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Comment by duxup | Hacker News Reader

I guess the question is, if you feel a company lies about something (just for the sake of argument let's assume that is true) and it hits the stock price, even if you don't own the stock directly... is that still fraud and do you have legal standing to sue?

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The question is rather: Why should a foreign company have to care about whether it is fraud in your jurisdiction? I can see that you possibly can sue whoever is offering the ADR in your jurisdiction, and that they can possibly sue the company in their home jurisdiction, but not like this.

Hasn't the question of if a foreign company can be sued in another country largely been answered in most countries as, yes?

No, most countries will not allow their courts to assert original jurisdiction for torts or crimes committed in other countries by foreign actors. The US has more exceptions to this then most other countries, for instance the controversial https://en.wikipedia.org/wiki/Alien_Tort_Statute

But even the Alien Tort Claims Act only applies to torts, and only to those which are "...committed in violation of the law of nations or a treaty of the United States."

Other countries have a mixture of ideology and consequences which limit the scope of their jurisdiction.

The ideology itself formed mostly from historical consequences and collaboration with neighbors.

The consequences being their relationship with other countries. Specifically related to negative consequences that have an impact.

The US ideology has no limit to its scope, and the consequences are non-existent. When other countries disagree with US ideology, their desire to maintain a relationship with the US is greater. This allows the US to so far operate with impunity, with notable exceptions being Russia and China, which do ignore administrative requests from the US for things within their territory.

This should give a lot of color and context to why the US has a different meaning of jurisdiction than what people expect.

A future US could be subject to unilateral drone strikes and internationally coordinated sanctions, forcing more mutual cooperation and limitations in its enforcement scope.

I think it has less to do with drone strikes and more to do if if you want to do business in a given place and they have courts who take action, you're more attentive to the law there.

Nobody is worried about China drone strikes, but they'll hand over IP or whatever is needed.

It was just an illustrative example which in particular can be severed from the rest without changing the point one bit.

And GDPR.

I would be interested in a financial product that provides just enough ownership in every public company that allows my corporate entity enough standing to seek damages from any of them. A legal liability exposure index if you will.

I can than profit off of being an activist investor with much more leverage utilizing much less capital.

In general damages are proportional to the harm you've suffered. If you only own a tiny amount of the company then you still spend a lot on a lawsuit but only suffered very low levels of economic harm.

If this is what you want, though, you could just buy a share of each public company. (An index fund wouldn't work, I don't think, you actually need to own the stock.)

(not a lawyer)

AIUI most countries, but not USA, award costs as the default position?

If that's true then in such countries you may only win an award of a few Euros but the cost to the losing party could be millions (your and their legal fees). If the company cave and accept liability, or whatever, then they're probably going to have to pay out to all shareholders (or customers); which might be even more cost.

So, even a small ownership can be leveraged.

If my understanding is correct then the unique USA system flips things putting the corporations in the power seat as legal costs for a case are usually much less of a proportion of their cash reserves/profits/available credit. Not awarding costs removes the multiplier making litigation too costly for all but the very richest in society.

In that case, how about a derivative that is a bit like a credit default swap, but it's a sort of legal compliance swap? If a company follows the law, the issuer pays you a modest coupon, but if the company breaks the law, you have to pay the issuer a large indemnity.

It would be a bit like a pandemic bond:

https://www.iii.org/insuranceindustryblog/pandemic-catastrop...

You might even find ready counterparties amongst firms that do business with the company in question, or law firms who take them on on a retainer basis.

I unironically quite like this idea. Now, who do i know at an investment bank?

in some places and situations the loser pays the cost of the other part's attorneys.

I think it might be more profitable to just be a lawyer to the folks suing.

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