Equifax CEO Richard Smith Who Oversaw Breach To Collect $90 Million (fortune.com) 170
An anonymous reader shares a report: The CEO of Equifax is retiring from the credit reporting bureau with a pay day worth as much as $90 million -- or roughly 63 cents for every customer whose data was potentially exposed in its recent security breach. Richard Smith, 57, is the third Equifax executive to retire under pressure following the company's massive data breach revealed earlier this month, putting the personal information of as many as 143 million people at risk. Equifax said Tuesday that as a condition of Smith's retirement, he "irrevocably" forfeits any right to a bonus in 2017, an amount that under normal circumstances would have totaled more than $3 million -- the bonus he received in 2016 -- according to the company's retirement policy. But the CEO is still set to collect about $72 million this year alone (including nine months' worth of his $1,450,000 salary), plus another $17.9 million over the next few years. That's when the rest of Smith's stock compensation hits a few important milestones or "vests," allowing Smith to essentially put it in his bank account. Altogether, it adds up to a total potential paycheck of more than $90.1 million, according to Fortune's calculations based on Equifax securities filings.
Still a kick on the bum (Score:1)
Re:Still a kick on the bum (Score:5, Funny)
Imagine if someone get his details, pretends to be him and steals it all. While that would be very very naughty I fear I might laugh a little bit.
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Laugh a little bit? More like offer praise to the perp.
These guys belong in jail and all their ill-gotten gains taken from them
What is wrong with criminal charges against him? (Score:2)
Do we not have SOX [wikipedia.org]?
Did he not sell his shares with insider information? Why is he not under indictment?
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The latest Red Scare is just a big nothing burger.
It's ironic that posts about Russian hacking are being done by a bot. This is the third identical post I have seen here today. So rather than being a "nothing burger" these posts indicate that the very interference they are trying to play down is in fact still ongoing.
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Retractions don't matter. People read the headlines. Zealot propagandists cite the headlines.
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I was thinking more of an assassin team with glass or ceramic knives.
No metal ripping required.
The perfect example of scam from 0.1% (Score:1)
People were yelling 'we are the 99%', but so what?
We can't do shit about scams cooked up by the ultrarich 0.1%
Not only they handed over our IDs, our credit info, our address, our property list, and so on to the hackers (by employing a music major overseeing online security, thanks to Political Correctness), they still get to get tens of millions of rewards doing such a criminal thing !
Go fuck yourself, you motherfucking 0.1% fuckers !
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People were yelling 'we are the 99%', but so what?
We can't do shit about scams cooked up by the ultrarich 0.1%
Not only they handed over our IDs, our credit info, our address, our property list, and so on to the hackers (by employing a music major overseeing online security, thanks to Political Correctness), they still get to get tens of millions of rewards doing such a criminal thing !
Go fuck yourself, you motherfucking 0.1% fuckers !
I still grieve over the 99% falling to identity politics. As long as identity politics dominate don't expect any economic justice. Bernie and Bannon are the only two really trying to get the average American to a better spot. As both are largely outside circles of influence that tells you our odds.
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Bernie and Bannon are the only two really trying to get the average American to a better spot.
Those 2 names should never appear in the same sentence with an "and" between them. You're going to melt brains.
There was actually a lot of overlap, economically speaking, between what the two advocated. Mind you this was before Bernie sided with illegals per Democrat requirements. In his earlier independent days he had pointed out both that trade policies (TPP et al) and immigration were both hurting the middle class. Pretty inline with Bannon in terms of economics. Citations:
http://www.politico.com/story/... [politico.com]
Re:Still a kick on the bum (Score:4, Insightful)
This is exactly why these breaches occur and will continue to occur. When there is no penalty for incompetence and the worst that can happen to you is that you get to "retire" with a huge payout, then there is zero incentive to actually run your business properly.
Re:Still a kick on the bum (Score:5, Funny)
I wonder who their advisers are....? Anyone got a number?
Re: Still a kick on the bum (Score:1)
They probably use Dewey, Cheatum, and Howe
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I'm sure there will be consequences for someone. Probably for the poor developer who wanted to update the buggy Struts module, but wasn't told not to by upper management because it would delay some new marketing roll out.
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This is exactly why these breaches occur and will continue to occur. When there is no penalty for incompetence and the worst that can happen to you is that you get to "retire" with a huge payout, then there is zero incentive to actually run your business properly.
Exactly. Perhaps if allow each victim to hit him exactly once, with no weapons allowed. Given 90 million people he won't last. Better yet, maybe we keep finding upper managers until all 90 million have had their chance.
Stock recovering (Score:4, Interesting)
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Yeah well human suffering and/or death aren't accounted into the stock price, so GET DEM MONIEZ! Buy low, sell high! Use it to buy perfumes to cover up the stench of human corpses if they start to pile up! Yay capitalism!
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comeuppance (Score:1)
Re:comeuppance (Score:5, Insightful)
Of course, he already supervised the posting of his personal information along with everybody else's.
It is amazing (not) to me that the board will let this happen. If his contract gives him this cash regardless of competence, then the board made a poor contract. If the contract requires competence for compensation, the the board should not give out the cash.
Come on, man. You know this works. It's a club where they all pay each other.
FTFY (Score:1)
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Come on, man. You know this works. It's a club where they all pay each other with someone else's money.
Heh, should have been you know how this works. But yes, it's always better with other people's money.
Nothing to see here (Score:2)
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https://www.wsj.com/articles/o... [wsj.com]
https://arstechnica.com/tech-p... [arstechnica.com] (doesn't have full text or anything, but wsj's paywalls are mildly annoying)
Re:Nothing to see here (Score:4, Interesting)
Not saying his transactions are or aren't overtly suspicious, but significant profits amidst potentially massive losses for so many make one look like a complete douche.
But that's the gag with totally royal douchebags . . . they don't really care if they look like one.
See Darl McBride for an excellent example. If Microsoft pays you a pile of cash in the Cayman Islands, what do you care what other folks think of you . . . ?
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[snark]Business as usual in Americana.[/snark] Not saying his transactions are or aren't overtly suspicious, but significant profits amidst potentially massive losses for so many make one look like a complete douche.
Meh, if I had $90 million I don't think I'd care if people thought I was a douche. My friends at the country club likely wouldn't care if the peasants thought so either. It most certainly is business as usual in Americana.
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Totally agree for $90M anyone can call me whatever names they'd care to. I'll laugh all the way to the bank, than a little more after, and probably a lot from the deck of my paid for mountain top estate; eating the pizza paid for with interest and dividends on the rest of the money.
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Meh, if I had $90 million I don't think I'd care if people thought I was a douche. My friends at the country club likely wouldn't care if the peasants thought so either. It most certainly is business as usual in Americana.
What if it mean you could never, again, walk safely down a public street, or go to a beach without a team of 'muscle' security following along. Never go to a concert except in antiseptic 'box' seats.
Yeah, that has some appeal, for awhile.
Re:Nothing to see here (Score:4, Insightful)
What are you talking about? It's not like he is Osama Bin Laden for God's sake. He's yet another corporate white dude that probably only 100 people in America could pick out of a photo array right now.
This is Normal Shit.
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If you have $90m, you can build your own private streets to walk down, buy your own private beach, and afford private concerts. They have this figured out...at least up to the point where they're hiding from pretty much everyone. Then their plan is to flee to remote properties on New Zealand, plug their ears and yell "LALALA I'M SAFE IN THIS INHABITED LOWISH-INCOME ISLAND!"
Demented (Score:2)
A buisness case for CEOs (Score:3)
We need to get away from bonus and stock manipulation culture that creates direct incentives to CEOs that conflict with long-term shareholder interests.
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Bonus and stock manipulation does not cause incentive for CEOs to conflict with shareholder interests. That is literally the opposite of what CEOs are supposed to do. They are supposed to follow the interests of shareholders or face rejection and replacement, and the interest of shareholders is to squeeze out another penny of profit wherever possible. Companies were not always like this, they acted in the best interest of the CEO and chairman of the board. But then a lawsuit set case law which forced c
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And the entire point of long term stock options was to get companies thinking long term instead of per quarter profits only. If your stock only vest after 5 years, you have to think 5 years. Of course it was rapidly abused... The creative opportunity thinking people that make the best company leaders are good at finding compensation loopholes.
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And the entire point of long term stock options was to get companies thinking long term instead of per quarter profits only. If your stock only vest after 5 years, you have to think 5 years.
But the difference is that if I have RSUs/options that have not yet vested and leave the company, I no longer have that stock. If executives do the same thing, they keep their non-vested shares and often get the vesting accelerated. Maybe if they actually enforced the vesting period on departing execs, having long vesting periods might make a difference in long-term thinking at the top, but since boards are made up of executives from other companies (who also want their boards to give them sweetheart deal
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I don't think there is a business case for the 'Celebrity CEO' You look at the relative performance gains some of this big name WSJ presser article guys get compared to lessor known peers at similar corporations not drawing nearly as much salary and I agree it just isnt there.
There is something to be said for strong leadership and vision. You cant always get that from some inside tracker. Sometimes you only need a caretaker to keep on keeping on if the company is doing well. Sometimes you need a strong
Re:A buisness case for CEOs (Score:5, Insightful)
I think there are two main problems with CEOs in the US.
1) Imperial CEO myth -- the idea that a single, all-powerful CEO is somehow the sole source of company success (and failure). I don't quite understand how this became true -- it's possible there are some corner cases where a change in CEO resulted in a significant company turnaround (like maybe Jobs at Apple). But for the most part, corporations are huge organizations that rise and fall based on group effort and lots of externalities beyond their control. Too many people are over-invested in the idea that a CEO is singularly responsible for a corporation.
2) Closed-loop compensation committees. Executive compensation committees wind up being board members of other firms, and many of them are executives at other companies are members of these committees. It's an conflict of interest and they use the Imperial CEO concept to justify ridiculous compensation packages.
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Either pay them a lot, hire a psychopath, or both.
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I'm always curious about the so-called shortage of CEOs. It's true there's a lack of CEOs with a proven track record within given business sectors, but that's mostly because there's a lack of CEOs in a given business sector, fewer still that are "successful" because by definition every business that's not #1 in its industry isn't as successful.
Even corporations don't believe that someone running a hospitality business is the right choice to run a vehicle manufacturer, no matter how successful they were in
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I think there's an analogy to NFL quarterbacks. Because there is competition between companies, you want to have a better CEO than your competition. For example, if K-mart had gotten a better CEO, maybe they would have beaten Walmart (I don't know, but there is definitely that perception).
So every NFL team wants the best quarterback, but there is only one best. There are a lot of really, really good quarterbacks, in fact eve
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The CEO is the most highly leveraged decision maker in the organization. A small error by a janitor in making the most important difficult decision they are tasked with making will probably never be noticed by anyone, let alone result in a company going bankrupt. A small error by a CEO in making the most important difficult decision they are tasked with making may ultimately sink the entire company - costing shareholder billions of dollars and tens or hundreds of thousands of employees their jobs.
This motiv
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What you're describing is the other problem of the Imperial CEO -- investing a single person with life or death, bet-the-firm decision-making authority.
I think there's two problems here. One, it's kind of a fallacy -- no CEO has the ability to ingest the mass of data that exists to rationally make these decisions. They have armies of support professionals who analyze and summarize data in ways that allow CEOs to make "the decision". So the Imperial CEO isn't really some super-human making amazing rationa
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Somehow big and sometimes bold decisions must be made in a company and direction and culture must be set. If not a CEO or other single human, how would this work? Some group of humans must make "life or death, bet-the-firm" decisions -- what is the advantage of that group having a cardinality greater than one? The more people in a group, the less likely it is to make bold decisions -- the larger the group, the more likely decisions will be "safe" (in the short term) watered down compromise decisions which w
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CEOs certainly do benefit shareholders. It's generally advantageous to have a single person who bears final responsibility for making day to day decisions.
The problem is, all these companies keep paying their CEOs too much. Research shows that the less you pay your CEO the better they perform.
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That would be fine in an employee owned company where each employee owns a share of the company proportional to their salary -- they, of course, would then be called "shareholders". For a company owned by outsiders (i.e., individuals who put their money, directly or indirectly, at risk by investing
This ladies and gentlemen is why I favor (Score:5, Insightful)
The 1%ers take care of each other and make sure that wealth accumulates at the top. Then that wealth is turned into power so they can get away with stuff like this. Money is power and we've let about 20,000 people have nearly all that power because we're not comfortable with taking it away from them. This stuff is gonna keep happening until we do.
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Money is power and we've let about 20,000 people have nearly all that power because we're not comfortable with taking it away from them. This stuff is gonna keep happening until we do.
We could separate money and power though. 2 term limits for EVERY POLITICAL office. Candidates should be DRAFTED, except for an incumbent who is seeking a second term, rather than self selected group of office seekers.
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https://en.wikipedia.org/wiki/... [wikipedia.org]
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We would be going back to 1940-1970 tax policy, you remember, the time and place in all of history that had the greatest economic and technological progress.
The unintended consequences might be that we get permanent colonies off world, them expected lifespan of citizens increases 25% and technologies we can't even dream of will be commonplace new product releases every year.
Doesn't sound so bad.
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a 90% marginal tax rate on income over $1 million a year (note, that's _marginal_, meaning you don't pay it until you hit that threshold, before that you're paying the same as folks in the lower brackets).
That's one for you, nineteen for me ... TAXMAN ...
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You really think that would change anything? Hey, let's take Mr. Evil Corporate Guy's money and give it to the government! Who do you think runs the government? Who do you think Equifax is? It's essentially a wing of the government already, and it was intended that way from the start.
Ask yourself why an Equifax should have such a say in the average American's life? Why do we live in a society where 99% of the people are in debt their whole lives?
Yes, I do (Score:2)
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You could easily argue that it was a coincidence. This was also the post-WWII period, when much of Europe's industrial capability had been blasted to smithereens. There was a huge boost in demand and we were the country with the infrastructure in place to handle it.
Anyway, my point is not about the income tax rate. It's about the laughable idea that it punishes Mr. Big at the top. $90 million is nothing to the real players in and out of government who pull the strings. An absolute joke. And giving the money
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So under that logic you also advocate punishing success for the rest of the CEOs who are ethical and who create the jobs that supply the government revenue rolls. I don't see that as a solution.
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a radical estate tax (Score:2)
Estate taxes are good at collecting what amounts to a wealth tax from actual real estate holdings located in (or near to) any major OECD metropolitan area, or associated fly-over country.
I'd actually like to see the estate tax scaled by age difference between the goner golden cuff links and the grinning silver spoon.
For a long time, you could make a real return (without even scamming the IRS) of about 4% per year on equity.
So scale back the size of the lump bequeathed to each recipient by -4% (or -3% per ye
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Taxes on wealth are by definition unfair (Score:2)
Or to put it more intuitively:
Add to that:
You're missing the point (Score:2)
You tax income over $1 million at 90% to prevent the accumulation of power into the hands of a lucky few. Otherwise your democracy quickly gives way to oligarch
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The amount of money beyond which the rest is excess is always going to be arbitrary and vary wildly from person to person. Just a couple decades ago I would have viewed my current fiscal situation as allowing a life of luxury. Now I look at my wages and think about how much better off I'd be with a $10k more a year. Meanwhile I read an article once where a couple with an income of around $350k felt they were living pay check to pay check. Of course the things they talked about as being necessities strike me
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Solandri, justifications sound pretty slimey, it's why people hate this shit. This apparent and ongoing decadence is exactly what was going on in Nazi Germany before WW2 and there were justifications there too.
When salaries and wages don't increase for over a decade it's natural for people to start asking why these people get so much more in relation to the sacrifices they are making. That's when people who do this don't get punished for their lack of competence reading the present. They come across as
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Thank you, that was a very interesting article.
If someone gets what they worked for everyone is happy, however not so if it is at everyone else's expense.
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You mean someone who did a meaningful thing like find the cure for a disease that has plagued mankind for all of written history? They never end up with that kind of cash.
We're clearly doing the wrong thing (Score:1)
Crime and corruption pays and it seems to be getting easier to get away with it too!
Look at it this way... (Score:5, Interesting)
It's cheaper than keeping him.
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I'd like to let the equifax board know - that I'd be more than willing to fuckup their company for 1/100th the amount this guy is making.
I wish golden parachutes.. (Score:2)
..would behave like an actual golden parachute. Some landing that'd be if they still took it anyway.
Whatever happened to Captains going down with their ship?
This should stop it from happening again.... (Score:2)
CLAW BACK (Score:2, Interesting)
Claw back the bonuses for the last several years.
If the stock tanks, he should not get any benefits!
I'm in the wrong profession (Score:2)
Seems that appearing incompetent and compromising the privacy information for millions at $0.63 a head is the way to go.
Why didn't I think of this????
I, wish I could sell snake oil this well.
Nothing to see here. (Score:2)
Perfect Failure (Score:4, Funny)
This is what I call a Perfect Failure - an incident, which in spite of being considered a failure by all parties involved, still leaves the party responsible better off than they were before.
From the perspective of the CEO, the "failure" was purely cosmetic. If only I could collect $90 million when I made a mistake..
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I doubt he's better off. He has $90 million, most of which is probably in the form of Equifax stock (is that $90 million at current stock price, or pre-incident price?).
Before he had a job that paid him millions per year, like a better payout if he retired with honour, and the guarantee of the golden parachute if he got ousted.
Poor guy probably lost at least $100 million in all this.
This isn't an example of someone being better off for royally screwing up. It's a particularly infuriating example of just h
Imagine your punishment. (Score:2)
If you only made 50k a year and didn't have a "C" as the first letter of your title.
90 Millions... (Score:2)
When you can get a bullet for a few cents and someone to use it for a couple thousands...
Makes no difference though (Score:2)
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Maybe :)
But that is not what I was saying.
Incentives my a$$ (Score:2)
Conservatives often say that huge inequality is necessary to motivate people to work hard, grow companies, and create jobs. However, golden parachutes like these do just the opposite. The "punishment" for screwing up is a luxurious quiet retirement.
So he gets to keep vesting after leaving? (Score:1)
For any of us pissants making less than a million a year, once we quit, retire, or are terminated, our "vesting" in whatever our stock options are is over and done and we can cash out at our current vested rate. So this ass-hat gets to "retire," take in around as much as he would have made had he continued to work this year, take in funds for the next several years (though not at the rate he would have if he had stayed, poor thing) AND continues to vest his stock options?
I need to find me a company to run
Poor Guy (Score:2)
its good to be the king (Score:1)
Oh wait, he probably has the overriding indemnification-for-all-things clause in his agreement as well.
My mistake.
Meanwhile in Vietnam... (Score:3)
A bank head was just sentenced to death for a fraud involving less money than this guy's payout. "Dozens" of former employees of the bank have received long jail terms.
http://www.bbc.com/news/world-... [bbc.com]
Now on the one hand, while Vietnam is on one of its periodic anti-corruption sweeps, this is mostly about the guy being a political opponent.
But, really, it's the very idea of the senior officials of a bank showing up in a criminal court at ALL, receiving jail time at ALL (rather than the bank paying a highly-affordable fine) that's the remarkable sight, here. Western culture can offer no comparable example.
Customers??? (Score:5, Interesting)
... roughly 63 cents for every customer whose data was potentially exposed in its recent security breach.
A customer is someone who purchases a commodity or service [merriam-webster.com]. The vast majority of those put at risk by Equifax's fuckup were in no way "customers". Unless they were capable of purchasing EVERYTHING using cash, or opting out of mainstream society and living off the grid altogether, they had no true choice in the matter of whether or not their personal data was under Equifax care. Calling them customers implies that they were partly responsible for their misfortune because in having chosen to deal with an irresponsible vendor; the fact is that they are simply victims of a too-powerful company's careless disregard for its responsibilities and obligations.
Can I get a 'HELL, NO!' from y'all? (Score:2)
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He clearly waited to tell the public about the breach until after he'd arranged for his 'golden parachute', so I say that should qualify as insider trading.
Hate to break it to you dude, but just because you believe something doesn't make it true. There's zero evidence of this. Insider trading however would apply on the stock he sold the day before the breach was announced. But golden parachutes are not negotiated at the time of a disaster. They are negotiated long before (i.e. when you're hired) and then re-negotiated as the board asks you to leave.
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Hate to tell you dude, but just because you believe something DIDN'T happen, doesn't mean it's NOT true
Indeed. That's why we have tests that we apply to these thought experiments. Occam's razor is a good start, as is reading the law you're actually accusing him of breaking despite negotiation of salaries having zero to do with insider trading.
So STFU, whose side are you on?
Neither. Notice how I made no comment on the person's character and didn't express any opinion on the situation at hand other than tell you how these contracts are typically negotiated and what would constitute insider trading. If I had to pick a side it would be the on
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Market solution to this... (Score:3)
Small minds talk about people (Score:1)
Great minds discuss ideas
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No, civil wars generally involve balanced sides in conflict.
This is more just a matter of sloughing off some scum up at the top.
This guy isn't finished yet, there are bound to be continued inquiries. 90M can buy a lot of lawyers, but lawyers can only go so far.