When someone deposits at a bank, they don't accept to take any risk as to if the bank will or will not make good investments. If the bank cannot pay depositors, it has to default.
That's correct. But that's because a case where the losses are equally the fault of the bank and those who loaned the bank money are rare. However, if you imagine such a case, it should seem clear they should split the losses.
As a silly example, suppose I tell you that I feel really lucky on the slots today and that if you give me $50, I believe I'll win $100 and split the profits with you. Say you also believe that this is the case and therefore loan me the money, fully believing that I will win $100 and split the profits with you. In this case, if I lose the $50, it's not fair for me to be responsible to you for the entire $50, lost profits, and so on. When you have a common mistake, made equally by both parties, with no significantly greater fault falling on either party, it is inequitable to try to enforce the contract as agreed. In our gambling case, our contract never addresses the case where I lose money because neither of us considered it possible -- it can't say what should happen in that case because neither of us ever tried to make it do so.
I keep looking at this thread hoping that somewhere you'll actually give an example that's even vaguely comparable to what happened. But, yet again, you disappoint.
Here's your example rewritten to at least have a crude similarity to the situation 0 but with your conlusions left intact.
"As a silly example, suppose I ask you to lend me some money. You know that a lot of people are borrowing money and gambling on the slots so you ask whether I intend to gamble on the slots. I say no. You ask whether I'll lend the money to others who gamble on slots and I say no. Say you also believe what I tell you and therefore loan me money, fully believing that I won't gamble it on the slots or lend it to other who will gamble it on the slots. In this case, if I lend the money to someone who gambles on the slots and they lose the $50, it's not fair for me to be responsible to you for the entire $50, lost profits, and so on. When you have a common mistake, made equally by both parties, with no significantly greater fault falling on either party, it is inequitable to try to enforce the contract as agreed. In our gambling case, our contract never addresses the case where I lose money because neither of us considered it possible -- it can't say what should happen in that case because neither of us ever tried to make it do so."
Do you see now just how dumb it is?
Elsewhere you've claimed PH was somehow "trying to do the impossible". Your claims that it's impossible to make 1% a week without investing in Pirate is unproven - yet your entire argument relies on it (if it's not totally impossible then your argument fails immediately - as you'd have to accept an investor couldn't know whether PH was investing/lending to such an alternative). Somewhere you've somehow conflated "investments in pirate were going to fail" with "all investments paying 1%+ per week were invested directly or indirectly in pirate" and have constructed an entirely fallacious chain of evidence based on that very elementary mistake. And now you keep on constructing different analagoies- none of which are actually analagous.
Here's a few pointers for your next attempt at an alternative comparable scenario. It needs to contain the following elements:
1. There's a well-known risk.
2. The Investor asks the Investment whether they have exposure to that risk.
3. The Investment indicates they have NO exposure to that risk (they do't say "Yes" as in your above-quoted dismal failure of an attempt at an analogy).
4. The Investor does not know the details of how the investment will be used - and has no way to find out (Again, totally unlike your above example).
5. The Investment uses the raised funds to expose themselves to the risk. They claim this was unintentional.
You would appear to maybe be claiming that my points 2-4 are irrelevant as investing in Pirate was the ONLY thing PH could be doing. Are we meant to take your word for that? If we find ONE company that paid 1% per week around then without pirate exposure would that disprove it? Or do you have some (so far unreleased) information indicating that PH, specifically, was bound to be invested in Pirate - even if others could make 1%+ per week without pirate exposure?