual have enough money? i.e. will the settlement, once paid, make investors whole?

- Why does stealing $7 three times get someone a life sentence, but stealing $7MM once get zero jail time?

[rayiner]

> - Why does stealing $7 three times get someone a life sentence, but stealing $7MM once get zero jail time?

It doesn't--stealing $7 isn't a felony, and no three-strikes state predicates a life sentence on three non-felonies.

But to address your general point: there are two different kinds of things. Criminal law isn't just about the effect, but the culpability of the offender. Is the offender a "bad person?" How bad is she? The outcome of killing a person can be anything from no crime at all to murder depending on the mental state of the person who did it--accidentally, recklessly, or intentionally.

"Stealing" is easy to prove and easy to understand as something intrinsically wrong, so we draw a harsh, bright-line rule against it. Financial "fraud," however, is much more complicated. With fraud, the actual transfer of money is voluntary. The crime instead relates to the circumstances surrounding the transfer. What representations were made, etc.? In this case, the $7 million was "excess fees." What exactly is "excess fees" and why are they such a clear violation of social norms that the person belongs in prison?

That's why we have civil actions. Civil actions address a broad range of conduct that we want to discourage, but which isn't so obviously intrinsically immoral that we want to send people to jail over it (even when they involve lot of money). As folks correctly point out below, the underlying conduct could support criminal prosecutions, which may still come. But the SEC's civil suit serves a different function.

[alex_young]

Old news at this point, but there are probably plenty of people serving life for small theft in CA on the old law:

https://www.sfgate.com/news/article/Stealing-one-slice-of-pi...

[rayiner]

California used to invoke the three strikes law where the first two crimes were serious felonies, and the third was anything. But not three misdemeanors.

[jmalicki]

It was still felony petty theft... how stealing a pizza is a felony is messed up, but it was still a felony.

[rahimnathwani]

"criminal prosecutions, which may still come"

I had misunderstood this point. I thought the settlement was like the 'plea bargain' I've seen on American TV shows, i.e. that the settlement meant that would be no criminal charges.

Thanks for the thoughtful explanation.

[jhabdas]

That helps explain the incarceration rate in the US. Mo money mo problems.

[slapshot]

The SEC only has authority to levy civil fines. They issue a fine, and then hand the case over to the US Attorney's Office (and often state attorney generals' offices), which then build a criminal case.

Stay tuned. This may not be over yet.

(A good comparison is the Fyre Festival, which led to both civil and criminal charges: https://www.cbsnews.com/news/fyre-festival-founder-billy-mcf... . )

Edit: Theranos was another where the SEC acted first, then the criminal case came next. https://www.vox.com/2018/6/15/17469332/theranos-elizabeth-ho...

[paulddraper]

And other times criminal charges comes first.

For example, SEC investigated Bernie Madoff multiple times, but the it was the FBI that decided to act, based on a criminal complaint.

Sentence: 150 years.

https://en.wikipedia.org/wiki/Bernard_Madoff

[jhabdas]

In this case should one be allowed to request a death penalty? Wouldn't 150 years in jail be considered cruel and unusual punishment?

[lmm]

> should one be allowed to request a death penalty?

If prison conditions are bad enough for someone to even consider that, that's a damning indictment of the prison system.

> Wouldn't 150 years in jail be considered cruel and unusual punishment?

Certainly not unusual, and jail doesn't seem inherently cruel, if we believe some people are enough of a danger to society that they need to be kept out of it. (Of course some particular jails might be cruel).

(I'm using the British English meaning of "jail"; I'm aware that in US English the term has a technical meaning)

[leetcrew]

> If prison conditions are bad enough for someone to even consider that, that's a damning indictment of the prison system.

really? a cage is still a cage, no matter how nice. i'm not thirty yet; to live out more than half of my life in confinement, with no hope of release, sounds like a fate worse than death to me. if i were near the end of my life already and had a family, it might be a different calculation.

[paulddraper]

Not that it really invalidates the point behind your question, but FYI currently felony larceny has a of minimum of $500-2,500 depending on the state.

(Though until 2013, Indiana actually had a no minimum.)