The Federal Trade Commission (FTC), which fined Facebook $5 billion for privacy violations, is not enough. The market learned of the fine, and Facebook’s market value jumped to $10 billion. Chief Executive Officer (CEO), Mark Zuckerberg, saw his net worth rise by $1 billion. Facebook’s leaders were happy. Why not? The market price rose because Facebook didn’t agree to wrongdoing. FTC accused the company of the crime of “deceiving users” that they could control their privacy. This was a good result for Facebook. Facebook is now able to continue its greed-induced policies unaffected by the firm paying. The $5 billion fine isn’t a severe penalty. It was 23% of the profit last year ($22 billion) and less than 10% revenue.
Facebook Fine Excuses Its Leaders: $5 Billion.
Facebook: Who or what are you? It doesn’t talk, walk, or think. So how did it do this? Its CEO Mark Zuckerberg, Sheryl Sandberg, Chief Operating Officer (COO), and other top executives decided the matter; they are guilty. They must be held accountable by the law, not the shell, vessel, or inanimate corporation Facebook. It sends a horrible message to leaders that they exploit by imposing a fine on the company but not on its executives. When their greed or other actions lead to wrongs, they get a free pass. They gain until the vehicle is stopped. This is similar to the law giving a driver who has been drinking a ticket for their car but exonerating them.
Supreme Court Made Corporations People
A broken system needs to be repaired. It is possible to find companies and exonerate their leaders. The Supreme Court’s 2010 decision reaffirmed companies’ status as individuals. The logic is clear to me. It’s easier to tax, sue, and good companies than it is for people. Prosecutors find it more difficult to convict individuals in companies than they do their employees. Sometimes it is difficult to prove who was responsible for these crimes. It means that we have to work harder and smarter when evidence points to widespread misconduct in the firm. The law must hold the CEO and board chair accountable.
Executives are not exempt from penalties by the Supreme Court’s decision. It extends beyond executive legal liability. Leaders take risks that could lead to crimes, and it is easier to blame the company. Leaders abuse people’s privacy, commit fraudulent acts, receive bonuses, and investors are paid for their misdeeds. Big Pharma is an excellent example of how crime pays. Their behavior can cause harm and even death. This behavior must end. Prosecutors must sue the company and its leaders.
Big Pharma gets away with much.
Corporations are not human beings; they do not make decisions. If a “firm” causes harm to people by offering products or services, the law must bring suit against that person or persons. If the firm doesn’t decide, it is wrong to sue the entire firm. The CEO, board chair, and COO should be held accountable. Prosecutors didn’t charge or imprison any Wall Street senior executives for the Great Recession-related crimes. This is not about bad decisions but corrupt practices. Wall Street executives will continue ruining lives and making huge profits. This is wrong! It’s not possible for people to commit crimes and still receive large bonuses.
Pfizer, Wells Fargo, and financial firms that existed before 2008 are examples of how criminals can be committed while not being punished. If only the law is able to charge firms for wrongdoings, then company leaders will be tempted to take risks that could even endanger lives. Although executives may not design products that kill, they are well aware of the enormous profit potential for new “breakthrough” drugs. This is the Pfizer, Big Pharma way.
Pfizer’s Transgressions
Pfizer was fined billions for its misdeeds. Yet, no one in the company was ever sentenced. Pfizer’s heart-valve problems led to several deaths. However, the FDA did not stop Pfizer from distributing these valves. Pfizer had to stop producing the valves after 300 deaths. By that time, thousands had been implanted. Pfizer had spent approximately $200 million in 1994 to settle similar lawsuits.
In the 2000s, Pfizer’s crimes continued. Pfizer agreed to pay $2.3 billion in 2009 to settle a civil and criminal liability for illegally marketing certain drugs. These were the crimes that American Greed committed on April 7, 2010. Two subsidiaries of the company pleaded guilty to a felony to misbranding Bextra with intent to defraud and mislead. Pfizer’s corrupt activities continued. It had two significant events in 2016. It paid $784 million for the settlement of underpaid Medicaid rebate charges. It also agreed to $486 million to settle a securities class-action lawsuit in which it misled investors about Celebrex’s safety. In May 2018, Pfizer agreed to pay $23.85million to settle claims it violated the False Claims Act. This was in response to allegations that it “paid kickbacks to Medicare patients… Pfizer also had pricing, safety, and marketing misdeeds and spent billions of dollars in fines. However, each case was settled by its executives.
Big Pharma Fined Billions, But No One Was Jailed
Pfizer’s culture is characterized by greed and lack of integrity, according to the facts. Can we trust Pfizer and other drug companies? The FDA allows them to use coercive and aggressive tactics against the public. Are their lobbying activities protecting them? Pfizer spent $11.5 million lobbying Washington last year, and the Pharmaceutical Research & Manufacturers of America contributed $28 million. Pfizer also spent $1 million for Trump’s inauguration gig. These are Pfizer’s insurance premiums.
It is a shame that Big Pharma’s crimes have so many victims, while politicians and leaders gain. What is the minimum Pfizer or other companies need to be ethical? Their behavior is accepted by the system. Their profit motive is not the issue. I support companies making profits but not lying, cheating, or destroying people’s lives.
Wells Fargo Fined $1 Billion Nobody Arrested.
In 2018, Wells Fargo was fined $1 billion by the Consumer Financial Protection Bureau (CFPB). This was for conduct that caused or was likely to cause significant injury to consumers. Wells Fargo violated the law and caused harm to its clients. It charged clients more for mortgage interest rate-lock extensions and operated a mandatory insurance program to increase auto loans. Leaders knew that the scheme was widespread within the company. They approved it. Did they support it? In either case, the person or persons responsible must pay. The CEO and board members did not pay, but no other senior officials did. This abuse follows 2016 one in which the CFPB had fined $185million to stop the “widespread illegal practice of secretly opening an unauthorized credit card and deposit accounts.” No one was ever sent to jail or fined. However, they did lower-ranking fire staff. Wells Fargo is trying to rebuild its brand today, but some employees don’t see any systemic changes.
Firms should limit their liability but hold leaders accountable.
Negative consequences can result when we treat companies as people. It encourages leaders to be greedy, which is evident by Big Pharma’s actions that hurt the public. As they receive large bonuses, they break the law in the belief that the law will not punish them. It encourages lobbyists and politicians to bribe dishonest officials to block regulations that protect the public. District attorneys do not charge CEOs who might be needed to reelect them, but they penalize their companies instead. People make the decisions, but the firms are responsible for any consequences. I don’t mean bad choices. I am referring to illicit ones.
A business is an entity that provides services to clients. Employees may offer these goods and services, but they also take risks. That’s normal. The only entity that can create wealth is business. Encourage firms to grow and create new jobs. We must recognize that business is a vehicle for creating wealth. Companies should not receive welfare benefits or pay taxes and only pay fines when the CEO, board members, or other senior executives do. The firm’s penalty should be a signal to the owners to fire the top leadership and return any bonus they have earned for fraud. For the company’s illegal actions, we must punish the person or people. Is this a way to limit investors’ liability? It does not see people in companies who decide who should be sent to prison and fined for their crimes.
Proposals to Resolve Negative Effects of Treating Firms as People
I support the limited role of the state in business and the economy. There are few rules that can be applied and leaders who can be held accountable for their illegal acts. The current status of limited liability corporations (LLCs) is crucial. Leaders make the decisions, and the law holds them responsible for their crimes. Companies must pay penalties for harming the environment or people. In every instance, senior employees or managers of the company must spend money and serve jail time.
After studying several corporate crimes in which only the company paid the penalty, I didn’t understand why leaders avoided jail. This baffles my mind! These people were exposed to breaches, and their leaders fired whistleblowers. Yet, Pfizer and Big Pharma, Wells Fargo, and Facebook leaders saw their companies fined. They kept their rewards. They received enormous bonuses for their decisions, which they held until the government stopped them. Sometimes leaders fire or blame low-ranking staff members for the negative results, as Wells Fargo did.
Facebook’s $5Billion fine is a wake-up call. We must hold those responsible for the crimes of their companies accountable. These are some suggestions to help you do this:
Seven Steps to Fix the Problem
Do not disintegrate large tech companies. Politicians want to dismantle large tech companies. This is a bad idea as it doesn’t address the real issue. Splitting these companies will only make the problem worse. What’s the problem? Boards and executives that aren’t accountable. We must enforce the laws. We must follow the principle that if we assign collective responsibility to a company and then charge it, we must also punish the CEO and the board. We must punish the CEO and board for their crimes. They are the ones who get credit for the boom. It’s only fair that they take the blame.
Companies shouldn’t be held responsible. This is absurd. Never fine a company by itself. The wrong was committed by the CEO, board, or other senior executives of the company. Only after a person or people is charged can the company be fined. Only to punish shareholders. They must also remove the CEO and other executives and seek damages.
Forbid executives from selling drugs for illegal purposes or other than those approved by the FDA to be repaid. This would make it less tempting for leaders to promote risky drug sales in order to gain short-term profits. For example, Pfizer executives should return the bonus they received from Bextra’s massive profits. The leaders of Wells Fargo made a fortune from illegal accounts and other crimes. They must also repay their bonuses.
Eliminate corporate welfare and taxes. Companies should not pay any taxes on their earnings. The marginal tax rates for income and benefits earned by employees of a firm are applied to tax people. Tax income, dividends, and stock options are all subject to the same tax rate. This principle is to tax people and not wealth-creating vehicles like the company.
Ex-Congressmen and Women and White House staff must stop direct lobbying or indirect lobbying in law firms for a period of ten years from the date they leave office. People who violate this rule will be sentenced. They are prohibited from voting or presenting laws that affect people or firms from which they might receive cash or other benefits.
Advertising pharmaceutical products is prohibited unless it includes three elements:
FDA approves drugs for advertised purposes.
Side effects are just as significant as the benefits.
Current problems related to the drug. The state reported issues for Bextra.
Ask doctors to disclose their relationship with drug companies at their reception desks and offices. This can lead to conflicts of interest that could affect the drugs doctors dispense. In the past, it has. Let’s get rid of the temptation. Patients need to be aware.
Conclusions
It is absurd for a company to be fined for wrongdoing but not to charge any employees. I’ve been involved in several securities class-action suits. Although companies were fined for lying, the CEO, board, and other members of the company received their jobs back, and they were not jailed or fined. This is absurd! Someone lied, and that person has to pay. It’s no wonder that the public has a negative view of the business.
