Could Underwriting An IPO Now Be A Crime?

from the bad-beat dept

Mon, Jan 22nd 2007 10:44am — Joseph Weisenthal

Last week's arrest of two former executives at NETeller, an online money transfer firm that does a lot of business with gambling sites, marked an expansion in the US government's aggressive war on online gambling. For the first time, it became clear that US law enforcement considered it a crime not just to be involved with one of these sites, but to be involved in a peripheral industry somehow related to online gambling. The Department of Justice appears to be going further down this road, as it's apparently started issuing subpoenas to investment banks that helped online gambling sites (many of whom are publicly traded in London) raise money. It's not clear yet what the purpose of the subpoenas is, and it's too early to guess whether or not the DOJ wants to pursue charges directly against the banks themselves. It's possible that they just want more information for help in prosecuting more cases against industry executives. But either way, it's a continuation of a disturbing trend, whereby legal activities, that may be related to illegal ones, come under fire.

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11 Comments

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Anonymous Coward, 22 Jan 2007 @ 11:06am

The Justice Department has also served subpoenas on the management of the McDonalds and a Taco bell next to the corporate offices of several gambling companies for supporting the illegal offshore gambling operations.
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Shag, 22 Jan 2007 @ 11:25am

Underwriting.
They fund a business that was legal where or when the loan has been accepted.

If simply arresting people for providing money, every bank manager in the world would be snagged. I am sure that some of the money that they have given out has been to front-companies et al. So why is it ok for that but not for on-line gambling that has nothing to do with their country.

I think that these people will have lawsuits against the go9vernment for this.

Malicious prosecution? Maybe?
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Witty Nickname, 22 Jan 2007 @ 12:25pm

Has anyone else noticed that for online gambling has a better return rate than Social Security?
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safusa, 22 Jan 2007 @ 12:47pm

SS
That is the problem, the government isn't getting their cut. LOL
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Arghblarg, 22 Jan 2007 @ 1:03pm

Re: SS
That's *exactly* why they want to stamp out online gambling -- they aren't getting the cut they think they deserve. Governments have always been hypocritical about gambling and lotteries. They want to be the only game in town, literally.
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H8tr, 22 Jan 2007 @ 2:13pm

Just subpoenas?
Since when does being issued a subpoena imply any sort of guilt? How would any case ever by tried if no one were ever subpoenaed? The Times piece was a little alarmist, but you didn't have to amplify that.
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Poomer, 22 Jan 2007 @ 2:21pm

Online Gambling :o&
I dont like gambling.
I have a Computer Science degree.
---
I think the goverment wants to monitor online gambling because:

Its easy to twist the program for the "house" to 'always' win.

For fairness in gambling, I would like to see the 52 card deck on the table that gets shuffled every round. Otherwise it just promotes cheating... I would never play online or play slot machine or anything electronic/programmable...

This is one of the few areas where I would want the goverment to get involved... Thats just me...
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Nobody Special, 22 Jan 2007 @ 2:23pm

nothing here
It's not clear yet what the purpose of the subpoenas is, and it's too early to guess whether or not the DOJ wants to pursue charges directly against the banks themselves.

So really, this article is about what???
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Panaqqa, 22 Jan 2007 @ 2:41pm

You want to see the cards, eh?
Well Poomer, let's just say you CAN see the deck of 52 cards in front of you.

I used to be a casino dealer. I could shuffle them right in front of you and then deal myself just about any hand I wanted without you noticing a thing. Never mind from the bottom of the deck, I can deal myself aces out of the MIDDLE of the deck.

I say it's a pure government revenue turf battle, plain and simple.
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thatmtnman, 22 Jan 2007 @ 4:40pm

not stamping out online gambling
just stamping out online gambling that is not made in the good old US of A. Anyone notice how the lagging US Casinos are moving online?
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patrick, 22 Jan 2007 @ 5:11pm

Re: not stamping out online gambling
There's US gambling sites online? Only one I have heard of is a NY State with horseracing that wants to expand to include poker - haven't been there
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