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Comment by nicce | Hacker News Reader

Including investors is a bit much unless they encouraged or mandated some decisons that enabled this.

Investors benefit from company gains despite not having encouraged or mandated some decisions that enabled the gains. So it makes sense that they also get exposure to the downside.

They already get downsides if company gets fines or even goes to bankruptcy. You never know whether they invested based on information that was not true at all. Which is unfortunately too common.

It sounds like they need additional exposure then as they aren't assessing the real risks and seem to have completely ignored them. Why should society care that some group of investors didn't do their homework? Is that the excuse we use to avoid prison sentences now?

There are many, many cases where investors are misled by companies -- this falls under the (very broad) heading of securities fraud and it's easy to find documented cases of it. It's not a question of doing their homework.

There is literally no way to have the broad base of investment in markets by members of the public that we see today if investors incur personal liability. It was and remains one of cornerstones of any commercial society.

They said VC, not all investors.

Let's say the investor part doesn't apply to public companies, to make it simple.

That still seems hard to make workable but I guess it doesn't seem impossible in the same way.

They gain but under a structure where they literally don't control the company at all -- that's kind of the point.

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