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?
The point is that it was no secret what Patrick was doing or how he believed he was protecting himself from Pirate exposure. There's no evidence that Patrick didn't do what he said he was doing or that there was anything he could have or should have done differently (other than changing his business model). Whatever you believe is the reason he actually did have huge Pirate exposure, there's nothing to suggest that Patrick is any more at fault for that than those who loaned money to him -- they also had unexpected indirect Pirate exposure just like Patrick did. Both Patrick and his investors made precisely the same mistake and caused precisely the same harm in precisely the same way.
(Note that the above does *not* apply to Kraken or any funds taken after Pirate was in default.)
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).
That's not true. Patrick's business model and practices were not secret, and there's no evidence whatsoever (and it totally defies common sense) to argue that what Patrick was doing was basically sound and Patrick just didn't quite say the right magic words or wave the right magic wand. That's just absurd. This is why I believe this kind of reasoning is an attempt to actively refuse to learn anything from this fiasco.