How Fines Became "The Cost of Doing Business"
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- Опубликовано: 24 июн 2024
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In 2012 the Hong Kong, Shanghai Banking Corporation best known simply as HSBC was charged by authorities for aiding and abetting the operations of some of criminal cartels between the US and Mexico.
Corporate personhood is the legal notion that corporations have many of the same legal rights and responsibilities enjoyed by natural flesh and blood people. They can own property, sue and be sued, donate to political campaigns, and even have defended religious beliefs…
… but if a normal person was found laundering money for cartels and the North Korean Nuclear Program, they would be living it up, here in ADX Florence IF THEY WERE LUCKY.
HSBC on the other hand still operates across the world, and their punishment for these crimes would be like a normal person getting a fine for roughly 2 months of their wages…
So if corporations are legally people… why can’t they be arrested?
If companies see fines as “just the cost of doing business” what reasonable punishments are there for organizations that break the law which DOESN’T just end up punishing innocent employees and the wider economy more than it does the people with actual discretion over how these companies act?
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Commentaries on the Laws of England: Book I: Of the Rights of Persons
By Sir William Blackstone:
IV. We come now, in the last place, to consider how corporations may be dissolved. Any particular member of a corporation may be disfranchised or lose his place therein, by acting contrary to the laws of the society or the laws of the land; or he may resign it by his own voluntary act (f). But the body politic may also itself be dissolved in several ways-which dissolution is the civil death of the corporation: and in this case their lands and tenements shall revert to the person, or his heirs, who granted them to the corporation; for the law doth annex a condition to every such grant, that, if the corporation be dissolved, the grantor shall have again the lands, because the cause of the grant faileth (g). The grant is indeed only during the life of the corporation, which may endure for ever-but when that life is determined by the dissolution of the body politic, the grantor takes it back by reversion, as in the case of every other grant for life.] The debts of a corporation aggregate, either to or from it, are totally extinguished by its dissolution (h); for it has no longer a corporate character in which to sue or be sued, and as during its existence the members of it could not recover or be charged with the corporate debts in their natural capacities, so neither can they when it has ceased to exist.
A corporation may be dissolved-1. By the loss of such an integral part of its members as is necessary, according to its charter, to the validity of the corporate elections; for in such cases the corporation has lost the power of continuing its own succession, and will accordingly be dissolved by the natural death of all its members (k). 2. [By surrender of its franchises into the hands of the sovereign, which is a kind of suicide. 3. By forfeiture of its charter, through negligence or abuse of its franchises; in which case the law judges that the body politic has broken the condition upon which it was incorporated, and thereupon the incorporation is void (1). And the regular course, in such case, is to bring an information in the nature of a writ of quo warranto; to inquire by what warrant the members now exercise their corporate power, having forfeited it by such and such proceedings. The exertion of this act of law for the purposes of the state, in the reigns of King Charles and King James the second,-particularly by revoking the charter of the city of London,-gave great and just offence; though perhaps, in strictness of law, the proceedings in most of the cases that occurred were sufficiently regular. But the judgment against the charter of London was reversed by act of parliament after the Revolution; and by the same statute it is enacted, that the franchises of the city of London shall never more be forfeited for any cause whatever.
Commentaries on the Laws of England: Book I: Of the Rights of Persons
By Sir William Blackstone:
IV. We come now, in the last place, to consider how corporations may be dissolved. Any particular member of a corporation may be disfranchised or lose his place therein, by acting contrary to the laws of the society or the laws of the land; or he may resign it by his own voluntary act (f). But the body politic may also itself be dissolved in several ways-which dissolution is the civil death of the corporation: and in this case their lands and tenements shall revert to the person, or his heirs, who granted them to the corporation; for the law doth annex a condition to every such grant, that, if the corporation be dissolved, the grantor shall have again the lands, because the cause of the grant faileth (g). The grant is indeed only during the life of the corporation, which may endure for ever-but when that life is determined by the dissolution of the body politic, the grantor takes it back by reversion, as in the case of every other grant for life.] The debts of a corporation aggregate, either to or from it, are totally extinguished by its dissolution (h); for it has no longer a corporate character in which to sue or be sued, and as during its existence the members of it could not recover or be charged with the corporate debts in their natural capacities, so neither can they when it has ceased to exist.
A corporation may be dissolved-1. By the loss of such an integral part of its members as is necessary, according to its charter, to the validity of the corporate elections; for in such cases the corporation has lost the power of continuing its own succession, and will accordingly be dissolved by the natural death of all its members (k). 2. [By surrender of its franchises into the hands of the sovereign, which is a kind of suicide. 3. By forfeiture of its charter, through negligence or abuse of its franchises; in which case the law judges that the body politic has broken the condition upon which it was incorporated, and thereupon the incorporation is void (1). And the regular course, in such case, is to bring an information in the nature of a writ of quo warranto; to inquire by what warrant the members now exercise their corporate power, having forfeited it by such and such proceedings. The exertion of this act of law for the purposes of the state, in the reigns of King Charles and King James the second,-particularly by revoking the charter of the city of London,-gave great and just offence; though perhaps, in strictness of law, the proceedings in most of the cases that occurred were sufficiently regular. But the judgment against the charter of London was reversed by act of parliament after the Revolution; and by the same statute it is enacted, that the franchises of the city of London shall never more be forfeited for any cause whatever.
Fun fact: in America corporations have even more rights than citizens, like being able to buy machine guns manufactured after 1986.
Please don't replace a sustainable natural loofah with one of these plastic things.
Any rule where punishment is monetary is just poor tax.
if you must do a fine, it should be a percentage of your yearly income / gross profits
Legal for a price
A "cost of doing business" is the phrase often used.
@@ohiasdxfcghbljokasdjhnfvaw4ehr
That still won’t work as flat taxes are still regressive and favor the rich. 10% of $200 can be way more impactful than 10% of 2,000,000 despite the latter being 10,000 times higher.
"If the penalty for a thing is a fine, that thing is only a crime for the poor"
Yes. If corporations are going to insist they’re people, they should “enjoy” the consequences of their actions.
I would start supporting capital punishment 😅😅😅
_No pun intended_ 😅
I've said it before, we need to pierce the corporate veil when fraud is involved.
@@WanderingExistence Came here to say this. If a company’s actions result in death of humans, and this is found to be willful, then they should be eligible for capital punishment.
Wouldn't executives be accessories to the crime?
this!!!
I love how corporations can just argue "but that could cost me money" in a courtroom and that apparently trumps everything
As HMW said in the video, too much, and it could cause them to go under.
If you wrongly execute an individual, only a (relatively) small number of people (the individual executed plus their close friends and family) are impacted. But if you wrongly shut down a corporation, you harm hundreds-if not thousands or millions-more, from shareholders (who also might have actually been trying to stop them from doing said illegal actions) who lose their investment to employees who lose their job (and possibly livelihood) to customers (who lose whatever the business was providing).
@@jwil4286 if they're killing people by doing what they're doing and that's the only way they survive then they have no more right to be an acting company than a mob and I don't think anyone would oppose shutting down the mob despite the loss of jobs for all the mobsters and the people who work for them or get great tips from them would they?
@@pedromoura1446 how many innocent victims of a wrongful prosecution would be too many to you then? Or are you saying that it doesn’t matter how many innocents and bystanders are adversely impacted by a wrongful conviction just so we can take down the bad actors?
@@jwil4286 how many innocent victims of a malicious corporation would be too many for you then? Or are you saying that it doesn't matter how many innocents and bystanders are adversely impacted by a malicious corporation just so some jobs stay open?
@@jwil4286 of course not. i'm not advocating for a "kill 1 person to save millions" situation but we dont even need to go there.
we ALREADY dont allow the mob to run unimpeded because imprisioning them would put jobs at risk do we?
And dont we fine people for speeding despite people's lives being sometimes at risk if they dont reach a place quick enough (like a hospital)?
we also jail people for stealing despite the majority of theft being done by people who were pushed to doing so because they NEED that money to survive dont we?
Should we allow premeditated murder if the murderer has a family to sustain?
without effective court rulling those very "innocent" people would also be forced into doing illegal things all day every day, and even causing death of others for the company's benefit having no choice in the matter other than starve or screw others which, in the case of the health and insurance companies, already reaches several thousand deaths each year in the US.
Are those not "innocent victims"?!
EVEN IN WAR there's crimes we CANNOT condone wateaver the cost, so why should companies get away with that logic as defence?!
rants aside..all of these have systems in place to protect the people that might suffer inadequately from systemic problems caused by the process of punishing someone who caused harm to others.
in first place a social security system which offers free professional oriented training should be a must even outside of this conversation.
secondly we're talking about a company. no matter how massive (ESPECIALLY IF it's massive) it's assets WILL be bought, even if only the physical assets, and some, if not most, of their employees maintained.
I can even give you a real example of a, somewhat, successful way to deal with these situations.
We had a massive bank go bankrupt due to negligence here in my country and what we did was separate the toxic assets from the non toxic assets by their market valuation, we left the bad assets with their old stakeholders and CEO's and nationalized the viable part of the bank which was then reestructured and those assets sold to the highest bidder.
Almost none of their employees lost their jobs as their local branch buildings were bought by other banks and the branch employees maintained by contract with the state, not that it was absolutely needed as the buildings still required to be crewed and maintaining and older and already trained staff was cheaper than training a new one.
The CEO's were then prossecuted by the shareholders for their mismanagement.
i say SOMEWHAT successful because the process was both rushed and some power moves were done in the middle which reduced the success.
outside pressure from the richer shareholders (which ended up with them still receiving some baillout money for a bankrupt company ) and a lot of retirees lost a lot of money after being scammed by that bank into investing their life savings in it (which was now mainly composed of toxic assets) and went knocking on the state's doors trying to recover their money instead of prossecuting the old bank's CEO's (banks have both a refund insurance of at least 50.000€ per person and CEO's have a mandatory insurance for mismanagement, which the bank pays by taking it from you in their account management rates so it was not the state's problem by this point. though their actions were at least partially justified as we had an ex-prime minister tell the country on the news that the bank was fine and people believed that lying prick).
BUT in the end the CEO's were still prossecuted, the richest shareholders responsible for mismanagement still lost money and people still kept their jobs so yeah...i'd say it's more than possible.
And of course this is not the end all of legislation for these things.
Companies (and ESPECIALLY banks) simply shouldnt be allowed to reach such massive sizes, and antitrust laws were already put in place before (by laissez faire economic liberals, like Bush Sr. of all people!) to guarantee economic stability and worked very well to guarantee economic stability, before being taken down by more neo-liberal thinking people (definition: people who think the state should not interfere in the economy but then need to have the state interfere in the economy constantly to save major companies because otherwise we get mass unemployement)
Companies getting too big are a risk for the economy, reduce competitivity, (thus increasing prices) and are harder to audit due to their enormous complexity thus their size should be capped. If they dont like it too bad...better THAT be the cost of doing business than constant unchecked illegal behaviour and whole societies going bankrupt trying to save something that built itself too large and now wants everyone to pitch in.
If a private company cannot be allowed to go bankrupt it shouldnt exist in the first place, that's the nature of a free market.
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How about nationalising the offending business? That is like death penalty for investors, so they will do all they can to avoid it. In the end if company still does that, gets nationalised and then state can sell it, recovering some of the damages back. A lesser punishment could be partial nationalisation, or fine equivalent to some amount of company value (say 30%) and jailing executives who have both failed to prevent it from happening and mislead investors about real business practices. In such case both investors would be incentivised to looks at what executives are doing more carefully and executives would be incentivised to be as transparent as possible.
it's a radical idea but it would get businesses to behave themselves and would heavily incentivise directors to keep a close eye on company management.
Depends on how you do the nationalisation. If you do a buyout it might actually be targeted.
That's only if you think governments are any better than corporations.
100% this, but also, the feds should stop doing free bailouts and instead only give money in exchange for controlling shares. If a business is "to big to fail", or "too important to the economy", then its too big and important to be privately owned.
@@agodelianshock9422 You are right IF the government is aiding and abbetting the corporations in violating the law by turning a blind eye (thanks to large campaign finance donations from them). IF not, then the corporations CEO and senior executives, would fear breaking the law.
If companies are people then the people in charge should be denied the protections of incorporating.
The 'people in charge' must make decisions to benefit the shareholder; it is their very job and purpose. It is the shareholder that constantly demands a profit on their investment that is ultimately responsible. This is why I believe the very concept of 'investing' will soon be challenged.
Fair, but the whole concept of "corporate personhood" exists under the premise that it's impossible to prosecute every single shareholder for every crime the whole company may have committed. That said, there are instances where courts can "peirce the corporate veil" and prosecute individual executives directly and put them in jail. Regrettably, I don't know much about how this process works as of yet.
@DistrustHumanz Constantly getting the company sued or fined is not in the interest of the shareholders. Corporations are legally obligated to act in their interests of their shareholders, but they are also legally obligated to follow the law. If the two are in conflict, then "bringing value to shareholders" is not an excuse - that one must be suspended in the case of illegal or irresponsible activities.
@@jeffbenton6183 Corporations are not legally obligated to act in the interest of their shareholders, although it is usually a pretty good idea if you don't want to lose your job. The "interest of their shareholders" is a very nebulous term that can mean almost anything so legislating around that is impossible.
Criminal liability should be unlimited in "limited liability" corporations. It isn't currently.
I love how the excuse of "not wanting to destroy jobs," is used by an industry that does just that. Why are they immune from the same treatment?
It's because private companies are much better at PR than the government. In Australia the government wanted to introduce a mining supertax, which only affected companies earning ludicrous profits to a quantity of about 20c on the dollar.
Well the mining lobby ganged up in a PR campaign lying that this would hurt the average Australian & those poor miners (whose jobs were never at risk because again, super profits tax). Because the average voter is an idiot, the government was kicked out and the new government immediately scrapped the tax.
Basically this was a long way to say: don't underestimate the power money has in being able to brainwash the average voter.
@@m136dalie Nothing new about people voting against their own best interests. Over here in the states people voted to cap the pay out of tort suits so now you can get permanately disabled at work and the max payout you can receive after suing is 250k which is not enough money to support you for the rest of your life so its putting a huge burden on the rest of society while also protecting the interest of private corporations.
You can't jail the corporation, but you should be able to jail the executives who made the illegal decisions. Also, what is and isn't illegal needs clear definition. Did a bank knowingly launder money for a cartel, or did the cartel set up accounts and the bank didn't have the security apparatus to sort out which of their clients were law abiding and which were cartels.
Private equity firms who destroy healthcare for profit.. are not breaking any laws. If America clearly writes out in law what is and isn't allowed by a private equity firm, that would be a useful first step.
Also, corporations are chartered by the state, so the state can also dissolve the corporation
Can't jail the corporation? Why not? Are you telling me a corporation is a fiction of law, an artificial being, intangible, invisible, incorporeal, existing only in consideration and contemplation of law?
Can't jail the corporation? Why not? Are you telling me a corporation is a fiction of law, an artificial being, intangible, invisible, incorporeal, existing only in consideration and contemplation of law?
It's the latter, the bank lacked controls, but banks are required to have those controls and negligence can also be prosecuted. Someone working at the bank was responsible for ensuring the bank had adequate controls, and auditors signed off reports saying they had adequate controls to prevent fraud.
@@matt69nice I think you are taking his example too literally. Of course if there are specific laws requiring specific action by the bank to prevent certain actions then the bank will be liable. Often that is not the case. I would not hold a bank liable for money laundering if they were not legally required to have protections against such actions.
Funny inside story about HSBC…
I was working with an employment agency who employed one of its formers directors as a coach - and that person was involved in my search for AML roles.
They explained that when the US Treasury fined HSBC it actually (excuse me if I translated wrong here) indebted HSBC that amount and “structured” that debt for the Bank. What this ended up meaning was that HSBC could only use the money it would have paid its director’s bonuses. Directors started dropping one after one, and this apparently made the burden on the remaining of them larger until they were paying the bank to work there. Only once they all got out that the Treasury only graciously let them pay with other means…
Don’t f!%$ with the US Treasury is the ‘long story short’ version of it!
That's actually quite interesting, so the people at the top were getting some sort of penalty even if it wasn't a on a level that could be seen as justice for the actual crimes.
So how I interpret this… HSBC was only fined the amount they paid in Directors bonuses. So to get around this, the Directors took early retirement (and they get a good redundancy payout!) So that HSBC had less and less of a fine to pay. I bet the Directors retired on a Friday and became a “freelance advisor” or “ambassador” that’s “sub contracted” by HSBC on the Monday.
Companies, like governments, don't exist as a single entity. Only our minds make them so. They are organisations of individuals. If a company does evil, it did so because individuals in the company did evil, and must be punished.
Lol this just in, "your" gubment is a corporation (see: Chisholm v. Georgia, 1793 and Charles Boone's "Manual of Corporations").
Why can't it be both? It is what it does
So jail time for executives? Sounds good.
If the US govt committed war crimes, should all the US citizens be punished for that?
It’s not that simple. The ppl in the companies will be tied to contracts with legal repercussions if they don’t comply.
If fines are the only punishment, then the fines need to be meaningful. Like, if the fine for a person would be a years income to the average person, it should be a years income for the company. If they can't pay it in cash, let the government take it in stock, if it takes a lot of stock, then the company is nationalised.
I think this last part is a good idea conceptually. There is a risk though that the circumstances of the company's conviction makes it a real dead weight as government asset. Which probably wouldn't be too popular with taxpayers (but still better than a bailout). I would say that for any such company that the government didn't want on as a going concern a second stage of 'managed decline ' should be legislated for where employees receive enhanced social security and re-skilling support.
I support nationalisation and socialisation
This video reminds me of a documentary movie from 2003 called "The Corporation" that studies the criminal behavior of corporations. In this documentary it is also mentioned how corporations, if they were actual people, would check every personality trait associated with psychopathy.
I would love to see this channels take on what that documentary says.
To be fair, that's any large group of people that feel somewhat immune from the consequences of their actions. Be it the government, an angry mob, etc. It takes 1 large group to keep another large group in check.
They don't want to risk wrongfully shutting down a company, but they are more than happy to wrongfully imprison someone for years, ruining their entire life going forward. Again, corporations are given special treatment.
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Yeah, I've always wondered, why not jail the decision makers of the company? Like CEO's CFO's Majority stake holders, etc.
Mostly because those individuals have apparatuses behind them which prevent such actions. Sort of like how the head of America’s first central bank (decades prior to the Federal Reserve) refused a direct order from President Andrew Jackson. Andrew Jackson thought that his position as President, where surely he could just order the military to arrest the head of the central bank, but he couldn’t, for complicated power politics reasons related to Congress writing that bank into law and having a lot of allies in Congress.
@@evannibbe9375Andrew Jackson Btfo. Central Bank +1
Can i register myself as a "moral person" and act as if i were a faceless company with 1 employee? Then if i mess up i can say it wasnt me, it was the company 👀
I believe that's why people incorporate: So they can take legal action like declaring bankruptcy without it affecting them personally
Yes but with your company only having one employee it would be easier for the justice system to pierce the corporate veil (i.e. ignore the incorporation and pursue you personally).
@@matt69nice sadge :(
Parole officers for corporations is such a good idea. One such entity is already dropped on Infowars. Which means we not only have the will, we also have the precedent for the means.
No.
@@MatterMadeMootYes corpo shill
How about a floating fine, "all net profits for X years." All money earned above operating costs must be turned over to the US government and any change in operating costs must be audited by a financial team to ensure they're not just trying to shift money. A company will find their stock crashing if investors know that not only will there be no dividends but the company is not legally allowed to turn a profit as part of their punishment. Also have the punishment roll upwards, if a company commits a crime not only should it be held liable but any parent companies can as well. Should the company fail during the punishment then the profits they've turned over are used to create projections for what they would have paid and is levied as a fine on the liquidated assets of the company.
Money raised in this way could be used to settle any injured parties first, then perhaps focused on encouraging creating new businesses and growing small ones through different programs.
And the US government will funnel most, if not all, that money to different gigacorps in the M.I.D.
I had worked as a contractor for a company for two years.
Ended up going back to school. Summer rolls around and they need assistance, so I start contracting again for the summer.
An overtime situation comes up that I have been paid overtime before to work the shift required.
Work the shift, supervisor won't approve overtime "that's not overtime eligible because xyz reason"
Me - Ok, but it was before, nothing has changed, and I sure as shit wouldn't have worked it if it wasn't OT eligible
Them - Oh well
Me - Lol kbye, have fun paying overtime the next 6 months while doing the mandatory training for the new hire
The right thing to do when a company breaks laws, is to do an _actual investigation_ and hold the individual people responsible.
Fine the company as an entity, only to pay back damages caused.
Imprison the employees and executives who were knowingly breaking the law.
This isn't complicated.
The problem is that rich people can pay off lawyers or threaten other members of the judicial system. There's also the black market: rich people can pay some criminals who don't fear dying or going to prison to do things to lawyers, judges, police officers, or just people they don't like.
If a company repeatedly and consistently breaks the law, the government should step in and claim the business. Keep it's doors open, but remove the needed personnel. Make the changes to get the company to comply, and then hire a new set of executive/management who won't make the same mistakes.
How would you sell that to the public though?
Yeah, the Feds firing people and cutting bloat. They're so good at that.
@@bojackhorseman4176 the public will get residual checks.
That's basically how they deal with banks that go under. This just broadens the horizons on our social insurance
Lol, heck, fing NO. Government, anything is worse and more corrupt.
Giving corporations the rights of individuals was the single dumbest decision this country ever made. This happened in the 70’s and you notice that is when all the wage issues and political divergences from what the people want began.
Just seize company assets when they step outta line. Like the other guy said nationalizing them would make sense.
e.g. we all pretty much have the same idea what happened to certain whistle blowers of a certain company that buildw aeroplanes.
If they're guilty, the investors should be told to f off and the government just takes over. Board can go to jail too.
Intellectual property should be absolutely seized, it's why these companies are so big to begin with. Seized IP should be public domain.
That's (about) the dumbest thing. Company assets are the assets of shareholders, and shareholders are the public. Grammas with retirement funds.
Nationalization is the dumbest thing period. Govts are inefficient at handling everything. Only critical infrastructure like a bank, or railways should be nationalized.
You can go to jail too by this logic.
And what's wrong with that? We need to stop acting like corporations and rich people don't need a heavy hand to stop them from abusing their authority and influence.
I have an idea. Put the c suite in jail since they did the crimes. Strip the shareholders of everything since they're the owners and the buck stops with them, and then run the company at cost, providing better prices for consumers and better wages for workers. We're just not generating surplus here. Operate this way for however long they were sentenced, and afterward, there can be a new public offering where shares can be sold, and the workers get even more!
so if your 401k includes shares in said company your shares just evaporate out of your retirement fund? that will go over really well.
@@ronblack7870 You shouldn't put more money in one business than you can afford to lose.
@ronblack7870 It'd be an incentive for shareholders to ensure those running their business are following the law. But perhaps there is a carveout for employees. At the same time those still working there are getting a substantial raise since the c suite and the shareholders won't be sucking most of the value out of their work.
I've said it before and I'll say it again: Private equity ruins everything. First step is heavy regulation of that industry.
2008 was caused by publicly traded companies
Come to think of it, private equity is kind of like war in that regard.
It's great for the economy... until it spills out onto your own territory and starts ravaging your vital infrastructure.
It doesn't ruin _everything,_ but it ruins enough stuff to be a noticeable problem.
Most businesses aren't robust enough to constantly maximize shareholder value, so they don't go through the IPO process.
Circumventing that and bringing the company into the public sphere through an intermediary might look like free money with no obvious drawbacks, but in the long term it just exposes you to the same risks as a publicly traded company.
@@tomlxyz He didn't say that private equity is the reason behind everything bad. He said that private equity ruins everything it touches.
Here is an idea:
Bring back "Taxable Offence."
Not only does it cost your company a % of your profits, but it is applied for *Decades* to come.
Another is to exploit the loophole in the 13th:
Imagine if these big companies where forced to carry out government contracts... for free!
Ooh! I like that last one. Make the minimum period of providing free products and services 100 years, AND make it a poison pill, so that if the offender gets bought, the new parent company takes on the burden for the remainder of its period as well. If they're bought out after 20 years, the new owner owes 80 years of free products and services.
For context, when were taxable offenses stopped in the US? What were famous examples of them being used?
Until CEOs, Board of Directors & other executives are held specifically accountable with long jail terms and a forfeit of all stock holdings where the government takes ownership of their equity.
If a human would go to jail for an equivalent time, split the jail time among all shareholders. This could mean a mandatory ethics course for small investors. After a few sessions, people would seek out ethical investments.
Dude arresting some semi senile 80 yo who barely watches a mutual fund is moronic. The whole point of corporations is limited liability. If you remove that then they are quite literally pointless and you may as well not have them
@@badart3204 You could have ethical mutual funds where the fund manager is liable.
@@badart3204 wow kinda like detaching consequences from actions is a net drain on society. Who woulda guessed.
Having a "parole officer" on the board? Don't we kind of have that already in the banking industry? There are regulators assigned to the banks that approve or deny certain operations. It has done nothing to prevent systemic issues in banking.
How about giving them more authority and making it more punishable to hide things from them?
This is just like when people bring up Veterans' Affairs in the discussion about socialized healthcare. Yes, attempts at similar policies may have failed in the US, but is giving up really the best solution? Would it not make more sense to investigate why the previous solutions don't work as intended, and enacting newer, more informed solutions?
I would love to go free-market, capitalist economics in the US, but all I have seen in my lifetime is corporations appealing to free-market economics when it benefits them, and encouraging regulation to stamp out smaller competitors. I'm tired of the BS regulations are going to be added anyways; why not make them work for the general public rather than exclusively for members of said corporations?
@@onpoint2292 - That was my point. The regulators at the banks had the authority and it did jack shit.
If we're going to insist on fining these offending companies, then we cannot allow them to account for them as "business expenses." The solution? Make the fines astronomical AND have the payments come from the top officers and investors first! Those golden parachutes won't look so tempting if they're used to pay off fines caused by bad practices, and investors will demand better behavior from their investments
Fines aren’t deductible
@@badart3204 I know that, but most big companies have profit set aside to handle any legal matters that crop up. It's factored into their budgeting
Fine the company in terms of market cap and make the shareholders pay based on the value of the shares they hold. If you had 50 shares worth $100 each, and the company got fined 10% of market cap, then you owe the government $500 to cover the company's fine.
They have the same rights they should pay their dam taxes and be charged as criminals if evidence is found to aided and abetted money laundering. Private equity is killing businesses and in extreme cases asset stripping of the assets.
Y..yes..? Why isn't this already a thing..? If a company does something illegal, there has to be tons of people in that decision-making process, and that means they need to be treated like PEOPLE. Cus they are??? A company is literally a bunch of people..
With the case of wage theft for example, why do they have to go for the corporation as a hole? can't they go for the specific individual witch is responsible for those actions?
just because one is part of a group, it shouldn't be a justification to be invincible :/
This is covered with the idea of corporate obfuscation. HMW briefly mentions this idea in the section about the ability for corporations to defend their actions from outside prosecution.
We really need an app that has an executive blacklist, and if you try to buy things from a company who's employing someone on the blacklist, then it informs you it's blacklisted. This could be as simple as pointing a camera at shelves, it detects the brands, and then outlines them in red or writes "blacklisted" over it. You can then tap it and see what executive, and what company they were working for, and the crime committed and whether they evaded punishment or not. If obfuscation was used or someone was made a scapegoat, then all the executives are added to the list. If evidence comes out about which executive was responsible and it went to court and they were punished, then only the executives involved would be added.
Their perception of invincibility stems from the ease with which a corporation can distance themselves from a "bad apple" employee who commits something like wage theft. You did exactly that with your statement by asking why go after the corporations if you can just go after the "bad apples" that actually commit the crimes?
Ask yourself, what if the reason those bad apples got to do such things is because the company's corporate policies and demands from investors created a culture that promoted and allowed it to happen in the first place? A corporation can easily just publicly fire a couple of people and wash their hands of the issue because they "dealt with it."
RICO was specifically invented to PREVENT organized crime from structuring their criminal liability like this. It's a terrible idea.
It's great to see a RUclips video where people are coming up with actual solutions rather than just ranting about the problem
I love how we have to think about the companies so hard but when a family gets a fine (sometimes for things they didn't even have a hand in) it's "tough luck" pay up, even if it costs you your house. And then the companies fire/lay off people anyways... 🙃
Wage labor is renting yourself via "self ownership". Employment is literally renting another human being as if they're property. The employer-employee relationship is a very insidious dynamic. Employment is a rental contract, like if you rented capital (say, a chainsaw from Home Depot), you pay rent for the "time preference" (basically the cost of time) for a piece of property. Capitalism is based on a principle of self ownership, which sounds empowering, until you realize that most people don't own capital goods other than themselves, and must rent out the authority over themselves as pieces of "human capital". This is a process of dehumanization where human beings are valued for their return on investment as capital goods. This is why, at the very least, capitalism needs unions and safety nets (or abolishment), or else the system won't value people for their human value. Importantly we must also think about our sick, elderly, and disabled people, as they can't provide competitive economic return for the investor class to value. We must figure out a way to change this economic system if we wish to value each other.
Thank you for you time. For some reason that seems funny to me. But seriously.... that was all well said.
@@clintholmes2061 I appreciate that very much. If you are interested in learning about possible solutions you might think about 'cooperativism' or the general practice of economic' democracy'.
I think of it more as "I'm an entrepreneur providing a service for an hourly fee". The trajectory being basic life skill building as a teen, apprenticeship during and after post-secondary, experience during 20's, then spending the 30's and 40's building off that experience. Whether it be through starting a business of your own, or a senior leadership position (Most of the rewards of business ownership with none of the consequences), or early retirement. The second you can do the work faster and cheaper than your employer takes off the top, you have the competitive edge. Spend your early career doing work that is essentially subsidized by your employer while you train and get up to speed, then break off once you can do it better.
@@agodelianshock9422 Ownership of the equity is not an hourly fee 🤦
Don't start with those disingenuous lines of "reasoning".
'If we wish to value each other.' That's gonna be a hard one. I think that's a wish a small number of people have. I'd wager common decency in public is a survival strategy rather than a genuine act of kindness.
I used to work at a beverage bottling factory until recently. Its a huge international company from italy. Its in a small town whos water treatment systems are not set up for the massive amount of sugar water the plant created. So, fines become a cost of doing business and the residents of the town suffer with astronomical bills ($80 flat rate for everybody) and terrible water quality.
The government can suspend their business license among other actions that effectively either kill them or make it impossible for them to do business. We've seen them break up large companies in the last few decades.
God I love this channel. Idk if you’ve ever thought about it but if you had a podcast where you just talked about current events in the financial world, I’d listen religiously
Okay I actually don't mind this solution. It's very long term, but say. For every major case a corp lost, in addition to the fines to cover damages, they had to accept another board member from the govt.... That would be a round about way of slowly nationalizing any corporation that acts in opposition to the public's well-being. You wouldn't even need to entirely nationalize them, just like nationalized ~enough~ to rein in their corruption. Sure, you could say that the corp would just corrupt/buy out the new board member, but the extant board members were already corrupt (literally evidently). This would reduce the power of the C-Suite by bloating their numbers as well and the outside influence could actually tank their ridiculous compensation packages by virtue of there being less corruption and their "work" being divvied up more. It's like socializing a corp from the top down instead of/in addition to the typical worker-led movements. Also I love the irony of micromanaging the people at the very top. That's just karma lmao
Favorite financial channel on RUclips!
4:05 does the combination of leveraged buyouts where the buyer saddles the debt on the company they just bought and then that same buyer charges consulting fees to the company they now own make it so the buyer can't lose even if they run their newly owned company into the ground?
Here in California a major utility company Pacific Gas & Electric was charged with manslaughter a few years ago for it's role in causing a huge wildfire.
But uh... none of us know what it even means for a company to be guilty of manslaughter lol.
My first thought on companies being too big to fail or jail is “clearly they’re not being taxed enough”-but I am anti-monopoly.
Making it easier to prosecute companies is a good first step, but I think that “if corporations insist their people” can be taken a liiittle farther. Like requiring more preemptive transparency about their actions and requiring them to publicize their work and the consequences of their own actions instead of lionizing their reputation.
I think a consent decree is what is needed like in the pharmaceutical industry where if the violations are bad enough the company has to pay a daily fine to continue operating while having officials on site until the company has undergone enough changes to satisfy the inspectors.
I wonder if, like the workers declaration that they have been convicted of a crime, the company should be forced to add a statement to the same effect onto all marketing/advertising etc. If a Facebook add, like a smoking add, had a banner across the bottom saying "we have have been convicted of systematic privacy violations and we're fined $5B", it would certainly help consumers to make better choices.
The UK company that I worked for was dependent on our parts supplier in SE Asia. Our business was suffering because our stock was running low. We were desperately waiting for a container ship to deliver the stock we needed…. It sailed straight past the UK without stopping and didn’t unload one container! When we contacted them to find out what the f*** has just happened to our order? The shipping companies excuse was “it’s cheaper to pay the non-delivery fine, than pay UK import fees :shrug: “
Reforming criminals is only one aspect of prison. Another is separation to keep criminals from doing more harm. Retribution is another, critical role - to make the aggrieved parties feel that justice was done so that justice isn't taken into their own hands.
Absolutely YES. It's bad enough companies can get out of paying out fees/fines through bankruptcy court and no one gets held accountable. Hold these presidents/ceos/board members accountable for the intentional and malicious actions. Monetary punishments do nothing anymore.
How about getting private equity completely out of emergency health-care systems? Yes, it would create a shock to industries, but a shock is what the US needs ultimately.
Thank you for honesty John. Wishing you a very healing month of July ❤
I think we need to have a huge round of trust breaking and make almost all companies medium sized or less. With that situation not only is there more competition but also no company is too big to fail and if they violate the law you can shut them down. The current system also makes it easy for larger players to keep others out of the market while if you had lots of smaller companies that would not be the case.
The very idea, that corporations are people, is ludicrous... Corporations are not people, they are embodiment of agreements between people. Owners and executives have to be held accountable with fines and those directly responsible for a decision and the very high top managment shoud face jail time on top of a fine and ban to work in industry.
This is obvious. However, the USA law does make them people.
The problem with any corporate punishment is that the people inside the corporation who made those decisions can still leave and conduct their business elsewhere possibly committing more crime in the process. Meanwhile they leave behind rank and file workers at the old corporation to face the wrath of whatever bureaucrat lands inside that boardroom. At some point, it's the government's responsibility to find the individual(s) responsible for corporate crime.
Considering the purpose in forming a corporation, it may be worth certain offenses voiding the corporate veil as part of the punishment.
Been saying for years if they are people then they have to serve time. As in the ceo, board memebers, etc. they all go to jail
Corporations could put in jail by prohibiting them from doing business during the period of the jail time. If some of the employees don't get paid during that time, well, that is the incentive for employees not to engage in any illegal transactions. Of course there will be innocent employees who had no knowledge of a companies illegal behavior, but the judge could order the corporation to continue to pay those employees for the duration of the sentence. This method of punishing corporations could work if there was enough public support.
Yes. And if they do something bad enough, they should get the "death penalty," which would mean getting dissolved and having their assets seized. Why should companies get all the benefits of a person but none of the punishments?
Maybe they should do to companies what they did to Gary Bowser, garnish their income for the rest of the company's life. That way if they keep stacking up on crimes, the company will enter a slow decline and be replaced by other newer companies without rocking the industry.
Go after the board of directors and the CEO. They are at actually responsible and it does not matter if they are new to the position or have been there for years.
Regulations and fines as cost of doing business means legal for a fee for big business and bankruptcy foe competition
So many people who find out they are getting arrested suddenly have all this important stuff to do like see their kids. While that's true, it isn't a reason to not take you to jail. We might saying something like, "You should have thought about that before you did _____." And that's the correct response. Unless you're a corporation. In that case, a "person's" sudden realization that others depend on them is sufficient to let the "person" go. The justice system isn't for them. It's for you and me.
HSBC is the best bank to handle creative accounting strategies and I love it.
Depending on the severity of the crime, instead of a "parole officer", offending companies could get taken from shareholders with no compensation to be managed by an appropriate government department. Managers responsible for allowing the crime to happen gets replaced, and eventually the company gets sold or listed. This way employees are not unduly punished, and companies important for the stability of society are allowed to continue operating, presumably under better management. Problematic industries like private equity could get strikes - the number also depending on the severity - lasting say up to 10 years and if they possess 3 or more strikes they are not allowed to own/operate entities in critical industries like health care, prisons, infrastructure, etc.
Your content is great, man.
Appreciate it 😀
A punishment slide should be instituted: From first violations to last: meaningful fines with Required oversight (though that has corruption pasted all over it), imprisonment of convicted executives, and dissolution of charter. Probably some problems with that, but the executives should definitely be tried and if found guilty imprisoned. People making evil decisions should think twice and prison could be a deter such behavior.
Going back to C-suite being criminally responsible for their actions would help too. With the default action being the current CEO gets the jail time if no other blame can be place.
imagine, instead of going to jail for x years, companies would be expropiated by the state for that same time. all the higher charges at charge would be booted or sentenced to communitary work at their same job, but with minimal wage and strict supervision from court (like communitary duties do) with a chance to not lose their jobs and recover their previous conditions (or a bit less depending of negociations, with a roof to avoid stupid bonuses) in that time the goverment could decide to sell it, bail it or do what their think fit to re-structure it to avoid future problems.
Fking hell I got a HSBC ad right after this video
Why can't a corporate equivalent of liens be placed on the books? Or what about putting the market equivalent fine amount of stocks into government's hands?
Do too much bad, and you'll just be handing your profits over to the (hated by shareholders) government.
That'll align all the stakeholder-hood real fast.
Here's an idea that could punish corporations without losing jobs and vital services: seize the corporation's capital assets. Things like hospitals the firm owns if it's the case of a private equity company that caused deaths in hospitals it bought or bank branches in the case of HSBC. Or in the case of Facebook, its data servers. That's part of how the R.I.C.O. act was effective against the Mafia.
Also, hold owners and high-ranking officers liable for anything criminal that they ordered, and have higher penalties for directing a whole business to do it, again similar to R.I.C.O.
Remember, until R.I.C.O. we had the same problem with the Mafia that we now have with corporations: the criminal justice system can punish individuals but can't really punish whole organizations or those responsible for its operations. So this is a fixable problem.
The big issue causing so much misery for so many people now was again touched on in this video: Corporations being beholden to their shareholders above all else. Get rid of that, get rid of the power to siphon value off for essentially nothing put in, and you'll fix the majority of the problem.
I know revenue isn't the same as value or available funds, but using the numbers mentioned they could have shut it down and given every employee not actively criming at work more than $33m and just scrapped the thing. That'd create a real push by all employees to keep an eye on the decision makers as well as investors who'd stand to risk losing all value in the stock if the company were found breaking laws. The payouts would be great for the economy as people would either invest or use it to start businesses or maybe just live it up the rest of their lives and spend it all. Pretty sure the voters would be 9n board as it'd mean they could basically win the lottery if the company they're working for breaks the law.
It's simple, just take at least 50% of all shares, then resell them at the market price, this way the shareholders get a fine that is far more proportional than just arbitrary small fines.
12:34 I mean, I think we should just take their private company and make it public, but this is a start
Possibly the fine could be paid in ownership, if a company is charged the government takes a percentage of shares from all owners. That way the company doesn't shut down but everyone who profits from it loses some or all of their investment. Plus the government now owns some or all of a business it can recoup the money from over time.
About the excuse that "we were just following our mandate to maximize shareholder value", how is that an excuse to knowingly and willingly commit a crime? I couldn't say that I robbed a bank because I had a mandate to feed my family and keep a roof over their head - they'd tell me I should get an honest job instead. So why aren't corporations required to find an honest job instead of using illegal means to increase profits?
"Only following orders"? That's the oldest excuse in the book.
Great vid. Its so disheartening that governments are failing their people so badly. Profiting off these "fines" with no changes being made to the system is insane, but thats what we get when people waste their lives arguing about insignificant bs
I squirrelled away cash for a rainy day, but with inflation pouring down, it feels more like a leaky bucket. Saving for retirement seems impossible if my money keeps losing value faster than I can earn it.
Financial literacy is so important. We should have it as a mandatory course in school. Luckily we have all these incredible content creators on RUclips teaching what we missed in school.
That makes sense. Unlike us, you seem to have the market figured out. Who’s your fiduciary?
Dustin Dwain King is my asset manager. Just research his name to find the details and set up an appointment...
Financial consultants can help by recommending investments that outpace inflation, such as real estate or certain stocks. A client of mine followed this strategy and saw their savings grow by 15% in just two years, effectively countering inflation.
12:30 that is not the goal, people who present it this way tend to pretend that the system doesn't work as designed whereas if you read the commentaries to specific bills you realise a huge part of the system is to isolate people causing harm from the society, period. The release part, if it even happens (US has stacking crimes specifically to keep people willing to break multiple laws, even at once, locked away), is a failsafe, a sort of trial in case they do change their mind over serving time. If they don't they go back in. And three times the charm - hence the controversial three strikes and life law.
It's really important to hit the profit of the owners instead of the salaries of the enployees. With public companies, you could mandate a negative dividend, directly hurting shareholders.
Ah yes, private equity firms. The house flippers of the corporate world. Where would we be without them? Oh yeah, the future.
The problem with fining HSBC for money laundering was the amount they had to pay was less than a weeks business to them. A drop in the ocean that they didn’t miss.
If anything they pass the cost down to the customer. In the UK, HSBC then pretended it was acting tough on money laundering by then screwing over the little guys, like closing the business accounts of genuine law abiding family owned shops without any warning because they didn’t borrow enough money or the closing the account of an elderly grandma because she doesn’t make enough transactions (true story).
9:10 That bit about the fines being the politically safe option.... could this be an extremely mutated version of political correctness?
All the parts are there, you're essentially softening a traditionally harsh measure for the sake of not hurting a minority/vulnerable group, and the outcome is a convoluted system that we all end up paying for with mental effort or money.
I… hmm. Rich people are an actually protected class in the US, while minorities are like, technically protected, but to get any of those protections is like pulling teeth. Meanwhile, if your bottom line gets harmed, the US government will trip over itself to punish those responsible.
This is one of several channels I have to resub to every time I watch it due to youtube's weird habit of automatically unsubbing me every time from certain channels. Why does youtube do this?
A very easy solution is to have a “head guy” or guys for each company or division of a company who does take the personal liability for crimes done by their subordinates. Replace plausible deniability with plausible responsibility. It IS your job to make sure your subordinates are behaving legally.
The solution is adding a government employee to a company’s board? Oh great. Why not have the government take over management of the company completely! Can’t see how that can go wrong
How I see it… if a State Military breaks Intl Law, they just go after the State but also the individuals in charge. It isn’t perfect but this one method to be practiced more. Also, fines shouldn’t be one time thing but rather a multi-year fine on top of due taxes.
I'm wondering why not just charge last year's profits as the penalty? Because the profits go strictly to the share holders, it wouldn't impact the employees/workers very much, cost of labor is a business expense and that is taken into account before calculating profits. For example, Company XYZ is being fined for like human rights violations, if in 2023 they had a profit of $200 Bil, then the fine is $200 bil. And then the money can go to the victims, local charities, idk what would your city do with $200 Billion dollars.
Corporations have legal guardians called CEO’s and board of directors. If the U.S. two tier system was based on “we the people are created equal” then just like animal owners can be held liable for their animals then the people who are responsible for the actions of corporations would be held accountable for their actions(CEO and board of directors). But the reality is that corporations being people has the point of insulating the rich from consequences for their actions. Notice that selling the corporations insulated the wrongdoers from consequences by passing the responsibility to the new owners of the corporate beast. Like if you owned a dog that killed people and you sold it so the new owner would be held financially liable while you go on without any repercussions. Two tier creativity of the lawyers and legal system will never be defeated because the point is to insulate the top tier citizens from consequences. (Think the Sackler family, almost got them but their friends in the two tier justice system gave them golden plea deals). The reality is the corporate entity is the solution to the wealthy facing consequences for their actions and you are not going to convince the system to change the solution to the problem.
instead of a single fine, why not: 1) ensure that the board & shareholders aren't allowed te enrich themselves further (wage increase/ dividends / "company retreats") for a period of 5 years (even if they move to other related-companies) 2) just like jail TIME make the company pay XX% (75?%) of their profits for X years (5?) as a fine 3) make sure they are audited not just by a big 4 / but by a governmental task force?
Sorry, could someone explain to me why this couldnt easily be solved by attaching criminal liability to voting shares only?
The best solution if you want to go the fine route would be that the government takes equity in the company as punishment instead. That way the company stays afloat, nobody loses their jobs, and the current owners are punished through having their share in the company diminished.
the richer a company gets, the less tax, wages, and legal settlement costs. You can only fail upward. Organizations don’t exist in a vacuum. If we continue to pretend the people in these organizations don’t deserves jail time, the system will keep working as intended
Ae have a similar problem with illegally obtained evidence (e.g. violations of the fourth amendment of the Constitution of the United States). When evidence is attained without due process, or through police overreach, it becomes challenged in court as inadmissable, but this often means a wrongdoer will escape conviction. And we really don't like to see serial killers walk free. (We don't like to see petty shoplifters walk either, really.)
As a result, we've carved out so many exceptions that allow illegalpy obtained evidence to be admissible that by the 2010s, the fourth and fifth amendments have all but disappeared. (Police regard an invocation of the right to remain silent as an admission of guilt.)
The thing is, wrondoers going free is supposed to be a penalty to the state, even though it can also endanger the people, the current security state and loss of privacy _also_ endangers the public. So the state is choosing to cheat, to evade consequence of its own agents.
So likewise, when too-big-to-fail corporations commit wrongdoing that results in loss of life, in destruction and cost, it should _also_ be a penalty to the state when that company is liquidated, and jobs and services are lost in mass. That would make for a strong incentive to regulate companies, and assure those regulations are enforced. Otherwise, the notion of fair play in the capitalistic model is shattered, and we serfs know the aristocrats are feeding us a line. Discontent and civil unrest follow.
At this point, millennials, zoomers and even alphas are pretty sure there's no security, no upward mobility, no hope for social safety nets, which is one of the reasons fascist mythology appeals so much, and fewer people are interested in sex or romance. Suicides and rampage killings rise with hate crimes.
Theory: Don't only fine the company... fine the shareholders as well.
Should a crime be committed, require a 20% (number debatable) new share offering. Shares go to the government who sells them on the open market in fixed amounts over the next 3-12 months. This aligns the shareholders with the legal requirements... the dilution event reduces the value of the previously outstanding shares.
Related, all companies over $SOME_VALUE should be required to be publicly traded. $SOME_VALUE is somewhere in the $1-10bil range.
This is a good video
Back in the 40s. Brazil had the idea that if a company had been criminal before. It would have its assets or stocks given to the government. That is a great way to increase government revenue and make stock holderw scared of fucking up. (As their shares would be deluded and their companies branded as criminals forever).
Well, whenever they put a husband and father that provides for his family in jail, that causes financial hardship for the household he presides over. Whenever they put a single mother in jail, that creates a hardship situation for her children who now are either put in the system, or handed over to a relative that may or may not be particularly good for them. Lawyers and lawmakers never seem to be hesitant nor concerned about those scenarios, so why have they been so quick to lick the self-inflicted wounds of big business when they commit their wrong doing? Yes it would be unfortunate to have jobs lost, but at least these businesses would be held accountable, which could lead to things like reforms and better business practices
Prosecutors overstepping their bounds, ignoring the law, destroying companies? Never!
LOL I was wondering when you would cover these issues.