Scammer tag: PatrickHarnett

[Namworld]

I definitely think this particular scammer request is a lot more grey than the Kraken Fund one. Might as well give all the PPT operators scammer tags, even those that were very clear they take no responsibility from the get go. Their defaults are just as opaque as Patrick's. Given there is currently not a "Debtor" or "In Default" tag it probably is for the best to slap a scarlet scammer on it all.

No, because they claimed no responsibility and they were clear they would strictly deposit money for them with Pirate and charge them a part of the % given by pirate for the "service of depositing". They fully delivered on all their claims. All those operators claims were found to be true and delivered upon, which makes the arrangement valid.

Patrick on the other hand claimed to offer instant withdrawal and x% interest on deposits. He did not deliver not because he can't but because he is unwilling to pay the debt he incurred in full from his own pocket. Which makes it not a default but a scam. He neither delivers all his claim as per agreement nor refunds the funds he received for the agreement.

[Coinoisseur]

Was there a contractually defined default clause? If there was I missed it. Just checkout this thread: https://bitcointalk.org/index.php?topic=94734.0

If a debtor is paying the trend has been to allow time for resolution before attaching the scammer tag. I presume this is based on the reasonable logic that someone with a scammer tag is less likely to try to make good than someone trying to avoid a scammer tag.

Regarding Patrick vs the PPTs: Accusing Patrick of lying about what he thought his Pirateat40 exposure was is on par with accusing the PPTs of knowing Pirateat40 was a scam. Requires evidence.

I do think the Kraken Fund + not answering the moderators in regard to his operations is a good reason to give him the tag.

[Namworld]

If it's forum policy to allow people in default that have the means to pay back debt to pay it back instead at a rate they are comfortable with, even if that was not in the agreement, than fair enough. I do not make the policies.

I will agree with that as long as balances are paid out within reasonable delays, for this case, whether it is out of his pocket or otherwise, so long as all his debt ends up being paid.

[JoelKatz]

I can't think of a single case in which such a mistake completely absolved the one who breached the contract of having to pay back money.  If nothing else, that would be considered unjust enrichment.

Of course. The resolution has to be equitable to both parties.

If you don't think the mistake was fundamental enough to constitute common mistake, which is a reasonable position given that the precise terms of the agreement are vague, then Patrick has a counter-claim against those who loaned him money precisely because the contract does obligate him to pay for their mistake.

To be a common mistake, the depositor would have had to guarantee/tell Patrick that HIS operation was free of pirate exposure and that he was able to repay. I have yet to see a depositor make that claim.

Read the transcript, particularly the "well that works" part. The parties agreed that Patrick's business model left his loan portfolio free of significant correlated risk.

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
Aug 10 08:10:56 <mircea_popescu>   well that works. i'd like to put 500 bitcoins with you

Here Patrick made the mistake of missing the issue of *indirect* Pirate risk. And MP agreed with him. This is inexcusable on both sides since the whole point of this conversation was MP trying to minimize indirect Pirate risk.

If it's forum policy to allow people in default that have the means to pay back debt to pay it back instead at a rate they are comfortable with, even if that was not in the agreement, than fair enough. I do not make the policies.

I will agree with that as long as balances are paid out within reasonable delays, for this case, whether it is out of his pocket or otherwise, so long as all his debt ends up being paid.

I think this really is overly generous. I guess it comes down to whether you think a "scammer" tag is appropriate even if it isn't clear there was any intent to defraud, even if there was reckless conduct that resulted in the person owing money they cannot pay back even close to the amount and rate that would be considered fair.

I guess it comes down to this question: If I borrow money to go on vacation and then when I get back I get hit by a bus, lose my job, and can only pay tiny amounts of money over long periods of time, do I deserve a "scammer" tag? In my opinion, the answer should be "yes". The scammer tag should just indicate a person who can't meet their obligations.

But in any event, it won't matter in this specific case because of Kraken. Certainly if after getting hit by a bus, I borrow more money that I can't pay back, ...

Was there a contractually defined default clause? If there was I missed it.

That's the big question.

You have to imagine that instead of "well that works", MP had responded: "Say it turns out that lots of people are borrowing money from you to invest in Pirate and lying about it, and say Pirate shortly defaults and pays not one single bitcoin, and many of the people you loaned money to just refuse to pay you back since you can't sue them and they aren't willing to make lifestyle sacrifices to satisfy a debt that can't be enforced in a court of law. Will you and you wife make the sacrifices to personally ensure I get 100% of my money back, plus interest?"

What do you think Patrick would have said?

[Coinoisseur]

But in any event, it won't matter in this specific case because of Kraken. Certainly if after getting hit by a bus, I borrow more money that I can't pay back, ...

Replace "I borrow more money" with "I sell fake branded goods I claim are legitimate from the back of my van".

[Namworld]

Read the transcript, particularly the "well that works" part. The parties agreed that Patrick's business model left his loan portfolio free of significant correlated risk.

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
Aug 10 08:10:56 <mircea_popescu>   well that works. i'd like to put 500 bitcoins with you

Here Patrick made the mistake of missing the issue of *indirect* Pirate risk. And MP agreed with him. This is inexcusable on both sides since the whole point of this conversation was MP trying to minimize indirect Pirate risk.

Where do you get the idea that Mircea CLAIMED Patrick's portfolio was free of pirate debt? He never said: "Patrick, your portfolio contains no pirate debt, I can guarantee that to you." nor "Patrick, you have paid my withdrawal to me instantly."

He's stating: "I agree to pay for what you offer to deliver: Instant withdrawal, X% interest, no Pirate exposure."

The seller is the only one to blame for not delivering. The buyer never led Patrick to believe his portfolio had no pirate exposure, partially leading to Patrick's loaning practices and partially causing the loss. No "common mistake" applicable.

Patrick claimed that he would:
- Honor withdrawals instantly
- Pay X% interest
- He can pay if pirate default because he is not invested in BS&T

Mircea agreed that the terms of Patrick offered to deliver satisfied him, he did not claim Patrick's statements were truths. He accepted that he'd pay for what Patrick said he'd deliver and Patrick didn't deliver, which makes him in debt for breach of contract. He can't keep the deposits/share the loss.

Buyer - I want to make a pirate free exposure deposit.
Seller - I am not exposed to pirate.
Buyer - Perfect, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. (False)

Buyer - I want a washing machine.
Seller - I have a washing machine in this box.
Buyer - Perfect, here's the deposit.
Seller - Sorry, it seems I actually had a dryer packaged in that box and cannot deliver. Since I already shipped, we should share the lost on that cost since we both believed a washing machine was being sent. (False)

When you accept a claim issued by one side of the contract, you don't claim it to be true or guaranteed. You agree that you WANT that claim executed/delivered in exchange of the funds.

--------------

If it's forum policy to allow people in default that have the means to pay back debt to pay it back instead at a rate they are comfortable with, even if that was not in the agreement, than fair enough. I do not make the policies.

I will agree with that as long as balances are paid out within reasonable delays, for this case, whether it is out of his pocket or otherwise, so long as all his debt ends up being paid.

I think this really is overly generous. I guess it comes down to whether you think a "scammer" tag is appropriate even if it isn't clear there was any intent to defraud, even if there was reckless conduct that resulted in the person owing money they cannot pay back even close to the amount and rate that would be considered fair.

I guess it comes down to this question: If I borrow money to go on vacation and then when I get back I get hit by a bus, lose my job, and can only pay tiny amounts of money over long periods of time, do I deserve a "scammer" tag? In my opinion, the answer should be "yes". The scammer tag should just indicate a person who can't meet their obligations.

He wasn't hit by a bus and has the mean to pay out of pocket.

He has the financial means to repay more of his debt but won't pay it of his pocket/reduce his lifestyle to do it although he guaranteed instant withdrawal and that he's in debt. I don't think he can't meet his obligations. I'm claiming he is unwilling to.

I'm making that statement because this forum is a private one owned by theymos and he's free to apply whatever rules he wants as to how to apply tags. His "private club", his free speech as to how to attribute tags. Those tags don't hold any legal value.

[JoelKatz]

Read the transcript, particularly the "well that works" part. The parties agreed that Patrick's business model left his loan portfolio free of significant correlated risk.

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
Aug 10 08:10:56 <mircea_popescu>   well that works. i'd like to put 500 bitcoins with you

Here Patrick made the mistake of missing the issue of *indirect* Pirate risk. And MP agreed with him. This is inexcusable on both sides since the whole point of this conversation was MP trying to minimize indirect Pirate risk.

Where do you get the idea that Mircea CLAIMED Patrick's portfolio was free of pirate debt? He never said: "Patrick, your portfolio contains no pirate debt, I can guarantee that to you." nor "Patrick, you have paid my withdrawal to me instantly."

Read the transcript, particularly the "because" that I bolded. Patrick says that he could make repayments in the event of a BS&T default because his deposits are not invested in BS&T and MP agrees that that works. But it doesn't work. That is, they both agreed to something that was logically invalid because it ignored indirect Pirate exposure. Since this conversation was *about* indirect Pirate exposure, that both parties forgot about it is inexcusable.

He's stating: "I agree to pay for what you offer to deliver: Instant withdrawal, X% interest, no Pirate exposure."

You're missing the *because* in there, followed by the "well that works".

The seller is the only one to blame for not delivering. The buyer never led Patrick to believe his portfolio had no pirate exposure, partially leading to Patrick's loaning practices and partially causing the loss. No "common mistake" applicable.

Yes, he did. He said "well that works", when it clearly doesn't because it ignores indirect Pirate exposure.

Buyer - I want to make a pirate free exposure deposit.
Seller - I am not exposed to pirate.
Buyer - Perfect, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. (False)

The problem is that your claim doesn't include a "because" or a "that works". In your example, one party is saying that they know they don't have Pirate exposure based on secret knowledge not shared and the other party has no way to investigate the validity of the logic. Consider:


Buyer - I want to make a pirate free exposure deposit.
Seller - I am not exposed to pirate because I prayed and God told me I wasn't.
Buyer - I agree with your reasoning and am now willing to make a deposit.

Very different.

You can't analogize "I have secret information that I will not share with you that leads me to believe X", where you have no choice but to rely on the other party, and "X is true because of facts A, B, and C", where you have all the information the other party does and agree with invalid reasoning. Here it's especially inexcusable because MP's whole purpose was to avoid indirect Pirate exposure and yet the possibility of indirect Pirate exposure was ignored! Both sides made precisely the same mistake. It's actually ironic.

Why do you think MP had every right to rely on Patrick's reasoning (that he can repay from loan assets if Pirate defaults because he hasn't invested in BS&T) yet Patrick had no right to rely on MP's reasoning (that this works)? It's precisely the same reasoning in both cases, and each side would not have entered into the agreement but for their agreement with that invalid reasoning.

[Namworld]

Buyer - I want to make a pirate free exposure deposit.
Seller - I am not exposed to pirate because I prayed and God told me I wasn't.
Buyer - I agree with your reasoning and am now willing to make a deposit.

Very different.

You can't analogize "I have secret information that I will not share with you that leads me to believe X", where you have no choice but to rely on the other party, and "X is true because of facts A, B, and C", where you have all the information the other party does and agree with invalid reasoning. Here it's especially inexcusable because MP's whole purpose was to avoid indirect Pirate exposure and yet the possibility of indirect Pirate exposure was ignored! Both sides made precisely the same mistake. It's actually ironic.

That example has an explanation which is pretty much impossible to hold true to explain why there's no exposure (I prayed). That there was no exposure might hold true however (I have no exposure). It is neither an explanation as in your example: Patrick does not say "I have no exposure to pirate because X Y Z". He simply makes a straightforward claim to it.

Mircea does not know and he's neither told how Patrick makes sure there is no pirate exposure. Mircea never had all that information you claim both party had. There is secret information. (Mircea is under no obligation to scour the forums, the web, or even the world, to find and verify what Patrick did not disclose for Patrick to have to respect his contractual claims. You could blame that he didn't pursue that information if you want, but that doesn't void the contract or make Mircea the partial cause of the loss to pirate exposure.)

--------------------
Let me reformulate with a because:

Buyer - I want to make a deposit to receive interests. Can you pay back anytime if Pirate defaults?
Seller - Yes you can withdraw anytime because I have no pirate exposure in my loans.
Buyer - That works with me, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. I would like to pay you back but hey, common mistake, I can't pay for all that loss! You're just as responsible as me for not lending to the correct persons, causing the pirate exposure, because you believed there was none, causing me to lend incorrectly!(False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

Buyer - I want a washing machine. Can you provide one?
Seller - Yes I can provide one because I have a washing machine I packaged in this box.
Buyer - That works with me, here's the payment.
Seller - Sorry, it seems I actually had a dryer packaged in that box and not a washing machine. Since I already shipped, we should share the lost on that cost since we made that contract on the premise I was able to provide a washing machine and both believed that, while I could not provide it. I'd like to reimburse you for that but hey, common mistake, I can't pay for all that loss! You're just as responsible for the shipping costs for believing I had a washing machine, causing me to ship the dryer to you in error! (False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

----------------

Yet again, he's not agreeing the statement to be true, he's just accepting that claim as what the other party must deliver as per contract to honor it and that this offered clause satisfies him. The seller is responsible for honoring the clause he promised whether he willingly or mistakenly offered something he could not. Otherwise the seller cannot require compensation/keep funds because he did not honor his contractual claims.

[Coinoisseur]

Namworld your washing machine example is slightly off:

Buyer - I want a washing machine that doesn't use any Pirateat40 parts . Can you provide one?
Seller - Yes I can provide one because I only stock brands that avoid Pirateat40 parts I have a washing machine I packaged in this box.

The washing machine breaks down a few months later and the Buyer discovers Pirateat40 parts inside.

*Pirateat40 parts have a mixed reputation for quality with many pointing to their absurdly low price as a prime indication that they are shoddy parts while a few review sites give the parts great reviews, but they have been used in huge quantities by washing machine brands with no public acknowledgment

[Namworld]

Namworld your washing machine example is slightly off:

Buyer - I want a washing machine that doesn't use any Pirateat40 parts . Can you provide one?
Seller - Yes I can provide one because I only stock brands that avoid Pirateat40 parts I have a washing machine I packaged in this box.

The washing machine breaks down a few months later and the Buyer discovers Pirateat40 parts inside.

No, because Patrick did not say "I only loan to people who avoid Pirateat40", he said "The money is not invested in Pirate":

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

The equivalent of claiming that there's no such parts included. In this specific example at least it is what Patrick claimed. No pirate exposure.

Regardless of the reasons brought forward by the seller, the seller said "yes" in both case that he'd deliver something exempt from something. The buyer could be blamed for being incredibly credulous in what he believes when he's told something such as "It's impossible because I avoid it" if it had been the case, but he's still not at cause for the loss.

[JoelKatz]

That example has an explanation which is pretty much impossible to hold true to explain why there's no exposure (I prayed).

Exactly, which is the same thing that happened here. In a discussion about *indirect* Pirate risk, Patrick said there wasn't any because he had no *direct* Pirate exposure. It is impossible for that argument to be true.

That there was no exposure might hold true however (I have no exposure). It is neither an explanation as in your example: Patrick does not say "I have no exposure to pirate because X Y Z". He simply makes a straightforward claim to it.

Read the transcript, especially the "because" that I bolded. At no time does Patrick say or imply that he has any special private reason to think there was no Pirate exposure. He argues that he has no Pirate exposure *because* he has no direct Pirate exposure.

Mircea does not know and he's neither told how Patrick makes sure there is no pirate exposure.

What? In the transcript, Patrick tells her how:

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

Mircea never had all that information you claim both party had. There is secret information. (Mircea is under no obligation to scour the forums, the web, or even the world, to find and verify what Patrick did not disclose for Patrick to have to respect his contractual claims. You could blame that he didn't pursue that information if you want, but that doesn't void the contract or make Mircea the partial cause of the loss to pirate exposure.)

It's right up in the transcript -- Patrick said he would have sufficient assets in his loan portfolio to cover obligations "mainly because the 15,500 coins I hold on deposit are not invest in BS&T".

Let me reformulate with a because:

Buyer - I want to make a deposit to receive interests. Can you pay back anytime if Pirate defaults?
Seller - Yes you can withdraw anytime because I have no pirate exposure in my loans.
Buyer - That works with me, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. I would like to pay you back but hey, common mistake, I can't pay for all that loss! You're just as responsible as me for not lending to the correct persons, causing the pirate exposure, because you believed there was none, causing me to lend incorrectly!(False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

The difference here is that this "because" is based on incorrect information. Patrick's "because" was based on correct information. Make it "You can withdraw anytime because two plus two is four" and you have something more comparable. That's a true factual claim followed by invalid reasoning based on that claim.

Buyer - I want a washing machine. Can you provide one?
Seller - Yes I can provide one because I have a washing machine I packaged in this box.
Buyer - That works with me, here's the payment.
Seller - Sorry, it seems I actually had a dryer packaged in that box and not a washing machine. Since I already shipped, we should share the lost on that cost since we made that contract on the premise I was able to provide a washing machine and both believed that, while I could not provide it. I'd like to reimburse you for that but hey, common mistake, I can't pay for all that loss! You're just as responsible for the shipping costs for believing I had a washing machine, causing me to ship the dryer to you in error! (False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

Your example is "X because A and B" where A and B are false but X does follow from A and B. The buyer relies on the seller's representation of A and B which turns out to be false. In this case, it was "X because A and B" where A and B are true but X does not follow from A and B. In that case, there is no factual representation of one party that the other party relies on.

There's a huge difference between these two categories of cases. Patrick didn't make any representation of fact that the other party relied on. The only representation of fact in "X because A" is A, and A was true.

[Namworld]

That example has an explanation which is pretty much impossible to hold true to explain why there's no exposure (I prayed).

Exactly, which is the same thing that happened here. In a discussion about *indirect* Pirate risk, Patrick said there wasn't any because he had no *direct* Pirate exposure. It is impossible for that argument to be true.

Can you prove that it was impossible to not be exposed to Pirate? It certainly could be possible to not be so and Patrick made a claim he was not. It's like me saying I trust someone to be honest, and upon realization he was not, you claim it was 100% impossible that person could be honest all along. Someone certainly can be honest, which might not end up being true. Patrick could well have not been exposed to Pirate, which did not end up being true.

That there was no exposure might hold true however (I have no exposure). It is neither an explanation as in your example: Patrick does not say "I have no exposure to pirate because X Y Z". He simply makes a straightforward claim to it.

Read the transcript, especially the "because" that I bolded. At no time does Patrick say or imply that he has any special private reason to think there was no Pirate exposure. He argues that he has no Pirate exposure *because* he has no direct Pirate exposure.

Just like someone who says he will deliver X for 100$ because he'll deliver X for 100$. He doesn't argue about it. He CLAIMS it because that's what he offers to provide. If someone pays him up, the other party must provide what he offered.

Mircea does not know and he's neither told how Patrick makes sure there is no pirate exposure.

What? In the transcript, Patrick tells her how:

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

Are you serious? He did not tell Mircea how he makes sure there's no exposure. He says there is no exposure. He straightforward claims to not be. No explanation or proof given.

Mircea never had all that information you claim both party had. There is secret information. (Mircea is under no obligation to scour the forums, the web, or even the world, to find and verify what Patrick did not disclose for Patrick to have to respect his contractual claims. You could blame that he didn't pursue that information if you want, but that doesn't void the contract or make Mircea the partial cause of the loss to pirate exposure.)

It's right up in the transcript -- Patrick said he would have sufficient assets in his loan portfolio to cover obligations "mainly because the 15,500 coins I hold on deposit are not invest in BS&T".

Let me reformulate with a because:

Buyer - I want to make a deposit to receive interests. Can you pay back anytime if Pirate defaults?
Seller - Yes you can withdraw anytime because I have no pirate exposure in my loans.
Buyer - That works with me, here's the deposit.
Seller - I am actually exposed to pirate and cannot deliver the deposit back. We should share the loss since we both thought I was not exposed. I would like to pay you back but hey, common mistake, I can't pay for all that loss! You're just as responsible as me for not lending to the correct persons, causing the pirate exposure, because you believed there was none, causing me to lend incorrectly!(False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

The difference here is that this "because" is based on incorrect information. Patrick's "because" was based on correct information. Make it "You can withdraw anytime because two plus two is four" and you have something more comparable. That's a true factual claim followed by invalid reasoning based on that claim.

Buyer - I want a washing machine. Can you provide one?
Seller - Yes I can provide one because I have a washing machine I packaged in this box.
Buyer - That works with me, here's the payment.
Seller - Sorry, it seems I actually had a dryer packaged in that box and not a washing machine. Since I already shipped, we should share the lost on that cost since we made that contract on the premise I was able to provide a washing machine and both believed that, while I could not provide it. I'd like to reimburse you for that but hey, common mistake, I can't pay for all that loss! You're just as responsible for the shipping costs for believing I had a washing machine, causing me to ship the dryer to you in error! (False, the seller made the error of promising something he did not have. The buyer did not cause that loss.)

Your example is "X because A and B" where A and B are false but X does follow from A and B. The buyer relies on the seller's representation of A and B which turns out to be false. In this case, it was "X because A and B" where A and B are true but X does not follow from A and B. In that case, there is no factual representation of one party that the other party relies on.

There's a huge difference between these two categories of cases. Patrick didn't make any representation of fact that the other party relied on. The only representation of fact in "X because A" is A, and A was true.

Ok then, so you say Patrick says X because A and B were he only make a representation that "X because A", and A was true.

Patrick says:
(X) You can withdraw anytime because (A) I have enough assets to cover deposits because (B) I am not exposed to BS&T

(A) cannot be true if (B) is not also true. He made both claims: That he had enough assets to cover the deposits and that he was not exposed to BS&T. There is a chain of claims Patrick makes regarding what he offers. That any part of it is false does not make the depositor at fault of a common mistake.

A common mistake applies when BOTH party make the same claim which renders the contract impossible to execute and producing the loss. Not when one party accepts the contract based on what the other party claims to offer when what the that other party offer is false. A common mistake cannot originate from a single side of the parties. Both must have made the claim. Not one side making the claim and the other accepting it.

I have yet to see Mircea make the claim that Patrick was not exposed to Pirate. He never told Patrick: Your loaning business is free of Pirate debt." Only Patrick made that claim. Mircea agreed that this is what he wanted delivered. Not that it was true nor delivered.

Your example is "X because A and B" where A and B are false but X does follow from A and B. The buyer relies on the seller's representation of A and B which turns out to be false. In this case, it was "X because A and B" where A and B are true but X does not follow from A and B. In that case, there is no factual representation of one party that the other party relies on.

Please avoid turning things in variables statement before stating that a specific variable is false without further arguments. There is no way to know what you assume each variable to be and thus make any knowledgeable decision that it is false or right because you didn't identify properly what you are talking about. I do not see any B in my example. My initial example was "X because A": (X) You can withdraw anytime because (A) I am not exposed to Pirate.

[CharlieContent]

Hi Joel,

Me again.

It seems that this debate is largely academic.

I'm happy to agree that both Patrick and his investors are responsible for the loss of his investors coins.

Seems to me though:

Investor is responsible for the loss of coins, therefore the coins are lost. A hard lesson they need to swallow.

Patrick is also responsible for the loss of coins. However they weren't his coins. Therefore he should suffer some kind of loss.

Would you suggest then that Patrick should pay 50% of the coins back to be morally discharged from his obligation? Is that what you mean by both parties sharing responsibility?

[Namworld]

If I recall right, he suggested something along those lines. You should find it rereading the thread.

[JoelKatz]

Would you suggest then that Patrick should pay 50% of the coins back to be morally discharged from his obligation? Is that what you mean by both parties sharing responsibility?

50% is kind of the default position when both sides make the same mistake and cause the same loss. However, it may be reasonable to adjust that. For example, if Patrick expected a greater share of the profits without having his own money at risk (remember, investors lose the use of their money while Patrick has it, he doesn't) then it's fair to make him bear a greater share of the loss.

[JoelKatz]

Mircea does not know and he's neither told how Patrick makes sure there is no pirate exposure.

What? In the transcript, Patrick tells her how:

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

Are you serious? He did not tell Mircea how he makes sure there's no exposure. He says there is no exposure. He straightforward claims to not be. No explanation or proof given.

He absolutely did tell Mircea how he makes sure there's no exposure -- by not investing the coins he has on deposit in BS&T. I don't understand how you can quote that transcript and not see that Patrick is saying that he has more than enough assets in his portfolio to repay investors in the event of a BS&T default because his deposits are not invested in BS&T.

Had Mircea not made the same mistake Patrick did, she would have reasoned as follows: "I'm concerned about indirect Pirate exposure. That's why I'm asking Patrick where his funds are. He's not BS&T, yet I'm still worried about Pirate exposure, so obviously not investing in BS&T is not sufficient to protect against Pirate exposure."

Yet, instead, Mircea told Patrick "that works".

[Namworld]

Ah, I see that now in that statement. He does not specifically claim his lendees are not invested in BS&T. Regardless of what Patrick claims, I still stand by the fact there was no common mistake on the premise only Patrick made the claim and that the depositor merely agreed that Patrick promised it, he did not also make the same claim, which would be required for a common mistake.

A bit old but still a good example:

I'll give you a real world example of this same principle. A few years ago, a doctor examining my daughter noticed that her pediatrician had noted a heart murmur in her records but that he didn't hear it. The physician felt that she might have grown out of it, but the only way to be sure was to run a test. He assured me my insurance would cover the test. We had the test, and my insurance didn't cover it.

I refused to pay. The physician argued that I had signed a contract saying that I was responsible for any amounts my insurance wouldn't pay. He argued that our contract clearly stated that I was responsible for any amounts my insurance wouldn't cover. I agreed with him, but then pointed out that because I was responsible for any amounts my insurance wouldn't pay, his mistake in assuring me that my insurance would cover the costs damaged me. And he was responsible to me for the loss his mistake caused me, a loss that (because both are between me and him) offsets my responsibility to pay him for the test. He actually checked with his lawyer (I think more because he was curious than anything) and he agreed.

It's substantially the same thing here. It's precisely because Patrick promised to pay that money back that the mistake made by those who loaned him money caused Patrick damages for which they are responsible. Because both mistakes are between the same two people, the losses one party's mistake caused the other offset the losses the other party's mistake caused.

Irresponsible lending is just as much a problem as irresponsible borrowing. We wouldn't have had the Pirate fiasco if not for irresponsible lenders.

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

Under your current arguments, Patrick would not have to give you your deposit back in full, because:
- He said the deposits would not be lost in case of BS&T default mainly because he has non BS&T investment which is apparently enough to cover those deposits. (He shows no proof of that and just states it to you.)
- You agreed to act upon that claim and proceed with it because you thought that was sufficient to guarantee the deposit.
- There was the common mistake that the deposits would not be lost, because Patrick had non BS&T investment which would be covering deposits if BS&T defaulted.
- Which was not the case because Patrick's non BS&T investment did not cover the deposits when BS&T defaulted.
- So the deposits' loss should be shared now that Patrick gave his loans based on the common belief that the non BS&T investment would be covering the deposits when BS&T defaulted.
- You both proceeded on the belief Patrick non BS&T investment would cover the deposits.

Under your current arguments, the doctor would not have had to pay you, because:
- He said you would not pay for the test in case you proceed with it because your insurance will apparently cover that cost. (He shows no proof of that and just states it to you.)
- You agreed to act upon that claim and proceed with it because you thought that was sufficient to not get to pay for the test.
- There was the common mistake that the test would not be paid for, because the insurance would pay for the test if you proceeded with it.
- Which was not the case because the insurance company did not pay it for you when you proceeded with the test.
- So the test's costs should be shared now that the doctor executed the test based on the common belief that the insurance would be pay the costs when you'd proceed with the test.
- You both proceeded on the belief the insurance would pay the costs.

The doctor's lawyer seems to agree with me about common mistake in contracts because your doctor ended up doing the opposite.

The depositors did not investigate if that was sufficient to guarantee deposits and took Patrick's claim for granted.
You did not investigate if your insurer would actually pay for it, yet you took your doctor's claim for granted.

Legally Patrick owes 100% of deposits for stating deposits would be covered on account of non BS&T investment prior to you accepting to deposit.

Legally your doctor owed you 100% the cost of the test for stating it would be payed for on account of your insurer paying for it prior to you accepting to do the test.

-------------

The only difference is that depositors decided to more or less blindly trust a stranger over the web over some much less realistic claim.

While the last statement is true (that if people didn't lend their money left and right without investigation, the Pirate fiasco would not have been possible), they did not cause the loss of Pirate running away with the funds. Pirate is solely responsible for that. Their tort is giving money left and right without thinking which is a completely different mistake than the one causing the damage.

I am IN NO WAY suggesting we should not blame people for unknowingly giving their money left and right without extensive investigation. I am simply stating that Patrick legally owes the full deposits as what he claimed to offer, regardless if the loss would have been impossible if people did not enter in poorly defined/investigated contracts. The mistake is not the same. Patrick's mistake created the loss to for the depositors. The depositors' mistake placed them in the situation, but did not directly cause the loss.

[MPOE-PR]

Was there a contractually defined default clause? If there was I missed it. Just checkout this thread: https://bitcointalk.org/index.php?topic=94734.0

If a debtor is paying the trend has been to allow time for resolution before attaching the scammer tag. I presume this is based on the reasonable logic that someone with a scammer tag is less likely to try to make good than someone trying to avoid a scammer tag.

Regarding Patrick vs the PPTs: Accusing Patrick of lying about what he thought his Pirateat40 exposure was is on par with accusing the PPTs of knowing Pirateat40 was a scam. Requires evidence.

I do think the Kraken Fund + not answering the moderators in regard to his operations is a good reason to give him the tag.

You're in a two week old thread. Are you aware of this?

The scammer is NOT PAYING. Are you aware of this?

He split long ago. He is not answering for himself. Are you aware of this?

PS. I really hope the various scammers lurking this forum are keeping tabs on you idiots. I for sure am saving all this crap for the eventual complaints you might wish to make.

[JoelKatz]

The doctor's lawyer seems to agree with me about common mistake in contracts because your doctor ended up doing the opposite.

There wasn't a common mistake in that case at all. The doctor represented that he had knowledge that I didn't have that led him to conclude that the insurance would pay for it. I had no way to check his reasoning. The point of that example is to see that you can't stop at the contract -- because my prior agreement with the doctor made me responsible for any costs the insurance wouldn't pay, his false representation (one I had no way to check nor any reason to doubt) damaged me.

This case is totally different -- Patrick substantially explained the reason he reached the conclusion he did, gave all the information needed to verify it, and she agreed with his reasoning even though it was obviously incorrect. The whole point of the discussion was to protect against indirect Pirate exposure and they agreed that if that Patrick had no direct Pirate exposure, that somehow meant there was no indirect exposure.

[JoelKatz]

Ah, I see that now in that statement. He does not specifically claim his lendees are not invested in BS&T. Regardless of what Patrick claims, I still stand by the fact there was no common mistake on the premise only Patrick made the claim and that the depositor merely agreed that Patrick promised it, he did not also make the same claim, which would be required for a common mistake.

Patrick made an apparent logical argument. Patrick said he'd have enough equity to cover his loans in the event of a Pirate default because his coins weren't deposited in BS&T. His only factual claim is that his loan portfolio wasn't in BS&T. That claim was *true*. Both parties made the mistake of concluding that this meant that the portfolio would have sufficient equity to cover a Pirate default. This wasn't due to any false claim but due to an incorrect chain of reasoning on which both parties *agreed*.

One can even argue that MP was in a better position to realize this problem than Patrick was. MP was specifically investigating the risk of indirect Pirate exposure. Patrick was not.

The doctor's lawyer seems to agree with me about common mistake in contracts because your doctor ended up doing the opposite.

There wasn't a common mistake in that case at all. The doctor represented that he had knowledge that I didn't have that led him to conclude that the insurance would pay for it. I had no way to check his reasoning. The point of that example is to see that you can't stop at the contract -- because my prior agreement with the doctor made me responsible for any costs the insurance wouldn't pay, his false representation (one I had no way to check nor any reason to doubt) damaged me.

This case is totally different -- Patrick substantially explained the reason he reached the conclusion he did, gave all the information needed to verify it, and she agreed with his reasoning even though it was obviously incorrect. The whole point of the discussion was for MP to protect against indirect Pirate exposure and they agreed that if that Patrick had no direct Pirate exposure, that somehow meant there was no indirect exposure.