There have been many corporations fined for misbehaviour, illegal practices or many other misdeeds. The money fused to pay those fines, however, belong the the shareholders of those corporations. Therefore, it is the shareholders of those corporations that a penalised while those who were responsible for the crimes or misdeeds often go unpunished.
Some of those crimes and misdeeds, and their associated fines include:
- BP – Environmental disaster as a result of the oil spill in the Gulf of Mexico – $34 Billion
- Glaxo-Smith-Kline – Paying kickbacks to doctors in return for support of their drug products and promoting their drugs in established medical journals – $ 3 Billion
- Time Warner – Deceiving their own shareholders about the details of potential merger with AOL – $2.4 Billion
- Pfizer – Misleading consumers – $2.3 Billion
- Johnson & Johnson – Misleading branding of their anti-psychotic drug Risperdal – $2.2 Billion
The full list of these can be found here.
While these are are large penalties they pale into insignificance compared to the amounts certain banks have been fined since the global financial crisis.
| Bank | Fine, in billions |
| Bank of America | $76.1 |
| JPMorgan Chase | $43.7 |
| Citigroup | $19 |
| Deutsche Bank | $14 |
| Wells Fargo | $11.8 |
| RBS | $10.1 |
| BNP Paribas | $9.3 |
| Credit Suisse | $9.1 |
| Morgan Stanley | $8.6 |
| Goldman Sachs | $7.7 |
| UBS | $6.5 |
The full article from which this was taken may be viewed here.
The Commonwealth Bank of Australia had agreed to pay $700 million, the biggest fine in Australia’s corporate history, for breaches of anti-money laundering and counter-terrorism financing laws. The current Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry may be the cause of many more penalties.
All of these fines are paid out of money belonging to the company’s shareholders. The shareholders, who have done nothing wrong, suffer the penalties while the perpetrator remains relatively unscathed. Surely it should be the executives and/or directors who committed, or upon whose orders or advice the crimes or misdeeds were performed, who should be in the firing line. Those who commit the wrongs should be the ones punished, not the shareholders. Shouldn’t it be those who commit the breaches of the law that suffer the financial penalties and the possible charges for criminal activity? Surely this would be serve as a deterrent to those who might otherwise consider doing the wrong thing. It’s not much of a deterrent when the company pays and the shareholders suffer the losses.