Full Tilt declared a ponzi reports WSJ
September 20th, 2011 at 10:17:13 AM
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http://online.wsj.com/article/SB10001424053111904106704576582741398633386.html?mod=googlenews_wsj
I dont play poker online just saw the headline, interesting and seems like a ponzi scheme would be unnecessary assuming they have a rake.
I dont play poker online just saw the headline, interesting and seems like a ponzi scheme would be unnecessary assuming they have a rake.
when man determined to destroy himself he picked the was of shall and finding only why smashed it into because."
— E.E. Cummings
September 20th, 2011 at 10:31:13 AM
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I don't play online poker (just live), although I almost started to right before Black Friday. Guess I dodged a bullet on that one!
Anyways, after reading that article, it seems to me that the government is grasping for straws to find a way to convict innocent people of something that the government couldn't tax and had no control over. If Full Tilt was a Ponzi scheme and judging their ability to pay players PERHAPS it was, then I agree that certain professional poker players have SOME liability.
There are a couple of dangers in this though. First, it will be EXTREMELY tough to prove that the leading players (Ferguson, Lederer and such) were truly involved on the business end and KNOWINGLY took money from players. Professionals keep extremely accurate records of time played and money won, so I think the government will have a problem proving that the money earned was specifically from the "scheme."
If the government is unsuccessful in prosecuting the players, then I can see those individuals filing a counter lawsuit for libel and slander, which they would almost certainly win. This will take money from taxpayers to cover expenses and what will likely be a HUGE payout. I'm sure the lawyers for Lederer and co. are drooling at the possibility of more money coming their way. Think about it: They can say that because what the government did to the reputation of the players, they had a harder time signing new endorsement deals and what not. To me, it's an open and shut case IF the government can't prove the Ponzi scheme.
The prosecutor better be DARN SURE they are going to win, because ANY chance for failure (and to me, it seems like a lot) and they just opened a new can of worms.
Anyways, after reading that article, it seems to me that the government is grasping for straws to find a way to convict innocent people of something that the government couldn't tax and had no control over. If Full Tilt was a Ponzi scheme and judging their ability to pay players PERHAPS it was, then I agree that certain professional poker players have SOME liability.
There are a couple of dangers in this though. First, it will be EXTREMELY tough to prove that the leading players (Ferguson, Lederer and such) were truly involved on the business end and KNOWINGLY took money from players. Professionals keep extremely accurate records of time played and money won, so I think the government will have a problem proving that the money earned was specifically from the "scheme."
If the government is unsuccessful in prosecuting the players, then I can see those individuals filing a counter lawsuit for libel and slander, which they would almost certainly win. This will take money from taxpayers to cover expenses and what will likely be a HUGE payout. I'm sure the lawyers for Lederer and co. are drooling at the possibility of more money coming their way. Think about it: They can say that because what the government did to the reputation of the players, they had a harder time signing new endorsement deals and what not. To me, it's an open and shut case IF the government can't prove the Ponzi scheme.
The prosecutor better be DARN SURE they are going to win, because ANY chance for failure (and to me, it seems like a lot) and they just opened a new can of worms.
"One out of every four people are [morons]"- Kyle, South Park
September 20th, 2011 at 11:44:52 AM
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These players are guilty of the one crime that government will not allow to go unpunished,
RECREATION WITHOUT TAXATION
RECREATION WITHOUT TAXATION
September 20th, 2011 at 12:09:40 PM
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Quote: Scotty71I dont play poker online just saw the headline, interesting and seems like a ponzi scheme would be unnecessary assuming they have a rake.
The government is making a poor choice of words. A Ponzi scheme is inherently unstable since it depends on exponential growth which can only last a short time. They are accusing Full Tilt of a more old fashioned issue, spending the escrow money in the hope that the players won't ask for it all at once.
In an effort to use a word that is negatively loaded, they are confusing the public. It makes it harder to convince people they are in a real Ponzi scheme.
September 20th, 2011 at 12:14:52 PM
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Howard Lederer and Christopher Ferguson are specifically named.
edit: I see Tiltpoul beat me to it. But just in case you missed it [g]
edit: I see Tiltpoul beat me to it. But just in case you missed it [g]
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
September 20th, 2011 at 1:27:10 PM
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Quote: TiltpoulIf the government is unsuccessful in prosecuting the players, then I can see those individuals filing a counter lawsuit for libel and slander, which they would almost certainly win. This will take money from taxpayers to cover expenses and what will likely be a HUGE payout. I'm sure the lawyers for Lederer and co. are drooling at the possibility of more money coming their way. Think about it: They can say that because what the government did to the reputation of the players, they had a harder time signing new endorsement deals and what not. To me, it's an open and shut case IF the government can't prove the Ponzi scheme.
The prosecutor better be DARN SURE they are going to win, because ANY chance for failure (and to me, it seems like a lot) and they just opened a new can of worms.
I'm not a lawyer but I don't see any grounds here for a counter-suit. If they could claim libel and slander, why couldn't anybody do the same who beat a criminal case? For example, OJ could claim that his reputation was slandered by the LA District Attorney's Office after the jury in the criminal case found him not guilty.
I won't point any fingers, but if the players don't get their money back then somebody should be help responsible. There should have been plenty of money for everybody.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
September 20th, 2011 at 1:29:59 PM
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money.cnn.com is blazing their pictures
the next time Dame Fortune toys with your heart, your soul and your wallet, raise your glass and praise her thus: “Thanks for nothing, you cold-hearted, evil, damnable, nefarious, low-life, malicious monster from Hell!” She is, after all, stone deaf. ... Arnold Snyder
September 20th, 2011 at 1:31:14 PM
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Quote: pacomartinThe government is making a poor choice of words. A Ponzi scheme is inherently unstable since it depends on exponential growth which can only last a short time. They are accusing Full Tilt of a more old fashioned issue, spending the escrow money in the hope that the players won't ask for it all at once.
In an effort to use a word that is negatively loaded, they are confusing the public. It makes it harder to convince people they are in a real Ponzi scheme.
This accusation is (reported to be) slightly different than the other accusation, made on Black Friday.
On Black Friday, they were accused of not holding player funds in reserve accounts dedicated to that purpose. Whether that would have been in its entirety or via some fractional reserve system. This article accuses principals of the company of receiving these funds that should have been held on behalf of the players. There's a subtle difference here: If it were just investments made with fractional reserve funds having gone bad, then that's just the risk you take in an unregulated industry and would form the basis of a call for more regulation and transparency </American Government>. When the heads of the poker company are literally raiding the pockets of the players - and unbeknownst to the players, at that... This speaks to a much more sinister state of intentions.
September 20th, 2011 at 1:31:39 PM
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I would agree that the term Ponzi is being mis-applied and thats is use is for its emotional impact value and bears no relationship to the actual financial transactions involved.Quote: buzzpaffGuilty of the one crime that government will not allow to go unpunished, RECREATION WITHOUT TAXATION
It is clear that the government prompted the chokehold on Full Tilt's finances and basically caused what would be termed "a run on the bank" by players anxious to get their funds out of Full Tilt after all the government seizures from Full Tilt and from associated payment-processing entities.
To the extend Full Tilt made statements about Safe and Secure... it seems they never said just how safe or just how secure or why safe and secure was applicable.
It is likely that star players have about as much knowledge of day to day operations or financial projections as any movie star has when appearing at some business or charity event. Movie stars appeared at Enron Events but were not charged with knowledge of fraud. Stars appear at casinos that are financially troubled but are not charged just because the star received their customary outrageous fees for strutting around half naked or something.
Its well known that the poker world involved various entities and political jurisdictions and so is inherently suspect. As are the cheating allegations that arose about superusers who supposedly were former employees.
Its akin to the government tipping over the pig trough and then suing the spokesmen claiming its a mess. Yes, its a mess. A mess that was contained and controlled prior to the government tipping it over.
September 20th, 2011 at 1:49:01 PM
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Isn't there a tendency to accuse much but negotiate a plea over one or two charges eventually? (or some version of that)
There's no secret. Just know what you're talking about before you open your mouth.
September 20th, 2011 at 1:54:28 PM
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If they were using player deposits to fund operational costs, including salaries, while relying on future deposits to cover any withdrawals, then, yes, that is very much a ponzi scheme.
Most ponzi schemes tend fall apart once they are revealed.
Quote: FleaStiffYes, its a mess. A mess that was contained and controlled prior to the government tipping it over.
Most ponzi schemes tend fall apart once they are revealed.
September 20th, 2011 at 2:01:13 PM
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Yes. Defense lawyers are expensive and the toll on the defendant's health is horrendous so its often easy to accuse in the headlines and then get a guilty plea to lesser charges.
September 20th, 2011 at 2:03:26 PM
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If that had been the game all along, I would agree. If that is what was happening only after the government seized funds, then no.Quote: kpIf they were using player deposits to fund operational costs, including salaries, while relying on future deposits to cover any withdrawals, then, yes, that is very much a ponzi scheme.
September 20th, 2011 at 2:54:45 PM
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Quote: WizardI'm not a lawyer but I don't see any grounds here for a counter-suit. If they could claim libel and slander, why couldn't anybody do the same who beat a criminal case? For example, OJ could claim that his reputation was slandered by the LA District Attorney's Office after the jury in the criminal case found him not guilty.
I'm surprised he didn't.
To your questions, a prosecutor who brings forth charges in good faith is discharging his duty and is not liable for anything he says or does in court. He might be liable for statements made outside of court that slander the defendant, but only so long as 1) the statements made are false and 2) the prosecutor knows them to be false.
It's more common, I think, to sue a DA's office for wrongful prosecution. I imagine that's also a lot harder to prove. You'd ahve to show the DA knew the charges to be false and/or impossible to prove on the evidence available, yet proceeded to file charges.
Donald Trump is a fucking criminal
September 20th, 2011 at 2:56:54 PM
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I am thinking that the charges are trumped up from the Black Friday charges. If these poker players and executives are receiving payments that are designated to be in customer deposits with the intention of never paying it back, then there is a problem.
When you think about what a Ponzi scheme is, it's the use of an asset for the permament gain of its employees. All companies use the cash they have on hand to either pay its bills or fund capital investment. What a Ponzi scheme is the intentional use of a fund for the gain of a member of the company.
For Full Tilt, customer deposits are supposed to remain as a cash deposit. Of course, Full Tilt should be allowed to invest those deposits or even use some of its funds to pay off short term accounts payable. The point is however that the cash deposits belong to the depositors and should be readily convertable to cash. However, clearly, the government believes that the level of deposits was so low that it would be impossible to pay back the depositors AND that there is a direct link between the customer deposits and the payments to its board members.
When you think about what a Ponzi scheme is, it's the use of an asset for the permament gain of its employees. All companies use the cash they have on hand to either pay its bills or fund capital investment. What a Ponzi scheme is the intentional use of a fund for the gain of a member of the company.
For Full Tilt, customer deposits are supposed to remain as a cash deposit. Of course, Full Tilt should be allowed to invest those deposits or even use some of its funds to pay off short term accounts payable. The point is however that the cash deposits belong to the depositors and should be readily convertable to cash. However, clearly, the government believes that the level of deposits was so low that it would be impossible to pay back the depositors AND that there is a direct link between the customer deposits and the payments to its board members.
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You want the truth! You can't handle the truth!
September 20th, 2011 at 3:22:11 PM
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Quote: NareedI'm surprised he didn't.
To your questions, a prosecutor who brings forth charges in good faith is discharging his duty and is not liable for anything he says or does in court. He might be liable for statements made outside of court that slander the defendant, but only so long as 1) the statements made are false and 2) the prosecutor knows them to be false.
As I said in the beginning of my post, to me, it sounds like the government is grasping for straws in a way to prosecute and maintain criminality in playing a game between other players. In this case, the prosecutor may be throwing some mud hoping there is truth in the matter.
As others have also pointed out, calling it a Ponzi scheme is extremely misleading. That may have been the article's choice of words, but if the DA is accusing THAT, when it's something else, then the truthfulness of the prosecutor could be called into question by the defense.
Quote: Nareed
It's more common, I think, to sue a DA's office for wrongful prosecution. I imagine that's also a lot harder to prove. You'd ahve to show the DA knew the charges to be false and/or impossible to prove on the evidence available, yet proceeded to file charges.
I'm not a lawyer either, but this sounds more correct. Again, I maintain that the government is trying to find a way to criminalize the acts of people are innocent, so I'm pretty sure the case would hold up.
Maybe I think too much of the players involved, but Lederer, Ferguson and the players mentioned are very smart individuals. I know, I know, smart individuals can be the greatest crooks, but what did they have to benefit from it? Full Tilt would have made all their money in rakes. Yes they spent a lot in advertising. If the company mixed operating expenses and player funds while the operation was still continuing, AND THEY HAD KNOWLEDGE OF IT, then yes, I hope they get what's coming. If it happened afterwards, and they KNOWINGLY blocked funds from being paid out, then yes, that's a problem.
Frankly I just don't think either one of these scenarios is plausible; I should restate that I don't think the PLAYERS would have willingly accepted or taken part in that. They were the face of the company, and involved, but they didn't own, and I just can't see them getting dirty with it... then again, that could be wishful thinking.
"One out of every four people are [morons]"- Kyle, South Park
September 20th, 2011 at 3:22:13 PM
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Quote: boymimboIf these [...] executives are receiving payments that are designated to be in customer deposits with the intention of never paying it back, then there is a problem.
Only if they never had intentions of "paying it back"? If that were a viable defense, then every embezzler would get off on the "I was planing to pay it back" defense.
Quote: boymimboFull Tilt should be allowed to invest those deposits or even use some of its funds to pay off short term accounts payable.
Why?
If you go to the cage to cash in some chips, would you accept that the casino had used your funds to pay an executive bonus or invest in crochet futures, and told you to come back next week when they hope to pay you?
September 20th, 2011 at 3:48:55 PM
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kp,
Casinos, by law, in Nevada, must keep enough cash in reserve to pay every chip on the floor. However, companies like WalMart or your local convenience store are not required to keep cash deposits to cover its inventory. However, it is required to be able to pay back money left in layway. Customer Some companies run very short on cash. Banks are another example. If every customer of the bank came to the branch and required its deposit back, the bank would have to call in mortgages to cover. The point is that a bank must have some very liquidable assets (stocks, short term bonds) to cover all of its customer deposits. Full Tilt failed to do so, instead electing to use a significant portion of its customer deposits to pay its boardmembers.
It would make sense to have a different account outside of operating capital for customer deposits. These deposits should be held separately. Was there a law for this in Full Tilt's jurisdiction?
Casinos, by law, in Nevada, must keep enough cash in reserve to pay every chip on the floor. However, companies like WalMart or your local convenience store are not required to keep cash deposits to cover its inventory. However, it is required to be able to pay back money left in layway. Customer Some companies run very short on cash. Banks are another example. If every customer of the bank came to the branch and required its deposit back, the bank would have to call in mortgages to cover. The point is that a bank must have some very liquidable assets (stocks, short term bonds) to cover all of its customer deposits. Full Tilt failed to do so, instead electing to use a significant portion of its customer deposits to pay its boardmembers.
It would make sense to have a different account outside of operating capital for customer deposits. These deposits should be held separately. Was there a law for this in Full Tilt's jurisdiction?
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You want the truth! You can't handle the truth!
September 20th, 2011 at 3:52:59 PM
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I just heard a report on the radio about FT owing players over 300 million, but less that 6 mil in cash is accounted for. Lederer has received 42 mil in payments, Jesus 25 mil with 62 still owed him.
Seems like something fishy was going on.
Seems like something fishy was going on.
Before you diagnose yourself with depression or low self-esteem, first make sure that you are not, in fact, just surrounded by assholes." ~ William Gibson
September 20th, 2011 at 4:41:26 PM
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Quote: boymimboCasinos, by law, in Nevada, must keep enough cash in reserve to pay every chip on the floor.
It is not that simple. There is a formula based on such things as the number of slots, tables games, game limits, and gross revenue of the casino. I think MathExtremist posted the exact formula several months ago.
This does have some elements of a Ponzi scheme -- stealing from player money that should have been in a bank or legitimate investment somewhere. Also, much like a Ponzi scheme, it probably would have kept working as long as there was not a run on the bank, or the operation got shut down. Where it differs is that there were players instead of investors. Whatever angle the DOJ has to take so that players at least get more of their money back I support.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
September 20th, 2011 at 5:02:16 PM
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Quote: avargovI just heard a report on the radio about FT owing players over 300 million, but less that 6 mil in cash is accounted for. Lederer has received 42 mil in payments, Jesus 25 mil with 62 still owed him.
Yeah, I would call the above a ponzi scheme, or even robbery if that's the case.
There's no secret. Just know what you're talking about before you open your mouth.
September 20th, 2011 at 5:53:09 PM
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Quote: WizardI'm not a lawyer but I don't see any grounds here for a counter-suit. If they could claim libel and slander, why couldn't anybody do the same who beat a criminal case? For example, OJ could claim that his reputation was slandered by the LA District Attorney's Office after the jury in the criminal case found him not guilty.
You can't sue the DA (or any other participant in a court case) for libel or slander, all the work product is privileged.
Nareed mentioned wrongful prosecution (the correct term is "malicious prosecution" or "wrongful initiation of criminal proceedings") ... This is a tiny bit more realistic, but still pretty far fetched.
"When two people always agree one of them is unnecessary"
September 20th, 2011 at 5:57:27 PM
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I won't play online poker. How do you know 2 or more players at the table aren't texting IMing or talking to each other on skype and colluding against the rest of the table?
Gambling is a metaphor for life. Hang around long enough and it's all gone.
September 20th, 2011 at 6:08:16 PM
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If they are really guilty of what is being said, I wouldn't being hiring lawyers, I'd be hiring bodyguards.
September 20th, 2011 at 6:12:51 PM
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Aren't all banks just a Ponzi Scheme? Remember the scene
in Its A Wonderful Life when the depositors tried to take out
all their money at once, and Jimmy Stewart explained to them
the money wasn't there, it had all been loaned out to home
buyers. Thats what all Savings and Loans and banks do, use
our money to make money by loaning it out.
in Its A Wonderful Life when the depositors tried to take out
all their money at once, and Jimmy Stewart explained to them
the money wasn't there, it had all been loaned out to home
buyers. Thats what all Savings and Loans and banks do, use
our money to make money by loaning it out.
"It's not called gambling if the math is on your side."
September 20th, 2011 at 6:26:59 PM
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EvenBob said "Aren't all banks just a Ponzi Scheme?"
See ref. Autumn 2008
See ref. Autumn 2008
Gambling is a metaphor for life. Hang around long enough and it's all gone.
September 20th, 2011 at 6:39:59 PM
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Quote: EvenBobAren't all banks just a Ponzi Scheme?
No. Legitimate banks make loans with most of their deposits. So the loans serve as assets. Even George explained that in Its A Wonderful Life. With a Ponzi Scheme the money that goes in goes right into the hands of previous investors. They own no assets to back up their so-called investments.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
September 20th, 2011 at 6:40:27 PM
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Quote: ncfatcatEvenBob said "Aren't all banks just a Ponzi Scheme?"
See ref. Autumn 2008
Whats Autumn 08 mean?
"It's not called gambling if the math is on your side."
September 20th, 2011 at 6:47:51 PM
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Autumn 2008 when the investment banks mortgage ponzi scheme began to unwind with the assimilation of Bear Stearns and the bankruptcy of Lehman Bros. Of course Goldman Sachs escaped since all their ex employees jsut happened to be working for the government Find a documentary film named "Inside Job"
http://www.imdb.com/title/tt1645089/
http://www.imdb.com/title/tt1645089/
Gambling is a metaphor for life. Hang around long enough and it's all gone.
September 20th, 2011 at 6:53:01 PM
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Quote: WizardNo. Legitimate banks make loans with most of their deposits. So the loans serve as assets.
Yet with both banks and Ponzi's, if the investors/depositors all
demand their money at once, its not there. Feels the like the
same thing to them. Thats why banks failed in the Depression,
no FDIC, no Fed money to back up the deposits.
"It's not called gambling if the math is on your side."
September 20th, 2011 at 7:02:08 PM
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Quote: weaselmanYou can't sue the DA (or any other participant in a court case) for libel or slander, all the work product is privileged.
I'm not a lawyer and I'm ignorant of precise legal terms. But doesn't privileged refer to information or communications protected by law from outside scrutiny? Such as doctor-patient privilege, or attorney-client privilege?
Anyway, I don't suppose a DA can be liable for slander for the questions she asks or the statements she makes in court. What happens outside of court, though, when talking to the media or releasing statements to the press, should be another matter.
Donald Trump is a fucking criminal
September 20th, 2011 at 7:04:23 PM
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Quote: EvenBobAren't all banks just a Ponzi Scheme? Remember the scene
in Its A Wonderful Life when the depositors tried to take out
all their money at once, and Jimmy Stewart explained to them
the money wasn't there, it had all been loaned out to home
buyers. Thats what all Savings and Loans and banks do, use
our money to make money by loaning it out.
When I took Economics, I think we were told that the RR (Ready Reserve) that banks must have is 10% of all deposits.
September 20th, 2011 at 7:08:56 PM
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Quote: EvenBobYet with both banks and Ponzi's, if the investors/depositors all
demand their money at once, its not there. Feels the like the
same thing to them. Thats why banks failed in the Depression,
no FDIC, no Fed money to back up the deposits.
At least with banks the assets still exist. The depositors would have to wait as the borrowers repaid their loans to get their money. With a Ponzi scheme depositors will have nothing in the event of a run on the bank.
"For with much wisdom comes much sorrow." -- Ecclesiastes 1:18 (NIV)
September 20th, 2011 at 7:16:51 PM
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Quote: WizardAt least with banks the assets still exist. The depositors would have to wait as the borrowers repaid their loans to get their money.
The problem in the Depression was the properties the
bank made loans on was almost worthless. We have
the same problem now, except the Fed's back the banks
up now.
"It's not called gambling if the math is on your side."
September 20th, 2011 at 7:23:51 PM
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Quote: WizardAt least with banks the assets still exist. The depositors would have to wait as the borrowers repaid their loans to get their money. With a Ponzi scheme depositors will have nothing in the event of a run on the bank.
According to thestreet.com 380 banks in the US have failed since 2008.
Gambling is a metaphor for life. Hang around long enough and it's all gone.
September 20th, 2011 at 7:46:38 PM
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Binions was shut down a few years back for not having the required reserves. By shut down, I mean literally federal agents showed up and ran everyone out. (well they walked out, but still)
There's no secret. Just know what you're talking about before you open your mouth.
September 20th, 2011 at 9:07:03 PM
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Quote: ncfatcatI won't play online poker. How do you know 2 or more players at the table aren't texting IMing or talking to each other on skype and colluding against the rest of the table?
I played online poker back in the Precambrian era (2004-5). The better sites had defenses against this even then. Most powerful was (is) the hand history - anyone can see the history of every hand they've played, and without too much effort, they can get access to hands that others played. The guys that run the sites, of course, can get access to all hands at all times. Over thousands of hands collusion is likely to show, someone is likely to complain, and the cheaters will find themselves kicked out.
The truest test is the ability to win without colluding. I never colluded, and I still won (overall) in both cash games and tournaments. This was for low stakes, where I doubt there was much collusion because it wouldn't have been worth it.
September 20th, 2011 at 9:09:26 PM
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If you have not been cheated playing online, then you have not played online !
September 20th, 2011 at 9:46:34 PM
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Quote: cclub79When I took Economics, I think we were told that the RR (Ready Reserve) that banks must have is 10% of all deposits.
The percentage varies and is set by the Federal Reserve. It is an easy way to control the money supply without actually issuing more currency or failing to replace currency that is destroyed. It is also much quicker since in the event of a scare people hold onto their $100 bills.
Many of the bank loans are bad, so in the event of them having to theoretically pay back all of their investors most of them could not do it. You could argue that paying salaries and executive bonuses is similar to what Full Tilt was doing.
But banks are not Ponzi schemes, and neither is Full Tilt. Full Tilt may have been playing a risky game, and it is quite possible the federal rules were not very specific. But by calling it a Ponzi scheme in the press, the government is guilty of causing a run on the company, which absolutely guarantees that a situation will arise.
A Ponzi scheme specifically pays the first investors a large sum of money with the promise that the next level of investors will be paid entirely out of future earnings. There is absolutely no creation of wealth involved.
To some extent nearly every company or government program (like social security) is dependent on future earnings. But the phrase should not be applied to everything you see. It should be reserved for true Ponzi schemes. Otherwise you are making a situation worse than it needs to be.
September 21st, 2011 at 2:29:57 AM
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Quote: pacomartin
But banks are not Ponzi schemes, and neither is Full Tilt. Full Tilt may have been playing a risky game, and it is quite possible the federal rules were not very specific. But by calling it a Ponzi scheme in the press, the government is guilty of causing a run on the company, which absolutely guarantees that a situation will arise.
Otherwise you are making a situation worse than it needs to be.
Agree. It was government actions that caused the Run on the Bank atmosphere that caused Full Tilt to give in to temptation on dipping into player's balances.
Making the situation worse in the headlines, is a favorite prosecutorial ploy.
In the really old days, Binions used to keep so much cash on hand that he often made money on overnight loans to other casinos. A downtown joint was often keeping Caesars afloat and saving Caesars from getting bank loans or letters of credit to comply with gaming board regs.
September 21st, 2011 at 3:19:01 AM
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Quote: FleaStiffAgree. It was government actions that caused the Run on the Bank atmosphere that caused Full Tilt to give in to temptation on dipping into player's balances.
True. Though I think all law enforcement busts across the board cause ruinous effects on more than just the target involved. Every time someone goes to jail he/she may be the caretaker, or main provider of some family.
So, it's not like they tiptoe in trying not to cause any extra waves.
.
There's no secret. Just know what you're talking about before you open your mouth.
September 21st, 2011 at 3:31:47 AM
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Quote: FleaStiffIn the really old days, Binions used to keep so much cash on hand that he often made money on overnight loans to other casinos. A downtown joint was often keeping Caesars afloat and saving Caesars from getting bank loans or letters of credit to comply with gaming board regs.
I heard that story from one of the old time Binion's employees as well. He said Benny used to keep a stash of $25 million over and above what was required by the NGC just in case some of the whales showed up and wanted to throw down huge bets. Someone would courier the cash in a car to Ceasars when they got in trouble.
I wonder what kind of interest you charge for a $5 million overnight cash loan delivered in a car?
September 21st, 2011 at 3:49:52 AM
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His goal was to maintain his reputation as being willing to book any action. That is how he could have someone walk in and put a quarter of a million dollars on the pass line with everyone else at the table piling on as well and Benny Binion not hesitating or blinking an eye when he said to his crew: Book It. It was his spirit that brought in the high rollers. His lending it out overnight or for a few days was just a way to earn a bit of extra money on it, but he made money on it by being able to book any action. If a Texas oilman flew into town, Benny Binion knew he had an extra 20 to 25 million cash on hand and could ride out any adverse short term events.
I've no idea if he actually had to transfer the cash or if his word was all that was needed, but I'd sure like to have been the cabbie who picked up this nondescript looking guy at Binions who wanted to go to Caesars and had a small beat-up looking suitcase with him.
I've no idea if he actually had to transfer the cash or if his word was all that was needed, but I'd sure like to have been the cabbie who picked up this nondescript looking guy at Binions who wanted to go to Caesars and had a small beat-up looking suitcase with him.
September 21st, 2011 at 4:02:27 AM
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Quote: pacomartinI wonder what kind of interest you charge for a $5 million overnight cash loan delivered in a car?
Can you imagine the scene? Three of the 'boys' pile into
a new '67 Lincoln, armed to the teeth, for the 12min ride
to Ceasars. Those were the days..
"It's not called gambling if the math is on your side."
September 21st, 2011 at 4:23:42 AM
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Quote: NareedI'm not a lawyer and I'm ignorant of precise legal terms. But doesn't privileged refer to information or communications protected by law from outside scrutiny? Such as doctor-patient privilege, or attorney-client privilege?
Privileged just means "special". What you mention is one kind of a privilege. Prosecutorial (and judicial, etc) immunity is another.
Quote:Anyway, I don't suppose a DA can be liable for slander for the questions she asks or the statements she makes in court. What happens outside of court, though, when talking to the media or releasing statements to the press, should be another matter.
As long as he is acting in his official capacity, and his statements are related to the criminal case he is prosecuting (or investigating) it does not matter where the statements are made, they are all protected.
"When two people always agree one of them is unnecessary"
September 21st, 2011 at 4:39:13 AM
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Yahoo has a featured article and in the article it says the Attorney's office says "Full Tilt Poker was not a legitimate poker company, but a global Ponzi scheme."
I know the Attorney's office can say what it wants in regards to the case and be protected, but to me, "those be fighting words." I simply don't believe that it would be a scheme. After reading a few more articles and thinking about some of the posts on here, it's VERY likely that when the government shut down, the "run on the bank" caused player money, which was intended to be separate, to get mixed with operating funds, who now needed millions of dollars in lawyers and security.
If Lederer and Ferguson are found to have KNOWINGLY defrauded players, then I hope they get what's coming to them. My guess is that the operators/owners of the site, Bitar and Furst, may have known what they were doing. I'm not saying that makes the other two less liable from the monetary standpoint, but I just don't see the government successfully prosecuting them.
The government would have probably turned a blind eye if they were in on the cut...
I know the Attorney's office can say what it wants in regards to the case and be protected, but to me, "those be fighting words." I simply don't believe that it would be a scheme. After reading a few more articles and thinking about some of the posts on here, it's VERY likely that when the government shut down, the "run on the bank" caused player money, which was intended to be separate, to get mixed with operating funds, who now needed millions of dollars in lawyers and security.
If Lederer and Ferguson are found to have KNOWINGLY defrauded players, then I hope they get what's coming to them. My guess is that the operators/owners of the site, Bitar and Furst, may have known what they were doing. I'm not saying that makes the other two less liable from the monetary standpoint, but I just don't see the government successfully prosecuting them.
The government would have probably turned a blind eye if they were in on the cut...
"One out of every four people are [morons]"- Kyle, South Park
September 21st, 2011 at 6:22:17 AM
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You have to hand it to him, the man knew how to wear a suit.
September 21st, 2011 at 7:03:46 AM
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No economist here, but weren't those packages of bad mortgages used to get around the big bank's reserves. I think one bank would wrap a few good mortgages with a bunch of bad ones and value it at 4X in their formula. The bank next door would buy it as their secret formula valued it at 8X, doubling it's reserve value.
September 21st, 2011 at 7:24:44 AM
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Quote: weaselmanPrivileged just means "special". What you mention is one kind of a privilege. Prosecutorial (and judicial, etc) immunity is another.
Ok. Thanks. I thought it meant confidential or protected speech and communications.
Quote:As long as he is acting in his official capacity, and his statements are related to the criminal case he is prosecuting (or investigating) it does not matter where the statements are made, they are all protected.
Let's say you're arrested for DUI because you were carelss and had one too many free drinks at the casino. Ok. You were careless, which is a form of negligence, and placed people at heightened risks of accident, injury and death. So you should be prosecuted. But it is your first offense, you have no criminal record and nothing serious in the way of traffic violations. In every other respect, you're a solid citizen, respectful of the law and of other people.
In this context, let's say the prosecutor calls you "a dangerous psychopath who shows no regard for human life," not in court, but in a press conference about the case. That seems to me to be way over the line, expecially since your prior record blatantly contradicts the prosecutor's assertions.
Wouldn't that be slander?
Donald Trump is a fucking criminal
September 21st, 2011 at 8:37:59 AM
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Its page 5 and the point is lost. Full Tilt did not have funds sufficient to payout what was won. Exec's were pulling Donald Trump Lotto money out of the business to fund their own accounts.You the Customer gets stiffed upon withdrawl request. Like NONE of these On-Line Poker houses could cut you an Int'l Money Order !!!, which is the way most money goes in from the USA. If thats the way it can go in, thats the way it can come out. I've left this funding point out of my previous discussion/opines to see if anyone else smelled a rat. I don't think anyone else did.
N&B
N&B
To err is human.
To air is Jordan.
To arrr is pirate.
