Shetty Case Offers Thought-Provoking Look at Investment Risk vs. Fraud

Nevin Shetty is accused of secretly investing $35 million of company funds in a cryptocurrency-backed venture. Prosecutors contend that Shetty’s investment in HighTower Treasury, a firm in which he held a partial ownership stake, constitutes fraud. But a debate has emerged that this case is more about business judgment than criminality.

The federal government’s fraud case against a former CFO accused of secretly investing $35 million of company funds in a cryptocurrency-backed venture poses an important legal question: should executives face criminal liability for corporate investment decisions that fail?

Prosecutors contend that Nevin Shetty’s investment in HighTower Treasury—a firm in which he held a partial ownership stake—constitutes fraud because it allegedly defied Fabric’s conservative investment policy, but a debate has emerged that this case is more about business judgment than criminality, warning ...