Re:How much do hedge fund traders earn?
by JumpCrisscross on Wednesday May 10, 2017 @09:55AM
(#14308175)
> when they fail, their clients lose money, and they don't
This is limited liability. It applies to employees and start-ups, too. (If a Boeing employee makes a shitty engineering decision, we don't put them in debtor's prison. Similarly, if a start-up fails we don't pillory them.)
We limit investment in start-ups and hedge funds to wealthy individuals, in part to protect the masses from this principal-agent problem solving.
This is limited liability. It applies to employees and start-ups, too. (If a Boeing employee makes a shitty engineering decision, we don't put them in debtor's prison. Similarly, if a start-up fails we don't pillory them.)
We limit investment in start-ups and hedge funds to wealthy individuals, in part to protect the masses from this principal-agent problem solving.