by u/ jhs0108
Disclaimer: Before I start, I want to be very clear. Just because this is my belief as to why the SEC and Justice Department haven’t moved on said parties obviously illegal activities, DOES NOT MEAN I CONDONE THEM FOR DOING IT THIS WAY, IN FACT I CONDEMN IT STRONGLY!!!
Now let’s begin. We’ll start off with the SEC’s own wording as to what their objectives are.
SAUCE: SEC.gov | What We Do
The point we’re interested in is protecting investors.
BuT ShOULdn’t tHEy aRrEST pEOple foR bREAking THE law? 100% but I’m getting to that. Be patient.
Let’s discuss the fall of Madoff first and how it’s similar to SBF’s fall and IMHO, it’ll explain the logic for not arresting them yet, even though it’s completely backwards logic.
Regarding Madoff, he ran a massive Ponzi scheme that because he was so closely tied to the SEC (even wrote laws for them) they should’ve known what was going on, but never acted on it as things seemed to be going Madoff’s way. Then the housing market imploded, and Madoff was arrested December 11th 2008 after he ran out of money due to the markets being on fire and openly admitting that he committed massive amounts of fraud and immediately plead guilty.
Regarding, SBF, he ran a massive Ponzi scheme that because he was so closely tied to the federal government (even testified on making laws to regulate crypto) they should’ve known what was going on but didn’t act on it because everything was going SBF’s way. Then crypto winter came and SBF was arrested after FTX declared bankruptcy due to crypto markets being on fire and openly admitting that he committed massive amounts of fraud and immediately plead guilty.
So they’re almost copy paste of each other. What does that mean?
So you know that whole thing that the SEC is supposed to protect investors? Well why didn’t the SEC arrest Madoff in 06 and SBF in 2021? Because the former would’ve probably caused the 08 recession to become the 06 recession and the latter would’ve caused crypto winter to come a year earlier when the overall markets were much weaker. From a certain point of view, the SECs actions while saving investors who had money with Madoff and SBF could’ve ruined the markets for the country as a whole (FTX fallout hasn’t fully happened yet but it’s heavily implied that it’ll be as bad)
The logic of the DOJ and the SEC might be to protect as many investors as possible, even if some get screwed.
So how come Ken Griffin, Doug Cifu, and countless others been arrested yet? To put it simply, they haven’t run out of money yet.
If it hasn’t been made clear yet, I STRONGLY CONDEMN THIS BEHAVIOUR FROM OUR GOVERNMENTS. It’s like not arresting a robber because he only robs accounts linked to bank accounts of countries that aren’t allies of the United States.
As the saying goes, we can stay stupid far longer than they can stay solvent.