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>Joe Bigshot, former SVP at BigCo, was sentenced to 5 years in jail, and had to sell two of his nine houses to pay the $20M fine" is much better. Well, they so
by john_moscow 6y ago
>Joe Bigshot, former SVP at BigCo, was sentenced to 5 years in jail, and had to sell two of his nine houses to pay the $20M fine" is much better.
Well, they sort of do that in Russia. So the CEO/founder of almost any sketchy company is a homeless person that signed the paperwork in exchange for some free vodka. Didn't particularly solve the problem.
Corporate fines just need to be sufficient to make such "business" unprofitable. "BigCo fined for 5% of its market cap" would be quite a deterrent. Except, it won't be happening as long as the regulators are in bed with the big business they are supposed to regulate.
- baq 6y agooh, regulators are playing the market both ways. congressmen and senators don't have any issue with trading options.
- mannykannot 6y agoThe second paragraph of the post you are replying to seems to anticipate this response: "So, we need to both move more towards prison and start digging in to which actual people inside bad corporations were responsible for deciding to do wrongdoing." In the post-Enron world, however, executives have learned how to use incentives to motivate their minions to break the law without being explicitly told to do so. On the one hand, this makes it difficult to prosecute those who bear most responsiblity; on the other hand, more effective prosecution might curtail the supply of minions who can be motivated to be compliantly criminal.
- hackflip 6y ago"Will no one rid me of this turbulent priest?"
- 55555 6y ago> Well, they sort of do that in Russia. So the CEO/founder of almost any sketchy company is a homeless person that signed the paperwork in exchange for some free vodka. Didn't particularly solve the problem. Can you find me a reference to this? I could believe it, but by default I'd be surprised if it were true at any real scale.
- postsantum 6y agoWe refer to such person as "зиц-председатель" which means chairperson-to-be-jailed
- fairity 6y ago> Corporate fines just need to be sufficient to make such "business" unprofitable. This seems untenable because large businesses will then be forced to break individual business units into separate corporations to manage risk. At first glance this might seem fine, but you'd basically be creating huge drag on the economy bc large businesses benefit from economies of scale.
- tfehring 6y agoI’d also like to see more fines in the range of multiple years’ worth of revenue, but it wouldn’t change directors’ incentives since they still have limited downside exposure and therefore asymmetric payoffs. Even if a CEO runs a company into the ground they’ll probably still be rich since they only have levered exposure on the upside (through ISOs, etc.) and comparatively limited exposure on the downside.