There are folks who define fining a company for violating the law as making the shareholders pay. Finance professional Barry Ritholtz calls Bravo Sierra on this line of thinking. A couple of good excerpts: The disingenuous silliness of “I don’t know what all these banks did to deserve all this” is beyond absurd. As a brief reminder, the banks have admitted to laundering money for terrorists and drug lords; engaging in bid-rigging fraud against local governments; manipulating the electricity market; manipulating the $300 trillion Libor rate, fixing Treasury auctions, and manipulating price of gold, as well as aluminum and copper. . . But lets move on to the dishonest thesis of “punishing the shareholders” for the acts of management. Who else are you going to fine? These are not innocent bystanders, caught in the crossfire between two rival gangs. They are the people who actually elected this management team in the first place. They are also the only ones with the power to fire these people as well. To suggest that they are merely bystanders of a drive-by shooting is absurd. Unless we want corporate shareholders to elect more dangerous executives. If that is your position, than by all means, never fine or punish them.
Posted on: Sun, 01 Jun 2014 18:50:11 +0000
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