"Accused of" and "allegedly" do this adequately. We don't know if this is embezzlement or if the firm's financial controls were so loose the CFO could plausibly and single-handedly "divert" cash like this. The title is generous, not incorrect.
Presumably he’s going to claim he intended to be the hero who doubled their runway with a clever trick, in which case “diverting” is the appropriate word.
He personally, and without approval, transferred $35M of company funds to a second company he owned jointly with another person.
He then invested that money in UST, which subsequently crashed.
So in addition to "don't put all your money in SVB", start ups need to add : "don't setup signing authority on your bank accounts such that one person can drain tens of millions".
I work at a very, very small startup. Even our very small startup has by-laws that cover this:
> An officer who is a party to, or who is a director or officer of or has a material interest in any person who is a party to, a material contract or transaction or proposed material contract or transaction with the Corporation shall disclose in writing to the Corporation, or request to have entered in the minutes of the meeting of Directors, the nature and extent of such person’s interest at the time and in the manner provided by the Act. Such a person may participate in any discussion related thereto but shall not vote on any resolution to approve the same except as provided by the Act.
I suspect this is pretty boiler plate stuff. The family corporation that my wife and I own doesn't have this text in its by-laws...but that's because it's a closely-held company. I'd certainly hope that a "real" VC-funded company would have this text.
Shetty’s attorney, Cooper Offenbecher, said in an emailed statement that he and his client had been in regular contact with prosecutors and disagreed with the decision to bring an indictment.
Damn...that is like 80 years, and even if the charges run concurrently and with plea, that may still 10 years easily (no parole in feds, only 15% reduction of time at best). Meanwhile kill someone on subway and only get 3 with parole. It's interesting how the legal system works that way. Except for pre-meditated murder, violent crimes tend to be punished less severely compared to fraud.
Only the most egregious frauds (Madoff, Skilling) result in any serious time.
Many people believe the opposite, given the number of life savings affected by white collar crime. Here’s a judge who thinks that violent crime sentencing is insanely long: https://archive.is/YL2Ek
It opens with a 146-year strict minimum sentencing for a crime described as:
> The teenager’s crime was horrible: He robbed a small restaurant at gunpoint, ordered the patrons onto the floor and ended up having a shootout with one customer who happened to have a gun. Miraculously, the only person injured was the robber, who was shot in the foot.
Elizabeth Holmes just spent two years delaying her prison date, and she (and her co-conspirator) will only serve a decade for stealing ten times as much.
They didn't steal. They raised money from investors based on lies and squandered it. Of course, some of the cash made it back into their pockets, but it's not like they pocketed the whole $900m they raised based on their falsehoods.
Here's the company.[1] It sells a "headless commerce platform".
Taking money under false pretenses is stealing.