Once they get the share price down enough they can buy the company for pennies on the dollar using the retention bonuses they give themselves. When studying law at university I remember the lecturer discussing how any company used to protect managers from committing a crime is null and void in terms of those protections. Stealing and fraud are criminal offences. The problem is there is just too much crime and not enough money/bureaucratic efficiency to enforce.
Have a look at Blue Sky Alternative Investments, where millions in bonuses were paid after a 100 million dollar loss (5 times their largest profit), the company then borrowed 50 mill and ended up in receivership less then 6 months later with a possible 100% interest rate charge. Now the CEO when the borrowing happened is buying assets from creditors who did not disclose how much the transfer was for. Both the CEO and the creditor worked for the same company in the past and the receiver's company was also hired by the company in a court case which resulted in a secret out of court settlement by people accused of stealing IP from the company.
Yet to see any lawsuits and enforcement action taken.
