Re:Woman Who Couldn’t Be Intimidated by Citigroup Wins $31 M...
by cynicalkane on Thursday June 21, 2012 @01:43PM
(#4143234)
"Limited liability" and "corporate veil" refer to shareholder protection, not employee protection. Traditionally shareholders, not employees, were on the hook for lawbreaking.
Anyway, you say something like "go through each individual in the corporation, see what laws they broke, and go after them" as though it's easy. In practice prosecutors have a hard time doing this even when they want to for the reasons I just said. Some of the Enron guys were acquitted by a jury, for example.
What? We solved this problem a long time ago. Corporations are beneficial because they provide liability protection to the employees. That's it.
In the case of fraud, we decided the corporate veil should be lifted.
So all you have to do is go through each individual in the corporation, see what laws they broke, and go after them. It's very straightforward.
The problems occur when the corporations received ungodly amounts of money from the government, when a government "appoints" individuals to positions within the corporation, and when there's quite a bit of collusion between the corporate entity and the government.
At that point, the government has very little incentive to prosecute and the corporate entity has even more incentive to commit fraud.