But that's exactly my problem--there are countless examples of banking crises the result of colossally irresponsible and negligent financial and economic decisions. Yet the government bails those out and does not call those fraud.
The issue that I have is the correct concept and the correct argument. The proof of fraud, I think, requires forensic evidence and proof beyond reasonable doubt. Not the optics and my personal level of credulity.
And I say this as a Marxist leftist, so it's not like I'm any supporter of cryptocurrencies, etc. I might even argue that under capitalism, people's notions of 'responsibility', 'stability', 'fraud' etc. are already so distorted that they don't have a coherent theory of what things are crimes and what things are just morally bad, socially bad, and so on.
The situation with Alameda resembles the Enron scandal more closely than a banking crisis like that of 2008.
Portraying Alameda as a typical borrower, while concurrently implementing a code change that singularly permitted them to maintain a negative account balance, is outright fraud.
Further, it seems like what you’re arguing is that more people should be prosecuted for banking crises, not that SBF shouldn’t be charged. Those two things aren’t mutually exclusive.
Things going badly for investors is not in and of itself fraud even if it causes a crisis. That's why the hedge fund Alameda losing investors money is not by itself a fraud. FTX taking customer money and spending it is however fraud. That's just like if you put money in a bank and they just spend it that's fraud.
Fraud has a specific meaning [1] but you could think about it as being a negligent misrepresentation of some fact for unjust financial enrichment. So if I say to you I'm a billionaire[2] that's just a lie not a fraud. But if I say to you "I'm a billionaire, invest with me and I'll make you a billionaire" and I take your money and just go spend it or whatever, that's a fraud because you were relying on a fact I negligently misrepresented and you were harmed. The complexity comes because there are lots of seperate laws under which fraud is illegal. So if you lie on a loan application that's a different type of crime to if you tell someone they are buying shares in a potato farm and the potato farm doesn't exist and you just spend their money on blow instead. They're both fraud but they are different kinds of fraud.
If I honestly get your cash for an investment, make that investment and lose all your money because it just doesn't work out, that's not a fraud.
Hope that's clear. The meaning of the word fraud doesn't change from a capitalist vs a Marxist perspective. It's just "fancy lieing for financial gain" either way.
The issue that I have is the correct concept and the correct argument. The proof of fraud, I think, requires forensic evidence and proof beyond reasonable doubt. Not the optics and my personal level of credulity.
And I say this as a Marxist leftist, so it's not like I'm any supporter of cryptocurrencies, etc. I might even argue that under capitalism, people's notions of 'responsibility', 'stability', 'fraud' etc. are already so distorted that they don't have a coherent theory of what things are crimes and what things are just morally bad, socially bad, and so on.