Why should investors be “punished” for having made a bad investment?
Are the fines (which directly impair financial performance), reputation damage (indirectly impairs) and operational obstacles (directly and indirectly), not sufficient? The value of the investment falls compared to a world where the bad behavior never took place. Investors will be incentivized to move their investment elsewhere. Everyone is disincentivized from said behavior and others are deterred from investing in ventures that seem likely to repeat that behavior.
What if you meticulously invest in the most pro-social / low-externality businesses, but it turns out management were egregiously comically evil and lied about everything? Should you be “punished” (again, beyond the financial damage to your investment) for the bad luck? Or because you had limited time / information for due diligence?
Are the fines (which directly impair financial performance), reputation damage (indirectly impairs) and operational obstacles (directly and indirectly), not sufficient? The value of the investment falls compared to a world where the bad behavior never took place. Investors will be incentivized to move their investment elsewhere. Everyone is disincentivized from said behavior and others are deterred from investing in ventures that seem likely to repeat that behavior.
What if you meticulously invest in the most pro-social / low-externality businesses, but it turns out management were egregiously comically evil and lied about everything? Should you be “punished” (again, beyond the financial damage to your investment) for the bad luck? Or because you had limited time / information for due diligence?