Vegas Free-for-All - Full Tilt Poker was Ponzi Scheme (according to Justice Department)

Full Tilt Poker was Ponzi Scheme (according to Justice Department)

kev2128

Sep 20, 2011
6:28pm

I was wondering every-time i went all in with A-A i would get called by some off the wall hand like 7-4 and the flop would always come 8-7-7-2-4!

snidely333

Sep 20, 2011
10:13pm

Block User

Quote

Originally posted by: billryan

Quote
Originally posted by: Joe K
Quote
Originally posted by: billryan
Quote
Originally posted by: Joe K
Just because they were paid doesn't mean they necessarily knew that the money was coming directly from the player's accounts.

It looks bad, but I still suspect Lederer and Ferguson were not fully aware of what was going on at Full Tilt. We shall see what the investigation and trial (if there is one) turn up.

If they were on the Board of directors, they certainly should have known what was going on. They were legally responsible for the actions of the company, and had to have known the state of its finances. If not, they were negilgent in their duties.
If Full Tilt is subject to Sarbanes- Oxley, those guys are screwed bigtime.

"Should have known" is asking a lot at times, particularly with multi-million dollar corporations.

Have you ever seen what a quarterly statement looks like? I imagine once you get past the lawyers and the accountants not too many people can figure out what the hell all the numbers mean.

Its the job of the B.O.D to not only understand those statements but to make sure they are accurate.

Officers of the company are liable for illegal activities perpetrated by their company. When $44Million show up in your bank account, you can certainly afford to hire a CPA to see where the money is coming from.

pjstroh

Sep 21, 2011
12:55am

Block User

Quote

Originally posted by: Joe K

Quote
Originally posted by: billryan
Quote
Originally posted by: Joe K
Just because they were paid doesn't mean they necessarily knew that the money was coming directly from the player's accounts.

It looks bad, but I still suspect Lederer and Ferguson were not fully aware of what was going on at Full Tilt. We shall see what the investigation and trial (if there is one) turn up.

If they were on the Board of directors, they certainly should have known what was going on. They were legally responsible for the actions of the company, and had to have known the state of its finances. If not, they were negilgent in their duties.
If Full Tilt is subject to Sarbanes- Oxley, those guys are screwed bigtime.

"Should have known" is asking a lot at times, particularly with multi-million dollar corporations.

Have you ever seen what a quarterly statement looks like? I imagine once you get past the lawyers and the accountants not too many people can figure out what the hell all the numbers mean.

I dont think their business model is particularly complex. The accusation is simple to audit. They had more money in accounts payable than they had available to pay with...and then lied about it. It doesn't take a team of forensic accountants to sort that out.

malibber

Sep 21, 2011
2:46am

Block User

According to one of the articles I read they could only survive 6 million in withdraws was a direct quote of Lederer which he said at a board meeting. Ferguson would have known too because he was also a member of the board of directors. As I understand it they weren’t mere celebrity endorsers they actually participated in the management of FTP. Of course even if they are found to be mere endorsers all their earnings at FTP would be subject to claw back and forfeiture. On the bright side when it is all sorted out maybe they can do a Celebrity Poker show from the Federal Pen where they play for cartons of cigarettes.

The real problem is Full Tilt continued to solicit new funds/players when they knew they were insolvent and continued to pay the management lavish salaries.

Quote

Originally posted by: Joe K

Quote
Originally posted by: billryan
Quote
Originally posted by: Joe K
Just because they were paid doesn't mean they necessarily knew that the money was coming directly from the player's accounts.

It looks bad, but I still suspect Lederer and Ferguson were not fully aware of what was going on at Full Tilt. We shall see what the investigation and trial (if there is one) turn up.

If they were on the Board of directors, they certainly should have known what was going on. They were legally responsible for the actions of the company, and had to have known the state of its finances. If not, they were negilgent in their duties.
If Full Tilt is subject to Sarbanes- Oxley, those guys are screwed bigtime.

Joe K

Sep 21, 2011
4:43am

Block User

I'm clearly outnumbered on this...but that wouldn't be a first.

All we have at this point is a series of articles that quote the DOJ. None of this has been put to the test in court, under scrutiny from attorneys on both sides. The DOJ is just doing what any prosecutor tries to do, put the defendants on trial in the court of public opinion before they get their day in a court of law. I'm sorry, but I don't subscribe to unsubstantiated hearsay presented in articles.

Perhaps I am wrong, but I just don't think Lederer and Ferguson knew what the hell was going on. Both had too much to lose to knowingly get mixed up in something like this.

snidely333

Sep 21, 2011
5:07am

Block User

Quote

Originally posted by: Joe K
I'm clearly outnumbered on this...but that wouldn't be a first.

All we have at this point is a series of articles that quote the DOJ. None of this has been put to the test in court, under scrutiny from attorneys on both sides. The DOJ is just doing what any prosecutor tries to do, put the defendants on trial in the court of public opinion before they get their day in a court of law. I'm sorry, but I don't subscribe to unsubstantiated hearsay presented in articles.

Perhaps I am wrong, but I just don't think Lederer and Ferguson knew what the hell was going on. Both had too much to lose to knowingly get mixed up in something like this.

Whether they knew or not is not material. They were company officers. It was their company. They were supposed to know. They had fiduciary responsibility to know. Not knowing also makes them guilty. Take off those rose colored glasses and smell the coffee.

777rojen777

Sep 21, 2011
5:29am

Block User

This isn't an American company, and thus aren't subject to US law. Even if they were, members of the board have no duty to investigate the books that closely. There is a presumption that your financial head, either a CFO or controller, tells the truth to the directors. IF this were a US company, Lederer and Ferguson would only be in trouble if they knowingly facilitated the fraud. I've never been to their board meetings, so I can't speak to their knowledge of illegalities. I'll let some of the hoi polloi do that. Unless their title and responsibilities included financial management, they're not on the hook for more than the ill gotten gains.

There will be a criminal prosecution for a supposed ponzi scheme, but most of this noise is meant to facilitate the case for bank fraud. Bank fraud cases don't get a lot of press, so the DOJ is probably bringing up semi famous people to sex up the story for press.

mrmarcus12LVA

Sep 21, 2011
9:42am

Block User

Quote

Originally posted by: snidely333 Officers of the company are liable for illegal activities perpetrated by their company. When $44Million show up in your bank account, you can certainly afford to hire a CPA to see where the money is coming from.

Directors are not officers; whole different animal.

Quote
Originally posted by: snidely333 Wonder why Ferguson's amount is rounded but the other guys are down to the penny.

Jesus don't take pennies; Jesus don't get fined in pennies.

Quote
Originally posted by: Joe K "He who makes a beast of himself gets rid of the pain of being a man" - Samuel Johnson

Dude, I loved Samuel Johnson in Pulp Fiction. He was awesome.

snidely333

Sep 21, 2011
9:49am

Block User

Well, whatever it is, I'm not counting on getting back my $2.48.

chefantwon

Sep 21, 2011
10:09am

Block User

With those shifty eyes of yours Snidely, I'd keep somewhat quiet on the issue. Those DOJ folks are like sharks in a feeding
frenzy when they are looking to score a big lawsuit.

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