> but generally speaking I'd like to see allocating jailtime across the top shareholders as an option.
Shareholders don’t control day to day operations of a company. Top shareholders rarely have enough shares by themselves to control anything about the company. Remember the VW emissions cheating scandal where people were jailed? It would be completely unreasonable to jail top shareholders because some manager somewhere concocted a scheme to cheat on emissions.
Jailing top shareholders for decisions made by the company would be a weird misdirected use of the justice system. If someone is to be jailed, it should be people responsible for the decision.
That said, I can’t believe anyone would be watching the news about the current U.S. administration threatening companies with spurious and often nonsensical demands and think that we should be normalizing the process of letting the government jail individuals if the company does something the government doesn’t like that would have previously been a small fine. You can’t think of any way this power might be abused by elected officials?
The only sense in which punishment of any kind is reasonable is when it works to disincentivise harmful behavior. If higher risks for shareholders convince them to take a more active role in ensuring that their investment isn't causing harm to the rest of us, then they're at least as reasonable than any other sort of punishment.
If the cheating had gone unnoticed, the shareholders would've been rewarded, so they should bear some risk whether or not they sold after the crime was committed.
As it is, we've got incentives set up to encourage investment in bad behavior so long as you get out before your people get caught.
As for the government abusing the justice system... What rules would create justice is sort of orthogonal to the circumstances under which the rules are broken.
There was a thread recently about sanctions, and how if you break that, executives can actually go to jail.
It is obviously known how to get corporations to comply, and the mechanism is used when governments really want to. In this case and others like it, probably they don't care enough.
Perhaps this case doesn't warrant it, but generally speaking I'd like to see allocating jailtime across the top shareholders as an option.
If my dog bites somebody, I'm on the hook, it should be no different with a company.