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> The true buyer of an asset can be people who have no idea they bought it. They're the buyers in the sense that their money is funding the purchase, but they
by bmm6o 11y ago
> The true buyer of an asset can be people who have no idea they bought it.
They're the buyers in the sense that their money is funding the purchase, but they are not the ones negotiating contracts. If their agents failed to perform due diligence or other fiduciary duties, the fund should file a civil suit.
- kolbe 11y agoThat's only effective in the case of fraud or gross negligence. There isn't a single court that considers being too dumb to properly do your job as either. Additionally, what would you expect from the civil suit? These guys get paid a few hundred grand a year, and they lose billions. The only people who would win anything meaningful are lawyers. Additionally, in the case of Chicago, the pensioners don't really care either. The government has guaranteed they'd honor pension liabilities whether they're currently funded or not.
- toomuchtodo 11y ago> Additionally, in the case of Chicago, the pensioners don't really care either. The government has guaranteed they'd honor pension liabilities whether they're currently funded or not. As a former Illinois resident, I'm super excited to see what happens when the government attempts to honor pension obligations with bank accounts at 0, and property owners flee the state as their property taxes skyrocket to foot the bill.
- josho 11y agoCivil suit? I'd make the case this was fraudulent behaviour and deserves criminal charges. By way of analogy, if I sold you my car with an added turbo charger yielding a 20% mpg improvement, but had the side effect of causing the engine to seize after 10,000 miles, which I neglect to tell you, then that's fraud. Similarly, if those inventory write offs and other machinations to inflate standard business metrics at the expense of derived metrics then cumulatively that is fraud. Standard business metrics are used for a reason and that understanding seems to have been exploited to hide the true status of the business. As a society we need to start doing a better job of seeing white collar crime as activities like this.--Of course I'm making assumptions here, but I'd expect due diligence would have created a paper trail that could be followed to find evidence of statements like 'we streamlined operations that contributed to our surge in profitability' rather than 'we aggressively wrote-off assets and dumped inventory to show a short term surge in profits'.
- deleted 11y ago[deleted]
- bmm6o 11y agoI'm saying the hypothetical fund managers didn't uphold their duty to the investors. I'm sure you don't mean the fund managers committed fraud.