Instead of talking about my typical genres of blathering (film, politics, and excuses for not having much to write about), I will once again venture into the murky realm of something I really don’t actually know terribly much about: Sports, subset football.
Except not really. You’re pretty much safe for now.
Listening to the news on the radio this morning, I discovered that Daniel “Rudy” Ruettiger, known for being the inspiration behind the classic sports film (a.k.a. movie I didn’t watch) “Rudy,” is being fined more than $380,000 by the non-football related SEC for performing a pump-and-dump scheme.
Props to Rudy for being part of a scheme that sounds both really awkward and yet still potentially sports related, I guess. And getting the Securities and Exchange Commission involved means most sports people will be too confused to know what’s going on.
So, let me explain. Using his claim to fame, Ruettiger created a company that sells sports drinks, Rudy Nutrition. The company uses penny stock options (whatever the heck those actually are). Reuttiger invited his neighbor Stephen DeCesare, an experienced penny stock organizer, into the company. DeCesare was apparently the primary organizer for the scam, but we’ll ignore that for now. The scam they used, the pump-and-dump, is when falsified, misleading misinformation is used to garner hype and therefore get people to buy stock in the company. Reuttiger’s company apparently falsified taste test results, made claims of outselling Gatorade 2-to-1 in the southwest, talked about their huge national base, et cetera. Once the hype is garnered, people buy a bunch of stock in the company you already have a ton of stock in, driving the stock prices up. Then, you sell and profit. For Reuttiger, that profit was apparently around $11 million.
And he’s being fined less than $400,000. 3.4806% of his profits, in fact.
I get taxed around 11% or so for my work at Walmart, but this guy lies to people and makes himself an instantaneous millionaire (if he wasn’t one already) and he just has to pay less than the sales tax for buying his stupid drinks would be in pretty much every state?
This seems to be a lesson that suggest cheaters DO prosper.
Now, I’m not sure how similar other fraudulent cases, like Bernie Madoff’s Ponzi scheme or ENRON’s “steal from your employees” scheme, are to this one. Nor am I certain how the punishments always turn out.
But it seems to me that making money fraudulently should be punished, not frowned upon.
Oh, sure, it’s not like he necessarily screwed over investors or anything. Well, other than all the investors jumping into a company at a higher cost than they should have had to with hopes of the company actually being semi-successful. It may not be as massively damaging as a Ponzi scheme, but it’s still a super crappy move to make. And super illegal. And super wrong.
And I have a proposal. Instead of letting the people profiting off of lying, cheating and stealing money from investors and the market walk away with over 90% of their “winnings,” why not… take it all away and then some?
Let’s say I hold up a bank and steal… oh, $11 million. I’m, like, Danny Ocean. I’m really good. Except, unlike Ocean, I get caught. I go to jail, serve my time, get out… do you think my $11 million should be waiting for me on the other side? Well, how about $10.5 million, is that okay? Or should I give it all back?
Just because someone didn’t physically steal hard cash doesn’t make it any less wrong.
The way I see it, you should not have that money. If you did not do the illegal thing, you would not have that money. So, my proposal is, why not take it all away? Take away every last penny they earned from the scheme. Every single one. And then, slam them with a fine that reflects the scheme appropriately. Like, say, fine them exactly how much money investors spent on you in your scheme.
Don’t have it? Do like a bank does when a person in debt dies: Liquidate some assets.
The money gathered from the fine and reclaiming of the fraudulent finances can first be spent paying back all the people that spent money on the scheme. Just pay them back exactly what they spent with some amount of interest, like they had put it in a savings account instead. Maybe they’d’ve done something else with the money that earned them more, maybe less, oh well. Can’t be perfect.
Then, the money that’s left? Goes to the government.
Suddenly, we have a criminal who has his crime practically undone and is definitely without a doubt punished, victims who are justly compensated, and a slightly more monied government. Everybody that should wins.
I bet that, if things were done like this, we’d likely see Wall Street cleaning up its act toot sweet. And the government would certainly have more money in its pocket (and I don’t mean in the pockets of the politicians like it all seems to be these days).
And none of this house arrest thing for rich people, please. Let them go to prison just like us poor folk.
P.S.: No, I haven’t seen “Rudy.” Nor have I seen “Hoosiers” or “Sandlot” or “Coach Carter” or “Raging Bull” or “Rocky” or whatever the heck else “classic” sports films you might mention. Except for “Angels in the Outfield” and “Rookie of the Year.” Oh, and “Air Bud” of course. But who hasn’t seen that?