But funders that are actively involved in the management of the company do not necessarily have limited liability. The function of investor and manager are legally segregated. This is, in fact, a common problem for investors (like VCs) that are guaranteed a seat on the board of directors: who do they represent? Themselves or all shareholders? To avoid liability for their decisions as directors, they have to disregard their individual interest as a shareholder in favor of the interests of all shareholders. The same goes for management.
So, the assumption of the theory of the corporation is that investors and managers are separate entities and, although in practice these rules are not always strictly followed, they are separate decision-making entities.
I think you're being a little over-picky here. The legal purpose of a corporation is to limit liability to its owners. This then assumes that its owners are non-management funders. The point of investing is to gain a return. Therefore the lowest common denominator of incorporation is that they exist to make money. The default rules governing directors of corporations make it clear that it is unethical for the directors to cause the company to do anything not in the best interests of the shareholders. The only common interest the diverse shareholders in any sizable company have is in maximizing the return on their shares.
Of course, in practice, these rules are bent, non-profit corporations exist, ethical considerations are considered essential to maximizing return, etc. But, I believe the poster is correct in stating that the LCD of corporations is making money. No other ethic can be universally applied.
On sort of a non-outraged point, how do you backtest data when there are no positives? Were there serious security incidents on JetBlue that I didn't hear about? If there weren't, wouldn't you then just have to classify all people with the characteristics of those 5 million flyers as 'safe'?
Unless you're seriously of the "any publicity is good publicity" school, I have to disagree. In New York City, the major tabloids (Post, Newsday) ridiculed the RIAA. One headline called the girl a " 'Thief' " (in quotes, that is)--implying that the RIAA has misrepresented the ethics of what she has done. This is the kind of publicity that even congresspeople take notice of. If there is enough of a public backlash, even our 'representatives' will have to come out on the side of the people.
Complete fiasco, from the RIAA's point of view.
The New York Times seems to be on the side of the RIAA, WSJ seems to be neutral. Interesting that the conservative papers (ie the Post) are anti-record industry while the liberal NYT is pro-industry. Is there a political sea-change occuring that nobody told me about?
Oh, I'm not against class actions: I agree they fill a need, protecting large classes who were each damaged a small amount. There is no other way I can think of to efficiently litigate these suits.
But saying that lawyers need to take all the money on the few they win because they lose so many suits is a bit specious. (It sounds like the RIAA argument for charging $20 for a CD.) Even early-stage venture capitalists supposedly on the cutting edge of investment risk shoot for 1 win out of 10 investments. If the litigators have odds even close to that bad, perhaps they should more thoroughly assess the suits they are bringing. The tort legal system in this country is tilted towards the litigant, not the defendant, so odds like those mean that a huge number of bad cases are being filed.
My solution? Damages go to the damaged, and their lawyers; penalties (ie. any amount in excess of actual damages) go to the government. This would rein in ridiculous rewards and force litigators to only bring suits that are meritorious. It might even help reduce the average citizens' tax burden. All the while keeping the pressure on wrong-doers.
Well, they don't only make good money when they win. They generally make good money when they settle, which they seem to do at least 99% of the time. Much of the time they settle for less than what it would cost the sued company to adequately defend the lawsuit. That seems like a shakedown. You don't read about it in the paper, but this happens all the time.
The other problem with class action litigators is that they keep a huge chunk of whatever damages are collected, rather than giving it to the people damaged. This makes their winnings a de facto penalty, rather than a repayment of damages. Penalties should be imposed by and paid to the government, in my opinion, not by and to individuals. If the class action attorneys can make so much money (and some of them have made a *lot* of money) from penalties, why shouldn't the SEC be allowed to enforce laws and extract penalties? In effect you've outsourced justice to a bunch of unprincipled vigilantes. Not good.
Okay, this shows a total of $212 (yes, two hundred and twelve dollars) being contributed by three individuals split between two congressional campaigns.
Now, I believe as much as anyone here that the military-industrial complex is driving our democracy into the ground, but even I do not think a congressperson can be purchased for anything less than $500 or so.
a) get pissed off, sue for justice b) performance review notes backbone, competitiveness c) get promoted because the boss 'likes the cut of your jib' and how 'you take it to the basket' and how 'the best defense is a good offense' d) new manager in charge of lawsuit sees he can save company $5 by settling, does so e) his performance review notes efficiency, talent at reengineering business processes f) he gets promoted because the boss 'needs more men like him around' and 'you got to know when to hold 'em and when to fold 'em' and he 'keeps his powder dry' g) company gets sued by copycats after seeing huge amount of settlement h) go to a
How can they file a cease and desist? How can they know that some developer didn't use a snippet of code that they aren't even allowed to see? It's hard to prove a negative.
The only thing they can do is ask the judge to tell SCO to stop screwing around and show them the allegedly infringed code already so they can fix the problem. Any reasonable judge is going to think the most just outcome is for IBM to stop the infringement (if they did and if they can), not to cause IBM to pay SCO a windfall. This is, of course, the last thing SCO wants. They don't want the infringement to stop, they want it to continue and for all infringers to pay them.
One of the many problems with the US legal system is that the resolution of a case can take years. Longer if one of the parties wants it to. This potential delay is one of the main reasons (after the sheer randomness of verdicts, that is) that companies and people settle. It's just cheaper.
Frankly, it might be cheaper for IBM to buy SCO outright than to defend this lawsuit.
It's only news because it sounds so bad. Jury trials are a lot like public relations contests. You think the jury is going to know anything about patents and related damages?
Boies: "This man willfuly ignored the provisions put in place in the United States Constitution! He said so himself! He practically called Thomas Jefferson an idiot!"
This would be akin to allowing Best Buy or Sears to imprison suspected shoplifters without trial or recourse.
In an odd example of synchronicity, the NYTimes yesterday had an article about Macy's detaining, handcuffing and questioning suspected shoplifters in their stores with private security guards. They also forced these people to sign confessions and, in many cases, pay fines to them right then and there.
The right to bear arms seems more and more prescient every day.
As a business strategy, swinging for the fences when your team is about to lose makes sense. SCO was down for the count before this lawsuit. After it, well check for yourself.
in the tech industry we're establishing the tradition that software is always going to be buggy...Microsoft seems to rely on all of the "you promise not to sue us..." clauses in their EULA
You know, I always wondered about this. I thought you could really only sue for negligence etc. if something happened that a reasonable person wouldn't expect. Since a reasonable person would expect Microsoft software to fold spindle and mutilate, how could you possibly sue them when it happens?
Hey, maybe that is their anti-liability strategy right there. And a darn effective one too...
Well, the majority shareholder can't order them to cease and desist. That's not how it works. The directors have a duty to look our for the interests of all the shareholders, not just the majority. In fact, the minority shareholders could sue the company if the directors knowingly did something that was not in the best interests of the company.
What IBM would do is start a proxy fight (you don't even need 50% ownership for this) and vote their own directors onto the board. These directors would still do what is best for all the stockholders, they might just have a different idea of what is best.
They would still get sued, though. SCO's market cap is up almost 10x in the past three months, and this must be a big reason. So, if the board scotched the suit and the share price fell back below $1, the board would be sued within hours.
Why they can't just ditch all the revenue recognition rules and use the catch-all "it ain't revenue until you earn it" (with earn being construed as cynically as possibel by the auditors) I don't know. Personally, I can't keep up with all the pronouncements... I am pretty sure this practice has been ruled away in the computer industry as well, though.
Both the IT departments' preponderance to order late in the year and the manufacturers temptation to compress the order-build-ship cycle late in the year create an accentuation of good years and bad years in regards to revenue. I suppose this should be expected by investors, but it always seems to take us by surprise (in both directions, I might add.)
IBM's rule here has to be the GAAP rule, which I believe they followed (at least as GAAP was interpreted at the time.) I do not believe that what they were doing was (a) illegal or (b) a violation of GAAP (and I would like to note for all you class action litigators out there that I do not remember the tech's name--so my testimony would be hearsay--and that my memory is spotty from too many years of sex drugs and rock and roll, so I would not be credible in any case.)
The story was simply an instance of them aggressively managing earnings, not creating them.
My favorite way to illustrate how earnings are managed is to bring up a story from when I worked at big blue, 1990-ish.
I asked a work friend, a tech, to a new year's eve party I was having. He told me he couldn't come because he had to spend the night getting mainframes on trucks. Seems everyone in the facility (except us engineers--too soft, I guess--and management I assume) got drafted into getting more big iron shipped. You see, if it's on the truck prior to midnight, it's revenue in that year.
Of course, if it's revenue in that year then it's not revenue in the next year, so one year later they have to work twice as hard loading trucks. Then one year you run out of either trucks or iron and you miss your numbers. That's called paying the piper.
True, but that doesn't prevent them from doing it in the future, so the threat to Linux users remains. Interesting that Novell would want to throw their hat into the middle ring of this litigation circus.
On a different note, the Wall Street Journal says that SCO claims that their contract with Novell gives them the right to enforce Novell's IP claims. Not that I really believe what SCO says at this point. It just gets more and more interesting, though.
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No, the GOP is a division of big business, not the other way around.
Of course, the democratic party is a division of the American Trial Lawyers Association, so choose your poison.
But funders that are actively involved in the management of the company do not necessarily have limited liability. The function of investor and manager are legally segregated. This is, in fact, a common problem for investors (like VCs) that are guaranteed a seat on the board of directors: who do they represent? Themselves or all shareholders? To avoid liability for their decisions as directors, they have to disregard their individual interest as a shareholder in favor of the interests of all shareholders. The same goes for management.
So, the assumption of the theory of the corporation is that investors and managers are separate entities and, although in practice these rules are not always strictly followed, they are separate decision-making entities.
I think you're being a little over-picky here. The legal purpose of a corporation is to limit liability to its owners. This then assumes that its owners are non-management funders. The point of investing is to gain a return. Therefore the lowest common denominator of incorporation is that they exist to make money. The default rules governing directors of corporations make it clear that it is unethical for the directors to cause the company to do anything not in the best interests of the shareholders. The only common interest the diverse shareholders in any sizable company have is in maximizing the return on their shares.
Of course, in practice, these rules are bent, non-profit corporations exist, ethical considerations are considered essential to maximizing return, etc. But, I believe the poster is correct in stating that the LCD of corporations is making money. No other ethic can be universally applied.
On sort of a non-outraged point, how do you backtest data when there are no positives? Were there serious security incidents on JetBlue that I didn't hear about? If there weren't, wouldn't you then just have to classify all people with the characteristics of those 5 million flyers as 'safe'?
But, then again, stats was never my strong point.
Unless you're seriously of the "any publicity is good publicity" school, I have to disagree. In New York City, the major tabloids (Post, Newsday) ridiculed the RIAA. One headline called the girl a " 'Thief' " (in quotes, that is)--implying that the RIAA has misrepresented the ethics of what she has done. This is the kind of publicity that even congresspeople take notice of. If there is enough of a public backlash, even our 'representatives' will have to come out on the side of the people.
Complete fiasco, from the RIAA's point of view.
The New York Times seems to be on the side of the RIAA, WSJ seems to be neutral. Interesting that the conservative papers (ie the Post) are anti-record industry while the liberal NYT is pro-industry. Is there a political sea-change occuring that nobody told me about?
Oh, I'm not against class actions: I agree they fill a need, protecting large classes who were each damaged a small amount. There is no other way I can think of to efficiently litigate these suits.
But saying that lawyers need to take all the money on the few they win because they lose so many suits is a bit specious. (It sounds like the RIAA argument for charging $20 for a CD.) Even early-stage venture capitalists supposedly on the cutting edge of investment risk shoot for 1 win out of 10 investments. If the litigators have odds even close to that bad, perhaps they should more thoroughly assess the suits they are bringing. The tort legal system in this country is tilted towards the litigant, not the defendant, so odds like those mean that a huge number of bad cases are being filed.
My solution? Damages go to the damaged, and their lawyers; penalties (ie. any amount in excess of actual damages) go to the government. This would rein in ridiculous rewards and force litigators to only bring suits that are meritorious. It might even help reduce the average citizens' tax burden. All the while keeping the pressure on wrong-doers.
Well, they don't only make good money when they win. They generally make good money when they settle, which they seem to do at least 99% of the time. Much of the time they settle for less than what it would cost the sued company to adequately defend the lawsuit. That seems like a shakedown. You don't read about it in the paper, but this happens all the time.
The other problem with class action litigators is that they keep a huge chunk of whatever damages are collected, rather than giving it to the people damaged. This makes their winnings a de facto penalty, rather than a repayment of damages. Penalties should be imposed by and paid to the government, in my opinion, not by and to individuals. If the class action attorneys can make so much money (and some of them have made a *lot* of money) from penalties, why shouldn't the SEC be allowed to enforce laws and extract penalties? In effect you've outsourced justice to a bunch of unprincipled vigilantes. Not good.
Okay, this shows a total of $212 (yes, two hundred and twelve dollars) being contributed by three individuals split between two congressional campaigns.
Now, I believe as much as anyone here that the military-industrial complex is driving our democracy into the ground, but even I do not think a congressperson can be purchased for anything less than $500 or so.
Send a certified mail letter to your ISP detailing the attack. If your info is compromised and you lose money, you can sue the ISP.
You do not have standing to fix the ISP's problem, but you do have standing to expect the ISP to fix its own problems once they start to impact you.
Please, don't give them any ideas.
We'll have to use your country as a staging point, of course. But don't worry, we pay well for that.
Yes, but, business 101:
a) get pissed off, sue for justice
b) performance review notes backbone, competitiveness
c) get promoted because the boss 'likes the cut of your jib' and how 'you take it to the basket' and how 'the best defense is a good offense'
d) new manager in charge of lawsuit sees he can save company $5 by settling, does so
e) his performance review notes efficiency, talent at reengineering business processes
f) he gets promoted because the boss 'needs more men like him around' and 'you got to know when to hold 'em and when to fold 'em' and he 'keeps his powder dry'
g) company gets sued by copycats after seeing huge amount of settlement
h) go to a
And Finland is right near Norway, a petroleum producing country. Must be al-Qaeda.
How can they file a cease and desist? How can they know that some developer didn't use a snippet of code that they aren't even allowed to see? It's hard to prove a negative.
The only thing they can do is ask the judge to tell SCO to stop screwing around and show them the allegedly infringed code already so they can fix the problem. Any reasonable judge is going to think the most just outcome is for IBM to stop the infringement (if they did and if they can), not to cause IBM to pay SCO a windfall. This is, of course, the last thing SCO wants. They don't want the infringement to stop, they want it to continue and for all infringers to pay them.
One of the many problems with the US legal system is that the resolution of a case can take years. Longer if one of the parties wants it to. This potential delay is one of the main reasons (after the sheer randomness of verdicts, that is) that companies and people settle. It's just cheaper.
Frankly, it might be cheaper for IBM to buy SCO outright than to defend this lawsuit.
It's only news because it sounds so bad. Jury trials are a lot like public relations contests. You think the jury is going to know anything about patents and related damages?
Boies: "This man willfuly ignored the provisions put in place in the United States Constitution! He said so himself! He practically called Thomas Jefferson an idiot!"
This would be akin to allowing Best Buy or Sears to imprison suspected shoplifters without trial or recourse.
In an odd example of synchronicity, the NYTimes yesterday had an article about Macy's detaining, handcuffing and questioning suspected shoplifters in their stores with private security guards. They also forced these people to sign confessions and, in many cases, pay fines to them right then and there.
The right to bear arms seems more and more prescient every day.
As a business strategy, swinging for the fences when your team is about to lose makes sense. SCO was down for the count before this lawsuit. After it, well check for yourself.
Doesn't make it ethical, though.
Welcome to the lottery we like to call Trial by Jury.
I was definitely more nimble-minded when I was 21, but did I ever tell you about that stunt when I pissed off an entire management hierarchy?
Seriously, maturity is definitely an asset in a corporate environment. The problem is if your manager is too immature to realize that.
in the tech industry we're establishing the tradition that software is always going to be buggy...Microsoft seems to rely on all of the "you promise not to sue us..." clauses in their EULA
You know, I always wondered about this. I thought you could really only sue for negligence etc. if something happened that a reasonable person wouldn't expect. Since a reasonable person would expect Microsoft software to fold spindle and mutilate, how could you possibly sue them when it happens?
Hey, maybe that is their anti-liability strategy right there. And a darn effective one too...
Well, the majority shareholder can't order them to cease and desist. That's not how it works. The directors have a duty to look our for the interests of all the shareholders, not just the majority. In fact, the minority shareholders could sue the company if the directors knowingly did something that was not in the best interests of the company.
What IBM would do is start a proxy fight (you don't even need 50% ownership for this) and vote their own directors onto the board. These directors would still do what is best for all the stockholders, they might just have a different idea of what is best.
They would still get sued, though. SCO's market cap is up almost 10x in the past three months, and this must be a big reason. So, if the board scotched the suit and the share price fell back below $1, the board would be sued within hours.
Why they can't just ditch all the revenue recognition rules and use the catch-all "it ain't revenue until you earn it" (with earn being construed as cynically as possibel by the auditors) I don't know. Personally, I can't keep up with all the pronouncements... I am pretty sure this practice has been ruled away in the computer industry as well, though.
Both the IT departments' preponderance to order late in the year and the manufacturers temptation to compress the order-build-ship cycle late in the year create an accentuation of good years and bad years in regards to revenue. I suppose this should be expected by investors, but it always seems to take us by surprise (in both directions, I might add.)
IBM's rule here has to be the GAAP rule, which I believe they followed (at least as GAAP was interpreted at the time.) I do not believe that what they were doing was (a) illegal or (b) a violation of GAAP (and I would like to note for all you class action litigators out there that I do not remember the tech's name--so my testimony would be hearsay--and that my memory is spotty from too many years of sex drugs and rock and roll, so I would not be credible in any case.)
The story was simply an instance of them aggressively managing earnings, not creating them.
My favorite way to illustrate how earnings are managed is to bring up a story from when I worked at big blue, 1990-ish.
I asked a work friend, a tech, to a new year's eve party I was having. He told me he couldn't come because he had to spend the night getting mainframes on trucks. Seems everyone in the facility (except us engineers--too soft, I guess--and management I assume) got drafted into getting more big iron shipped. You see, if it's on the truck prior to midnight, it's revenue in that year.
Of course, if it's revenue in that year then it's not revenue in the next year, so one year later they have to work twice as hard loading trucks. Then one year you run out of either trucks or iron and you miss your numbers. That's called paying the piper.
True, but that doesn't prevent them from doing it in the future, so the threat to Linux users remains. Interesting that Novell would want to throw their hat into the middle ring of this litigation circus.
On a different note, the Wall Street Journal says that SCO claims that their contract with Novell gives them the right to enforce Novell's IP claims. Not that I really believe what SCO says at this point. It just gets more and more interesting, though.