
The FBI is investigating Mithril Capital for financial misconduct - danso
https://www.vox.com/recode/2019/9/12/20859055/mithril-capital-federal-investigation-peter-thiel-ajay-royan
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altmind
>> Royan has frustrated some of his investors by sitting on some of their
money rather than investing it in startups — while almost certainly raking in
millions of dollars in fees for himself.

its the first time i hear about legal consequences of not doing anything to
the funds' money. the investors are free to leave the fund if they are not
happy with the management, right?

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Litmus2336
Theoretically, if he has fiduciary duty, he has to act in the best interest of
his clients. I'm not sure if he has that duty (I've googled but can't find
anything) but if he did they could argue leaving money in cash is clearly not
what's best for investors.

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blackflame7000
Yea but investing in a startup is far from a sure thing. They could easily
lose their money

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human20190310
It's possible that the best performing startup fund will be one that invests
in nothing, collects a fee, and returns the rest of the money later.

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themgt
It's possible the best performing knee surgeon will be the one that doesn't
perform knee surgery, collects a fee, and returns your knee in the same
condition it was in.

Nonetheless, that would be fraud.

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ukoki
> the best performing knee surgeon will be the one that doesn't perform knee
> surgery, collects a fee, and returns your knee in the same condition it was
> in.

Why not? Eg: "Sorry sir, but as you are a weak/old/high-risk patient, knee
surgery would be very dangerous — my advice is to stay in a wheelchair"

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blackflame7000
This situation occurs fairly regularly with cancer when they find out it's
inoperable once they open you up. You still gotta pay for it though.

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lacker
What exactly is the alleged financial misconduct - is it just not investing
money?

That doesn't make too much sense to me in terms of incentives. The VC will
make this fee no matter what they invest in. They make more money if their
investments go up, and they make the same amount of money if their investments
go down. So there isn't really an incentive to sit on the money and do
nothing. If anything VCs have an incentive to invest in stupid investments
rather than sit on the money..

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buboard
Article reads like a hit job on Thiel, as if he 's anyone's darling

> who heads an enormously influential network of tech investors, startup
> founders, and political allies across Silicon Valley.

I thought nobody liked him there, thats why he left?

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sjg007
I wonder if they are using Palantir in the investigation...

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5822130027
For a second I though LH of mithril.js started a hedge fund.

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gjsman-1000
I thought for a moment that Moria is the Mithril Capital of Middle-Earth, so
"FBI Investigating Moria" would be a bit...

