Reserve Primary Fund

I am not your lawyer but let’s forget about that for two minutes and I’ll give you legal advice and then later we’ll pretend it never happened. Here is a thing that it is okay to do:

  • Get people to invest their money with you and then lose it all because you’re unlucky, reckless, an idiot, an unlucky reckless idiot, etc.

And here is a thing that it is not okay to do:

  • Lie to them about it.

That’s pretty much that!1 But it’s easy to lose track of the difference, especially if you or your loved ones or your financial system lost all their money through the good efforts of reckless idiots. The Journal had a whole package of like “why aren’t more reckless idiots in jail???” today, spurred mostly by the pending SEC settlement in which JPMorgan will pay a ton of money over mortgage fraud but no individual humans will be charged with having committed mortgage fraud; the mortgage fraud was, like, in the system.2 It bears pondering.

Nonetheless: the law is the law, and in its majesty has decreed that reckless idiocy = okay, lying about it = not. Where does that leave Bruce Bent Sr. and his son Bruce Bent II? BB Sr. invented money market funds, which I guess some people would say qualifies as reckless idiocy all by itself, but anyway he and BB2 ran the Reserve Primary money market fund and it invested in Lehman debt and lost a bunch of money and they were arguably not totally forthcoming about it and the SEC sued them for fraud. Today a jury more or less decided that they didn’t lie about it: Read more »