Astros hack case

[diehardtwinsfan]

 

Why do you keep saying it's not hacking?

The official definition of hacking is:
Use a computer to gain unauthorized access to data in a system.

I admit I'm not an expert so tell me what I'm missing based on that definition of hacking?

 

I'm arguing semantics more than anything else here.  I'm not even saying there shouldn't be a punishment, but the term does have different connotations, and guessing a password because you knew the guy is something just about anyone could do.  Not exactly what I call a hacker.

[d-mac]

I think this is an intellectual "property" (more like monopoly) issue. Information/ideas are nonrivalrous, meaning my ownership/consumption of an idea does not prevent you from owning/consuming them. Unlike, say the computer I'm using to write this comment. My use of it prevents you from using it. Thus traditional property rights do not apply to nonrivalrous goods.

 

https://en.wikipedia.org/wiki/Rivalry_(economics) 

https://en.wikipedia.org/wiki/Intellectual_property#Criticisms

 

Did the people who accessed the information do damage to the Astros computer systems, or damage and destroy information, thus preventing the Astros from using it? Did they steal money from the Astros' bank accounts or steal identities of Astros' employees? I don't believe they did. Thus what the Cardinals did should not be a crime. If the Astros want to keep their trade secrets secret, then do a better job of protecting it. 

[d-mac]

 

To be fair, there are issues with cross boarder prosecution, and most hacking falls under that umbrella.  Internationally, nothing has really been done which makes it even more difficult...  But if you want have some fun, the broad definition could give fits in lots of areas, such as high frequency trading where companies like JP Morgan and GS use technology to front run large trades so they can mark them up. 

 

And yeah, let's not talk about everything that caused 2008.  No one has been prosecuted for that at all, despite the fact just about every person in America was impacted by those crimes.

 

Are they crimes? Since when was stupidity a crime? Believing the housing market would continue to go up ad infinitum and then leveraging on it was stupid and their businesses failed (or should have been allowed to fail) because of it.

 

By your logic Alan Greenspan should be in jail for his easy monetary policy that allowed a bubble to occur in the real estate sector. It was stupid and the federal reserve should be abolished, but was it a crime? No. 

[Brock Beauchamp]

 

Why do you keep saying it's not hacking?

The official definition of hacking is:
Use a computer to gain unauthorized access to data in a system.

I admit I'm not an expert so tell me what I'm missing based on that definition of hacking?

It's *technically* hacking but the colloquial definition of the word implies a certain skillset that allows a person to illegally access a computer network without someone handing them the keys. There's a reason most of the (real) tech sites I've seen have referred to this as something other than "hacking".

[Mike Sixel]

 

It's *technically* hacking but the colloquial definition of the word implies a certain skillset that allows a person to illegally access a computer network without someone handing them the keys. There's a reason most of the (real) tech sites I've seen have referred to this as something other than "hacking".

 

snobbery, mostly.....imo.

[bird]

I don't get the thinking that somehow what this guy did should not be a serious crime. And apparently, the Cardinals are doing a masterful job of avoiding trouble related to what Correa did.

 

No doubt that Houston spent a ton of money developing it, and deciding what data to collect, how to organize it, how to use it for decision-making, how to present things and who gets to see it, etc. It fits the description of a trade secret. Despite the fact that the data was clumsily secreted from the competition, the Cards are wrong to gain access to it or to take advantage of its intellectual value. We have no real idea about how valuable this property is, or how much harm has or will be caused to Houston, or how much value the Cardinals have or will derive from it. But logic tells us that, because each team spends many many millions each and every year trying to gain an edge in this part of the business, the crime is a serious one. But still, four years feels like a lot of punishment to me, and it's hard for me to believe that the Cards are being justifiably exonerated here.

[Brock Beauchamp]

 

snobbery, mostly.....imo.

Maybe, but I think there's more to it than that. Hacking, at least to me, implies a coordinated effort to infiltrate a system and steal data.

 

Defrauding a million people and stealing a car from an open garage are both theft. This seems more like a crime of opportunity than hacking.

[Vanimal46]

 

I don't get the thinking that somehow what this guy did should not be a serious crime. And apparently, the Cardinals are doing a masterful job of avoiding trouble related to what Correa did.

 

No doubt that Houston spent a ton of money developing it, and deciding what data to collect, how to organize it, how to use it for decision-making, how to present things and who gets to see it, etc. It fits the description of a trade secret. Despite the fact that the data was clumsily secreted from the competition, the Cards are wrong to gain access to it or to take advantage of its intellectual value. We have no real idea about how valuable this property is, or how much harm has or will be caused to Houston, or how much value the Cardinals have or will derive from it. But logic tells us that, because each team spends many many millions each and every year trying to gain an edge in the part of the business, the crime is a serious one. But still, four years feels like a lot of punishment to me, and it's hard for me to believe that the Cards are being justifiably exonerated here.

That's the amazing thing to me too, is Correa taking 100% of the punishment, and somehow the Cardinals are off scotch-free. That doesn't seem right to me. 

As far as the value of information they saw from the Astros, I don't know if I believe the $1.7 million in damages, but they still saw all of the Astros' notes from contract negotiations, trade negotiations, trade targets, free agency targets, etc. over a 10+ month period. Is it possible to put a true monetary value on knowing what your competitor's are looking for, the value they're looking to pay the players they want, and what names other teams in the MLB are offering for a specific player? I'm not sure it is. 

Either way, I agree that the Cardinals deserve a penalty too from this mess. My preference is the Cardinals losing draft picks. 

[diehardtwinsfan]

 

Are they crimes? Since when was stupidity a crime? Believing the housing market would continue to go up ad infinitum and then leveraging on it was stupid and their businesses failed (or should have been allowed to fail) because of it.

 

By your logic Alan Greenspan should be in jail for his easy monetary policy that allowed a bubble to occur in the real estate sector. It was stupid and the federal reserve should be abolished, but was it a crime? No. 

 

That was only component to the housing market.  Plenty of mis-representation and fraud occurred on the mortgage side of things (and yes, I know plenty of buyers engaged in that too), which soaked investors rather heavily, not to mention the back door deals that allowed for the tax payers to pick up the tab when the guilty parties got bit by it... that's before you even start talking about the foreclosure mills.  Yes, there was buying based on desperation and foolish decisions made based on that mentality, but let's not pretend that no crimes were committed by people looking to take advantage of it.

[Mike Sixel]

I bet the Cards don't get off free.....

[markos]

 

Maybe, but I think there's more to it than that. Hacking, at least to me, implies a coordinated effort to infiltrate a system and steal data.

 

Defrauding a million people and stealing a car from an open garage are both theft. This seems more like a crime of opportunity than hacking.

I agree. I'm no lawyer, so I'm not sure if the legal community has well-defined definitions. But it seems to me that there should be a distinction between hacking and accessing a computer without authorization, much like there is a distinction between breaking-and-entering and trespassing.

[diehardtwinsfan]

 

I bet the Cards don't get off free.....

 

In my humble opinion, this really for the most part is a baseball matter. MLB can sanction them much like the NFL does when teams cheat. That's how CBA type items work. I'm a bit surprised to be honest that Correa is charged/convicted at all for this reason (though the law does allow for it).  Really the only other avenue here would be the Astros suing the Cardinals for damages, which is what would happen in normal circumstances... however, that is why baseball has a commissioner and MLB's business model doesn't fit normal circumstances...

 

Now if the league does nothing, that's an issue.

[Vanimal46]

 

In my humble opinion, this really for the most part is a baseball matter. MLB can sanction them much like the NFL does when teams cheat. That's how CBA type items work. I'm a bit surprised to be honest that Correa is charged/convicted at all for this reason (though the law does allow for it).  Really the only other avenue here would be the Astros suing the Cardinals for damages, which is what would happen in normal circumstances... however, that is why baseball has a commissioner and MLB's business model doesn't fit normal circumstances...

 

Now if the league does nothing, that's an issue.

Agreed. When it comes to the Cardinals penalty, it should come from the MLB itself instead of a federal court. It's going to be interesting how they handle it. Other than the New England Patriots, there's not a ton of examples of teams in the US sports leagues that have been caught doing shady things in order to gain an advantage. 

[diehardtwinsfan]

yeah, seems more prevalent in the NFL, which is a bit more cut throat than MLB....

 

Then again, Steinbrenner had no problems crossing ethical barriers back in the day.

[Mr. Brooks]

For those referencing other white collar crime.

Unfortunately the government is corrupt. It has been since the first caveman took a leadership position, and will be until the end of time.

Guys involved in the housing collapse, who committed crimes, deserved very harsh penalties.

But, they spent millions, if not billions of dollars lobbying the government. That naturally lead to preferential treatment. I doubt this guy from the Cards scratched anyone in government's back. Sadly, that is how it works.

[d-mac]

 

That was only component to the housing market.  Plenty of mis-representation and fraud occurred on the mortgage side of things (and yes, I know plenty of buyers engaged in that too), which soaked investors rather heavily, not to mention the back door deals that allowed for the tax payers to pick up the tab when the guilty parties got bit by it... that's before you even start talking about the foreclosure mills.  Yes, there was buying based on desperation and foolish decisions made based on that mentality, but let's not pretend that no crimes were committed by people looking to take advantage of it.

 

Fraud? I don't know if it was as widespread as people want to believe. Maybe it's human nature to want to believe that there are bad people out there that cause bad things to happen. It's not that black and white. Most of the people engaging in mortgage derivatives market had no idea what was in the products they were trading. I doubt most of them were willfully trying to deceive people. The mortgage originators making the bad loans did so based on the same fallacious reasoning that real estate prices would continually go up that the people buying them did. 

 

As far as the back door- deals- those are the politicians doing politician-y things. Whether they were truly trying to save the financial markets or looking for their next campaign donation, does it matter? Bailing out businesses that should have failed is bad economic policy. It's the moral hazard of knowing that no matter how bad you screw things up by making risky investments the government will always be there to bail you out because you're too big to fail. Cronyism at it's finest. You want end cronyism? End government interference in the market place. You'll put all the lobbyists and special interest groups out of work overnight. 

 

Foreclosure sucks. But are foreclosures immoral? No. The definition of a mortgage is a loan that uses a piece of real estate as collateral. If there weren't mortgages it'd be awfully hard to gather the financing to purchase a house. And nobody wins in foreclosure, it's a lose-lose. A family loses a home. The bank ends up losing money in foreclosures. The bank has to incur the cost of putting home up for sale and then receive pennies on the dollar (this is true during especially during a real estate market collapse)- far less than they would have received had the principal been repaid (not to mention foregone interest). It's in a bank or mortgage company's best interest to keep you in your home in order to pay the loan back. If too many loans go bad, they won't have enough deposits (especially in an era of fractional reserve banking) to cover, thus becoming insolvent. 

 

Again, these are all symptoms of a larger problem. WARNING: Free Economics Lesson! Artificially low interest rates and an expanding money supply create asset bubbles. Interest rates are merely the price of credit. If the price of anything lowers, naturally, the demand goes up. If the price for anything lowers, the quantity supplied is lowered. In this case, savings is the supply. As interest rates lower the return on savings lowers forcing investors into higher risk assets to seek better returns. Conversely, as interest rates are lowered credit (debt) becomes cheaper, thus more attractive relative to savings. Thus, people save less and more readily take on debt to purchase things. 

 

See where there is a problem? A feedback cycle of increasing leverage and risk taking occurs. If debt is artificially cheap, then it is more attractive avenue to purchase large items with debt than to save- households are leveraged as debt to income ratio goes up. Banks are making more and riskier loans to cover their reduced income from fewer savings deposits and lower profit margins from lower interest rates on safer loans. Banks are increasingly leveraged- Debt outstanding to deposits go up. Investors' returns on traditional fixed income (bonds) go down and more complicated and esoteric (riskier) fixed income instruments (ex- credit/mortgage derivatives) become more attractive along with equities (stocks), thus pushing the stock market higher. Finally, as interest rates go down business expansion and projects that were once not profitable (not economically viable) suddenly become profitable as financing becomes cheaper. 

 

Economic bubbles are indeed characterized by excess. But that excess is not sustainable. Those bubbles will eventually pop and the result is a credit crunch in which there is a period of painful deleveraging as the market reallocates resources to more economically productive areas. Those business that over extended by taking on cheap debt either have to downsize or end up failing as those projects become unprofitable. Investors rush to safety as those risky assets go bad. The banks that made too many bad loans and can't cover their deposits fail. And the households that purchased homes outside their budget get foreclosed on when they can no longer afford them. 

 

Bubbles not the fault of any single individual person or group (except the government, but I won't go there). You want to end or at least limit the severity and impact of economic bubbles and their corresponding painful bursting? Let the market set interest rates and stop monetary expansion. 

[biggentleben]

Anyone I talk to who has any link to New York says they've been waiting to bring down the hammer on the Cardinals since this came out, as this wasn't just a Correa thing, but he took the blame for it. I've heard everything up to and including the loss of their entire 2017 draft is on the table for punishment.

[diehardtwinsfan]

 

Fraud? I don't know if it was as widespread as people want to believe. Maybe it's human nature to want to believe that there are bad people out there that cause bad things to happen. It's not that black and white. Most of the people engaging in mortgage derivatives market had no idea what was in the products they were trading. I doubt most of them were willfully trying to deceive people. The mortgage originators making the bad loans did so based on the same fallacious reasoning that real estate prices would continually go up that the people buying them did. 

 

As far as the back door- deals- those are the politicians doing politician-y things. Whether they were truly trying to save the financial markets or looking for their next campaign donation, does it matter? Bailing out businesses that should have failed is bad economic policy. It's the moral hazard of knowing that no matter how bad you screw things up by making risky investments the government will always be there to bail you out because you're too big to fail. Cronyism at it's finest. You want end cronyism? End government interference in the market place. You'll put all the lobbyists and special interest groups out of work overnight. 

 

Foreclosure sucks. But are foreclosures immoral? No. The definition of a mortgage is a loan that uses a piece of real estate as collateral. If there weren't mortgages it'd be awfully hard to gather the financing to purchase a house. And nobody wins in foreclosure, it's a lose-lose. A family loses a home. The bank ends up losing money in foreclosures. The bank has to incur the cost of putting home up for sale and then receive pennies on the dollar (this is true during especially during a real estate market collapse)- far less than they would have received had the principal been repaid (not to mention foregone interest). It's in a bank or mortgage company's best interest to keep you in your home in order to pay the loan back. If too many loans go bad, they won't have enough deposits (especially in an era of fractional reserve banking) to cover, thus becoming insolvent. 

 

Again, these are all symptoms of a larger problem. WARNING: Free Economics Lesson! Artificially low interest rates and an expanding money supply create asset bubbles. Interest rates are merely the price of credit. If the price of anything lowers, naturally, the demand goes up. If the price for anything lowers, the quantity supplied is lowered. In this case, savings is the supply. As interest rates lower the return on savings lowers forcing investors into higher risk assets to seek better returns. Conversely, as interest rates are lowered credit (debt) becomes cheaper, thus more attractive relative to savings. Thus, people save less and more readily take on debt to purchase things. 

 

See where there is a problem? A feedback cycle of increasing leverage and risk taking occurs. If debt is artificially cheap, then it is more attractive avenue to purchase large items with debt than to save- households are leveraged as debt to income ratio goes up. Banks are making more and riskier loans to cover their reduced income from fewer savings deposits and lower profit margins from lower interest rates on safer loans. Banks are increasingly leveraged- Debt outstanding to deposits go up. Investors' returns on traditional fixed income (bonds) go down and more complicated and esoteric (riskier) fixed income instruments (ex- credit/mortgage derivatives) become more attractive along with equities (stocks), thus pushing the stock market higher. Finally, as interest rates go down business expansion and projects that were once not profitable (not economically viable) suddenly become profitable as financing becomes cheaper. 

 

Economic bubbles are indeed characterized by excess. But that excess is not sustainable. Those bubbles will eventually pop and the result is a credit crunch in which there is a period of painful deleveraging as the market reallocates resources to more economically productive areas. Those business that over extended by taking on cheap debt either have to downsize or end up failing as those projects become unprofitable. Investors rush to safety as those risky assets go bad. The banks that made too many bad loans and can't cover their deposits fail. And the households that purchased homes outside their budget get foreclosed on when they can no longer afford them. 

 

Bubbles not the fault of any single individual person or group (except the government, but I won't go there). You want to end or at least limit the severity and impact of economic bubbles and their corresponding painful bursting? Let the market set interest rates and stop monetary expansion. 

 

As a real estate investor, I witnessed plenty of fraud.  My wife also had a side job selling real estate during that time, and that's just us in our small sample sizes.  On a grand scale though, those loans were being sliced and diced and marketed to investors as AAA securities despite the mortgage companies knowing the situations underneath. That is pretty much the definition of fraud... and those same mortgage brokers turned around and soaked the tax payers as well. There were plenty of crimes committed during that time, and we like to focus on stupid buyers/sellers and not on the groups that quite frankly made it possible for them (illegally in some to many cases) to do what they shouldn't have been doing and then soaked the rest of us when it fell apart.

 

I don't have a problem with foreclosures. But chain of title is a real thing and foreclosure mills are fraud. Banks screwed up there cutting corners and losing custody of their title chains in order to sell those loans to wall street and then setup illegal foreclosure mills to get them back, including I might add foreclosing on people who had owned their homes/land out right for years.  I know someone dealing with that right now too, so let's stop pretending it's all stupid buyers.  Yes, there were plenty of those, and yes bubbles are caused by more than one thing.  But yes, people should be in jail right now.

 

No back to the topic at hand

[diehardtwinsfan]

 

Anyone I talk to who has any link to New York says they've been waiting to bring down the hammer on the Cardinals since this came out, as this wasn't just a Correa thing, but he took the blame for it. I've heard everything up to and including the loss of their entire 2017 draft is on the table for punishment.

 

Interesting, were the cards doing this to other organizations too? 

[Mike Sixel]

I'd be shocked if they don't lose multiple first round picks, pay a huge fine, and lost international signing money.....

[d-mac]

 

As a real estate investor, I witnessed plenty of fraud.  My wife also had a side job selling real estate during that time, and that's just us in our small sample sizes.  On a grand scale though, those loans were being sliced and diced and marketed to investors as AAA securities despite the mortgage companies knowing the situations underneath. That is pretty much the definition of fraud... and those same mortgage brokers turned around and soaked the tax payers as well. There were plenty of crimes committed during that time, and we like to focus on stupid buyers/sellers and not on the groups that quite frankly made it possible for them (illegally in some to many cases) to do what they shouldn't have been doing and then soaked the rest of us when it fell apart.

 

I don't have a problem with foreclosures. But chain of title is a real thing and foreclosure mills are fraud. Banks screwed up there cutting corners and losing custody of their title chains in order to sell those loans to wall street and then setup illegal foreclosure mills to get them back, including I might add foreclosing on people who had owned their homes/land out right for years.  I know someone dealing with that right now too, so let's stop pretending it's all stupid buyers.  Yes, there were plenty of those, and yes bubbles are caused by more than one thing.  But yes, people should be in jail right now.

 

No back to the topic at hand

 

Uhhh, where did I blame home buyers for anything? While they could have done a better job living within their means, they were just responding based on the "carrot" of low interest rates. 

Did fraudulent activity happen? Well yeah, it always happens (that's what the law should be for, defense from assault, fraud, and theft) and bubble environments usually lead to increases in fraud as less savory people try to jump on the gravy train or protect their butts after it pops. But bad people did not cause the bubble in the first place- bad economic policy did.

 

I have no idea how we even got here. What were we talking about? LOL 

[Vanimal46]

This saga continues.... 

The Cardinals must send the Astros $2 million along with their top 2 draft picks in 2017 as a penalty for hacking Houston's internal system. 

http://deadspin.com/cardinals-must-send-two-draft-picks-2-million-to-astr-1791787347

[laloesch]

 

You know, I don't get the justice system in this country.  That Stanford swimmer got not even close to that amount of time.

 

Oh, and let's stop calling him a hacker please.  Just because Luhnow was too stupid to change his password doesn't mean that the guy who know it previously is a hacker... not exactly what I call a true cybercrime. 

 

The Eighth Amendment of the United States Constitution prohibits the federal government from imposing excessive bail, excessive fines, or cruel and unusual punishments to criminal defendants who have been convicted of a crime. This means that the government cannot impose a penalty that is grossly disproportionate to the seriousness of the offense. 

This guy did not steal 1.7 million dollars from the Astro's. He looked at their scouting reports. This did not make them unusable for the Astros. The value of this information is subjective since it is really just their opinion on the value of players. No doubt it is a disadvantage to have 1 team know who you are targeting, but it's not going to stop you from obtaining any of players you want. I can not see how this disadvantage equates to a 4 year prison sentence.

If you break into my house and make a sandwich it's trespassing. If you rob me it's burglary. Intent matters when it comes to sentencing. The cost of the investigation should not. Hell, we've spent tens of millions of dollars investigating the Clintons. Does that mean they should get life in prison?

 

Do not understate what this man did.  He did MORE THAN "looked at their scouting reports", he looked at individual player person-ell files, reviewed how they evaluated players they intended to draft, scouting processes, etc.   This man stole organizational proprietary information which is a BIG BIG crime in corporate America.  Sorry! he deserves every day, ever hour every second of that 4 years.  Inexcusable.  

 

 

[nicksaviking]

 

This saga continues.... 

The Cardinals must send the Astros $2 million along with their top 2 draft picks in 2017 as a penalty for hacking Houston's internal system. 

http://deadspin.com/cardinals-must-send-two-draft-picks-2-million-to-astr-1791787347

 

Hmmmm, the Cardinals gave up their 1st round pick to sign Dexter Fowler. Geez, if I didn't know any better I'd think they saw this coming.

[Vanimal46]

Great point... Just another way to stick it to the Astros by not giving them their 1st round pick. 

[Vanimal46]

 

I'd be shocked if they don't lose multiple first round picks, pay a huge fine, and lost international signing money.....

You were close with your guess! Any idea on what the power ball numbers are 6 months from now? 

[nicksaviking]

Also, this is a little bit of BS in the fact that the other 14 AL teams also get penalized in so far that the Astros gain two picks at the expense of a NL team.

 

I wish the Twins got hacked and the other team caught....

[Mike Sixel]

Hmmmm.....I would not have given picks to the Astros, I would have just taken them away from the Cards. This does seem unfair to the AL teams......

[nicksaviking]

 

Hmmmm.....I would not have given picks to the Astros, I would have just taken them away from the Cards. This does seem unfair to the AL teams......

 

Yeah, they should have taken the Cardinals picks and distributed the funds derived from the value of the picks among the additional 29 teams. Did the investigation find that the Astros suffered irreparable harm from the hacking?

[biggentleben]

Interesting to come here on this as I've not heard the AL/NL thing until I got here with fans of an AL team. Nationally, the outrage is more that the Cardinals are not losing a Competitive Balance A pick or a first rounder.