Mark Pincus Blog

Rigas's get life in prison

wsj reports today that the father who's 80 got 15 years while the son got 20 years. i'd love to know how these sentences compare to other white collar crimes over past 20 years. i believe milken served less than 2 years for a higher dollar figure crime. same with ivan boesky. while i am happy that there is govt interest in fighting corporate corruption (maybe they'll focus on the govt variety next) it is still troublesome to see them do so in such a political way. while i have no sympathy for the rigas's, i am deeply troubled by the inequity in this approach. how can gary winnick be lauded by the nytimes after taking $600m from investors in his fraudulent venture (global crossing) and john moores be the pillar of san diego, owning the padres, after taking a similar amount from his peregrine systems after that company filed for bankruptcy for faking $1 billion in profits. i dont mean to say that either of these guys had their hand in the cookie jar (moores was never accused of anything while winnick was exonerated), but the whole thing does strike me as bizarre and lopsided and not the way i would hope to see our justice system managed. shouldnt there be some test of consistency with past rulings? is this really a deterent or more of a sign that large corrupt acts will fare better if matched with large political donations? makes me wonder how long ken lay's donations to bush served in protecting him. and how can it be fair for the executives at haliburton (accused of multiple counts of fraud) get away scott free? guess it helps to be part of the ruling class.

Burning some witches

i read in today's wsj that prosecutors are recommending life sentences for bernie ebers (worldcom) and the rigas family (adelphia).  this is the most clear indication that our justice system remains a largely politically motivated,  unfair and biased institution. our country is sinking down a slippery slope where it's now normal and common practice for politics to be a part of how justice is managed. the republicans are putting admittedly biased individuals into federal judgeships. our congress is bipassing the constitution to overrule judicial rulings to suit their political whims.

what sickens me is that we are not making anything better, but rather preserving a corrupt status quo. the govt appeases the masses by burning a few token ceo's at the stake while allowing hundreds of others to continue with their quarterly corruption. when 414 public companies restate earnings in a single year (2004) we have a systemic problem. when the SEC's board is comprised of the the heads of the very firms it regulates we have a systemic problem.

i have a few questions for you all...

• why are corporations allowed to invest in political campaigns and lobbyists? does this really promote democracy?
• how can we all sleep at night knowing that different people can be sentenced to 1 year or life based on the location and time of conviction?

we're not dealing with dangerous people. society will be no safer with bernie behind bars.  is a life sentence arbitrarily issued for political expediency really greater deterent than say a ten year sentence consistently given? no! is prison for a few token scapegoats going to stop corruption? no!

Change the Rules, Reform the System

the only way to fix the system is to change the rules. i've blogged before that there is a simple effective way to stop the 414 companies in their tracks and that's to go after the personal profits in the system. the SEC simpy needs to amend the 16B rule on insider sales (which today forces insiders to disgorge profits on short swing trades) to say that any profits on sales during periods of fraud or significant restatement must be disgorged (that is returned to injured investors).  this would have captured the enron guys, gary winnick's $600m from global crossing, john moores $600m from peregrine, schlushy's money on healthsouth, greenberg for AIG. if we really want to do something unprecedented, how about making this law retroactive? who says we cant do that? lets go after everyone back 10 years and force them to repay the money. what's ironic, is that while there is no outcry to save the couple of scapegoats from unjust life sentences, there would be bankers, ceo's and politicians in the streets fighting this proposal, as it would move billions.

and fuck sarbanes oxley. the dumbest law i've ever heard of. that's just another bullshit political move to keep us all sleeping. it makes about as much sense as asking a witness to pledge on the bible that they will tell the 'whole' truth. (guess clinton missed the 'whole' part when he said he didnt have any 'sexual relations'.)