41–50 of 74 posts
In addition to the fine, the SEC notes that the founder lost $65 million dollars as a result the drop in price and compensating early investors for that drop.
This seems like a pretty strong example in favor of the idea that the SEC doesn't need to do much to protect investors in private companies, because they tend to be more sophisticated (better at protecting themselves).
Zenefits paid a fine for misleading investors (with some contribution from the founder). The company is financed by investors, so in other words they indirectly paid the fine for being misled. Ironic?
That is sort of the joke about all securities litigation. Shareholders will often sue companies that experience price drops due to "misleading investors" and, as you mentioned, the fine or damages end up being paid for by the investors themselves.
One thing that I occasionally mention around here is that every bad thing a public company does is also securities fraud: If you did the bad thing and didn't first disclose it to shareholders, then they can claim to have been defrauded by your failure to disclose it. (If you did the bad thing and did first disclose it to shareholders ... why?)
https://www.bloomberg.com/view/articles/2017-08-22/stock-buy...
Zenefits paid a fine for misleading investors (with some contribution from the founder). The company is financed by investors, so in other words they indirectly paid the fine for being misled. Ironic?
That is sort of the joke about all securities litigation. Shareholders will often sue companies that experience price drops due to "misleading investors" and, as you mentioned, the fine or damages end up being paid for by the investors themselves.
Earlier quoted context omitted.
> How you get rich matters It really doesn't. There is a very narrow set of circumstances that would aversely affect your place in society based on how you earned it. Just think about how often it actually comes up regarding the wealthier people you may know or have heard about. Your wealthier neighbor. Odds are you never dug for all the civil litigation they encountered, or the relative morality behind each case or…
People definitely judge someone based on how they made their money. Look at trust fund kids, for a trivial example. I'm not saying there aren't a number of advantages to being wealthy, there certainly are.
Earlier quoted context omitted.
How about Slack ($5bn) and Stripe ($9bn)? That being said, when you get that big, of course there's problems. You have targets on your back, you're managing thousands of people, etc. Especially if you're entering into a market with regulations... someone is going to fight back.
Fraud and problems should be seen as two different things. This looks like a clear case of fraud. lying to investors and regulators. That isn't a "growth problem" from having a target on your back, its a legal/cultural/approach issue that probably existed from the start and grew large enough to bite you in the ass.
such is life
Earlier quoted context omitted.
> If you’re used to obeying rules (especially unwritten ones) you’ll never get off the ground in the first place. I know plenty of people who "get off the ground" by playing by the rules. I'd love for you to re-read your comment again and tell me that it doesn't sound dogmatic.
Of course it’s a general statement and doesn’t represent 100% of instances. But it’s generally true. Find me a billion dollar company started by someone who follows all the rules.
Earlier quoted context omitted.
Fraud and problems should be seen as two different things. This looks like a clear case of fraud. lying to investors and regulators. That isn't a "growth problem" from having a target on your back, its a legal/cultural/approach issue that probably existed from the start and grew large enough to bite you in the ass.
gentle/kind souls don't usually want to be CEOs/leaders and accept that stress and risk. People who are cutthroat and willing to step on other people to get ahead DO want to be CEOs. such is life
It's interesting that I can't think of any of these megagrowth tech startups that have gone off without a hitch. Zenefits, Uber, Snapchat, etc. are all in some form of trouble or another, and yet these companies are supposed to be the shining success stories that all other tech startups aspire to.
The reason to be skeptical of the "shining success story" ideal is the underlying, incorrect assumption that success is about being free of faults. Success is about achievement far in excess of the average. When a change is massive, it usually hurts someone. Sometimes things that seem really positive, like facebook helping kids stay in touch, contain massive negatives, like amplifying polarization in society. That's…
..with Facebook's mass surveillance and manipulation apparatus.
Earlier quoted context omitted.
gentle/kind souls don't usually want to be CEOs/leaders and accept that stress and risk. People who are cutthroat and willing to step on other people to get ahead DO want to be CEOs. such is life
Sorry but we live in a country that has rules and regulations for what CEOs and leaders do - regardless of how "cutthroat" they are. Their ambitions do not forgive their transgressions, and we have no obligation to accept that as "life". I do not see such behavior to be the essence of life, and I find it concerning you're so willing to accept it as the natural order.
Laws are just there to compress the variance of outcomes. Where as in the past you would've starved, today you just struggle to get by.
Earlier quoted context omitted.
> If you’re used to obeying rules (especially unwritten ones) you’ll never get off the ground in the first place. I know plenty of people who "get off the ground" by playing by the rules. I'd love for you to re-read your comment again and tell me that it doesn't sound dogmatic.
Of course it’s a general statement and doesn’t represent 100% of instances. But it’s generally true. Find me a billion dollar company started by someone who follows all the rules.