https://www.espn.com/nfl/story/_/id/3944...n-millions

Why does this come off as something a poverty franchise would do?

You hired a P.O.S.
You failed to keep tabs on said P.O.S.
You lost money fair and square.

Deal with it.

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"What do I know of cultured ways, the gilt, the craft and the lie? I, who was born in a naked land and bred in the open sky. The subtle tongue, the sophist guile, they fail when the broadswords sing; Rush in and die, dogs - I was a man before I was a king."

It’s an interesting question though. In most cases I think the criminal would have his ill gotten assets liquidated to help make the injured party whole. In this case though there are no assets to liquidate so what else is there? I agree it’s not FanDuel’s fault (unless you can prove they knew the funds were illegally acquired maybe).

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I'm condescending. That means I talk down to you.

I'm not sure that's how it works. I know this isn't apples to apples, but didn't the people who got out of and made money off of the Bernie Madoff ponzi scheme have to give all of their gains back since they were basically illegal (even unbeknownst to them)?

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I'm not sure that's how it works.  I know this isn't apples to apples, but didn't the people who got out of and made money off of the Bernie Madoff ponzi scheme have to give all of their gains back since they were basically illegal (even unbeknownst to them)?

I don't know the full details of the Madoff victims' payoff off hand, but I can see why they weren't treated as such, if so.  There aren't actually "gains" in a ponzi scheme.  Madoff was just calling them "gains", but really it was just new investors' money.  That's a big difference from actually risking capital through a true investment broker or gambling establishment and coming out a winner whether they were led to believe that was the case or not.  In short, a criminal enterprise calling a return in excess of initial investment "gains" doesn't make it so nor should it absolve the recipient of having to pay those funds back to other aggrieved parties.

The lesson from that should be if you have an investment advisor outside of one of the big brokerage firms like Fidelity or Schwab, your advisor should still custody your assets in separate accounts in your name at one of the big brokerage houses.  They can't do what Madoff did when custodied at places like that.

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I mean, we are a poverty franchise. So this makes perfect sense.

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Fanduel shouldn't have to eat a dime assuming they didn't know the cash used was ill-gotten. And how would they know? I mean, I don't blame the Jags for asking, but they had to have an expectation of what the answer was going to be.

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Lock that idiot up. This dude is toast. heck, after jailtime, he'll have to pay restitution and doesn't even have the $$ he embezzled. If the system works properly, he'll be paying his future earnings back to the Jaguars....

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Doesn't hurt to ask?

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fanduel and draftkings do have exposure to liability

with the gambling addiction element this has massive blowback potential for everyone

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I'm not sure that's how it works.  I know this isn't apples to apples, but didn't the people who got out of and made money off of the Bernie Madoff ponzi scheme have to give all of their gains back since they were basically illegal (even unbeknownst to them)?

I don't know the full details of the Madoff victims' payoff off hand, but I can see why they weren't treated as such, if so.  There aren't actually "gains" in a ponzi scheme.  Madoff was just calling them "gains", but really it was just new investors' money.  That's a big difference from actually risking capital through a true investment broker or gambling establishment and coming out a winner whether they were led to believe that was the case or not.  In short, a criminal enterprise calling a return in excess of initial investment "gains" doesn't make it so nor should it absolve the recipient of having to pay those funds back to other aggrieved parties.

The lesson from that should be if you have an investment advisor outside of one of the big brokerage firms like Fidelity or Schwab, your advisor should still custody your assets in separate accounts in your name at one of the big brokerage houses.  They can't do what Madoff did when custodied at places like that.

Legally the big firms don't have to give you squat if they gamble your money and get toasted on margin calls. The law is on the big investment places and your brokerage account is just an asset they can liquidate to satisfy their debts. Unlike the Jaguars organization thief who will get jail time the brokerages will just cut your loses.

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The Khan Years

Patience, Persistence, and Piss Poor General Managers.

I don't know the full details of the Madoff victims' payoff off hand, but I can see why they weren't treated as such, if so.  There aren't actually "gains" in a ponzi scheme.  Madoff was just calling them "gains", but really it was just new investors' money.  That's a big difference from actually risking capital through a true investment broker or gambling establishment and coming out a winner whether they were led to believe that was the case or not.  In short, a criminal enterprise calling a return in excess of initial investment "gains" doesn't make it so nor should it absolve the recipient of having to pay those funds back to other aggrieved parties.

The lesson from that should be if you have an investment advisor outside of one of the big brokerage firms like Fidelity or Schwab, your advisor should still custody your assets in separate accounts in your name at one of the big brokerage houses.  They can't do what Madoff did when custodied at places like that.

Legally the big firms don't have to give you squat if they gamble your money and get toasted on margin calls. The law is on the big investment places and your brokerage account is just an asset they can liquidate to satisfy their debts. Unlike the Jaguars organization thief who will get jail time the brokerages will just cut your loses.

You would have signed an advisory agreement allowing them to do that and neither of those two companies engage in margin trading on client accounts in their advisory arms. Otherwise, just having a self directed account at the big firms doesn’t allow them to do any of that or exert any other type of control of what you invest in with your account (unless it’s restricting access to certain private investments), nor can they settle their debts with securities registered in your name.  If Fidelity or Schwab fail as companies and you own Apple stock in an account with them, you still own those shares whether Fidelity or Schwab cease to exist or not.

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You would have signed an advisory agreement allowing them to do that and neither of those two companies engage in margin trading on client accounts in their advisory arms. Otherwise, just having a self directed account at the big firms doesn’t allow them to do any of that or exert any other type of control of what you invest in with your account (unless it’s restricting access to certain private investments), nor can they settle their debts with securities registered in your name.  If Fidelity or Schwab fail as companies and you own Apple stock in an account with them, you still own those shares whether Fidelity or Schwab cease to exist or not.

The last part is not true. The only way to ensure you own the share is to direct register it. For Fidelity, they can do whatever they want with the share you supposedly own. There is an option that supposedly stops them from lending your share but you have to set that and most people don't.

Retail buyers don't really own any of the shares and we have no clue what would happen if a company like that failed.I doubt you keep your shares if they fail.




For the Jags, Fanduel does have some responsibility to confirm the money was legal. For what he was losing, they should have known he didn't have the income for it. He even had a vip rep assigned to him. They finally told the NFL about him and that's when the Jags found out. A simple check of the credit card would have shown it was a business card and not a personal one.

I don't know why the transactions weren't flagged by the credit card company but maybe they did and he told them it was fine.

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You would have signed an advisory agreement allowing them to do that and neither of those two companies engage in margin trading on client accounts in their advisory arms. Otherwise, just having a self directed account at the big firms doesn’t allow them to do any of that or exert any other type of control of what you invest in with your account (unless it’s restricting access to certain private investments), nor can they settle their debts with securities registered in your name.  If Fidelity or Schwab fail as companies and you own Apple stock in an account with them, you still own those shares whether Fidelity or Schwab cease to exist or not.

The last part is not true. The only way to ensure you own the share is to direct register it. For Fidelity, they can do whatever they want with the share you supposedly own. There is an option that supposedly stops them from lending your share but you have to set that and most people don't.

Retail buyers don't really own any of the shares and we have no clue what would happen if a company like that failed.I doubt you keep your shares if they fail.




For the Jags, Fanduel does have some responsibility to confirm the money was legal. For what he was losing, they should have known he didn't have the income for it. He even had a vip rep assigned to him. They finally told the NFL about him and that's when the Jags found out. A simple check of the credit card would have shown it was a business card and not a personal one.

I don't know why the transactions weren't flagged by the credit card company but maybe they did and he told them it was fine.

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What Happens When a Stockbroker Goes Bust? (investopedia.com)

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I mean, I do find them complicit. They took 20 million from a guy without having any idea about him. Usually a real life gambling operation dealing with those kinds of numbers would know something about their clients.

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"Under federal law, FanDuel has an obligation to make sure funds used for sports betting were legally obtained, but the regulations are murkier for daily fantasy."

Looks cut and dry to me, some smarmy lawyer is going to make a lot of money protecting those scumbags.

"Sources said FanDuel alerted the NFL to Patel's betting in January 2023 after he placed traditional sports bets in Tennessee."

LOL, scumbags got greedy. They should be shut down.

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You would have signed an advisory agreement allowing them to do that and neither of those two companies engage in margin trading on client accounts in their advisory arms. Otherwise, just having a self directed account at the big firms doesn’t allow them to do any of that or exert any other type of control of what you invest in with your account (unless it’s restricting access to certain private investments), nor can they settle their debts with securities registered in your name.  If Fidelity or Schwab fail as companies and you own Apple stock in an account with them, you still own those shares whether Fidelity or Schwab cease to exist or not.

The last part is not true. The only way to ensure you own the share is to direct register it. For Fidelity, they can do whatever they want with the share you supposedly own. There is an option that supposedly stops them from lending your share but you have to set that and most people don't.

Retail buyers don't really own any of the shares and we have no clue what would happen if a company like that failed.I doubt you keep your shares if they fail.




For the Jags, Fanduel does have some responsibility to confirm the money was legal. For what he was losing, they should have known he didn't have the income for it. He even had a vip rep assigned to him. They finally told the NFL about him and that's when the Jags found out. A simple check of the credit card would have shown it was a business card and not a personal one.

I don't know why the transactions weren't flagged by the credit card company but maybe they did and he told them it was fine.

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Yes, you still own the shares whether registered with a broker or directly with a transfer agent.  Your name is still listed as the beneficial owner when held through a broker.  And what you're referring to regarding "doing whatever they want" is in reference to them loaning your shares out to other investors who are shorting the stock and/or liquidating a client's account to cover bad shorts.  Short positions aren't long term investments.  You must have a margin account to short and bad short investments get margin called and the investor's account would get liquidated as needed to cover the short position if the investor didn't produce additional cash almost immediately to cover.  The likelihood that a big broker would fail due to mass shorting by their customers is nil as very few investors actually understand or engage in shorting and other assets in their account would get liquidated to cover prior to threatening the broker's balance sheet.  Also, if many short positions were getting squeezed it likely means the market has gone up and brokerages make money in a lot of different ways, but more so in up markets.  Step out of the paranoia, friend.  

The big brokerages aren't going anywhere because they specifically don't engage in excessively risky behavior with client accounts because there's too much for them to lose in court by ignorant investors or those feigning ignorance vs what they might gain.  If you sign an advisory agreement with one of them and put your account at the highest risk level, you'll wind up with a 100% stock portfolio with a lot of blue chips.  Not that there isn't some risk in that, but it's far from the riskiest behavior an investor can engage in.  They don't trade on margin on your behalf and they don't trade options on your behalf (perhaps they've delved into covered call writing income strategies, but that's quite tame as far as options go).  If you want non-cookie cutter or riskier strategies, you would seek a 3rd party RIA advisory firm that offers what you are looking for or do it yourself.  Madoff was a 3rd party advisor.  I haven't reviewed the specific details of the case, but I would assume he was running some sort of hedge fund that required clients to wire funds to an offshore account. Hedge funds are significantly less regulated than what goes on at the large brokerage houses.  

When a 3rd party advisor custodies client assets at Fidelity, Schwab or the like, the client grants them limited power of attorney over their account to be able to trade, bill and disburse funds on behalf of the client.  They can't fudge numbers and engage in ponzi schemes in such an arrangement as the brokerage house is the primary record keeper, not the advisor.  Madoff took direct custody of client assets and could produce statements saying whatever he wanted them to say.  By contrast, an advisor custodying client accounts at Fidelity or Schwab will still have Fidelity and Schwab producing statements and tax documents.  If you engage a 3rd party advisor and they ask you to transfer assets to somewhere other than a brokerage you're familiar with (i.e. an offshore account), that should be viewed as a red flag.  Madoff type behavior can't happen when your assets are held directly with the big boys.

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If I steal money and blow it on travel, you can't go to the hotel or airline and ask for the money back. If I spend the money at a stripclub establishment making it rain, you can't go to the entertainers and ask for the stolen money back. Fanduel is in the entertainment business. The money spent on entertainment is gone.

I feel for the Jags organization. This is an important lesson in being careful who you hire and maybe having some better controls in place regarding expenses and accounting.

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His username was "ParlayPicker"

And according to the article, "one veteran daily fantasy player told ESPN on condition of anonymity that they believe ParlayPicker is 'the biggest loser ever on FanDuel. He was legendarily bad' he said."


WOW

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His username was "ParlayPicker"

And according to the article, "one veteran daily fantasy player told ESPN on condition of anonymity that they believe ParlayPicker is 'the biggest loser ever on FanDuel. He was legendarily bad' he said."


WOW

I find it hard to believe Fan Duel didn't have any idea how much this guy was losing and the rate of the losing.  They fail the "reasonable man" test as an organization which is written into many US laws. (I do not know if that is in the ones covering gambling). On the other hand it was the Jaguars that did not have proper process checks to keep this from happening. I see both sides here.

My advice to Fan Duel is to come to some agreement with the Jags, whether public or private.  Why, simple Kahn is one of the 32 owners and can he, as such make it tough on Fan Duel? If I were the NFL, I would charge a fee to all using their stats for gambling or other enterprises. I would charge a variable fee based on risk. (for some 1$, others 20 million)

The Jags should have insurance to cover this anyway, they are most likely looking for the deductible.

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A new broom always sweeps clean.

The last part is not true. The only way to ensure you own the share is to direct register it. For Fidelity, they can do whatever they want with the share you supposedly own. There is an option that supposedly stops them from lending your share but you have to set that and most people don't.

Retail buyers don't really own any of the shares and we have no clue what would happen if a company like that failed.I doubt you keep your shares if they fail.




For the Jags, Fanduel does have some responsibility to confirm the money was legal. For what he was losing, they should have known he didn't have the income for it. He even had a vip rep assigned to him. They finally told the NFL about him and that's when the Jags found out. A simple check of the credit card would have shown it was a business card and not a personal one.

I don't know why the transactions weren't flagged by the credit card company but maybe they did and he told them it was fine.

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What Happens When a Stockbroker Goes Bust? (investopedia.com)

If a big one fails, you wouldn't get shares back. Insurance most likely doesn't cover it because they don't have enough money. Shares should be there but for them to fail, something bad would have to be going on so they probably don't have enough shares. At best you end up with cash value at the point of failure.

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