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Comment by wl | Hacker News Reader

I don't think all the money they've raised so far is sufficient to settle all the claims that will be made against them. The company will not ever be worth enough to settle those claims. In a just world, their assets would already be frozen.

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They have very very few assets. The $9 billion valuation is a paper valuation that can vanish in one night.

You can pierce the corporate veil if there is willfull and intentional fraud. Doesn't always happen, but it's possible.

And what, compensate people with the stock of the company that was found to be willfully and intentionally defrauding them?

No, compensate people with the money of the stockholders. That's what piercing the veil means: culpable stockholders assets are no longer protected from liability.

piercing the veil usually applies to manager-owners, like S-corps. If I invest in a corporation and the managers do something horrible, the managers could potentially be reached through the veil, but not the stockholders -- their only involvement was handing over money, so they had no wrongdoing.

Now, investors who are also decision-makers on the Board or maangement, that's another story.

It requires that the particular stockholders be actually culpable and involved in the fraud - fraud done by non-owning management would not allow to capture funds of non-managing investors.

What I'm saying is the culpable stockholders (Holmes being the primary one) have few assets.

I'm sure their insurance is still paid up.

They have taken in over $400,000,000 in investment, I'm sure there are more than a few bucks laying around.

> In a just world, their assets would already be frozen.

Who would one contact in the federal government to ensure the right folks were looking into this?

Shouldn't CMS be doing that?

The article mentions CMS threatening to revoke their license, it seems like they would be inviting in a law enforcement investigation if they felt it was warranted.

Unfortunately, it seems unlikely there's a public and open tip-line for general corporate malfeasance (that anyone's paying attention to anyhow).

Fortunately, I think the feds are already on the case.

There are links on the SEC's and FTC's homepages for filing complaints, reporting antitrust violations, submitting tips, and reporting identity theft. There are probably more but I only spent about 30 seconds looking.

I'd be shocked if they weren't. But the Feds like it when private suits do the heavy lifting first, and they cruise in and take a quick victory. Civil plaintiffs have broad discovery powers (pretty much going to be able to read all the important insiders emails about the company) that the Feds lack.

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