NationStates Jolt Archive

If I own shares in a company that profits hugely (and is making me rich) from human rights abuses, and is polluting heavily, and may be engaged in terrorism, is there any chance that I will have to pay any damages or fines?

Any reasoned opinions?





(no, I don't really own these shares, nor does my sister...)

The law is actually....really really complicated on this issue. I actually deal with some of this stuff, and I'm not able to give you a short answer. By and large, it boils down to a few things: 1) how much do you know about the companies activities 2) when did you know 3) how did you acquire the stock?

There is no easy answer to that question I fear

I think the simplest answer is: "How good are the lawyers for the plaintiffs?"

There is no easy answer to that question I fear

One can always hope...

Perhaps it would make such a hypothetical person feel better to donate all this ill-gotten blood money to a worthwhile charity; Such as the 'Give a Goofball The Good Life Foundation'. :)

I think the simplest answer is: "How good are the lawyers for the plaintiffs?"

forget plaintiff's attorney. If you invest in a company that you know commits acts of terrorism in order to profit off those acts of terrorism, you're not looking at a plaintiff's attorney.

You're looking at a special prosecutor from the office of the Attorney General.

forget plaintiff's attorney. If you invest in a company that you know commits acts of terrorism in order to profit off those acts of terrorism, you're not looking at a plaintiff's attorney.

You're looking at a special prosecutor from the office of the Attorney General.

That really depends on who the targets of the terrorism are.

forget plaintiff's attorney. If you invest in a company that you know commits acts of terrorism in order to profit off those acts of terrorism, you're not looking at a plaintiff's attorney.

You're looking at a special prosecutor from the office of the Attorney General.

...who may already be monitoring this very thread, yes. But shouldn't the stock exchange already have made sure that everything is ok, me being but an idiot consumer? :(

...who may already be monitoring this very thread, yes. But shouldn't the stock exchange already have made sure that everything is ok, me being but an idiot consumer? :(

well, it's mostly the job of the SEC and FBI, but again, if you innocently invest in a company and you did not know, and could not know about their illegal activities, it's not really your fault as a matter of law.

You'll probably find that the majority of blame falls on the company directors - the people making the decisions to pollute, kill or whatever other nasty stuff the company may be engaged in - rather than the shareholders. Although the directors are often shareholders too.

The law is actually....really really complicated on this issue. I actually deal with some of this stuff, and I'm not able to give you a short answer. By and large, it boils down to a few things: 1) how much do you know about the companies activities 2) when did you know 3) how did you acquire the stock?

There is no easy answer to that question I fear

So where's the line between perfectly accepted profiting from human rights abuses and heavy pollution and prosecutable profiting from human rights abuses and heavy pollution?
I left out terrorism because I'm thinking of companies like Shell Oil, for example, where millions of people are stockholders (and which, presumably, do in fact not support terrorism. Then again, who really knows...).

You'll probably find that the majority of blame falls on the company directors - the people making the decisions to pollute, kill or whatever other nasty stuff the company may be engaged in - rather than the shareholders. Although the directors are often shareholders too.

And no one will confiscate the huge dividends I've received? Promise?

And no one will confiscate the huge dividends I've received? Promise?

The fact that you have to ask this question suggests you might know something that would cause problems. If this is a legitimate question regarding a legitimate potential stock, my advice is simple.

Consult with an attorney.

So where's the line between perfectly accepted profiting from human rights abuses and heavy pollution and prosecutable profiting from human rights abuses and heavy pollution?

This is, again, a complex question. The general rule is "what does the law deem acceptable? Where did they occur? Are they polluting with purchased credits or without?

The fact that you have to ask this question suggests you might know something that would cause problems. If this is a legitimate question regarding a legitimate potential stock, my advice is simple.

Consult with an attorney.

I'm writing a thesis. Sound advice though, thank you.

This is, again, a complex question. The general rule is "what does the law deem acceptable? Where did they occur? Are they polluting with purchased credits or without?
The bolded one being the decisive one, more likely than not...

And no one will confiscate the huge dividends I've received? Promise?

I don't have my law notes with me so I can't double check. But I strongly suspect that your dividends would not be confiscated unless you had a direct hand in running the business. However, this would probably only be true for a publicly limited company. It might be different if it is a privately limited company and you have a close relationship with the management.

Disclaimer: This is all based on my somewhat shaky knowledge of UK company law, so I will accept no liability for poor grades/financial loss/appearance of stupidity caused by accepting what I write as fact.

......................
Disclaimer: This is all based on my somewhat shaky knowledge of UK company law, so I will accept no liability for poor grades/financial loss/appearance of stupidity caused by accepting what I write as fact.

None whatsoever?

The bolded one being the decisive one, more likely than not...
Unless it happened outside the US and the US government wants to prosecute you for political reasons. Because apparently they're allowed to kidnap you now if that's the case, not only if you're a terrorist.
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article2982640.ece
Apparently it goes back to bounty hunting laws.

The reason corporations are a "person" is so investors do NOT hold any liability for the actions of the corporations. Thats the whole point. So no, as an investor in a corporation there is no chance that you be can be held liable.

Although, if you are directly responsible for the acts in question in the questionable acts in question as an administrator, that might be a problem.

forget plaintiff's attorney. If you invest in a company that you know commits acts of terrorism in order to profit off those acts of terrorism, you're not looking at a plaintiff's attorney.

You're looking at a special prosecutor from the office of the Attorney General.

Hehe then the next question is: How good are the company's attorneys? :p

The reason corporations are a "person" is so investors do NOT hold any liability for the actions of the corporations. Thats the whole point. So no, as an investor in a corporation there is no chance that you be can be held liable.

.............



Even if I own all the shares?

The law is actually....really really complicated on this issue. I actually deal with some of this stuff, and I'm not able to give you a short answer. By and large, it boils down to a few things: 1) how much do you know about the companies activities 2) when did you know 3) how did you acquire the stock?All quite true. I think the "easy" answer, then, is this: when you find out that you own stock in such a company, get rid of it.

It's obviously the ethical thing to do, and to cut through all the legal uncertainties... it's the "safe" thing, too.

All quite true. I think the "easy" answer, then, is this: when you find out that you own stock in such a company, get rid of it.

It's obviously the ethical thing to do, and to cut through all the legal uncertainties... it's the "safe" thing, too.

But if you are managing other people's stock, maybe because you are a bank, then they will be of the opinion that you are losing their money, for personal ethical reasons they don't share. And they will sue. Especially if you have no good reason to think the owners may be held liable.

catch-22

If I own shares in a company that profits hugely (and is making me rich) from human rights abuses, and is polluting heavily, and may be engaged in terrorism, is there any chance that I will have to pay any damages or fines?

Any reasoned opinions?





(no, I don't really own these shares, nor does my sister...)

It really depends on your level of involvement in the company, how many shares you own, and your level of knowledge of the abuses.

The reason corporations are a "person" is so investors do NOT hold any liability for the actions of the corporations. Thats the whole point. So no, as an investor in a corporation there is no chance that you be can be held liable.

Although, if you are directly responsible for the acts in question in the questionable acts in question as an administrator, that might be a problem.

ugh, no...

But if you are managing other people's stock, maybe because you are a bank, then they will be of the opinion that you are losing their money, for personal ethical reasons they don't share.I didn't mean to include such a situation. I meant when making decisions about your own investments. I should have clarified.

Of course, I think it is the ethical responsibility of the bank or manager to make such things clear to clients, something they generally do not do.

No. Limited Liability FTW.

Generally no. Limited liability an all that.

Neo Art may I make a suggestion?

I myself charge people for sane and sound advice, you should charge people for using your skills as an attorney on NS. It would be a quick and easy buck. Speaking of which you owe me a dollar, I don't accept credit....

I didn't mean to include such a situation. I meant when making decisions about your own investments. I should have clarified.

Of course, I think it is the ethical responsibility of the bank or manager to make such things clear to clients, something they generally do not do.

I presented the situation as if it was my own investment, so the error is mine. I am also entirely of the opinion that such things should be made clear to clients.

What I am especially fishing for is how strongly people believe in the security of limited liability. Opinions on ethicality are very welcome, though.

I think people should know what they are profiting on.

Generally no. Limited liability an all that.

No chance of a pierced corporate veil?

No chance of a pierced corporate veil?

its not that there is NO chance but that for the typical stock owner who has pretty much zero involvement in the running of the company its extremely unlikely.

stocks and corportations exist to protect the money of rich people. if the rich had to worry that their bad business practices might end up draining them of all their uninvolved money they would hesitate to invest in anything. better to live off simple interest than risk the family billions. plus, of course, the rich have the best lawyers who are paid to make sure that they are financially responsible for as little as possible.

by allying yourself with the rich in the buying of stocks in their corporations you are as protected as anyone can be in a world run by human laws.

so you could lose the value of the stock but its probably more likely to fall into an open manhole than to lose personal money over the reprehensible but pretty much legal practices of the companies they own a few shares of stock in.

I would like to invest in this company.

If I own shares in a company that profits hugely (and is making me rich) from human rights abuses, and is polluting heavily, and may be engaged in terrorism, is there any chance that I will have to pay any damages or fines?

Any reasoned opinions?





(no, I don't really own these shares, nor does my sister...)

The company might be forced to make recompense, and if it is big enough it will cause the shares to loose value. You will, in effect, pay the money that your shares would have been worth had the judgement not been made against the company.

I would like to invest in this company.

No problem with profiting from environmental degradation (drowning polar bears), widespread human rights violations, genocide, torture, slavery and terrorism?

You'd pay through lost profits and therefore lost dividends, but it would be quite unprecedented for you to get hit with damage claims personally.

God knows there've been enough horrible things caused by corporate actions, but the buck stopped with the CEO and the Board of Directors every time, AFAIK.

That being said, if you have an ethical problem, you should probably consider selling the share. All a share is is a right to a proportion of the company's profits - and if those profits come from things you consider dirty, then the dividends you are receiving are dirty money. There are funds out there today that make a special point of only investing in ethical companies, depending on what you consider ethical. Some don't deal with the "Axis of Evil", some make a point of avoiding firms that use questionable labour in the Third World, some try to buy environmental goodies and shun the baddies.

It's your money, and there's enough competition out there for it to make sure you can get exactly what you want.

Generally no. Limited liability an all that.

Limited liability is about the debts of the business, rather than full legal liability. At least, I think so. And I imagine the government would want to keep it that way, to prevent people making companies for the sole purpose of breaking the law and not being totally liable for their actions.

Limited liability is about the debts of the business, rather than full legal liability. At least, I think so. And I imagine the government would want to keep it that way, to prevent people making companies for the sole purpose of breaking the law and not being totally liable for their actions.

I think it's legal liability, in most cases; as owners of the company, shareholders would be protected from any legal issues that arise from the operation of that business. However, limited liability does not mean no liability, which means there might be certain things for which a shareholder would be responsible in the event of an infraction.

If I own shares in a company that profits hugely (and is making me rich) from human rights abuses, and is polluting heavily, and may be engaged in terrorism, is there any chance that I will have to pay any damages or fines?

Any reasoned opinions?

Unless you're a majority shareholder, which is very unlikely, and able to make decisions, you wouldn't be liable because you're not directing the company to do these atrocities.

Unless you're a majority shareholder, which is very unlikely, and able to make decisions, you wouldn't be liable because you're not directing the company to do these atrocities.

The company couldn't operate without its shareholders, does that matter?

Unless you're a majority shareholder, which is very unlikely, and able to make decisions, you wouldn't be liable because you're not directing the company to do these atrocities.

Not to mention there has to be a real, actual legal case for them doing something wrong.

(Fourth time lucky! Mods, prefer this over the first three attempts please)

If we want an example of a company to flesh out this question, how about Chiquita Banana, a company with a long history of exploitative business practices (http://www.freshinfo.com/index.php?s=n&ss=nd&sid=44228&s_txt=&s_date=0&ms=&offset=0) which would be illegal in the US, recently accused of funding terrorists. (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article2879864.ece)

(Fourth time lucky! Mods, prefer this over the first three attempts please)

If we want an example of a company to flesh out this question, how about Chiquita Banana, a company with a long history of exploitative business practices (http://www.freshinfo.com/index.php?s=n&ss=nd&sid=44228&s_txt=&s_date=0&ms=&offset=0) which would be illegal in the US, recently accused of funding terrorists. (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article2879864.ece)

oooo that IS a good example.

im not going to read the links, did any common uninvolved shareholder have to face any legal penalty?

(Fourth time lucky! Mods, prefer this over the first three attempts please)

If we want an example of a company to flesh out this question, how about Chiquita Banana, a company with a long history of exploitative business practices (http://www.freshinfo.com/index.php?s=n&ss=nd&sid=44228&s_txt=&s_date=0&ms=&offset=0) which would be illegal in the US, recently accused of funding terrorists. (http://www.timesonline.co.uk/tol/news/world/us_and_americas/article2879864.ece)

Gold!

Lovely, thank you. Have a banana.

Gold!

Lovely, thank you. Have a banana.

*suspicion*

It's not a terrorist banana, is it?

I have this worrying feeling that buying a banana from Chiquita (contributing to their profit, thereby perhaps funding terrorists) might actually place me in more legal jeopardy than buying stocks in the company.

*suspicion*

It's not a terrorist banana, is it?

I have this worrying feeling that buying a banana from Chiquita (contributing to their profit, thereby perhaps funding terrorists) might actually place me in more legal jeopardy than buying stocks in the company.

*wipes banana carefully with state-of-the-art nanofiber cloth, wearing latex gloves*


Nope. Not a terrorist banana. There would be blood stains on it. This is a Fair-Trade, Eco-Friendly banana. Really.

bump?

I'm writing a thesis. Sound advice though, thank you.

Just a heads up... this is an interesting discussion but the mods frown on "homework help" threads (and the above post clearly indicates that this is what you are seeking) which are not allowed around here.

Just a heads up... this is an interesting discussion but the mods frown on "homework help" threads (and the above post clearly indicates that this is what you are seeking) which are not allowed around here.

If this is homework help, then students of economy, political sciences, and modern history are in trouble.

Besides, it´s not homework anymore at postgraduate level. I hope. It is Academic Research. *nod*

If this is homework help, then students of economy, political sciences, and modern history are in trouble.

Besides, it´s not homework anymore at postgraduate level. I hope. It is Academic Research. *nod*

postgraduate in what?

postgraduate in what?

Law.

Law.

and you came HERE for a legal perspective?

and you came HERE for a legal perspective?

I've been here on and off for years, and the sensibility of some perspectives, legal or other, is amazing.

So, yes I did. I am also an addict.

It is not so much a legal opinion I seek, it is more the opinion of 'who is to blame'

If a starting-up business is planning to profit from human rights abuses and ecological damage and terrorism, can anyone blame me for providing the funds for profit?