Scammer tag: PatrickHarnett

[JoelKatz]

No, but you can fault a party for making an impossible claim.

Absolutely. And I do fault Patrick for making impossible claims.

If I lie to you, are you equally at fault if you believe it? Maybe you do believe that, but I don't. I think the liar bears the moral responsibility for lying. Maybe Harnett didn't deliberately set out to deceive anyone, but he made various untrue statements. He made the statements. He bears the responsibility for making them.

There's no evidence Patrick lied about anything having to do with this arrangement. And I agree, he bears the responsibility for the false statements he made.

In this case, there was a shared mistaken belief on which the agreement was based, without which neither party would have entered into the agreement.

You speak as if this shared mistaken belief came out of nowhere. It came out of Harnett's mouth. Yes, it was a shared belief, but if Harnett didn't make the proposal then the deal wouldn't have been made. Harnett made various assurances. He assured the impossible. We can't blame him for not making good on his impossible claim, but we can fault him for making it in the first place surely?

Yes, and I do. However, I place roughly equal blame on those who believed that what Patrick was claiming was possible. It is substantially the same mistake. There's no significant information that Patrick had that those who invested with him didn't have that had any relevance to the question of whether his basic business model was sensible.

Those who invested with Patrick made precisely the same fundamental mistake Patrick made, in precisely the same way, causing precisely the same harm. I want to hold them responsible too. You seem to think I'm trying to excuse some fault on Patrick's part. Absolutely not -- I do not excuse anyone who believed that Patrick's business model was sound and risked people's money on that basis.

[CharlieContent]

However, I place roughly equal blame on those who believed that what Patrick was claiming was possible.

I think we will need to agree to disagree on this point. I think the moral responsibility rests on the person who makes the claim, not the person who believes it.

I want to hold them responsible too.

They were responsible for the decision they made, but why should you hold them responsible? Surely the loss of their coins is bad enough. And surely this thread is about holding Harnett to account?

I do not excuse anyone who believed that Patrick's business model was sound and risked people's money on that basis.

I don't excuse anyone who risked other people's money either. They should also be held to account. Scammer tags applied, etc.

But what of those who risked their own money? Do they really need to be pilloried for making a stupid decision? Surely the man who lead them down that road should be the one blamed for what happened. The road lead to disaster, and they should both have foreseen that, but Harnett was the one walking ahead, saying "Follow me, follow me."

His carelessness was not mere personal carelessness. By being careless with other peoples money, he abused the trust that they placed in him.

You say you have no wish to absolve Harnett of responsibility, but when you say that both parties in this transaction are equally culpable for the loss of coins, then you paint the whole thing with a brush of moral ambiguity. When you say to the gentleman who has had his coins stolen "More fool you for believing him!" then you automatically absolve Harnett of at least some responsibility.

In my mind there is a victim and a culprit here. People lost a lot of coins so that Harnett could gamble with their money. I think that what he did was wrong and it was his responsibility to make sure he could do what he said he could before he claimed it. That's an issue of personal ethics and my moral compass, and as I said it's maybe something that we will have to disagree on.

[JoelKatz]

I think we will need to agree to disagree on this point. I think the moral responsibility rests on the person who makes the claim, not the person who believes it.

They're not mutually exclusive. And I don't think anyone believes that you can't hold someone responsible for believing a false claim and acting on it.

I want to hold them responsible too.

They were responsible for the decision they made, but why should you hold them responsible? Surely the loss of their coins is bad enough. And surely this thread is about holding Harnett to account?

What?! If the loss of their coins is just compensation for the harm their mistake did, then Patrick wouldn't owe anyone anything and this thread would have no point. The point of this thread is to resolve the claim that Patrick owes his investors money.

I do not excuse anyone who believed that Patrick's business model was sound and risked people's money on that basis.

I don't excuse anyone who risked other people's money either. They should also be held to account. Scammer tags applied, etc.

But what of those who risked their own money? Do they really need to be pilloried for making a stupid decision?

Yes, they do, because their stupid decision harmed others.

Surely the man who lead them down that road should be the one blamed for what happened. The road lead to disaster, and they should both have foreseen that, but Harnett was the one walking ahead, saying "Follow me, follow me."

The idea that Patrick was the leader and his investors mere followers is just comical. That's simply not how it happened.

You say you have no wish to absolve Harnett of responsibility, but when you say that both parties in this transaction are equally culpable for the loss of coins, then you paint the whole thing with a brush of moral ambiguity. When you say to the gentleman who has had his coins stolen "More fool you for believing him!" then you automatically absolve Harnett of at least some responsibility.

No, not true at all. If I ever suggested that, it was unintentional.

In my mind there is a victim and a culprit here. People lost a lot of coins so that Harnett could gamble with their money. I think that what he did was wrong and it was his responsibility to make sure he could do what he said he could before he claimed it. That's an issue of personal ethics and my moral compass, and as I said it's maybe something that we will have to disagree on.

Ahh, so you do wish to excuse those who are equally culpable. That's too bad. Because Patricks and Hashkings and Pirates will always come along and if we don't hold the other people accountable for making precisely the same mistake with precisely the same consequences, we'll repeat this fiasco again and again.

But don't say that I'm trying to excuse people. I'm trying to hold *more* people accountable than you are.

[MPOE-PR]

He's not going to argue with me ever again, given that he's never going to have a good response to the 40% and 50% "coincidence".

I made it quite clear that 40% over three years was something I felt people could agree was a *minimum*. And I said that 50% if the default position when a harm appears to be equally caused by both sides. And I also argued that the 50% default position could be adjusted if one side expected to get a greater share of the profits because it's reasonable to make it bear a greater share of the harm.

But you're clearly much more interested in turning this into an insulting match or questioning my integrity than in ever facing the possibility that maybe, just maybe, some of this is your fault.

What integrity?

[JoelKatz]

What integrity?

The integrity that comes from taking responsibility for your own bad judgment and admitting when you are in the wrong rather than hurling insults and accusations at the people who try to point it out to you. The integrity that comes from taking an unpopular position because you believe it is correct and because you believe it is what the community needs to hear.

[Stephen Gornick]

The integrity that comes from taking an unpopular position because you believe it is correct and because you believe it is what the community needs to hear.

I'm sorry I've been holding back from commenting on this thread (as I've never had any business dealings with Patrick and thus this topic is really none of my concern) but now with that comment I must interject.

This logic of yours is NOT what the community needs to hear.

If someone says they have funds to personally cover any losses and then doesn't actually cover said losses there's not much left to argue about here.

[JoelKatz]

If someone says they have funds to personally cover any losses and then doesn't actually cover said losses there's not much left to argue about here.

I agree. Patrick was mistaken and should be held accountable for that mistake:

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that
Aug 10 08:10:41 <patrickharnett>   mainly because the 15,500 coins I hold on deposit are not invest in BS&T

There's no evidence this was a lie or misrepresentation. It was simply something that he was incorrect about. Where I disagree with some others in this thread is that I believe the people who loaned Patrick money made precisely the same mistake and are likewise accountable for the harm that mistake caused. Patrick believed he was sufficiently free of Pirate exposure and correlated risk that he would have sufficient loan assets to make repayments if Pirate defaulted. He was wrong. But this was not because of secret knowledge only he had, it was because he thought his basic business model (which was not a secret) was sound when it wasn't.

This logic of yours is NOT what the community needs to hear.

If people are not held accountable for bad decisions and poor judgment that causes harm, we're doomed to repeat Pirate, Patrick, and Hashking over and over again. Those who invested paid folks like Pirate to run their scams and knew, or should have known, that they were paying people to make them the recipients of fraudulent transfers. Patrick was an un-knowing Pirate intermediary and is, in my opinion, much less culpable than the knowing Pirate intermediaries such as PPT operators. Those who loaned him money were equally un-knowing Pirate intermediaries.

[Namworld]

If someone says they have funds to personally cover any losses and then doesn't actually cover said losses there's not much left to argue about here.

I agree. Patrick was mistaken and should be held accountable for that mistake:

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that
Aug 10 08:10:41 <patrickharnett>   mainly because the 15,500 coins I hold on deposit are not invest in BS&T

There's no evidence this was a lie or misrepresentation. It was simply something that he was incorrect about. Where I disagree with some others in this thread is that I believe the people who loaned Patrick money made precisely the same mistake and are likewise accountable for the harm that mistake caused. Patrick believed he was sufficiently free of Pirate exposure and correlated risk that he would have sufficient loan assets to make repayments if Pirate defaulted. He was wrong. But this was not because of secret knowledge only he had, it was because he thought his basic business model (which was not a secret) was sound when it wasn't.

This logic of yours is NOT what the community needs to hear.

If people are not held accountable for bad decisions and poor judgment that causes harm, we're doomed to repeat Pirate, Patrick, and Hashking over and over again. Those who invested paid folks like Pirate to run their scams and knew, or should have known, that they were paying people to make them the recipients of fraudulent transfers. Patrick was an un-knowing Pirate intermediary and is, in my opinion, much less culpable than the knowing Pirate intermediaries such as PPT operators. Those who loaned him money were equally un-knowing Pirate intermediaries.

Patrick Harnett's offered loans and taking deposits. He was acting somewhat as a bank often guaranteeing no loss. If he was under a LLC/entity separate from himself, the operation defaulting and paying partial might have the way to go. However, this was not the case. He operated under his own name.

- Not a joint venture.
- Often promising no default would cause any loss.
- Claims of good backings.
- Offering deposits with interest paid on balance.

When someone deposits at a bank, they don't accept to take any risk as to if the bank will or will not make good investments. If the bank cannot pay depositors, it has to default. Same as when the bank loans to businesses. They're not in a joint venture and the bank is not going to accept the business defaulting on the loan without the whole business defaulting on the sole reason the specific investment didn't go as planned and claimed. The person extending money to the other party is not at fault for the receiver's business shortcomings.

You could potentially blame the depositors for for their choice of place to deposit their money I suppose. And you could argue that the default being unavoidable, it's logical that people are partially paid with what is left.

However, in this case, the issue is not the default or partial payment. It's that Patrick Harnett chose to operate as himself, and he took deposits in his name and should not default on deposits if he does not default himself as an individual and keeping his personal wealth. The risks of operating under your own name instead of managing a legally separate entity.

[JoelKatz]

When someone deposits at a bank, they don't accept to take any risk as to if the bank will or will not make good investments. If the bank cannot pay depositors, it has to default.

That's correct. But that's because a case where the losses are equally the fault of the bank and those who loaned the bank money are rare. However, if you imagine such a case, it should seem clear they should split the losses.

As a silly example, suppose I tell you that I feel really lucky on the slots today and that if you give me $50, I believe I'll win $100 and split the profits with you. Say you also believe that this is the case and therefore loan me the money, fully believing that I will win $100 and split the profits with you. In this case, if I lose the $50, it's not fair for me to be responsible to you for the entire $50, lost profits, and so on. When you have a common mistake, made equally by both parties, with no significantly greater fault falling on either party, it is inequitable to try to enforce the contract as agreed. In our gambling case, our contract never addresses the case where I lose money because neither of us considered it possible -- it can't say what should happen in that case because neither of us ever tried to make it do so.

However, in this case, the issue is not the default or partial payment. It's that Patrick Harnett chose to operate as himself, and he took deposits in his name and should not default on deposits if he does not default himself as an individual and keeping his personal wealth. The risks of operating under your own name instead of managing a legally separate entity.

The issue in this case is that both Patrick and those who loaned him money made precisely the same mistake, and neither party would have entered into the agreement but for that mistake.

[davout]

Some global mod should grow some balls and either tag harnett until he defends himself or lock the fuck out of the waste of disk space that this thread has become.

[Stephen Gornick]

Aug 10 08:10:41 <patrickharnett>   mainly because the 15,500 coins I hold on deposit are not invest in BS&T

If you lend me $1, and I haven't done anything with it, then I still hold that $1 that was deposited.  But If I lend that $1 to someone else, I no longer can say that I hold $1 on deposit.  

You don't say that you hold a deposit when you no longer hold those funds and instead have turned around and lent those funds out.

You might make the argument that Patrick made a mistake and used the wrong words (versus intentionally trying to deceive).

The issue in this case is that both Patrick and those who loaned him money made precisely the same mistake,

Nobody else but Patrick is "on trial" here though.

[JoelKatz]

Aug 10 08:10:41 <patrickharnett>   mainly because the 15,500 coins I hold on deposit are not invest in BS&T

If you lend me $1, and I haven't done anything with it, then I still hold that $1 that was deposited.  But If I lend that $1 to someone else, I no longer can say that I hold $1 on deposit.  

You don't say that you hold a deposit when you no longer hold those funds and instead have turned around and lent those funds out.

You might make the argument that Patrick made a mistake and used the wrong words (versus intentionally trying to deceive).

In context, I don't think it was possible to understand what he said that way. This was preceded by:

Aug 10 08:07:21 <patrickharnett>   I run a slightly complicated business, but most of the deposit accounts I run are BS&T free

I think both sides clearly understood that Patrick's "deposit accounts" were in fact loans. If there was any confusion about that, that would be a separate issue.

In fact, I can't see how that could be misunderstood. If he had 10,000 BTC on deposit, he would have 10,000 BTC sitting around, but he'd also owe 10,000 BTC. So how would that help cover a default? He has to have been referring to his loan portfolio. (If he had said it was a "reserve", you'd have a point.)

The issue in this case is that both Patrick and those who loaned him money made precisely the same mistake,

Nobody else but Patrick is "on trial" here though.

Right, but we can't do that without figuring out how to handle a case their contract didn't cover. When we do that, it makes a difference how you apportion fault on the two sides.

For example, say you represented that there were 1,500 pounds of cherries on a truck and I bought it from you for $3,000. If I don't pay you the money, and there weren't actually 1,500 pounds of cherries on the truck, we can't just conclude that I owe you the $3,000 the contract specified because you didn't provide me the 1,500 pounds of cherries the contract specified.

Now, saw we both determined there were 1,500 pounds of cherries on the truck and we were both wrong. It's still inequitable to make me pay you the entire $3,000, making me suffer all the losses that flowed from a common mistake, when the fault was both of ours equally. We have to adjust the amount owed based on things like the relative fault. (But not just the relative fault. As I argued elsewhere, it's complicated.)

We can't assess whether Patrick is in default unless we asses how much he should pay. And we can't do that until we apportion fault among the parties. (However, as I've also argued elsewhere, we may be able to skip this process if we can agree on an amount so low it's obviously fair to make Patrick pay at least that and then show he hasn't even paid that amount. I've suggested 40% over three years as this amount.)

[MPOE-PR]

What integrity?

The integrity that comes from taking responsibility for your own bad judgment and admitting when you are in the wrong rather than hurling insults and accusations at the people who try to point it out to you. The integrity that comes from taking an unpopular position because you believe it is correct and because you believe it is what the community needs to hear.

Except you are NOT taking an "unpopular" position. You are taking a logically inconsistent and provably (and proven) untenable position.

Originally I thought you were just mentally ill, but the "coincidence" of the 40% and the 50% arbitrary values coming out of you with the 40% and 50% arbitrary values coming out of Patrick as well as a mounting pile of circumstantial evidence paint quite the opposite picture:

You have absolutely no integrity, you are just shilling. And you should be ashamed of yourself.

You might at the very least have disclosed your relationship instead of lying about no relationship.

[Namworld]

When someone deposits at a bank, they don't accept to take any risk as to if the bank will or will not make good investments. If the bank cannot pay depositors, it has to default.

That's correct. But that's because a case where the losses are equally the fault of the bank and those who loaned the bank money are rare. However, if you imagine such a case, it should seem clear they should split the losses.

As a silly example, suppose I tell you that I feel really lucky on the slots today and that if you give me $50, I believe I'll win $100 and split the profits with you. Say you also believe that this is the case and therefore loan me the money, fully believing that I will win $100 and split the profits with you. In this case, if I lose the $50, it's not fair for me to be responsible to you for the entire $50, lost profits, and so on. When you have a common mistake, made equally by both parties, with no significantly greater fault falling on either party, it is inequitable to try to enforce the contract as agreed. In our gambling case, our contract never addresses the case where I lose money because neither of us considered it possible -- it can't say what should happen in that case because neither of us ever tried to make it do so.

However, in this case, the issue is not the default or partial payment. It's that Patrick Harnett chose to operate as himself, and he took deposits in his name and should not default on deposits if he does not default himself as an individual and keeping his personal wealth. The risks of operating under your own name instead of managing a legally separate entity.

The issue in this case is that both Patrick and those who loaned him money made precisely the same mistake, and neither party would have entered into the agreement but for that mistake.

In your example, indeed it's an investment contract with no clause in the case money is lost. It could be seen as a joint venture and the share of the loss could be expected. It was never agreed it was loan, but that he'd use the money for gambling and share the profits.

But in this situation, I disagree that it could be regarded as such. He took deposits, acted as a bank taking deposits and extending loan, stating repeatedly that his business was sound, diversified, and that he could bear defaults. The mere fact people asked about how he operated does not suddenly make it a joint venture or imply that risk will be shared. Otherwise, applying this logic, if I asked a bank about their business practices before depositing into an interest bearing account, the bank could make a bad investment and then default on my deposit without default as a whole because my particular funds went on a bad investment and risk is somehow shared.

By depositing with Patrick Harnett, just like at a bank, you do not assume taking risk in any particular venue or to sharing risk with the various investments & loans the bank will make. They simply entrust their money to a financial service provider who will then make decisions for them. They are not making any specific investment or assuming the risks. One key characteristics is that capital is pooled from all the depositors' funds to be then redistributed to business ventures. The depositors do not take any risk other than the bank defaulting as a whole and Patrick Harnett operated under himself, not a separate entity, but did not default himself.

He acted as if it was a joint investment venture and defaulted only on the capital of depositors, not personally, despite operating as a bank under his own name for his own personal profit, acting as a financial service provider and not directly disclosing how he invested the capital.

If he operated under an independent entity (which earn it's own profit, pays its own taxes, etc.), then defaulting purely as a bank on the deposited capital would have been acceptable, however he was acting as the bank and he was directly and personally receiving any profit yet didn't claim personal bankruptcy.

The wording and claims Patrick Harnett made (at least for the Starfish lending/deposits business) were very misleading as to the nature and how he would manage scenarios regarding his offer.

If you don't agree with the above, well let's agree to disagree on whether to classify Patrick Harnett's business as a joint venture such as your example or as a bank (financial service provider) such as in my example. Because it does not seem we disagree on how to handle the case in either scenario, but on what kind of scenario we are actually dealing with. (Note that I did not deposit anything with Starfish. But I did have a deposit in his other operation (fund), but the mere fact it was a fund would place me under your joint venture example where risk is shared. However he added the claim that "Contributed capital is backed by my personal funds." and defaulted on it without personally going bankrupt. One could have assumed he was borrowing investment capital by backing it with his personal assets, which turns it into a loan more than an actual fund/investment vehicle, but he did not back it as promised when the situation required so. Which you seem to have agreed to already.)

[JoelKatz]

Originally I thought you were just mentally ill, but the "coincidence" of the 40% and the 50% arbitrary values coming out of you with the 40% and 50% arbitrary values coming out of Patrick as well as a mounting pile of circumstantial evidence paint quite the opposite picture:

I explained where the 40% and 50% come from at least twice now. As for "values coming out of Patrick", I don't know what you're talking about. If Patrick is attempting to copy my argument, it's not because I've asked him to or he's asked me to.

You have absolutely no integrity, you are just shilling. And you should be ashamed of yourself.

I have never accepted money from anyone to express an opinion of any kind. (Though not for lack of trying. If you want to pay me to shill, I'll take your money. I just won't lie and say I didn't.)

You might at the very least have disclosed your relationship instead of lying about no relationship.

I dislike Patrick. I've never coordinated any activity with him nor, at least as far as I can recall right now, have I ever had any communication with him (or, so far as I know, anyone connected with him) whatsoever other than public posts to this forum. (Other than one private forum message to, I think, ripper234, in which I advised him that I thought Patrick's business was likely a scam.)

There is absolutely no possible reason I would lie or be dishonest about this. Patrick will likely get a scammer tag anyway, and this has no effect on any actual court of law. The only difference is that I put some blame on you. It's hard to imagine anyone would pay me to do that.

[MPOE-PR]

I have never accepted money from anyone to express an opinion of any kind.

Accepting money is not what's at issue. Nice try, I suppose this sort of slimy, intellectually dishonest behavior usually works for you.

I dislike Patrick. I've never coordinated any activity with him nor, at least as far as I can recall right now, have I ever had any communication with him

Right. Except not really.

[JoelKatz]

(Note that I did not deposit anything with Starfish. But I did have a deposit in his other operation (fund), but the mere fact it was a fund would place me under your joint venture example where risk is shared. However he added the claim that "Contributed capital is backed by my personal funds." and defaulted on it without personally going bankrupt. One could have assumed he was borrowing investment capital by backing it with his personal assets, which turns it into a loan more than an actual fund/investment vehicle, but he did not back it as promised when the situation required so. Which you seem to have agreed to already.)

That claim was based on his false belief that his business model was fundamentally sound and that he was diversified against Pirate exposure. It's certainly enforceable against those who have no culpability in that mistake. But it's not fully enforceable against people who shared that mistaken belief and jointly acted to cause the harm. Both Patrick and his investors made the same mistake and it caused precisely the same loss in precisely the same way.

To give a somewhat silly analogy, say some people believe that if you give money to the poor, God will repay you tenfold. If someone borrows money to give to the poor expecting to pay it back from God's bounty, they are totally stuck if the bounty fails to materialize. It's all on them. But if they jointly develop a loan scheme with someone else who shares this belief, and borrow from them in the mutual expectation that the bounty will materialize, it would clearly be inequitable to hold the borrower 100% responsible for the amount borrowed because the mistaken belief that caused the loss was shared by both sides equally. This is so even if one person says, "I'm sure I can pay you back from my money", so long as that assurance flows directly from the shared, mistaken belief.

That's precisely what happened here. Both sides were equally culpable in their mistaken belief that Patrick's business model was sound and that his loan portfolio was largely free of correlated risk. Everything they said to each other reinforced and flowed from that shared mistake belief. The damages flowed directly from that mistaken belief.

[JoelKatz]

I have never accepted money from anyone to express an opinion of any kind.

Accepting money is not what's at issue. Nice try, I suppose this sort of slimy, intellectually dishonest behavior usually works for you.

I'm pretty sure you're trolling now. You have exhausted my ability to presume good faith. I give up on trying to reason with you.

In all the years I've been posting on Internet forums and blogs, only two people have ever exhausted my presumption of good faith. So congratulations.

[Namworld]

(Note that I did not deposit anything with Starfish. But I did have a deposit in his other operation (fund), but the mere fact it was a fund would place me under your joint venture example where risk is shared. However he added the claim that "Contributed capital is backed by my personal funds." and defaulted on it without personally going bankrupt. One could have assumed he was borrowing investment capital by backing it with his personal assets, which turns it into a loan more than an actual fund/investment vehicle, but he did not back it as promised when the situation required so. Which you seem to have agreed to already.)

That claim was based on his false belief that his business model was fundamentally sound and that he was diversified against Pirate exposure. It's certainly enforceable against those who have no culpability in that mistake. But it's not fully enforceable against people who shared that mistaken belief and jointly acted to cause the harm. Both Patrick and his investors made the same mistake and it caused precisely the same loss in precisely the same way.

To give a somewhat silly analogy, say some people believe that if you give money to the poor, God will repay you tenfold. If someone borrows money to give to the poor expecting to pay it back from God's bounty, they are totally stuck if the bounty fails to materialize. It's all on them. But if they jointly develop a loan scheme with someone else who shares this belief, and borrow from them in the mutual expectation that the bounty will materialize, it would clearly be inequitable to hold the borrower 100% responsible for the amount borrowed because the mistaken belief that caused the loss was shared by both sides equally. This is so even if one person says, "I'm sure I can pay you back from my money", so long as that assurance flows directly from the shared, mistaken belief.

That's precisely what happened here. Both sides were equally culpable in their mistaken belief that Patrick's business model was sound and that his loan portfolio was largely free of correlated risk. Everything they said to each other reinforced and flowed from that shared mistake belief. The damages flowed directly from that mistaken belief.

You admitted a bank would rarely be at common fault, yet you know just as much by depositing at a bank that the deposits will be lent afterwards and you're just as much led to believe its loaning behavior is sound. Yet depositors are not sharing the risk. Your analogies/examples always show an example where the investment is disclosed, while Patrick Harnett acted as a bank, being the financial service provider selecting who to loan to. Those benefiting from those loans made the actual investments (and lied to Patrick). The depositor is yet not at fault for the bank mismanagement.

The depositors were not investing in the bank itself such as would be the case if they became shareholders. (In which point they would be equally liable to a loss from the unsound business such as in your example.) They merely deposited with Patrick Harnett providing a financial service:

Depositor > Patrick (bank) > Lendee > Investment or Personal Purchase

I claim your proposed scenario cannot apply on behalf that it was not an investment but a deposit. Patrick was providing a financial service and was not directly making an investment or disclosing the lendees and the specific reason they are taking a loan just like a bank. The wording strongly suggest that he works as a bank and that he takes the responsibility to loaning cash to sound requests and doing proper investigation. Now the bank needs to default, Patrick voided part of the deposits but did not default himself personally, despite that he was acting as the bank entity (which has to default), directly and personally pocketing any profit.

[Scott J]

Joel, you are actively stopping this debate from moving forward.

In my mind, what we need to know is quite simple:

Should Patrick not recover any coins from his Kraken Pirate investments, will he back contributed capital as he stated?

Contributed capital is backed by my personal funds.