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Shake-up At SonicBlue
InfoMinister writes "Good story at SiliconValley.com. The lead tells the tale: "In a boardroom drama rivaling its courtroom battle with Hollywood, SonicBlue's chairman and chief executive, Kenneth Potashner, was ousted Thursday after he demanded board members repay more than a half million dollars in loans they gave themselves to buy stock in an affiliated company.""
Sad that they can excerciset that much control over their own questionable activities.
It's like Congress.
That what was all this school was for... to teach us how to solve our own problems. -- janeowit
Here we see the incentives and punishment versus the morality of the corporate boardroom. On the one hand, he is a national hero for standing up for morality, on the other he is going against the personal incentives that drive capitalism in the first place.
I hate to point this out to the ten mature adults who are in chage of SonicBlue but this market environment is really not a good time to be having public popularity contests and fights over control of the company. Investor confidence is at an all time low and people will tank your stock and your market cap and avaelable funding base if you pull stunts like this. Dont you tyhink they could keep this figt under wraps?
Pants are optional, but recomended for you.
Potashner, who also received a $261,232 loan in December 1999 to purchase RioPort stock, said the board members voted last December to make their loans ``non-recourse,'' an accounting term that meant the directors would not be personally liable if they failed to pay.
How do I get one of these loans? Sounds an awful lot like free money...
I hate to say it but with all the news I have seen lately about large corporations this is not a big surprise. When someone tries to reform their company so it does not look as bad as the rest they get stomped on by those who benefit. Companies shouldn't give out loans to board members, thats what banks are for. If someone can't get a loan from a bank why would it be a good idea to give them that loan instead? The only reason these people have for taking the loan from the company is that they hope they can get away without repaying it or get little or no interest on the loan. This cannot be good for the company and it just shows that all the board members care about is their personal wealth and not the interests of the shareholders. Shareholders must unite and let the boards know they will not tolerate these practices.
Greg Ballard was former CEO of 3dfx before it crashed. 3dfx is a terrible story of mismanagment of manager abuse. As a company, 3dfx existed to make money for it's managers, and for no one else--and Mr Ballard was at the helm then for 3dfx, and now for SonicBlue. Do the words Golden Parachute mean anythign to you Mr Ballard? If anyone is investing in SonicBlue, I'd pull out...
The illegeal activites going on in this country are getting out of control. I don't mean to single out the US, but this is where I live and work, and this is supposed to be a great country. Instead, all I hear of are large companies that are literally ruining its loyal employees. I was taught in school that america was founded on the principal that if we all work together, we can all be happy, productive, and (hopefully), somewhat wealthy. Instead, the top 1% are really screwing the rest of us with illegeal activities, fraud, lies and cheating. It really makes me sick.
The loans given to the board members were completely legal and were not hidden in the financial statements. Some investors came to the CEO and asked about them.
He then requested that the three board members, who had taken out legal loans, repay them immediately (instead of at their due date, of June 2003) or to resign.
Now which of these actions is worse, really? Allowing somebody to take out a loan, then demanding they either accept a major change in the terms of the loan or they resign. Or to oust the guy who just renegged on a perfectly legal deal that he had previously agreed to.
I hate boardroom shenanigans as much as the next guy, but there's no story here.
How long before we see some network make a reality TV show about the corporate boardroom?
Probably not because, in effect, it's already on the air.
In the case of Sonic Blue, apparently repayment is not a legal necessity. The board voted that they would not be held personally liable for failure to repay the loans, which means that the company is left holding the bag if anyone defaults.
If I was working at Sonic Blue right now, I wouldn't be by the end of the day. An action like this means that the board of directors can rape the company cashpile and not have to do a thing to replace it. It's legalized theft.
For whatever criticism the CEO may have endured in the past, right or wrong, he was definitely right to call in those loans and when they fired him, he was definitely right to call "shenanigans" and inform the press.
To celebrate the occasion of my 1000th post, I will post no more forever on Slashdot. Goodbye.
It's a good thing this sort of illicit loaning only goes on in the corporate world... Wait a sec, you mean it happens in government too?
I mean, yeah, having the company ask for repayment of loans is fine and such, but it isn't a "legal" nessessity... meaning... who cares?
I know it's a bit to ask people to READ the actual article before they say they don't understand what's going on. The article states:
said the board members voted last December to make their loans ``non-recourse,'' an accounting term that meant the directors would not be personally liable if they failed to pay.
That's the entire point of the article, the directors voted themselves not financially responsible if they fail to pay back the loans.
-- If god wanted me to have a sig, he'd have given me a sense of humor.
Wanted: Someone to fill empty board seat at highly motivated company
Qualification:The perfect candidate will have no moral values what-so-ever. He (and I suppose she if one actually applies) will not have an honest bone in his (or her) body. Must be willing to disappear when the government catches wind of what we're up to. Candidate should think they are above the law.
Note: Former Enron executives a plus.
-- Knuckle Blood : Official Lube of Team Rusty Nuts.
You can't short stocks that are trading below $5/share. SBLU is trading at 0.40/share now (down 9% for the day).
[All quotes delayed by however long it takes from when I checked them to when you read my post.]
Hence, if I'm ever in charge of a profitable company, I'll keep doing stock splits to keep the share price in that range. [Well, there may be an exception if the market cap is over a certain level.]
1.) Write a check to yourself ...
...
...
2.) Deposit the check
3.) Repeat until rich
HUH?? Since when can you just give yourself money??? or since when can a company buy itself??? And this is actually holding up in court?
Basically I'm seeing what I would like to NOT call a trend. Where company execs are becoming increasingly more and more greedy, to the point that the economony is taking a huge hit right now. Wouldn't it be ironic if something like this was happening at Microsoft??
Ignore the "p2p is theft" trolls, they're just uninformed
Ken isn't an angel. He has caused a lot of problems for S3/SONICblue due to his management style.
I suspect this row was caused by the new law that makes him (and other executives) criminally liable for fraud and errors on financials. Without that he wouldn't have cared.
NOTE: I am biased. For a decade I worked for a company that became part of SONICblue and still own a lot of now worthless stock. I have several friends who are still there, all are worried about their jobs. The only reason the company is still alive is the large amount of UMC stock they own from a very old investment. Whenever the cash reserves get low they sell UMC shares. At one point they had almost a billion dollars in UMC, between sales and the market slide it's around a tenth of that.
IMHO you need to simply realize that there is no such thing as a Capitalist. Capitalism is based on allowing greed as a personal motivator. It's closely tied to the Free Market, which says that informed consumers make informed choices and vote with their Capital.
You can always make more money, and therefore give better vent to your greed, at least in the short and medium terms, by destroying the Free Market. That's been What Business Is All About, especially (most recently, this is an age-old cycle) since the 80's and Microsoft. Attain a monopoly and you can print cash. I suspect most people believe in Capitalism as long as it offers them a chance to move up. Once they're there, thoughts of Capitalism as a principle wane, and they're ready to pull up the ladder.
Karl Marx criticized Capitalism, saying that it would end in a few mega-corporate monopolies controlling everything. He's right, unless external stabilizing forces are present. For instance, antitrust laws, accounting standards, SLAPP laws, and the like. He's also wrong, in that he effectively substituted one Government for several mega-corporations.
Say it again. Capitalism and the Free Market need external maintenance, or else their most successful participants will act to destroy them.
The living have better things to do than to continue hating the dead.
I'll tell you what's being taught:
Parents:
"Son, get your MBA. I'm proud of you and want you to make scads of money."
Friends:
"MBA? You're so smart. You'll make so much more money than I will with my BA in Art History, which I enjoy very much."
Business Administration:
"In times of decreased customer expenditure, it is often appropriate to reduce resources to appease the stockholders."
Business Ethics:
"Humans are our greatest resource."
Marketting:
""
Accounting:
"Payroll is the most expensive operating expense of any business."
Business Frat Poster:
"Win real money in our fantasy stock game! Each person gets $10k to play the market and the person with the most cash after just 30 days is the recipient of a $1000 datek account thanks to Takka Alla Profits"
Smart folks are filling in the blanks, mate. Customers are not always right -- they're the morons who fell for our marketting. Employees? Get the best we can get for the shit we're paying...young folks especially, and train them to work 10 hour days. Your only boss is the stockholders, and these guys will believe anything that shounds like it will make them money.
Lying? Don't get caught. Stealing? Give it a nice name. Executives have privilidge, or else they wouldn't be executives, eh? We're better than those 30k plebians. Offer them 28k and we'll get Mexican -- how does Mexico sound? Shit, we should move our corporate office there...cheap work, no taxes, and thanks to NAFTA no bloody tariffs.
Hey freaks: now you're ju
No, you are wrong. Companies have a duty to their shareholders. If they don't hold up their end of the bargain, they are open to legal problems, and even disregarding that, they are doing something wrong. 3dfx is a perfect example of a bad company. MANY others companies are good companies. Think dividends for example.
Having said that, yes, managers make more money that Joe Shareholder, and that's as it should be--they are employees of the company.
Anyone see a huge problem in the legal system that allows any corporation to pretend it's a bank, without having to follow the same rules as banks? I think the law Bush recently signed should have barred loans to all execs and board members. No if, and, but about it.
Unless we're talking about a small, private, family company where the managers are the only shareholders, then your argument holds true. However, when you're managing a public company where there are many shareholders, then the concept of fiduciary duty comes into play.
No, the little shareholders do not get to manage the company. It is the job of the managers (especially those under contract) to work to enhance shareholder value. There's nothing wrong with bonues and perks, since they help to attract better managers, but such bonuses and perks should only be a means to an end...again - to enhance shareholder value.
The only way the activities these guys participated in could be ethical is if they bought the company outright and took it private, making them the only shareholders and holding no accountability to no one but themselves.
Bill Clinton: Pimp we can believe in. - The Shirt!!!
If the board members don't have the personal resources to repay such small loans, what the heck are they doing on the board of a going concern? And why did they vote to remove their personal liability if they do fail to repay on schedule? These people should be worth how many millions each? The whole success of SonicBlue depends on being seen as the good guys standing up to sleazy industries. Repaying those ethically questionable loans was correctly brought to the center of the agenda. As a shareholder I demand the immediate resignation of the board.
"with their freedom lost all virtue lose" - Milton
A corporate board voted to give themselves a no-recourse loan from corporate coffers to purchase stock. Explain to me how this was ever in the company's interest? Wasn't there a better use of the funds more in tuned to the *corporation's* interests? And where were the checks-and-balances to prevent this sort of crony-ism?
This sort of thing was common place in during the freewheeling days of the Internet bubble, when everyone expected a big payoff for little work. We (i.e., our economy) is going to be paying for those decisions for a long time to come.
And it is precisely this scenario (and Enron, MCIWorldcom, etc.) that I'm going to use as a counter-point to my laizze-faire free-market friends who claim that government has no business in then business of business. When corporate officers can't be trusted to act in the long-term best interests of their company over their own short-term self-interest, how can we reasonably expect them to make decisions that are in the best interest of society at large?
Any supposed free-market capitalist who is not opposed to these practices is actually merely a supporter of the aggregation off personal wealth, not competitive business.
---anactofgod---
"Equal opportunity swindling - *that* is the true test of a sustainable democracy."
It's in great peril now.
The CEO was the one driving their fights against the media companies. He was winning. What happens when we lose that knight? Who will take up the charge?
This is a very bad day for digital rights.
Obviously something is very broken with the system then. We have CEOs running companies into the ground and bailing out with tens and hundreds of millions in bonuses and exercised stock options just before the company tanks. They get away with it all too often too. If they have such a duty to shareholders, why are these bastards getting huge bonuses as the company fails? Oh yeah, because it's one big circle-jerk in management. They know that the company is dead, so they approve bonuses for each other and bleed the company dry, often leaving nothing for the regular employees.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
Just makes me wonder if Kenneth Potashner started making this incident public because he didn't get the "non-recourse" loan as well?
It's a little too cynic, but it's a possibility.
Either he's a moral person standing up for the shareholders--or he's a sour loser who's upset since he didn't get the good end of the deal that his Board Directors got.
I hope he's the former.
These boards have too much power. I don't think he EVER supported what they did or could've done anything about it beyond what he did do, which didn't do much except get him fired.
retrorocket.o not found, launch anyway?
I think a company like WorldCom would be happy to snatch him up and pay him whatever he wants to be their "reform mascott".
'No, you are wrong.' Maybe a better phrase would be 'We seem to hold differing opinions'?
The original poster is quite correct that the reason to start a compnay is to beneift the founders. Reduced liability, access to greater funds etc. Share holders only benefit if the company chooses to let them. Microsoft does not pay dividends.
Having worked in merchant banks, stock exchanges and futures markets I can say without a moments hesitiation that the markets are rigged and no amount of legislation is going to stop that.
The nice thing at the moment is that the worst offenders of corporate theft are getting exposed. But until companies are forced to publish every financial transation on their books investors will never be sure they are with one of the very small minority of companies that has an ethical board.
'MANY others companies...' drivel, pure drivel. Companies are neither good or bad. Aside from good/bad being totally subjective there is the point that companies should not be judged rather the people who invest/manage/work there should be judged. For instance, the Red Cross has taken millions of dollars after Spet. 11th for the purpose of helping the families. They have released very little of these funds, where is the money going? Now is the Red Cross bad? Is the management bad?
None of this was illegal- that's the problem.
They vote to give themselves a lone.
Then they vote to let themselves not pay back the loan.
And that is an acceptable practice.
How long do people operate in an environment like that before they lose the ability to make right choices?
Power corrupts...
.
It's hard to believe that's how Micronians are made. Why don't we see it right now by having you both kiss one another?
I wonder if the stockholders can say something about this though. Could the stockholders join together and say 'no, we won't let your directors absolve yourself of your debits. we're the majority here, not you.'? I don't know exactly how all this crap works but I would think the stockholders as a whole would have more power than the directors and would have the ability to overrule the board's decision.
'MANY others companies...' drivel, pure drivel. Companies are neither good or bad. Aside from good/bad being totally subjective there is the point that companies should not be judged rather the people who invest/manage/work there should be judged. For instance, the Red Cross has taken millions of dollars after Spet. 11th for the purpose of helping the families. They have released ...
I meant good in terms of being responsible to their shareholders. Ie, not pulling a 3dfx. I agree that companies are neither good nor bad in a moral sense.
Which pledge were you saying? The only one I know never states "united we stand, divided we fall." I believe that was a slogan during the revolutionary war used to inspire people to join the common cause.
The pledge *does* however state "with liberty and justice for all," and I think we would do well to make sure this gets applied liberally to whatever corrupt management we can track down throughout these fiascos. The justice part anyway, which might in fact lead to a restriction of their liberties (say, the liberty of being able to not live in prison).
But I don't see the value of government intervention.
You don't see the value of THE PEOPLE stepping in when a PUBLIC company is corrupt?
Your anti-government ideology is getting in the way of your practical thinking. OBVIOUSLY your "keep the government out of this" ideology has failed. Even now with all the corporate coruption in the news we see this story of a Board voting itself "loans" that they don't have to repay. Of course this should be illegal.
well, they implemented a system called 'fuck hbo', where you could record something off of hbo, then send it to your friend who doesn't have hbo, and they implemented a system called 'sponsorfuck', which automatically skips commercials.
oh, you meant unethical behaviour that doesn't benefit you.
Such loans are a common practice; in general, it only ever becomes an issue if the company is having financial problems, big political bor there is a blow-up.
The most common way this plays out in the "financial problems" scenario is that a startup gets funding, spends down to some threshold, and the board members, who are largely appointed by the VC firms, bail the remainder of the money out of the company into some other position as a hedge against the impending failure of the original company. It's basically a form of VC "buyer's remorse".
The people on the board or in executive positions that permit them to attend board meetings (varies by bylaws, but usually CEO, president, and wherever the founders have landed) who want the money to stay with the company end up fighting it out with the people who want to bail it out of what they see as a losing proposition.
Things tend to get nasty like this when you end up with board members on opposite sides of the bet on whether the company is going to sink or swim.
The article didn't make it clear to me whether these were non-recourse loans on behalf of the board members personally, or whether they were non-recourse loans on behalf of the interestes that were represented by the board members. If the latter, then this was just insurance by the funcding partners against sinking with the rest of the enterprise.
Most often, these type of loans are "forgiven" at a later date, as a means of permitting the taking compensation at a deferred tax rate (if it's a loan, particularly on a big house, then the interest is personally or business deductible, so you get a tax benefit, they get a tax benefit, and the tax is deferred until the "forgiveness" comes through).
It may be (and this would be a serious motivation for the fireworks to happen as they have happened) is that the board was refusing to "forgive" a loan to the CEO, which was secured somehow.
In any case, nothing illegal has happened, so it's probably nothing more than a lot of mud-slinging, using the current climate in the investment community as leverage to get handfuls of "the really *good* mud".
-- Terry
That's the problem with trusting stuff to a corp, and why you can't ever expect a corporation to ever do anything 'nice' (unless it can get a tax break or better sales out of it). There are good places to work, and bad places to work, but in the end, if you want an organization that's motivated by something other than money, go start a not-for-profit. Duh.
Or help to get our culture's myopic head out of its collective ass and structure our economic, political, and social systems so that greed is not the sole motivator, and stockholders not the sole beneficiaries.
Ayn Rand and her libertarian acolytes have promoted capitalism and greed as a great panacea that can (and should) address all of a societies issues, and that is simply untrue. Indeed, history is repleat with examples of just how misguided that entire Capitalism As World Order notion really is. The last two decades aren't the first time its been tried, and this isn't the first time its fallen apart.
As we all know (from 19th century history if nothing else), but some idealogues will nevertheless remain in denial about, a free market with no regulation quickly devolves into a monopoly market, which ultimately is no market at all.
We have some limited, and ultimately insufficient, regulation in place to prevent this sort of thing (anti-trust regulations), but one thing no one seems willing to consider is how to restructure rules for incorporation, regulations of business practices and accounting procedures, and social law as a whole such that the motivation of greed can be supplimented with other motivations that are more conducive to creating a world fit for humans to inhabit. Examples of where and why this is necessary abound (Monsanto's poisoning of a small southern town in the United States in the 1990s is one example, Love Canal and other environmental abuses are another, all of the economic scandals of the 1980s, and now the naughties, are another example, and more abound).
No one would be foolish enough to try and build an edifice with just a saw and no other tools, why are we surprised when we try and build a society with just one tool, capitalism/greed, and the resulting structure trembles and threatens to fall apart after a scant two decades?[1]
[1]Prior to Reaganomics there was the notion of a plurality of balanced forces that included economics, government regulation, and even redistribution of wealth as needed to keep a society running smoothly. Indeed, the latter, most derided notion prevented a revolution during the great depression and built sufficient faith in the social and political order of the country to ride out the cold war and sustain a half a century of growth. It is only since Reagan that this notion of Capitalism Above All Else, including Above our Democratic institutions themselves, has gained such widespread, and misguided, support, and now we are beginning to reap the consiquences of that notion and the weakend regulation and oversight inherent in it.
The Future of Human Evolution: Autonomy
There are a lot of companies that are ethical and are playing by ALL the rules that are getting the crap beat out of them by all the companies that aren't playing by the rules.
The man who trades freedom for security does not deserve nor will he ever receive either. - Benjamin Franklin
But, the board has civil liability. There is a mechanism in place to resolve this. The shareholders can and should sue them for far more than they stole.
So, what should the government do to correct this? Make all procedings of the board open to shareholders? Require extensive reports of corporate financial activity? Require board members to be elected by the shareholders? Guess what...they already do? So, my point still stands. What should change? In what sense should this be "illegal"?
Knee-jerk responses such as your don't really deserve a response, but I was feeling generous.
In any case, nothing illegal has happened, so it's probably nothing more than a lot of mud-slinging, using the current climate in the investment community as leverage to get handfuls of "the really *good* mud".
Midslinging or not, the dirt is real, and the practice is corrupt (and undermines the viability of the company in question) whether or not it is VCs trying to do an end run around the intent of the law to pull some of their investment out of the company after the fact, or (as seems just as likely) its a little petty pilfering by the board of directors of the company kitty.
Voting to give oneself unsecured loans, voting to "forgive" oneself one's loan, or what have you is deceptive and amounts to legalized, institutional theft from the company and its stock holders (if any). Arguing that its just a clever dodge to avoid taxes otherwise owed for compensation, that the rest of us not privy to the board, and such insider perks, would end up paying certainly doesn't elevate the act any, no matter how much distate one might have for taxes.
In short, it is sleazy in any context. The fact that it is as common as you imply, and for as many varied "legitimate" reasons as you imply, makes me doubly glad to be invested in real estate and not in the stock market.
The Future of Human Evolution: Autonomy
The CEO certainly was trying to do right by shareholders and employees. Unfortunately, corporate boards (which are usually controlled by CEOs) tend to have a lot of power.
Regarding your questions, the best way to prevent these types of shenanigans is to file shareholder lawsuits. It's very hard to win a criminal conviction, since these types of crimes (when they are illegal) are perpetrated by very savvy individuals who often make sure not to leave a paper trail. It's organized crime at it's best: lobby the hell out of government to make your actions legal, then cover up all evidence of your crimes if that doesn't work. That's where shareholder suits come in. The burden of proof in a civil trial is simply a preponderance of the evidence (rather than "beyond a reasonable doubt"). That makes shareholder suits (or the mere threat of them) the best defense against these types of executive transgressions. Unfortunately, intense lobbying and massive bribes, er, campaign contributions during the last two decades have strictly limited shareholder suits. In fact, Ken Lay's ill-gotten gains are all sitting in annuities which, under Texas law, are immune from shareholder suits.
Sure, I'd like nothing more than to see the Kenneth Lays of the world living in 5x8 cells and being punked by bald-headed inmates named Debbie, but it's just not going to happen. In many ways, it's better to hit them where it really hurts: their pocketbooks. Let's get rid of shareholder suit-proof annuities and other vehicles that allow execs and board members to keep their pilfered dollars. Let's allow shareholders to sue when boards of directors do this. Hell, let's turn shareholders into creditors for these loans and let them get paid first.
"You done taken a wrong turn."
-Bill McKinney, in Deliverance
Apparently, you missed the part where I noted that it was unclear as to whether or not these were personal loans, or corporate loans for the purchase of alternate stock.
Personal loans are a tax dodge to get around compensation issues by turning a tax liability into a deferred liability with a short term asset.
This type of thing wouldn't be necessary, if there were no capital gains tax. As it is, between state and fed, 55% of all capital gains ends up in the government's pocket, otherwise, instead of funding new business, paying people's salaries, creating jobs, etc..
More likely, it was corporate, with the investors bailing out of a bad investments.
Yeah, it undermines the business in question, but it protects the money from some idiot who thinks there's such a thing as "page views" and "selling eyeballs".
It's the fiduciary responsibility to directors to protect the money of the investors they represent, and sometimes, this means taking it out of a bad investment, and putting it some place else.
Yeah, businesses fail over this. Euthanasia is better than the alternative. If you are looking for compassionate spending of millions of dollars to prop up a failed business model, you are dreaming.
-- Terry
No, but he does mean laissez-faire
Double French Nazi action. No French lazy fair for you!
Well, I suppose this just points out how people have differeing ethical standards. For example, i don't think that skipping commercials is unethical at all, while, on the other hand, I think that knowingly failing to meet your legal responsibilites and draining your company of funds is.
I doubt SonicBlue have given huge amounts of money and loaned their corporate jets to the President and Vice-President of the United States, so it seems unlikely that ivestigative bodies will have any incentive to drag the chain on them.
"Hey, can I fire you?"
:P
Looks like they could
autopr0n is like, down and stuff.
But if company A lends its directors or executives money to invest in company B, then forgives the loan (perhaps because company B's stock didn't perform well), company A is out the money!
I don't see why anyone should think it is in company A's interest to forgive the loans. The risks regarding company B's stock were undertaken by the directors or executives of their own free will; let them shoulder the risk as well. If company A wanted to assume the risk, it should have purchased the company B stock directly, rather than lending money to others to do so.
In this particular case, since SONICblue owns a third of RioPort, they would presumably lose only 2/3 of the amount of the loan, but that's still a lot different than option repricing.
I find it funny that those who would make us all slaves to the state in this communist anti-capitalist ideal, are constantly using examples of fraud as the reason to do implement their fraud.
Enron, Global Crossing, et al. broke the law. That doesn't justify making us all slaves to the state, as you advocate. (For that is the ONLY alternative to capitalism. slaves to the state, slaves to a dictator, or slaves to some tyrannical government.)
If you'd actually read of Ayn Rand, you'd know she predicted this. Ever heard of Anaconda Copper? She's already disproven the argument you make... but we both know your audience of hate mongers is going to just shout "yeah! eat the rich!" while they toodle around in SUVs and vote for higher cigarette taxes and the elimination of human rights.
Furthermore, if you ever get your way and eliminate freedom, you will have an armed uprising on your hands, and will, of course loose becuase those you count on for defense (drafted against their will, of course) will not be very motivated.
GREED is a natural force. The only motivation in nature for any organism is survival and to thrive.
Greed, for lack of a better word, is good. Greed works. IT clarifies the mind, and focuses the spririt.
This idea that greed = fraud is the lie propagated by those who want to eliminate human rights. FRAUD = FRAUD.
There's no shame in being human and exercising human rights-- and there's nothing inherently unethical about it.
You might as well be complaining that birds are out there eating worms rather than cooperating on farming.
Shame on you.
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
You can easily give yourself half a million dollars when you have the control over someone else's money. In this case, the SONICblue shareholder's money.
The error you're arguing against is that these people don't understand what OWNERSHIP is. They have trouble grasping why communism won't work-- remember many of them are following the Stallman pied piper.
They fundamentally don't understand that their expectations of a handout from companies, is only going to come by eliminating the concept of ownership-- making them all slaves as well in the process.
And of course, to maintain this illusion, they ignore the fact that the market is quite good at rectifying and eliminating companies that aren't wise-- SonicBlue is at what, $0.44 right now?
We don't need the government-- the market does a much better job and we don't have to give up the bill of rights in the process.
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
But I think that even the minority shareholders have the right to sue for damages, if only for not having the same loan "opportunities" made available to them. The board is reponsible to represent the best interest of ALL of the shareholders, not just their buddies.
It looks very very bad. Any judge/jury would be sympathetic. It just takes an excuse of a lawsuit and the board will be wiped out. The real problem is for employees of that company. How would you like to find out that the captain of your ship is drilling holes in the hull?
This would be an excellent excuse if lawyers worked for free. They don't.
Also, shareholder do sue boards. The political result? Tort "reform" - presently being pushed by our current U.S. President - which aims to make it effectively impossible to get court review of nearly any malfeasance, short of the CEO holding up the corporate treasury at gunpoint.
Finally, boards are protected by the corporate "veil" which shields them from liability. In the above case, they simply say "look - it's another form of compensating our critical people" and they're off scott free.
What they don't say is that the real reason why they're scratching the CEO's back with absurd compensation is that he is scratching theirs as a board member in the company they head up. (Yes, CEOs routinely make up large percentages of the board members in the US.) This "crony capitalism" is extremely obvious - but nearly impossible to prove in a court of law.
No wonder self-dealing is the norm.
The simple truth is that civil liability isn't worth the paper it's written on. Unless there is a law to prevent a form of corporate malfeasance, you can expect people will practice it. How do you think we got the financial disclosure laws in the first place?
And who owns the mutual funds? You and I. (again not everyone, but most US people reading this own at least one). Most of the money in the US is in the hands of the middle class. If your mutual fund isn't doing their job of voting, there is a problem. John Bogle (founder of Vanguard, on of the largest fund coporations), in his book Common Sense on Mutual funds said that he is surprized how few funds vote against management. He strongly recomends that you put your money with funds that will watch management. (Of coures by which he means his company, unless you can change your own. Good book though, you should read it)
Yeah, its really insightful to pretend that without government intrusive regulation and oppression there would be no government.
When I said "We don't need the governmetn" it was obvious (to anyone not quoting me out of context) that I was saying they don't need to interfere. Sheesh.
And furthermore, anyone who invests does so freely and with full knowledge of the risks.
Your desire to oppress me with tyranny (By getting the "Rich" ) is not justified with your claim that people were victims of fraud. When they are, they have the courts to turn to-- fraud is illegal, don't you know.
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23