At a time when Americans are divided on matters of criminal justice, the conviction last week of Martin Shkreli for securities fraud seemed a momentary unifying force. Many were overjoyed to see the widely disliked former hedge-fund manager found guilty, and there was perhaps an additional layer of public satisfaction given how many bankers escaped punishment in the aftermath of the financial crisis. Finally, a verdict everyone seemed pleased with.
But the glee surrounding Shkreli’s conviction points to a naive conception of financial scams. The Justice Department’s indictment of Shkreli and the view that prevailed in court represent the typical view of financial frauds: an act perpetrated by an evildoer on ignorant investors. When hucksters get most of the attention, financial frauds come to be seen only as a problem of supply; the usual narrative is that eliminating fraud simply requires banishing the Shkrelis and the Bernie Madoffs of the world, for they are the unique source of the problem, tricking unwitting and innocent investors.
Source: The Atlantic