DYSPEPSIA GENERATION

Read it.

Back in January 2007, Mayor Bloomberg issued a report complaining that “the prevalence of meritless securities lawsuits and settlements in the U.S. has driven up the apparent and actual cost of business — and driven away potential investors” — and then his own city law department turned around and sued Apple over the city retirement fund’s investment in Apple stock, which was up 600%.

The university payouts are particularly insidious. Do you expect professors at these programs to denounce Apple for caving in to this legal pressure at the expense of its shareholders when the professors themselves are to be beneficiaries of the payout? It’s interesting that NYU, whose Professor David Yermack virtually invented the options backdating issue at the center of the Apple case, gets no money. These corporate governance programs are supposed to be about protecting shareholders from poorly run companies, yet here is a case in which the corporate governance professors themselves are preparing to accept $2.5 million that is being taken away from the shareholders of Apple. It’s outrageous.

Apple’s management doubtless decided that the settlement, which is puny in the context of Apple’s profits or revenues, would be less costly than the legal fees and management time involved in continuing to defend the litigation. Doubtless some shareholders and non-shareholders would have preferred that the company stand on principle and fight, but at least on can understand Apple’s position on the matter.

Well, they realized that the current political climate favors the Crust, so the decided to pay the Danegeld. Modern corporate governance considers six months to be a long-term view.

Extortionists of the Crust, unite! You have nothing to lose but … well, you really have nothing to lose.

I’m just astonished that Jesse Jackson and Al Sharpton didn’t try to wet their beaks as well. Although that may be coming.

This entry was posted on Thursday, October 7th, 2010 at 07:17 and is filed under Dystopia Watch. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.