I disagree. The structure of financial malfeasance in the presence of the limited liability corporation is as follows: 1) become a corporation. 2) borrow a lo

I disagree. The structure of financial malfeasance in the presence of the limited liability corporation is as follows: 1) become a corporation. 2) borrow a lot of money. 3) bet it on red. 4) If lose, have the limited liability shell declare bankruptcy, no personal loss. If win, pay back the loans and dissolve the company. There are many laws trying to prevent this exact scenario, but there is no way to characterize the pattern well enough to catch all of the instances of it. Furthermore, the incentive to find such a pattern always exists, so long as the liability limiting financial instrument (LLC) does. The pattern is, in a modern context, streamlined through insurers. Insurers, as a rule, are businesses which lie about the applicability of the central limit theorem to investments. Insurers are only interested in increasing the number of policies that they cover. In the lie of the central limit theorem, more policies is less risk. But since a lot of risk is actually correlated, more policies is more correlated risk. Correctly identifying correlated risk is hard, in general, and furthermore, identifying correlated risk is explicitly against the insurance companies interest, as selling policies that they know they can't cover is fraud, but otherwise profitable.