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by generativenoise
393 days ago
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Your first statement is terrible logic when it comes to trying to create more globally correct system dynamics. It may seem more fair but it basically creates the lossy liability mentioned by another commenter. Especially since you are creating a one way ratchet where the share in upside disproportionately to the downside. Yes, maybe you want to include some scaling function so larger shareholders that should have more agency bear more liability. But then you are likely going to get games played to on paper to dilute shareholdings though shell companies. Unless big transparent voting blocks are directly needed for their purposes. The problem with your second statement is that is seems to be unclear who the relevant people actually are most of the time and we just end up with fall guys. Especially when it is the environment dominating individual agency where in effect you could swap all the people and get the same outcome most of the time. |
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However, I don't think it would be correct to turn illegal behaviour (by the corporation) into a monetary punishment for non-illegal investing. That provides an incentive for execs to choose illegality as in the worst case that they are found out, the stock price would take a hit, but the decision makers would likely be unaffected in any meaningful sense.
Taken to the extreme, you could have a situation where a corporation's execs decide to start a new hit-person service (obviously somewhat hidden and only available to their biggest customers) and then if it gets discovered, no-one gets to spend time in prison for it.
Alternatively, in the instances where the corporation defrauds investors, the investors then get to be punished twice (c.f. Bernie Madoff).
I generally agree with the recent Germany decision to imprison the VW execs for the Dieselgate scandal (I haven't followed the details of that case however): https://news.ycombinator.com/item?id=44098091