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Can a CEO be criminally prosecuted for 80% dividend drop due to egregious decision
Posted on 6/29/17 at 10:38 pm
Posted on 6/29/17 at 10:38 pm
Can a CEO be prosecuted under any criminal codes for making egregiously poor decisions which lead to 80% reduction in dividends?
Scenario:
Business languishing for several years. CEO implements lower level managerial change and business results improve such that dividend accrual improves 25% over 5 year period.
Company independent accountants and analysts are very complimentary of the manager and his staff with such outstanding results
CEO retires, new CEO with no background in the industry ( smartest guy in the room type) forces multiple changes in processes and procedures, reduces staffing numbers for reasons never explained. Ultimately fires lower level manager whose vision and leadership resulted in the enhanced results under prior administration for not " buying into his agenda."
Results under new lower manager during subsequent five years show a drop of 80% in dividend accrual.
Member investors continue to receive residual dividends on a delayed basis from high yield period so most are not yet fully aware of the huge drop off.
The failed performance under the recent manager stands in vivid and stark contrast to the fired manager. Can the CEO be prosecuted for clearly making such poor decisions and costing the investors such a a huge loss?
Scenario:
Business languishing for several years. CEO implements lower level managerial change and business results improve such that dividend accrual improves 25% over 5 year period.
Company independent accountants and analysts are very complimentary of the manager and his staff with such outstanding results
CEO retires, new CEO with no background in the industry ( smartest guy in the room type) forces multiple changes in processes and procedures, reduces staffing numbers for reasons never explained. Ultimately fires lower level manager whose vision and leadership resulted in the enhanced results under prior administration for not " buying into his agenda."
Results under new lower manager during subsequent five years show a drop of 80% in dividend accrual.
Member investors continue to receive residual dividends on a delayed basis from high yield period so most are not yet fully aware of the huge drop off.
The failed performance under the recent manager stands in vivid and stark contrast to the fired manager. Can the CEO be prosecuted for clearly making such poor decisions and costing the investors such a a huge loss?
This post was edited on 6/29/17 at 10:42 pm
25
Posted on 6/29/17 at 10:41 pm to tigersbb
Not unless he illegally profited from it and/or it was found to be intentional instead of just a result of him being an inept CEO
*I am not an attorney.
*I am not an attorney.
Posted on 6/29/17 at 10:41 pm to tigersbb
Publicly traded company?
Posted on 6/29/17 at 10:43 pm to tigersbb
BJR rule controls without bad acts.
Posted on 6/29/17 at 10:43 pm to Finch
quote:
Not unless he illegally profited from it and/or it was found to be intentional instead of just a result of him being an inept CEO
Sounds right. Usually they parachute out with a big payday.
Posted on 6/29/17 at 10:45 pm to Finch
quote:
Not unless he illegally profited from it and/or it was found to be intentional instead of just a result of him being an inept CEO
I did not want to be too descriptive for certain reasons but it is possible the CEO may have been able to profit from the move at some point.
It is not a publicly traded company but a private industry specific group.
Posted on 6/29/17 at 10:46 pm to tigersbb
Trying to get someone to help you with your corporations quiz?
Posted on 6/29/17 at 10:46 pm to tigersbb
Probably not unless you can prove gross negligence which is a blatant disregard. Pretty much he has to have sabotaged the company. I would put it at .1%
Posted on 6/29/17 at 10:47 pm to tigersbb
If this is a real life scenario, go talk to a lawyer. Posting it here can only hurt things.
Posted on 6/29/17 at 10:47 pm to tigersbb
Contact attorney, bring an action for wasting corporate assets. Civil not criminal, easier to prove.
Posted on 6/29/17 at 10:49 pm to tigersbb
Not for being an idiot if he was acting in good faith (fiduciary duty of care) and doesn't receive any benefit
I think
I think
Posted on 6/29/17 at 10:56 pm to tigersbb
Is Vlod involved in this scenario by any chance?
Posted on 6/29/17 at 10:56 pm to Mingo Was His NameO
quote:
Probably not unless you can prove gross negligence which is a blatant disregard. Pretty much he has to have sabotaged the company.
It was essentially gross negligence, but probably not sabotage. It would be like a college football coach taking a program which wins 6 to 7 games a year and the new coach wins 10 to 11 games and contends for championships. Then a new president takes over and fires the coach. The new coach (s)win 3 to 4 games over 5 years.
Posted on 6/29/17 at 10:59 pm to captainahab
quote:
Is Vlod involved in this scenario by any chance?
I don't know who Vlod is but h might be involved. A lot of people in this state are adversely imp[acted, some worse than others, many just don't realize it yet.
Posted on 6/29/17 at 11:07 pm to tigersbb
quote:
Can a CEO be prosecuted under any criminal codes for making egregiously poor decisions which lead to 80% reduction in dividends?
Do you really think the government would put someone in jail for making a poor HR decision? You aren't breaking any SEC regulations by making a bad hire.
If it was such a bad idea, why didn't the board remove him before the damage was done?
This post was edited on 6/29/17 at 11:09 pm
Posted on 6/29/17 at 11:12 pm to tigersbb
quote:
Can the CEO be prosecuted for clearly making such poor decisions and costing the investors such a a huge loss?
Unfortunately stupidity is not yet a crime in this country.
Posted on 6/29/17 at 11:13 pm to tigersbb
Dude, you really shouldn't post this here. I'm serious. It's obvious this is a real event you are tied to personally. You should delete your comments before you get fired.
This post was edited on 6/29/17 at 11:15 pm
Posted on 6/29/17 at 11:14 pm to tigersbb
I see little way this is illegal.
Posted on 6/29/17 at 11:16 pm to lynxcat
I see no way it's illegal.
You can't be arrested for poor managerial decisions regardless of money lost.
If so, every small business that fails would have a would be entrepreneur behind bars.
You can't be arrested for poor managerial decisions regardless of money lost.
If so, every small business that fails would have a would be entrepreneur behind bars.
Posted on 6/29/17 at 11:16 pm to tigersbb
(no message)
This post was edited on 6/29/17 at 11:17 pm
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