Corporations would not exist without the financial support of their respective shareholders. Attorney Juan Monteverde helps to explain how corporations are supposed to protect shareholders and account for all spending. Yet, time after time, well-publicized as well as relatively unknown examples of corporate greed and malfeasance continually occur when the people in charge think they are above the law.
From the very recent disaster that was the FTX cryptocurrency to accusations of fraud among nonprofits, fraud and wrongdoing are virtually continual. Let us take a closer look at how corporations are supposed to protect shareholders and how to hold them accountable when they do not.
Quarterly and Annual Financial Reports
Transparency is the only real way to protect shareholders against the misuse of funds and criminal acts by corporate leaders. Whether it is a board of directors, executives, or workers handling financial accounts, the potential for misusing shareholder dollars is very high in corporations.
Quarterly and annual financial reports are the strongest tools for enabling shareholders to know how and where corporate leaders are spending their money. The reports should include detailed lists of expenditures, revenues, and assets acquired and held by the corporation.
The reports enable shareholders to stay abreast of the corporation’s financial dealings. The reports give investors a better idea of whether or not their investments are helping or simply enriching one or more people at the top of the corporate food chain.
SEC Investigations Into Financial Wrongdoing
Ever wonder how corporate fraud and wrongdoing come to light? It usually starts with a complaint to the U.S. Securities and Exchange Commission (SEC). The SEC has the power to initiate an investigation into corporate fraud and other potential crimes.
An SEC investigation enables the federal government to closely inspect all revenue intake, expenditures, and assets claimed by corporations. If it finds anything wrong, the SEC investigation might trigger a federal prosecution of those identified as violating federal laws.
The investigation also can give shareholders the power to file federal civil suits against corporations and specific people within them, like board chairs and other members, CEOs, and other executives and managers.
Civil Suits Can Help to Recoup Shareholder Losses
A civil suit that is based upon the results of an SEC investigation into fraud, misspending, and other corporate malfeasance is a strong tool for shareholders. Attorney Juan Monteverde helps those who are wronged to right the ship as much as possible by regaining a significant amount of their respective investments.
Unfortunately, many examples of corporate fraud end up with no money left over. But the ill-gotten wealth acquired by corporate leaders who thought they were above the law often can help to fund at least partial reimbursement for wronged shareholders.