...a VC/investor passing information to the DHS about a startup founder who pitched him who was working illegally... ...was totally in his right to do so...
Huh?
From the limited details provided, that sounds highly unethical, unless the founder was endangering others by his presence.
A frank discussion with potential investors has to include legal risks, including transgressions-so-far that could, if uncorrectable, cause problems. If the investor takes it upon themselves to report people pitching to immigration (or tax or copyright or employment) authorities, then necessary conversations can't happen.
It'd be like pitching an investor and then having them say: "I like what you're doing, and in fact have some investments in a related space. But it sounds like you might not be paying everyone proper overtime, and some of your contractors should probably be reclassified as employees. I've informed my friends at the IRS and EDD. Have a nice day!"
It'd be like pitching an investor and then having them say: "I like what you're doing ... But it sounds like you might not be paying everyone proper overtime, and some of your contractors should probably be reclassified as employees."
For a start, it's nothing like that and I think you're being a bit extreme with your counter example. Your example includes 'probably', ie subjective information on the part of the VC. I my original example it's likely that the founder out-right admitted his out-of-status.
I don't know the back-story and I only heard it as secondary info (ie not from either party involved) but knowing the SEC and other regulations VCs are under they may well be legally bound to report this and other information.
A closer to home example: I know my CPA is legally bound to inform the IRS and DHS of any issues with my immigration status, insider trading on my investments and any tax irregularities.
To that end, keep in mind it is also hard to pay tax on income if you are working illegally and not get found out. And if you don't pay tax...
Except in limited circumstances, there is no legal duty for citizens to report crimes or otherwise be enlisted as law enforcement agents. Several dozen US cities are 'sanctuary cities' with official policies against verifying immigration status or assisting with the enforcement of immigration laws.
CPAs may be required to report money-laundering or outright tax-evasion, but I've never heard of them being required to report 'issues with immigration status' or something as minor as 'irregularities'. I'd need an authoritative citation to believe you on that.
Huh?
From the limited details provided, that sounds highly unethical, unless the founder was endangering others by his presence.
A frank discussion with potential investors has to include legal risks, including transgressions-so-far that could, if uncorrectable, cause problems. If the investor takes it upon themselves to report people pitching to immigration (or tax or copyright or employment) authorities, then necessary conversations can't happen.
It'd be like pitching an investor and then having them say: "I like what you're doing, and in fact have some investments in a related space. But it sounds like you might not be paying everyone proper overtime, and some of your contractors should probably be reclassified as employees. I've informed my friends at the IRS and EDD. Have a nice day!"