Legal Extortion

There are many ways to game the system, through intimidation, contacts, or an unresponsive legal system. Legal extortion profits at public expense.

Copyright trolls:
1.) Cease and desist letter
(states that someone is using copyrighted material)
Settlement Offer
(mailed en masse, starts low, preying on those without time to contest)
Threatens Court Proceedings
(Raises settlement, most people settle rather than paying court fees)

Sample details:
1.) send out 100,00’s of letters to small businesses
Cost: $1 a letter
Use Legalese to intimidate business owners
10% response rate:
Small settlements: $500-$3000 per copyrighted material
2 and 3) Press Harder, actually file lawsuit
Cost: $400
40% response rate
Press for court settlement in the $100,000’s

Stage one: $100k investment ($1 each for each letter sent)
Lower estimate (based on $500 settlement in 10% of cases)=$5 million
Higher estimate (based on $3000 settlement in 10% of cases=$30 million

Stage two: $4 mil investment (if $400 filing costs on 10% of initial pool)
Hundreds of millions in profits

Public Risk:
Being threatened when you create new content, share ideas
Private Reward:
Massive payout for copyright troll firms.

Case Study: Prenda Law
Uses the courts to get info on people who have downloaded porn with embarrassing names
Threaten to publicize info unless defendants settle

Medical Bankruptcy:
How health service providers threaten your very life with exorbitant fees:
62.1% of all bankruptcies in America are Medical related[1]
Or 703,451 people from march 2012-march 2013[6]

With costs of being in the ICU for a month easily rising above $1 million[2]

Public Risk:
Insurance premiums for small employers have increased 180% from 1999 to 2009[3]
Private reward:
While Health insurance companies increased profits by 56% in 2009 alone.[4]
(The same year 2.6 million people lost their health insurance coverage)


“Too big to jail” banks
Case Study
HSBC: $1.9 billion fine [5]
Or 5 weeks profit
For a decade of public harming abuses:

HSBC Mexico, Cayman Island Branch:
50,000 clients with $2.1 billion in assets.
In 2002, 41% of these clients were missing personal data
15% customers didn’t even have a file
These accounts were paying a U.S. company allegedly supplying aircraft to Mexican Drug Leaders

Subprime mortgages:
HSBC Holdings Plc owns–>
HSBC Finance corp which owns–>
subprime lender Decision One

Ranked the 9th worst subprime lender[7]
For comparison:
Wells Fargo is ranked 8th
JPmorgan Chase and Co is 12th
and Citigroup is 15th

2006-2009: $200 trillion in money transfers went through completely unmonitored

LIBOR Scandal
[5]HSBC in conjunction with
UBS, Barclay’s, and the Royal Bank of Scotland
Regularly conspired to manipulate the London Interbank Offered Rate (LIBOR)
Used to price:
commercial loans
credit cards
municipal bonds
and currencies

Allowing them to make billions in profit.

That’s like car manufacturers meeting to set the price of metals every morning.

Public Risk:
Bail outs, and inability to punish criminal activities because the bank is too big to fail.
Private reward:
Billions in profit.


1.) The Fed increases money supply by buying up bank securities.
2.) Banks then have more money to lend.
3.) There is more money so it costs less (lower interest).
4.) Cheap money makes some rich, but increases prices for all.
Winners: Banks, those who need to start long term projects (building factories, businesses)
Losers: Those who save their money, those on fixed incomes (retirement, pension, etc.), those with a fixed rate mortgage/car loan. Most of America.

Institutionalized extortion is all around us. Even if it’s legal, it’s not right.