> I don't expect investors to he held liable for internal decisions made by companies...
But they are liable up to and including the total amount of their investment.
Some may say that this is to enable people to pool their resources to accomplish goals that are beyond what the individuals can accomplish on their own without losing everything if their plans go awry, best laid plans of mice and men and all that...
> But they are liable up to and including the total amount of their investment.
That's how it should be! I don't think I explained myself well there.
I was thinking specifically of legal concerns. If a company breaks the law, I wouldn't expect investors to be held criminally liable unless they reasonably knew what was done. I would expect them to be financially liable if the company value falls and their investment loses value.
How are investments supposed to work if the upside is unlimited but the downsides are mitigated by regulation? Investing is a risk, effectively gambling. You should expect that anything you put in can be lost.
The downside in your scenario is limited by regulation!
It's hilarious that limited liability is an obvious assumption for how the world should work and then telling companies that they don't get to offer high interest unsecured loans that also have punitive fees is some kind of perilous overreach.
> It's hilarious that limited liability is an obvious assumption
I must have gotten myself lost if my comments read as though I was arguing that limited liability is a good thing. I guess if you consider limiting investor liability to criminal activity they were aware of, that's some form of limited liability.
But I don't agree that liability should be limited even when someone is, or can be, aware if the risks they sign up for. I'm not saying anyone should tell companies they can't offer high interest unsecured loans - I'm only saying that consumers don't have to take the loans.
But they are liable up to and including the total amount of their investment.
Some may say that this is to enable people to pool their resources to accomplish goals that are beyond what the individuals can accomplish on their own without losing everything if their plans go awry, best laid plans of mice and men and all that...