{"id":1486,"date":"2006-04-18T08:30:00","date_gmt":"2006-04-18T08:30:00","guid":{"rendered":"https:\/\/mhgoldberg.com\/blog\/?p=1486"},"modified":"2006-04-18T08:30:00","modified_gmt":"2006-04-18T08:30:00","slug":"shareholders-pay-twice","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=1486","title":{"rendered":"Shareholders pay twice"},"content":{"rendered":"

Tyco is paying $50M<\/a> in civil penalties to the SEC for its previous management’s cooking of the books. Nortel settled a shareholder class action suit<\/a> for $2.5B in February. What do these events have in common?<\/p>\n

In both cases, shareholders are paying the price for management misdeeds. Notice that there aren’t payments from the Board of Directors. These aren’t payments from the management teams that misbehaved. The audit firms haven’t refunded their fees.<\/p>\n

Instead, in some warped sense of justice, shareholders are paying fines and settlements for the transgressions against themselves. Perhaps it is supposed to be a form of penance; self-flagellation to achieve a higher level of forgiveness in order to move forward.<\/p>\n

Sorry – I don’t feel cleansed. I’d like to see the Boards and the auditors held accountable. If the Board fell asleep at the wheel, despite their tens of thousands of dollars in retainers and meeting fees, then hold them accountable for these fines and settlements. Individual shareholders rely on and pay handsomely to have auditors and the Board look after their interests.<\/p>\n

Yet individual shareholders have again paid for the failure of both groups to do their jobs.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tyco is paying $50M in civil penalties to the SEC for its previous management’s cooking of the books. Nortel settled a shareholder class action suit for $2.5B in February. What do these events have in common? In both cases, shareholders are paying the price for management misdeeds. Notice that there aren’t payments from the Board …<\/p>\n

Shareholders pay twice<\/span> Read More »<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1486","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nShareholders pay twice • Telecom Trends<\/title>\n<meta name=\"description\" content=\"Tyco is paying $50M in civil penalties to the SEC for its previous management's cooking of the books. 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