3 ms·
maybe. but also consider that if the SEC can go after 2 or 3 times as many companies, it may have a bigger deterrent effect, via extra publicity.
by andylei 17y ago
maybe. but also consider that if the SEC can go after 2 or 3 times as many companies, it may have a bigger deterrent effect, via extra publicity.
- cwan 17y agoThe problem with going after companies and not people is that it doesn't necessarily act as a future deterrent since these people aren't the ones paying for the penalties anyway - it's the companies. So there's that agency problem that the interests of managers are different than that of shareholders (the risks for the managers may be much lower than the potential reward). Further, as in the case now of some of these prosecutions that are negotiated against companies (as Spitzer arguably did with AIG), the appearance is also that it amounts to extortion. The simple act of threatening to charge a company making it more difficult to do business, may be enough to "settle" to provide some prosecutor with publicity for a future gubernatorial run.