We generally do not punish corporations harshly for criminal wrongdoing because (1) punishing the corporation mostly harms the shareholders, who aren't responsible because they only have indirect control over the corporation, and (2) the individual employees who commit crimes face criminal prosecution and punishment.
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I regret that my comment was taken as one endorsing corporations or their shareholders profiting from crimes. That was not my intent.
> I regret that my comment was taken as one endorsing corporations or their shareholders profiting from crimes. That was not my intent.
Regardless of whether your intent was angelic, devilish, or neither, rampant corporate criminality (such as TicketMaster's) is the obvious consequence of building a system according to principles that advantage criminality so baldly.
As I wrote elsewhere, there is no advantage to criminality because there are many ways that a corporation can be brought to justice.
TicketMaster is not an outlier — corporate impunity is the rule, not the exception. The incentives you advocate have proven utterly inadequate to ensure either "justice" (for those who care about justice) or economic efficiency arising from legitimate competition.
1) it’s rare, if ever, that a CEO, CFO or COO faces jail time for crimes the company committed that are similar or worse compared to jail-able offenses by individuals. So your second point doesn’t really happen in practice.
2) shareholders SHOULD be punished for the actions of the company. If my dog maims you because of my negligence to control it, I’m liable. If a corporation knowingly commits crimes, then the CEO (and everyone in the chain down to whoever performed the criminal action) is a criminal, and the board and the shareholders should be liable for not exercising proper control and guidance. When you own something you also take on responsibility for that object. Stocks are no different.
It happened in this case. From the article, "Zeeshan Zaidi, the former head of Ticketmaster’s artist services division, pled guilty in a related case to conspiring to hack the rival company..." Anyone else who conspired with him could be charged with the crimes.
> shareholders SHOULD be punished for the actions of the company.
The entire purpose of the corporate entity is so that investors can share in the ownership of a business that they do not manage without risking personal liability. Shareholders can completely lose their investment because of liabilities of the corporation, but they usually don't face personal liability.
Advantaging criminality to this degree is a choice. Our economic institutions did not have to be designed in such a way that criminality is rewarded so highly. We could architect them differently — but then it would be harder for a small number of people to make a great deal of money ripping off the rest of us.
Executives involved in crimes can face personal liability for those crimes. The corporation can also be wiped out and the shareholders can lose their investments.
Then why should shareholders get the profits from the work they don't comtrol?
> the individual employees who commit crimes face criminal prosecution and punishment.
Do they?
Because they invested money into the corporation when the corporation issued stock.
It seems like you're arguing that shareholders should reap rewards for actions that a company takes but be shielded from negative financial repercussions that result from criminal actions it takes.
This creates a moral hazard similar to to the "too big to fail" situation of banks. It incentivizes risky and potentially criminal behavior because ownership is able to capture the value of any upside and is shielded from the downsides of the behavior.
That's crime-laundering. Whether it should be punished by criminal prosecution is dubious, but whether it should be punished by investors losing money is not. Otherwise the system manifests a perverse incentive to invest in corporations which commit crimes.
Then again, facilitating criminality by the investor class is the whole point, isn't it?
Shareholders lose their investment
Investors that didn't invest in the criminal corporation get to buy the assets for pennies on the dollar.
Perfect harmony.
Shareholders are responsible, albeit indirectly, for the corporation they've invested in. If shareholders have a reasonable chance of signfiicant loss of value, then they're more likely to require the company take steps to mitigate that (i.e don't do shady stuff).
As for prosecution of employees for crimes - that, too, is often rarely done, or focuses on the wrong people. Plenty of cases where it was the whistleblower, or someone who was raising red flags that gets the harsher penalty, rather than management who deliberately ignored it and has better paid lawyers to go for some light-weight bs
