3 ms·

> The executives have a fiduciary duty to the shareholders and will be personally accountable if they willfully neglect that (vs just the company being liable).

> The executives have a fiduciary duty to the shareholders and will be personally accountable if they willfully neglect that (vs just the company being liable). There is almost no valid argument that an executive could not anticipate the blowback from doing that and no executive in their right mind is going to risk personal liability like that. Has there ever been a case of executives being held personally liable for their companies doing grossly stupid and evil things that were obviously going to have blowback? Things like Union Carbide and the Bhopal disaster, the Sony rootkit CDs, Volkswagen cheating on emissions tests, United Airlines carrying out criminal assault on a passenger? Not a rhetorical question, maybe there is such a case that I don't know about.

throwaway2016a 9y ago
I don't know of any examples. I think usually they are low profile civil cases not criminal. I know there are cases where an executive has made fraudulent decisions and gotten charged personally for fraud vs the company. I have first hand knowledge of several at smaller companies where the board of directors sued an ex executive or sometimes another member of the board. There are also several high profile cases going through courts around Blockchain companies where the government is arguing that the executives themselves are willing participants in money laundering. Importantly, breaching your duties does not mean you are bad at your job. If you lose the company lots of money because you suck at your job you probably aren't in breach. You have to intentionally make a decision that is not in the interest of the people you have a duty to.
ahartman00 9y ago
Plenty. Here is an example for Volkswagon(just because I happen to remember it): "Federal prosecutors announced criminal charges on Wednesday against six Volkswagen executives for their roles in the company’s emissions-cheating scandal" "The six executives include a former head of development of the Volkswagen brand and the head of engine development. One of those charged on Wednesday, Oliver Schmidt, was arrested in Florida last week; the other five are believed to be in Germany" "The automaker is set to pay $4.3 billion in criminal and civil penalties in connection with the federal investigation, bringing the total cost of the deception to Volkswagen in the United States, including settlements of suits by car owners, to $20 billion — one of the costliest corporate scandals in history" https://www.nytimes.com/2017/01/11/business/volkswagen-diesel-vw-settlement-charges-criminal.html https://www.nytimes.com/2017/01/11/business/volkswagen-diese... Here is an article about Enron executives(quite a bit here): http://www.nytimes.com/2006/01/29/business/businessspecial3/10-enron-players-where-they-landed-after-the-fall.html http://www.nytimes.com/2006/01/29/business/businessspecial3/... Here is one about Tyco: " finding Kozlowski and Swartz guilty on 22 of 23 counts of grand larceny and conspiracy, falsifying business records and violating general business law. They face 15 to 30 years in prison" http://money.cnn.com/2005/06/17/news/newsmakers/tyco_trialoutcome/ http://money.cnn.com/2005/06/17/news/newsmakers/tyco_trialou... I'm sure there are more, just don't know of any off the top of my head. "the Sony rootkit CDs" -- was this illegal? Note that we can't punish people for things we don't like. "United Airlines carrying out criminal assault on a passenger" -- IIRC, the police carried the passenger off. I also thought the airlines have the authority to order people off planes. Like it or not, IIUC this was legal too.
- rwallace 9y ago
  > "the Sony rootkit CDs" -- was this illegal? Hacking computers is very illegal - to crazy extremes, indeed. But the other examples are relevant, thanks! Upvoted.

throwaway2016a 9y ago

I don't know of any examples. I think usually they are low profile civil cases not criminal. I know there are cases where an executive has made fraudulent decisions and gotten charged personally for fraud vs the company. I have first hand knowledge of several at smaller companies where the board of directors sued an ex executive or sometimes another member of the board. There are also several high profile cases going through courts around Blockchain companies where the government is arguing that the executives themselves are willing participants in money laundering. Importantly, breaching your duties does not mean you are bad at your job. If you lose the company lots of money because you suck at your job you probably aren't in breach. You have to intentionally make a decision that is not in the interest of the people you have a duty to.

ahartman00 9y ago

Plenty. Here is an example for Volkswagon(just because I happen to remember it): "Federal prosecutors announced criminal charges on Wednesday against six Volkswagen executives for their roles in the company’s emissions-cheating scandal" "The six executives include a former head of development of the Volkswagen brand and the head of engine development. One of those charged on Wednesday, Oliver Schmidt, was arrested in Florida last week; the other five are believed to be in Germany" "The automaker is set to pay $4.3 billion in criminal and civil penalties in connection with the federal investigation, bringing the total cost of the deception to Volkswagen in the United States, including settlements of suits by car owners, to $20 billion — one of the costliest corporate scandals in history" https://www.nytimes.com/2017/01/11/business/volkswagen-diesel-vw-settlement-charges-criminal.html https://www.nytimes.com/2017/01/11/business/volkswagen-diese... Here is an article about Enron executives(quite a bit here): http://www.nytimes.com/2006/01/29/business/businessspecial3/10-enron-players-where-they-landed-after-the-fall.html http://www.nytimes.com/2006/01/29/business/businessspecial3/... Here is one about Tyco: " finding Kozlowski and Swartz guilty on 22 of 23 counts of grand larceny and conspiracy, falsifying business records and violating general business law. They face 15 to 30 years in prison" http://money.cnn.com/2005/06/17/news/newsmakers/tyco_trialoutcome/ http://money.cnn.com/2005/06/17/news/newsmakers/tyco_trialou... I'm sure there are more, just don't know of any off the top of my head. "the Sony rootkit CDs" -- was this illegal? Note that we can't punish people for things we don't like. "United Airlines carrying out criminal assault on a passenger" -- IIRC, the police carried the passenger off. I also thought the airlines have the authority to order people off planes. Like it or not, IIUC this was legal too.

rwallace 9y ago
> "the Sony rootkit CDs" -- was this illegal? Hacking computers is very illegal - to crazy extremes, indeed. But the other examples are relevant, thanks! Upvoted.