Why haven't prosecutors gone after Silicon Valley yet?

One of the patterns of modern day politics is that prosecutors can move on to higher political offices by taking down a big name or two. Rudy Giuliani famously took down Michael Milken by threatening him and his company with the RICO act, a law that was designed to only apply to Mafia style organized crime organizations. That victory gave him the name recognition that helped him become the mayor of NYC.

Eliot Spitzer publicly went after many people on Wall Street, which raised his profile enough to become governor or New York State. He was eventually caught with a prostitute, but his story still adds another data point to the idea that all a prosecutor needs to do to achieve higher office is win high profile cases against big names. 

It doesn't matter to the prosecutor's career if the company or person getting prosecuted is acting significantly worse than their peers. All that matters is that the prosector gets positive press for fighting a big name (That they help the press demonize) and that the prosecutor finds some way to win. 

Today, inequality is a growing political issue. Many people see technology, and Silicon Valley as its proxy, as one of the driving factors of inequality. That leads to the obvious question: Why haven't prosecutors gone after any big Silicon Valley targets? 

It isn't because they don't have anyone to go after. Carl Icahn's attack against Marc Andreessen gives an overview of plenty of grey areas where it looks like a prosecutor could make his career.  The quote, "No conflict, no interest" is frequently attributed to John Doerr.  He sits on numerous public company boards while making VC investments in companies while benefiting from internal information gained at these board meetings. While there are many ways to break federal law, breaches of fiduciary duties are generally regarded as civil actions. So regardless of whether or not a determined investigation would find wrongdoing, this might not be as fertile an area for prosecutors as the headlines make it appear.

There are still other places prosecutors can look. Despite what many people seem to think, insider trading in private companies is illegal. And there are likely to be a few big names out there involved with situations where employees, the most sympathetic of the investors allowed to own shares in private companies, are found to have been ripped off by insiders who traded with them while misrepresenting relevant information about the company.

Michael Milken was largely thought to be a target of Giuliani because of how unpopular he was among certain groups of people. His work in high yield bonds took business from banks (if it weren't for the "junk bond" market, companies would have to get much higher cost loans from banks) and facilitated leveraged buy outs which were unpopular with both existing management and with workers at the companies that might get laid off after a takeover.  Eliot Spitzer only became the Sheriff of Wall Street after the stock market crash.

This presents two ways that Silicon Valley can be dragged into the bullseye of prosectors.

1. A financial crash centered around tech stocks. If investors start losing lots of money in tech stocks, a scapegoat will be required. This is the Spitzer scenario. In this case those behind the most inflated valuations will be most at risk.

2. The continued success of Silicon Valley as entrepreneurs focus on more traditional industries. If software continues to eat the world, those incumbents who find themselves being pushed to the sidelines will fight back. They might do more than fight to protect their rents, they might use their political connections to get prosecutors to punish those who they see as responsible for their business's growing irrelevance.

Either way, those in Silicon Valley should remember to be careful in their electronic communication. I'm sure that many of them are ahead of the curve when it comes to this issue, maybe that is why all of those secret sharing applications are getting funding.