Risk vs. Reward. Fraudsters and thieves can easily return the amount stolen. The fact that they rarely get caught works for them. Now make them pay 10x, jail or ban them from doing business and they're likely to think 10x before doing it again.
Even the Romans worried. About "who would be there to clean after the janitors"
Time for a financial death penalty: state imposed maximum impoverishment as penalty for such corruptions.
It's GS types only real fear...
10x was legit in Babylon, circa 1754 BC, with the oldest written law concerning this:
Ex. Law #265: "If a herdsman, to whose care cattle or sheep have been entrusted, be guilty of fraud and make false returns of the natural increase, or sell them for money, then shall he be convicted and pay the owner ten times the loss.
Innocent until proven guilty was also in the Code of Hammurabi, not sure about the 'eye for an eye' bit or the treatment of slaves though. Nonetheless the precedent of 10x is there.
Thanks for the tip, I will go for the YouTube talk before investing in the book.
baybal2 - sibling comment - was correct and unfairly modded down. A well known leader referenced the Law of Hammurabi the other day.
Coincidentally I was listening to this press conference whilst procrastinating on HN, to come across this story. New to the Law of Hammurabi, I had to check out the Wikipedia page, to read the 'ten times' bit, enabling me to conveniently cut 'n' paste the above comment.
Despite going to school I had not ever heard of Law of Hammurabi before. I have not read it in depth but just that small bit of knowledge regarding the history of written laws has changed how I see and understand the world.
It seems to me that the prosecutor and finance minister are probably just as corrupt. They just see a pot of money and want to steal it, masquerading it as reparations.
I don’t think GS did anything wrong and I hope they tell the Malaysians to fuck off.
> It seems to me that the prosecutor and finance minister are probably just as corrupt. They just see a pot of money and want to steal it, masquerading it as reparations.
Could you provide some data to substantiate these accusations? The prosecutor is the first non-Muslim Attorney General in Malaysia's history, picked right after a historic election for Malaysia where the opposition party won for the first time. I don't see any evidence of corruption from what I scanned.
The finance minister is Lim Guan Eng. A politician who was previously imprisoned for defending a rape victim. Allegations of corruption against him were proven to be false and planned by, ironically, a corruption-funded organization under the former regime (the one that was partnered with GS). https://en.wikipedia.org/wiki/Lim_Guan_Eng
> I don’t think GS did anything wrong and I hope they tell the Malaysians to fuck off.
I do think that the two partners Leissner and Ng are probably complicit to some degree. They probably do deserve to get prosecuted by the justice department.
But GS are just the underwriters of the bond, they aren't guaranteeing the bonds. They didn't steal the money either. The Malaysian government is claiming that because the fee was large (around 10%) that it's clear evidence that the organization as a whole was complicit and guilty. I don't think that's a very strong argument.
But the Malaysians don't seem as interested in justice (certainly the two partners should be jailed) as they are in finding someway to get their money back. So instead of looking at the people in their own country who stole the money, an investigation that might implicate other powerful people besides Jho Low, they turn their eyes to easiest target they have, GS, a foreign company.
It might even be reasonable to ask for the underwriting fee back (though I'm on the fence about that), but 7.5 Billion USD? Do you think that number of motivated by justice? Do you think it's motivated by "teaching them a lesson?" Or do you think that the number is so high because Malaysia wants the money and they see an easy way to get it?
7.5 Billion is almost 10% of the entire company's shareholder equity, truly a staggering sum for GS to pay. Total revenue for GS in 2017 was around 30 Billion, net profits were just 4 billion. How is almost 2 years of net profits in the least bit fair as a punishment?
And if it is fair, why stop at that? Why not 15 billion? Or 30 billion? Why not just take all their equity and turn it into a state corporation. Surely Goldman Sachs, the blood sucking squid, deserves a comeuppance for all the proletariat ire they have received over the years.
Maybe that last paragraph is a little much, but the point still stands. I think people irrationally hate banks and hate wall st, and their view of justice for the banks is colored by that discrimination.
Perhaps it would help if we clarified some terms first. "An underwriter is the party that evaluates and assumes another party's risk for a fee, such as a commission, premium, spread or interest.". Note, the part about taking on the risk. GS underwrote the huge 1MDB bond, but allegedly in cahoots with corrupt individuals, while allegedly intentionally ignoring red flags (raised by their own internal compliance department) and then knowingly passing all the risk and subsequent losses to the Malaysian tax payers.
> 7.5 Billion is almost 10% of the entire company's shareholder equity, truly a staggering sum for GS to pay.
Apparently the 1MDB losses have cost Malaysian taxpayers around USD $12 billion. Given that GS was the underwriter and allegedly the key enabler of the scandal, punishing GS by making them pay at least the majority of those taxpayer losses seems unjustified or unfair to you? What amount do you believe is fair?
For example, if a "fence" helps a thief sell off some "gear" and the thief is caught. How much should the "fence" be liable for? How much should the victims get back?
In a bond issue i think the underwriter normally promises to buy securities if they are not sold and evaluates the risk for potential buyers. I'm not sure what claim the Malaysian tax payer has. Maybe Malaysia should default on all these bonds and then hope the people that bought them from GS sue GS if they want to punish GS.
you don't gtake back just the money that they stole. always you get more to convince others to not try it again. they should try and get as much as possible.
The punishment has to be 5000$ and personal punishment such as imprisonment.