Quote from: JoelKatz on November 11, 2012, 07:10:01 PM

Quote from: augustocroppo on November 11, 2012, 03:20:13 PM

If Patrick made this blatant promise for his potential customers, and then later he provided evidence contradicting his initial promises, than a scammer tag should be issued. The investors should open a thread in this section and present the necessary evidence to prove the intention of fraud.

The Kraken fund may be a slam dunk case of fraud. The Kraken fund began operations after it was quite clear that Pirate was in massive default and very unlikely to ever pay back another penny. Yet the Kraken fund bought Pirate debt, and Patrick was clear about it being guaranteed by him personally. (All of this was known to the investors too, but the fault in this case is not equal. In this case, the investors mistake really was to rely on Patrick's promise. There was nothing Patrick didn't know at the time.)

You don't see how this totally undermines your argument in the MP/PH situation?

One of the foundations of your argument is that neither PH/MP knew PH was exposed to pirate. Doesn't his behaviour with Kraken suggest that MAYBE he DID know he was exposed to pirate but chose to lie about it to raise more funds?

The basis of a common mistake is common knowledge - which is where your argument has always fallen down. PH KNEW where he was invested, his depositors/investors had to take his word about it. As he had more information AND made assertions which his depositors/investors had to take his word for, there's absolutely no basis on which a common mistake could be concluded.

Otherwise, by your twisted logic, EVERY defaulter could use your argument - after all, neither they or the lender believed they would be unable to repay (or they wouldn't have entered the agreement). Hence they shared a "common mistake" of believing that repayment would be possible, hence they share fault.

All your examples about cherries, sunk ships etc share one element in common that is NOT common to the PH/MP deal - symmetry of information. The information in PH's deals (with MP and also Kraken) was asymmetrical - PH KNEW what his investments were, the other parties didn't. Accordingly, any error in assertions made by PH about those investments HAS to be his fault if wrong - as he was the only one in a position to make any judgment about them. Common mistake has nothing to do with one party making an assertion that they can verify but the other can't. It has to do with an assumption made by both parties where neither has significantly more information than the other.

A good example of what WOULD be common mistake would be losses caused by the failure of GLBSE - where no mention of that (or responsibility in the event of its collapse) had ever been made in negotiation or in contract. But where one party has made an assertion that they could reasonably be expected to have significantly more information about than the other party then there's no longer anything "common" about it.

PH explicitly took on the risk of losses caused by pirate default anyway. You can't explicitly take on a risk then walk away from it when it happens because "I was wrong and you believed me - so we're both at fault." And, to get back to the original point of this post, given what's transpired with Kraken it's arguable that he's no longer even entitled to an assumption that he was being honest in his discussion with MP anyway: did Kraken somehow accidentally, and without his own knowledge, end up owning large chunks of pirate debt rather than what it was supposed to be invested in? If someone's intentionally misrepresented themself on a very specific issue once do you really believe an argument predicated on the basis that when they made such a representation previously it was honest has any validity)?

I assume you accept that if PH KNEW he was invested in pirate but lied about it to MP then there was no common mistake. Given Kraken and that he definitely KNEW what his Starfish investments were (MP didn't) how confident can you possibly be that he was honest when he made that assertion to MP?