The financial papers are filled with discussions of Goldman Sachs and their alleged misconduct in the trading of certificates linked to the housing crisis. Executives at Goldman Sachs [stckqut]GS[/stckqut] have had to testify in front of congressional committees and it appears that at least one Attorney General is investigating them for crimes committed.
The result will likely be fines for the company. But is the company evil? Should the company be punished? The company is officially only a filed document in some state. The reality is the company is a group of shareholders that employ some managers to run a company to make a profit. Therefore, the company itself is not evil, even if there is a chance that some of those managers or employees are criminally negligent.
If there is wrong-doing at a company then the company should be penalized in some way since the proper safeguards were not set up to prevent the practice. This company punishment should be reflected to the stockholders as well, since they hired the directors to run the company well. The directors of the company should be punished because they didn’t effectively run the company. Also individuals should be punished for breaking the law.
- Fines against individuals should be more severe and should probably include some kind of moratorium on against their employment at similar companies.
- Executive management and directors should be very severe and might include losing a ‘license’ to be on the board of a publicly traded company (which would mean the total turnover of the board and executive management in severe cases).
- Fines against the company should be eliminated as the stockholders will be punished enough by losing their executive leadership. Stock prices would surely take a major hit in that situation.