5 ms·
i suggest that, when a PtLd or publicly traded company gets under criminal investigation, that all trade in shares gets suspended. when a fine/settlement is det
by cies 7y ago
i suggest that, when a PtLd or publicly traded company gets under criminal investigation, that all trade in shares gets suspended. when a fine/settlement is determined the trade is resumed but the fine is --for the part that cannot be paid in cash-- paid in equity while considering an adjusted valuation (post fine) of the company. This means the shareholders dilute to pay the fine/settlement.
1) the fine needs to be fair to the society (often we see these "slap on the wrist" fines for big corps, that's just disgusting and shows how much our democracies are disfunctional)
2) i suggest this because i want the shareholders to be pushing their companies to ethical behavior.
3) it is very important that companies are also held liable for unethical behavior in other countries, and/or even for unethical behavior of subsidiaries (the foxcons and the likes).
- tomp 7y agoThe company is going bankrupt, so the effective "fine" to the shareholders is 100% of their equity. That's the point - "limited liability" just means it can't be more than 100% of equity.
- cies 7y agoGood point. I should have added: 4) When the fine is larger than the company's worth, collect it from the shareholders.
- tomp 7y agoThen noone would invest. Don't forget that often "shareholders" are index funds, pensioners, school endowments... No, the correct solution already exists - the criminal justice system going after criminals that did crime - it just doesn't work very well (especially when criminals are rich - e.g. Epstein - no need for "limited liability company").
- cies 7y agothere are so many ways a huge corp can commit crimes while individuals can all use the "plausible deniability" card. also often the crime is committed by the company as a whole, while no individual did something wrong. > Then noone would invest. i disagree, you just only invest in ethically sound endeavours. and thats exactly what im trying to achieve by my suggestions. starve bad-business from investment and/or people willing to take ownership. and make investors also do dilligence on the ethical side, instead of only an assessment of books+team+product+market.
- vorpalhex 7y agoHow is any investor supposed to be able to do any level of research approaching that depth, much less a college kid or your grandparents? "Sorry Grandpa, I know you thought that company was on the up and up, but we're gonna have to take your retirement."
- cies 7y agoexactly. no boundless protection for your capital/investments. you can do all kinds of other investments! but this kind of structure pushes corps to become "walk over dead bodies" evil, and investors not giving a shit.