This is about Wells Fargo allegedly lying about pursuing diversity in its security filings.
But I'm hearing more and more from friends on the tech interview circuit about processes requiring, in essence, free consulting to be done for a posting that remains listed and unfilled almost indefinitely after the interview (and subsequent ghosting). My hunch is these start-ups don't want to show an empty hiring pipeline to investors. But if that's being pursued wilfully, it seems to imply fraud.
Intelligence on what other firms are doing, even if you are just getting a very high level view. Around 2009, I was working at an algo trading startup, and long story short, after having a previous company call me up after their non-compete in a business ended, and in the process one of them slipping in that they made like 4x what I was making at the time, I decided to look around.
I got lots of bites on my resume! And I was called in for lots of interviews. But they didn't really go anywhere, despite me often feeling like I did well in them. It took me a few months to realize that they were actually just hearing some murmurs about what my company was doing and wanted to learn more about it- we were approaching the problem in a unique way for the time.
Even seemingly innocuous details can give away a lot about a company's strategy. If you are working on say AR at Amazon, and you mention that your group is about 200 people, that says that they are not only going into this space, but doing a reasonably big push on it as well, which might be news to say FB. (This is completely contrived, I have no idea if Amazon is doing AR stuff at all).
I guess anything is possible but this seems unlikely. The type of questions (and followups) you would ask in a job interview are quite different than for an inquiry. Also, there are more straightforward ways of getting this information so why take a more convoluted and less efficient path.
I think you can get more intel than this just by scouring LinkedIn. You might have to use some statistics to eyeball some numbers, but you can get technologies used, group sizes, levels of team members, etc. Especially if you snapshot and compare over time.
The thing about "fake interviews", having gone to several myself, is that they are never completely fake, just very, very unlikely to produce a hire.
I imagine the company internally can say something like "we'll hire if we find someone capable of solving all of department X,Y and Z's problems simultaneously and will do so for market rate. We probably won't find that but looking will make people happy." with the second part said with only winks.
Except if I'm an investor, and someone tells me that they are looking for a specific role that will help the company reach financial goals, they are spending time and money trying to find that person(s) and they aren't actually looking (rather, just posturing) that is fraud-y in a roundabout way. They are spending time and money on something that they know won't pan out. That's a waste of money.
sadly, there can be a lot of inefficies and the number can still go up. That's ultimately all modern (western?) stakeholders care about these days. Not like they can't switch their stocks in days if they get worried.
Except if I'm an investor, and someone tells me that they are looking for a specific role that will help the company reach financial goals, they are spending time and money trying to find that person(s) and they aren't actually looking (rather, just posturing) that is fraud-y in a roundabout way.
Sure, if you're the investor that asks all those questions and has enough information to answer them, you won't be happy. But I think most investors aren't going to drill down to that level. Especially, anyone investing is going to know some money wasting has to happen, some posturing has to happen, just to be trendy and so attract "brilliant/energetic/etc" people as well as more investors. And a given start-up investor has to want more investors since the company runs on an accelerating flow of funds; your money is only being multiplied if other people are tossing in theirs and if your money isn't being multiplied, it's vanishing.
I could only read the first paragraph, but it seems like the article is about a specific type of fake job interview rather than "fake job interviews" in general.
> My hunch is these start-ups don't want to show an empty hiring pipeline to investors.
This wouldn't make any sense. If a startup has headcount and budget, they're going to want to hire someone as quickly as possible.
Investors don't care about the minutia of how many people are in your hiring pipeline. If portfolio company had board-approved budget and headcount and was failing to fill those roles in a timely manner, that would be a huge red flag that something is not right within the company.
Investors care about result and efficiency. I don't think any startup is going to impress investors by wasting a bunch of time deliberately fake interviewing people and then failing to hire anyone.
What's more like is the company wants to hire, has told the teams they can hire, but the board is reluctant to approve more headcount until the team starts showing results. Another possibility is that they're waiting for financials to improve enough to justify the hire.
Even large corps leave postings up forever as a way to manipulate their stock price. Take down the postings and analysts see it as weakness. This has been going on for decades.
"always hiring" in the same way anyone would hire, say, Steve Wozniak if he knocked on your door.
I think one regulation to resolve this is to outline a term on when you expect to fill the role, in order to delineate between "we need this role right now" (AKA, "urgent hire"), "we want to fill it in 1-3 months", and "nice to have but no rush" postings. It'd give a better signals to workers and make it easier to call fraud if they are "urgently hiring" but repost the same thing 5 months in a row.
That's a nice theory but in reality many things could conspire to prevent you from hiring on schedule: lack of qualified applicants, changing business strategy, reduced budget, etc. It would be hard to tell from the outside whether lack of adherence to the schedule was due to malfeasance or "stuff happens."
>It would be hard to tell from the outside whether lack of adherence to the schedule was due to malfeasance or "stuff happens."
Sure. That's why they get audited for their recruitment like anything else in business. I'm not saying to bring the hammer down, just to have a better excuse than "well we're always hiring!"
Make it a criminal felony for everyone involved with fake job posts. It's wage theft of people who aren't even the company's employees. In almost all other contexts this would be criminal theft. Make it criminal theft in this context too. Once you include the hundreds or thousands of people they've stolen labor from, it easily passes any threshold required for it to be a felony.
Guarantee the ghost job nonsense will instantly stop once the first person is shown being shipped off to prison for a year and one day.
In the absence of proper documentation and genuine feedback, assume it was a fake.
E.g. I had a CodeSignal assessment recently that resulted in the end of my "consideration". If it had been a genuine opening, they'd be able to tell me what the expected score was and how tenured peers at the company are scoring in recent assessments.
Really? Guess they'd better make sure they aren't discriminating unfairly, conducting fake interviews, or doing other things that would get them nailed by a system that exists for good reason.
I had a very strange interview experience with Discord myself. They sent me a rejection letter, saying that after much consideration, they'd decided to go with a different candidate.
Thing is… I'd never even applied with them, and certainly hadn't done any interviews.
There are people going around filching resumes and impersonating people when applying for jobs. It's worth reaching out to see how they got your name and resume to see if you're the victim of fraud.
> Wells Fargo did a bad thing. But the badness of the thing is uncertain, amorphous, hard to quantify: People were harmed, but not in ways that the legal system can easily reduce to money.
> But the financial system can: The bad thing that Wells Fargo did caused its stock to drop, which is a good rough measure of how bad it was. The shareholders perform the socially useful service of measuring the badness [...]
I think this is a really interesting point - assuming the actors in the market who are buying and selling stocks share the same general morals of the rest of the population, they can penalize companies that do bad things. But that would mean market forces would need to act on moral grounds and not on profit motives.
People who have the stake or dry powder to move the share price of a bank (or megacap tech company while we’re at it) are in no way interested in socially useful pricing around dickhead behavior.
There is a financial accounting line item called “goodwill” and it’s often non-trivial.
In a functioning market customers (whether consumers or enterprise purchasing decision makers) tell you to take a walk if you act with bad will in any kind of consistent way.
There isn’t much money to be made in markets that are both of “mature” and functioning.
Goodwill has a very specific definition that has nothing to do with your behavior. It is simply the difference between the price an acquirer pays for something and the book value of that thing
Goodwill only comes into play in the context of an acquisition. Unless they are being bought, the decrease in market cap is just that. It doesn't come out of anything in particular, accounting-wise.
Price is definitionally attached to the likelihood of a transaction! The “price” of something is perfectly defined at the moment of a transaction, at any other time it is at best a rough estimate of the consensus of an amount at which a transaction would occur.
I’m not nitpicking: this a la carte treatment of market capitalization neatly severed from what anyone would be willing to pay, warped by the prospect of intervention and other insidious capture is why we’re discussing this embarrassing cavalcade of depressing behavior on the part of the executives in the first place.
Goodwill isn’t germane only to risk arbitrage discussions, it is (among other things) how the accountants keep track of the impact on value that accrues to piece of shit finance guys pulling stunts like this one.
In accounting, "goodwill" has a specific definition which takinola correctly gave. It is IMO poorly named, since it has nothing to do with what "goodwill" means outside of accounting. The amount of "goodwill" a company has on its books has nothing at all to do with what a layman would think of as "good will".
This is a part that he takes on faith which is completely unsupported. What the market is really doing (assuming rationality) is judging how much any punishment Wells Fargo might receive from regulators, customers, counterparties will alter the net present value of the stock.
> The shareholders perform the socially useful service of measuring the badness
That's a dangerous idea as it presumes that shareholders are investing not for profit but to improve "goodness" in the world. This is obviously not true.
The shareholders are providing the economically useful service of measuring _risk_ to those future profits. These two factors may be linked through an abstraction but they are most definitely not equivalent.
> they can penalize companies that do bad things
Without journalists to expose the bad things in the first place the investors can do no such thing. There is no mechanism in place to discover these facts and there is no effort to build one independent of journalism.
> Without journalists to expose the bad things in the first place the investors can do no such thing. There is no mechanism in place to discover these facts and there is no effort to build one independent of journalism.
Isn't that backwards? Investors are a major funder of journalism in the broad sense, and one of the few robust revenue sources left for it.
> Investors are a major funder of journalism in the broad sense
I see it as an advertising driven industry. I'm not sure how investors could be funding it directly.
> and one of the few robust revenue sources left for it.
That there are publications meant for investors does not mean investors can be seen as the revenue source. The advertisers looking to get in front of investors are the source.
If someone was investing in news for it's own sake then why is the quality of the information presented so poor? You'd almost have an easier time making the case they invest to _intentionally_ obscure the process of reporting facts.
> If someone was investing in news for it's own sake then why is the quality of the information presented so poor?
Financial-oriented news tends to be noticeably better than other kinds. Often the best widely-published journalism in the UK will be in the Economist or the FT, for example, and some more specialised publications allegedly have even higher standards.
It doesn't presume that shareholders are altruistic.
It presumes that shareholders' only objective is to maximize the share price.
From Wells Fargo's reports to investors, it's clear that management believed that investors would interpret successful diversity efforts as important to maximize the share price.
After the diversity rules were suspended, the share price dropped.
It's nearly impossible to prove cause and effect, but the plaintiffs don't have to prove direct causation. They only have to show that management misrepresented the facts in reports to investors, that the false statements were material, and that investors suffered a loss at that time.
Non-investor, and I was conflating too many concepts, but, very roughly: based on fundamental value of the business vs. only how others will react in buying&selling of the stock (and maybe even nudging others to react).
The "fundamental value of the business" is not an exact amount. The day-to-day variation in price (to the extent it isn't correlated to the index, anyway) can generally be viewed as a side-effect of uncertainty about what it actually is. In some sense, the value is unknowable, because it is a function of other things that are not knowable (e.g. future interest rates). So there's a measure of "other people would find an argument for this valuation reasonable", even for the fundamentals.
In any event, this sort of news generally does not move the fundamental value of the business in a way that exceeds the "uncertainty band", so pretty much all of the active trading is necessarily in anticipation of how others will view the news.
This is in contrast to e.g. merger offers, which are much more about the actual value of the business (which has suddenly become very concrete and precise), and not trying to judge the reaction of others. But major events like that are a small minority.
The author (Matt Levine) is always a bit tongue in cheek about securities fraud and the “socially useful” role shareholders play in pricing securities. He writes about these kind of incidents in a weekly basis, so his typical audience knows to read it that way.
He likes to point out that basically everything and anything a company may do is securities fraud. It’s almost parody at this point, which I think is his point. So it’s basically impossible to exist without committing said fraud by definition. That seems to be a problem — likely a structural one as well. At some point everyone is going to use that as a defense (or maybe they have already) and the sec/courts/congress are going to have some work to do.
It's probably intentional - securities fraud is a catch-all in the same way that tax evasion is an easy catch-all for all sorts of varied criminal activity which is much harder to prosecute.
I think the point of this case is that they don't have to be moral at all. They penalise the company for doing bad things not because they think it's bad, but because they have financial incentive to do so.
Markets are not about morality. They are designed to allocate resources optimally. If you want moral outcomes, you would need to inject incentives that make those outcomes optimal for the market participants
> not in ways that the legal system can easily reduce to money
this is a sad truth for lots of things. Like folks who collect, then lose private information. It is wrong and bad, but rarely quantifiably so in court.
I think this explains a lot of the "companies only act in the interests of their shareholders" thing, too. I know there's a legal obligation to act in the interests of the shareholders, but additionally, as TFA points out: shareholders have a really easy time quantifying their damages so that a case can be brought.
Employees having a really bad time at a company because it keeps doing bad things have to be able to quantify that bad time in dollars, and that's hard.
It's interesting to think of how we could adjust the legal system to allow for emotional distress, environmental damage, morally bad actions, etc on their own terms without having to convert them to monetary damages. Make it easier for a court to judge executive decisions on moral grounds and that makes it easier to claim damages for bad decisions and that makes it easier to keep companies behaving morally.
Morals are subjective and fluid. They are effectively areas where society has "agreed to disagree".
Morals that society agree on are codified into laws. The legal system is set up to enforce and uphold laws. It cannot uphold morals because they are not law.
As executives we allowed alcohol at the year end party. If some of our group gave a moral position of no alcohol (say Mormons or Muslims) is that morally incorrect for us yo allow it?
What if said objector imbibed at the event? Are we "morally responsible"? Who gets to decide and tell us what is morally ok or not ok?
There are endless examples of legal actions which are utterly immoral.
I agree that morals are personal and differ between individuals. Though that's not an opinion that religious folks accept: they hold that morals are defined by their deity and codified in their sacred texts. I'm glad we don't recognise that codification in our laws (though some countries do).
Having said all that, there are some pretty clear cases where companies are acting immorally; against the interests of their employees, customers, etc and generally against the interests of humanity. It would be cool to be able to call this shit out in a court without having to monetise the damages.
Companies should (and are) called out for immoral behaviour. Citizens, journalists etc do it all the time.
And I agree that some laws are immoral. Either because morals have changed while the law has remained static, or because the elected people who wrote the law themselves behaved immorally (and subsequent electees have not sought to reveal them.)
But the place for pointing out immoral behavior is not the courts. And the penalty for such behavior is our wallets - if you don't like a company, don't doend your money with them.
This is inaccurate, and the article itself actually contradicts itself by showing that it's inaccurate.
They can penalize companies for lying. If the companies just stop lying that they do/will do/will not do/don't do a certain thing, there's no securities fraud. The issue is that they lie about it.
Please read a bit more carefully and put on your thinking cap before writing inflammatory comments. Matt Levine is accurately summarizing what Wells Fargo is alleged to have done in 2022. He is not "making anything racial", just describing a situation.
"Talking about race" in plain terms on public forums is punishable by white supremacists (many of whom have moved their communications out-of-band, eg into dog whistles). This way, they pursue a monopoly on the discourse surrounding these concepts.
Edit: If downvoters could proffer a counter-theory, I might be corrected and save you and your ilk future clicks.
> because only racial fake jobs....are securities fraud
The securities fraud is telling investors you're doing something - in this very specific case, attempting to hire diverse candidates - but not actually meaningfully doing it.
This happened to me at a very large publicly traded tech company. After being offered a position, they had to consider more diverse candidates. After a month of "searching" they hired me.
You can absolutely turn up to the interview and claim a bunch of protected characteristics you don't have. I would wager it is not going to increase your chances of being hired.
> In some ways, the decision over “white” has been more ticklish. The National Association of Black Journalists and some Black scholars have said white should be capitalized, too.
> CNN, Fox News and The San Diego Union-Tribune said they will give white the uppercase, noting it was consistent with Black, Asian, Latino and other ethnic groups. Fox cited NABJ’s advice.
> CBS News said it would capitalize white, although not when referring to white supremacists, white nationalists or white privilege.
> CBS News said it would capitalize white, although not when referring to white supremacists, white nationalists or white privilege.
Oh, interesting - so would I be correct in saying that "white supremacists" are people thinking that White people are superior to others, whereas a "White supremacist" is a White person who is a supremacist of some group, e.g. "A White male supremacist"?
Assuming this is about ethnic groups in the context of America, saying "White" doesn't have a "shared culture and history in the way Black does" is arguably true, but "Asian" and "Latino" also both don't have a shared culture and history in the way "Black" does. Also "White" is the only ethnic group name that doesn't refer to a place, even though it's clearly a stand-in for "European", which kind of implies everyone else came from somewhere else.
Black is not just the shared culture of African Americans but also includes Africans who immigrated after the slavery era, Afro-Latinos, and Afro-Caribbean people, which have significantly less overlap.
It is why African-American has dropped out of usage as the general term.
> "White" doesn't have a "shared culture and history in the way Black does" is arguably true
I don't think this is even right. For example, many Australian aborigines or natives of the Caribbean are "black" but are only from Africa in the sense that all humans are including Europeans. Likewise, a recent immigrant from Zimbabwe will have a very different "culture and history" than a fifth generation resident of Brooklyn, even if they have similar genetics and skin color. For that matter, at this point a resident of New York and a resident of Mississippi will have about as much in common as someone from France and someone from Poland, regardless of the color of their skin.
It also seems like quite a presumption to even suggest the contrary. Are we really safe to claim that people from Ghana and people from Ethiopia have a uniform culture just because they're both on the same continent and we aren't that familiar with either of them?
> Also "White" is the only ethnic group name that doesn't refer to a place, even though it's clearly a stand-in for "European"
How is this standing in any different than "Latino" implying Central and South America or "Black" implying Africa?
It seems like the best solution is to just not capitalize any of them. Or, for that matter, to stop trying to categorize people in this way, since the entire premise was established by foolish racists and doesn't deserve the dignity of continued deference.
The problem is that we do need the categorization because no matter the subcategory, the interactions with foolish racists are common and need to be talked about and addressed.
What's the reason for capitalising either of them introducing any debate in the first place?
I doubt this will pass the test of time, makes it seem like a noun ('a White'; it must be a noun to be a proper noun after all) rather than an adjective ('a black person') which (capitalisation aside) is way out of favour. (At least it is/would be in the UK, where 'PoC' isn't really used either, so ymmv.)
I think it would make more sense in a hyperlinked / popup definition field / WikiLike proper noun (a page is a full thing).
E.G. White Privilege helps to denote that this is a title for something, and might link to an outside definition, footnote that describes the term (in case someone somehow doesn't know it yet) etc.
Tired of questions asking "what I am", both from people and on forms. I'm American, not Asian, not Latinx. I have so far traced 3 great-grandparents lines back to England and 1 from an eastern European country that no longer exist (so how am I suppose to classify myself with that?). 2 left for Virginia in the 1600's the other 2 left for the US in the early 1800's. I'm an 11th generation American, yet I don't have that option on forms and people still ask me where I am from - no, I mean before that, what country are your(my) parents from? confusion
Also, I don't speak Spanish, so am not Hispanic (why is this even grouped with things like Asian, Black, White? and why are Asian's Asian but the other two get colors?)
> It’s interesting that Matt Levine capitalises “white”, as well as capitalising “black”.
In this context, they're both proper nouns and this is the correct stylization, what's interesting about it?
> I haven’t seen this style choice before.
Do people imagine that they're going to have an impact on any social outcome by merely changing capitalization of certain words? It's incomprehensible that this would be a "style choice" and not simply "moral navel gazing."
I visited a website once that only capitalized "black" and not "white". It was a website geared towards black entrepreneurs iirc but I forget the name. It came across as creepy to me.
I remember somebody at TheRoot saying they didn’t want to capitalize either one because if they capitalized one they’d have to capitalize the other and capitalizing White meant centering white privilege.
Really I think it becomes clear when you know that Custer capitalized mule but not Indian.
Neither are proper nouns as I understand the term. They're not names for anything, they're just adjectives or broad categories at most. Treating them like proper nouns makes them sound like baseball team names.
What if the hiring manager had a stack of 10 applicants, and of those 10 applicants, only 2 had a resume which appeared qualified. Let’s assume those 2 candidates were not “diverse”. But out of the remaining 8 non-qualified resumes, 1 was “diverse”. Could they interview the 2 qualified candidates, and the 1 “diverse” candidate in order to meet the requirement of interviewing at least one diverse candidate? Would this be considered the scenario the lawsuit is talking about? Or do they need to wait until they have one diverse candidate with a competitive resume?
I think the issue was closer to one where the interviewer (all but) hires the "non-diverse" candidate and then as an afterthought interviews the "diverse" candidate. This clearly defeats the spirit of the plan.
As for your specific hypothetical, it still seems to be contrary to the stated goals. My guess is you'd want to cast your net wide to get a cross-section of qualified candidates and maybe not just hire from the same sources that produce homogenous candidates
I’ve had job opening where I’ve had maybe 5 applicants. They were all subject to the same screening questions, all well documented and interviewed by multiple people. Usually within the first 2 questions you could tell if the person had even the slightest chance of being a good fit. Yet, we would have to continue the interview in order to be fair to all candidates. With our company’s salary (low), hiring in a competitive field, we were lucky to get any applicants. Yet we had to wait for a diverse candidate to apply. We had already interviewed the previous 5, already has them stack ranked, and as soon as a diverse candidate applied, and was dutifully interviewed, the job was offered to the most qualified. I don’t see how this is any different than what is being raised as a concern.
Not sure about banking, but at least in tech, you'd be a horribly incompetent hiring manager in the US if you couldn't attract a diverse pool of candidates.
I mean, horribly incompetent.
Like, what'd you do? Post your job ad in the mens room of a cracker barrel in rural Arkansas? How'd you manage it?!
I wish that were the case. I would have loved to have a more diverse pool of candidates apply. This was a mid-sized tech company (1500 employees) that is very well known in its vertical. We'd post job openings on Twitter, LinkedIn and the company website at least.
Yet the pool of US-based applicants was anything but diverse. Very few women and almost zero URM (Under-represented minorities). Also the candidate diversity was worse for more senior levels.
Maybe offer hiring bonuses to diverse candidates. Many people are secretly diverse, they just need a bit of motivation, to disclose they are non-binary or queer!
Also it is very important to respect privacy. Many people have a family, that does not know about their secret gender identity or secret sexual orientation!
Really? I'd guess for the typical tech job posting your applicants will be 90% male and 90% under age 30. Racial diversity may vary but will be mostly White, Asian, or Indian.
At age 60, I have worked with exactly one black programmer. I've only interviewed one black programmer (who was actually from Africa, not an American).
Unless things have drastically changed recently, I have no idea how normal companies can find black programmers. As I understand it, the FAANGs are able to hoover up a lot of the diversity to meet their DEI goals, because they can outbid everyone else.
I worked in Big Tech for years and saw very few black programmers.
Then I work for an insurance data provider based out of Atlanta and I met loads. It's mostly about the proportions of said people within commutable range of your office.
They could start by citing Matt Levine’s own 2021 introduction to the idea published during the halcyon days of r/wallstreetbets and pandemic markets, titled “Is Everything Securities Fraud”[0] ;-)
Well....he's kinda right. There is a staggering amount of fraud in the world these days, and some of the more nefarious propagators of said fraud don't even bother hiding it.
This is simply because it has become second (or rather, first) nature for companies to lie about everything. Stop lying, and there's no more securities fraud. Be honest.
Everything is securities fraud is just a subset of the general idea that everything is fraud. By which we mean, "every company is lying about things, all the time".
Turns out this is trivially true, because the game theory for rational corporations (and its executive decision makers) clearly suggests that on net, lying all the time is very, very profitable.
I find it interesting that investors don't really have to prove they were ever mislead, just that misleading statements were made about something bad that happened. For example if you didn't actually read Wells Fargo's diversity statement, you would have been incapable of making any financial decisions based on them, thus you were never actually lied to or defrauded. Can investors demonstrate that they changed their investing patterns based on diversity statements?
If a lie is whispered in the forest and no one is around to hear it, is it securities fraud?
Matt addressed this in a footnote, this is the "fraud on the market theory".
> The fraud on the market theory is based on the hypothesis that, in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business. Misleading statements will therefore defraud purchasers of stock even if the purchasers do not directly rely on the misstatements. The causal connection between the defendants’ fraud and the plaintiffs’ purchase of stock in such a case is no less significant than in a case of direct reliance on misrepresentations.
Any public information eventually is priced into the stock price by the market.
Say you buy the stock even though you didn't read the DEI statement, but other people bought the stock before you having read it. Their purchases drove up the stock price, so you had to pay more for the stock. You got defrauded of the delta. Especially if now it comes out, the price goes down, and you make losses.
The company I worked at had a diversity interview rule like this, but it’s not really clear to me how it’s legal. Isn’t it literally making hiring decisions based on protected attributes?
The final decision should be based on merit, otherwise it would be discriminatory and also self-sabotaging.
If unqualified people get their time wasted by being invited because they fulfill some diversity quality, but no skill quality; I'll put the blame on the system that imposes the rule.
I see what you mean, but even the act of choosing to interview a candidate (or not) based on a protected attribute seems like it would be illegal, since whether or not someone interviews at all is generally a function of the "merit" seen in their resume (or lack thereof).
For example, if someone selling a house chose which prospective buyers were allowed to tour the house based on race, I assume that would definitely be illegal, even if the "final decision" on who to sell to was ostensibly not based on it.
This is essentially the Rooney Rule. It's not saying that the candidate must have protected attribute X, but that the candidate pool must have variants of X.
I think the courts would take a dim view of claiming that a procedure to partly mitigate bias regarding attribute X is somehow illegal discrimination along the same attribute.
Explain it like I'm five: I'm a shareholder. I get defrauded. There's a shareholder suit. Where does the money come from?
It feels like we'd be suing ourselves. Wells Fargo defrauded us and if we win, we'll get money back from an entity we own
The might be a little bit of a shuffle with money going from people who bought one year to those who bought another, but for buy and hold, that's pretty moot. It seems like the lawyers are making money at my own expense?
I'm a shareholder. The company does something I don't like. I file a lawsuit. The lawsuit costs the company time and money and possibly forces them to change their policy. Is this good for my immediate financial interest in the company? Probably not, but does it fulfil other purposes I may have? Sure!
If you want to send a message to companies that they better not fuck about with this DEI stuff for example, this might send that message.
I'll never truly understand what the practical value of suing companies as a shareholder of those companies, when if they lose, they have to pay it out of cash, which is neutral for you as a shareholder. You're incurring the cost of litigation either way, so it's always a negative proposition.
That's obviously only true if you remain a shareholder, but given the majority of stock generally doesn't change hands it seems like most people who are being represented as the victims in these lawsuits are worse off. Shouldn't the people who remain shareholders be able to exclude themselves from the suit, thus shrinking the size and maybe making it cheaper to settle? (It is possible this is a thing you can do, I've just never heard of it.)
Not necessarily, depending on how many shares you own.
Typically shareholder lawsuits are brought by minority shareholders (or, as you say it’s pointless) seeking to get paid to compensate for some malfeasance they feel was being perpetrated against them by the majority shareholders (and management, as their agents).
> Typically shareholder lawsuits are brought by minority shareholders
I don't know if this is true - I just asked Claude and it said the type of lawsuits I described are significantly more common, at least among suits against public companies.
But regardless of relative frequency, you say it's pointless, so why does it happen? (The answer seems clearly to be because the lawyers want it to happen, but still seems like it's a very inefficient process for most shareholders.)
I think that's basically the answer. In many cases, the process is initiated by lawyers looking for litigants. It's a big payday for the law firm and peanuts-out-of-your-own-pocket for actual shareholders.
A majority shareholder might still decide to sue, hoping that any short-term loss would be offset by long-term gains if the lawsuit served to dissuade future malfeasance on the company's part.
Many shareholders aren't in the business of managing a company directly. They simply want to invest in companies that are run well. Just because they have the power doesn't mean they know how to wield it correctly, let alone want to be the person to do so.
If they are the majority shareholder, suing the company they are the majority shareholder in for some tort has about as much point as suing themselves for punching themselves in the face.
They could literally just do a board consent to pay themselves directly instead if they wanted to. Or direct their management to do it, since they can literally fire that management otherwise (minor edge cases of bylaws withstanding).
A minority shareholder potentially has a lot of reasons to do a shareholder lawsuit though, especially in a privately held company where they can’t easily sell their shares.
They might be getting drug along on all sorts of silly wasteful misadventures, for instance, and have no control or way to get out.
I worked closely with lawyers for a time and a colleague of mine pointed out something interesting. She said that if we could remove emotion entirely from lawsuits and get both parties to only think rationally, the vast majority of lawsuits would never happen.
Sounds like a Causal Decision Theorist. Every other rational decision theory supports suing under some circumstances, and refusing to settle under some circumstances; even when the expected monetary return (considered in isolation) is negative.
For the same reason we lock people up in prison. It’s a punishment and incentive to behave.
Also, oftentimes the bad action of the management impacts the value of the company. The past malfeasance and fraud committed by Wells Fargo is an excellent example of that, where it moved to criminal liability.”
There are a few good reasons to sue as a share holder. The first is that you just have different interests. For example, the board and CEO decide to do something that benefits themselves and their other financial interests. In that case you can sue and stop them doing whatever it was. So it's a mechanism of control - and you don't need a shareholder vote or a majority of support, what you can force can be unpopular but in your interests. That was the pretext for Tesla getting sued for Elon Musks' compensation package - the shareholder won and Musk had to hand back billions in compensation, that's strictly a financial gain for the shareholders.
But secondly, there's the meta game. If you're a good lawyer and you spot some company doing something egregious you can go shopping. Go and find a shareholder and say "Hey, we can sue that company, I'll take care of all of it, I just need your name because you're a shareholder". You can then conduct a massive expensive lawsuit against the company and if you win? They have to pay your exorbitant costs. Going back to the Musk example, the shareholder who sued to reverse the compensation package had a derisory number of shares, but the lawyers who took on that case are now asking for something like $5Bn in costs. That's a pretty nice payday, and in some ways it works like a bounty against companies with poor governance.
The pattern here with Wells Fargo is interesting (you may recall they got into a ton of trouble by setting aggressive sales targets, causing employees to defraud customers).
There’s clearly a huge disconnect between the numeric targets they set and the resulting behavior of employees. That’s always a hazard, but I wonder why it’s such a pattern at WF
Almost all tech companies post fake job ads for sponsering Perm green card application for employees who are already working for them. Never understood how that shit is legal.
Hey HN, want a side project idea that's easy, and would be a huge hit?
Make a web crawler that hits publicly traded tech companies careers page, once a day, and tracks how often their job listings change. Make a big line chart at the top of a landing page that compares the different companies job openings (by count), over time. Penalize listings that list/delete/re-list job openings to always make it seem like they are hiring. Maybe have a max time a job post can be open before it's no longer part of their count (3 months?)
What you'll end up showing is similar to this article: A lot of company's stock is evaluated on growth, and part of the growth estimation is based on how much they are hiring in this down market. Some companies know this, and are trying to game the system
Anyways, I bet a decent amount of people would watch that like a hawk, and the honest companies would love it because it would show how great they really are doing
My company keeps a req open on the off chance somebody in the domain (CAD data translation) will see it and apply. It's a small enough niche that if somebody with the right skillset comes along we'd like a chance to hire them, even if we're not in dire need of people at that particular moment.
In other shops it is sometimes used as a safety if someone spontaneously decides to go.. one local place puts out lots of feeler reqs around bonus time (as that is when most jump)
The most incorrect assumption about stock is the idea that it's based on reason of metrics and evidence. In reality it is orchestrated by handshaking of existing wealth. Value is whatever they want it to be.
What would happen is the information goes ignored for the corps in good graces, and used negatively for the ones already going under as a small bullet point.
If you want markets based on sane economics this isn't the one to be in.
Sell the data to hedge funds. I saw a company selling this data at an alternative data conference a few months ago. I can't remember of the name of the company but if you message me I'll find it.
I've worked at a large company where the job portal showed open roles in chronological order, newest to oldest, so recruiters would constantly delete and repost unfilled roles to get them back up top for a while.
Working in some hiring-tech stuff right now, there are systems where the business-domain/database-model explicitly incorporates "evergreen" job postings, meaning ones that are left up constantly often because the company really is always hiring due to high turnover.
In other words, there are some legitimate reasons for a job posting to be indefinite, even if it doesn't seem common for software engineering jobs in particular.
If it doesn't explicitly say it's an evergreen/non-urgent position, I'd still penalize it.
But sure, that doesn't happen often in tech because they would hire a consultant or a specialized contractor for such roles of its necessary and very specialized.
I had some code partially written that did this with the HN API. I was going to call it "Who's Not Hiring?" and find/call out companies that had the same job posting week after week. Got bored and never finished it.
> Also there is something good about workplace diversity
Because? All workplaces should be based on merit. The whole reason why companies are doing this clown show is because of woke laws that don't take reality into account. Like the reality that maybe there just isn't enough women or minorities that are qualified.
Because? There are many different kinds of organizations that do work, including families where merit isn't as important. The whole reason why laws were written to enforce diversity is because narrow-minded, little white men weren't willing to accept reality. The reality being that in an equal opportunity society they can't bin the CVs because they don't like the color of their skin or their expressed gender.
I really like Matt Levine's quote from his previous article (https://archive.ph/eKH6k) on this topic:
> To some extent you have to manage a big organization with simple, crude, legible metrics. In a big enough organization, somebody will game those metrics. Ideally you create a culture that minimizes that gamesmanship, one where employees understand and buy into the organization's real goals rather than just trying to maximize the dumb metrics. Wells Fargo seems to be having some trouble creating that culture.
It's really just a fantastic example of Peter Drucker's famous adage "Culture eats strategy for breakfast." And it's why I get very wary of any large organizations that focus too much on data-driven goal setting (OKRs and the like) without having some way of stepping back and doing a reality check. To be clear, I actually like OKRs if they are used correctly to help prioritize and focus, but too often I've seen them become a weird, gameable time sink.
> Ideally you create a culture that minimizes that gamesmanship ... having some trouble creating that culture
This ideal culture is like unicorns and rainbows - some of it exists under very specific atmospheric conditions and some of it, when you look closely, is really just a horse with a toilet roll on its forehead sprinkled with glitter.
It's truly shocking how organizations do not bring the hammer on managers who outright try to game the metrics. At least never (?) make the claim that gaming the metrics will get you booted. There is a feeling that, within rather lax limits, gaming the metrics is seen as good sports.
Because yes, in the US I rather suspect that this comes from high school and college sports worship. Winning is what it's about and someone who bends the rules to win can probably be put to good use and should be promoted to where they can do the most damage?, bending?
My contract company was attempting to hire one data scientist. The slot was temporarily suspended, position tweaked, then read advertised. Then the title changed. Multiple recruiters posted the position. I think there were five different ads for the one slot.
Not to get all too political on HN, but the increasing number of cases like this over the last few years is the most positive thing I've seen happen in the US in a long time. And one of my biggest worries for the next administration is that they will put an immediate stop to this.
These cases all come down to a very simple thing: "Don't lie if you're a publicly listed company". Which is an enormous boon to society if enforced, like it is indirectly through these lawsuits.
Fake job interviews aren't securities fraud - as long as you don't lie about them. Bad passwords aren't securities fraud - as long as you don't lie about them. It has become entirely second nature for companies to lie about everything; there's a whole industry around it (usually known as "PR"). These lawsuits can disrupt this status quo. Stop saying A and doing B. All these cases are very clear in that the company said A without even doing A at the time. It's not like they were forced into either saying A or doing B. Both Wells Fargo and Solarwinds could very easily just not have made false claims wrt diversity and security. They willingly, knowingly did so.
A company could have bad passwords without lying about them, just don't comment on passwords at all.
But it's hard to see how to have a "Fake job interview" without lying, as the publicly listed job would itself be a lie. Or in the example given, the "diversity" candidates interviewed without any real intent to consider them for the job, were lied to.
yes, I see that this is covered better in the article.
Lying in public seems like it would include "lying to investors", no? Sure, lying at the water cooler doesn't matter. But the Solarwinds case seems to be about lying on their website.
I think I was hired once as a diversity candidate.
When I was about to quit, my manager begged me not to, explaining that otherwise, his team (~20 people) would be 100% Indian. (Best team I ever worked in, BTW).
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[ 4.3 ms ] story [ 288 ms ] threadBut I'm hearing more and more from friends on the tech interview circuit about processes requiring, in essence, free consulting to be done for a posting that remains listed and unfilled almost indefinitely after the interview (and subsequent ghosting). My hunch is these start-ups don't want to show an empty hiring pipeline to investors. But if that's being pursued wilfully, it seems to imply fraud.
Sounds very plausible, but why bother interviewing anyone?
I got lots of bites on my resume! And I was called in for lots of interviews. But they didn't really go anywhere, despite me often feeling like I did well in them. It took me a few months to realize that they were actually just hearing some murmurs about what my company was doing and wanted to learn more about it- we were approaching the problem in a unique way for the time.
Even seemingly innocuous details can give away a lot about a company's strategy. If you are working on say AR at Amazon, and you mention that your group is about 200 people, that says that they are not only going into this space, but doing a reasonably big push on it as well, which might be news to say FB. (This is completely contrived, I have no idea if Amazon is doing AR stuff at all).
Candidates will willingly disclose quite a bit, especially if they were stiffed by the last lot.
I imagine the company internally can say something like "we'll hire if we find someone capable of solving all of department X,Y and Z's problems simultaneously and will do so for market rate. We probably won't find that but looking will make people happy." with the second part said with only winks.
Sure, if you're the investor that asks all those questions and has enough information to answer them, you won't be happy. But I think most investors aren't going to drill down to that level. Especially, anyone investing is going to know some money wasting has to happen, some posturing has to happen, just to be trendy and so attract "brilliant/energetic/etc" people as well as more investors. And a given start-up investor has to want more investors since the company runs on an accelerating flow of funds; your money is only being multiplied if other people are tossing in theirs and if your money isn't being multiplied, it's vanishing.
Because then you don’t have to ask anyone else to lie for you, or count on them to do it well.
There are other options here though, beyond just lying and pickiness, which include:
a) some internal party sabotaging hiring to prevent someone getting in who will be a better fit for the role they want during growth
b) startups often don’t actually know where they need to put bodies, especially in areas outside of the founders’ technical training
This wouldn't make any sense. If a startup has headcount and budget, they're going to want to hire someone as quickly as possible.
Investors don't care about the minutia of how many people are in your hiring pipeline. If portfolio company had board-approved budget and headcount and was failing to fill those roles in a timely manner, that would be a huge red flag that something is not right within the company.
Investors care about result and efficiency. I don't think any startup is going to impress investors by wasting a bunch of time deliberately fake interviewing people and then failing to hire anyone.
What's more like is the company wants to hire, has told the teams they can hire, but the board is reluctant to approve more headcount until the team starts showing results. Another possibility is that they're waiting for financials to improve enough to justify the hire.
I think one regulation to resolve this is to outline a term on when you expect to fill the role, in order to delineate between "we need this role right now" (AKA, "urgent hire"), "we want to fill it in 1-3 months", and "nice to have but no rush" postings. It'd give a better signals to workers and make it easier to call fraud if they are "urgently hiring" but repost the same thing 5 months in a row.
Sure. That's why they get audited for their recruitment like anything else in business. I'm not saying to bring the hammer down, just to have a better excuse than "well we're always hiring!"
we need to start prosecuting companies that do this shit, not just for financial fields.
Guarantee the ghost job nonsense will instantly stop once the first person is shown being shipped off to prison for a year and one day.
E.g. I had a CodeSignal assessment recently that resulted in the end of my "consideration". If it had been a genuine opening, they'd be able to tell me what the expected score was and how tenured peers at the company are scoring in recent assessments.
Thing is… I'd never even applied with them, and certainly hadn't done any interviews.
> But the financial system can: The bad thing that Wells Fargo did caused its stock to drop, which is a good rough measure of how bad it was. The shareholders perform the socially useful service of measuring the badness [...]
I think this is a really interesting point - assuming the actors in the market who are buying and selling stocks share the same general morals of the rest of the population, they can penalize companies that do bad things. But that would mean market forces would need to act on moral grounds and not on profit motives.
funds don't share those morals
In a functioning market customers (whether consumers or enterprise purchasing decision makers) tell you to take a walk if you act with bad will in any kind of consistent way.
There isn’t much money to be made in markets that are both of “mature” and functioning.
Why do people say things like this?
I’m not nitpicking: this a la carte treatment of market capitalization neatly severed from what anyone would be willing to pay, warped by the prospect of intervention and other insidious capture is why we’re discussing this embarrassing cavalcade of depressing behavior on the part of the executives in the first place.
Goodwill isn’t germane only to risk arbitrage discussions, it is (among other things) how the accountants keep track of the impact on value that accrues to piece of shit finance guys pulling stunts like this one.
Goodwill has a meaning which isn’t related to market cap due to a bad news day.
> Meeting the increasingly diverse needs of Wells Fargo’s global customer base is critical to our company’s long-term growth and success.
This is a part that he takes on faith which is completely unsupported. What the market is really doing (assuming rationality) is judging how much any punishment Wells Fargo might receive from regulators, customers, counterparties will alter the net present value of the stock.
That's a dangerous idea as it presumes that shareholders are investing not for profit but to improve "goodness" in the world. This is obviously not true.
The shareholders are providing the economically useful service of measuring _risk_ to those future profits. These two factors may be linked through an abstraction but they are most definitely not equivalent.
> they can penalize companies that do bad things
Without journalists to expose the bad things in the first place the investors can do no such thing. There is no mechanism in place to discover these facts and there is no effort to build one independent of journalism.
Isn't that backwards? Investors are a major funder of journalism in the broad sense, and one of the few robust revenue sources left for it.
I see it as an advertising driven industry. I'm not sure how investors could be funding it directly.
> and one of the few robust revenue sources left for it.
That there are publications meant for investors does not mean investors can be seen as the revenue source. The advertisers looking to get in front of investors are the source.
If someone was investing in news for it's own sake then why is the quality of the information presented so poor? You'd almost have an easier time making the case they invest to _intentionally_ obscure the process of reporting facts.
Financial-oriented news tends to be noticeably better than other kinds. Often the best widely-published journalism in the UK will be in the Economist or the FT, for example, and some more specialised publications allegedly have even higher standards.
This is part of their public articles.
It presumes that shareholders' only objective is to maximize the share price.
From Wells Fargo's reports to investors, it's clear that management believed that investors would interpret successful diversity efforts as important to maximize the share price.
After the diversity rules were suspended, the share price dropped.
It's nearly impossible to prove cause and effect, but the plaintiffs don't have to prove direct causation. They only have to show that management misrepresented the facts in reports to investors, that the false statements were material, and that investors suffered a loss at that time.
What is a "direct response"? Any change in price is still the result of individual actors expressing directional opinions.
In any event, this sort of news generally does not move the fundamental value of the business in a way that exceeds the "uncertainty band", so pretty much all of the active trading is necessarily in anticipation of how others will view the news.
This is in contrast to e.g. merger offers, which are much more about the actual value of the business (which has suddenly become very concrete and precise), and not trying to judge the reaction of others. But major events like that are a small minority.
this is a sad truth for lots of things. Like folks who collect, then lose private information. It is wrong and bad, but rarely quantifiably so in court.
Employees having a really bad time at a company because it keeps doing bad things have to be able to quantify that bad time in dollars, and that's hard.
It's interesting to think of how we could adjust the legal system to allow for emotional distress, environmental damage, morally bad actions, etc on their own terms without having to convert them to monetary damages. Make it easier for a court to judge executive decisions on moral grounds and that makes it easier to claim damages for bad decisions and that makes it easier to keep companies behaving morally.
Morals are subjective and fluid. They are effectively areas where society has "agreed to disagree".
Morals that society agree on are codified into laws. The legal system is set up to enforce and uphold laws. It cannot uphold morals because they are not law.
As executives we allowed alcohol at the year end party. If some of our group gave a moral position of no alcohol (say Mormons or Muslims) is that morally incorrect for us yo allow it?
What if said objector imbibed at the event? Are we "morally responsible"? Who gets to decide and tell us what is morally ok or not ok?
There are endless examples of legal actions which are utterly immoral.
I agree that morals are personal and differ between individuals. Though that's not an opinion that religious folks accept: they hold that morals are defined by their deity and codified in their sacred texts. I'm glad we don't recognise that codification in our laws (though some countries do).
Having said all that, there are some pretty clear cases where companies are acting immorally; against the interests of their employees, customers, etc and generally against the interests of humanity. It would be cool to be able to call this shit out in a court without having to monetise the damages.
And I agree that some laws are immoral. Either because morals have changed while the law has remained static, or because the elected people who wrote the law themselves behaved immorally (and subsequent electees have not sought to reveal them.)
But the place for pointing out immoral behavior is not the courts. And the penalty for such behavior is our wallets - if you don't like a company, don't doend your money with them.
This is inaccurate, and the article itself actually contradicts itself by showing that it's inaccurate.
They can penalize companies for lying. If the companies just stop lying that they do/will do/will not do/don't do a certain thing, there's no securities fraud. The issue is that they lie about it.
Edit: If downvoters could proffer a counter-theory, I might be corrected and save you and your ilk future clicks.
The securities fraud is telling investors you're doing something - in this very specific case, attempting to hire diverse candidates - but not actually meaningfully doing it.
I can't speak to the truth of that assertion but they definitely believed it was the case.
I haven’t seen this style choice before.
https://apnews.com/article/entertainment-cultures-race-and-e...
> In some ways, the decision over “white” has been more ticklish. The National Association of Black Journalists and some Black scholars have said white should be capitalized, too.
> CNN, Fox News and The San Diego Union-Tribune said they will give white the uppercase, noting it was consistent with Black, Asian, Latino and other ethnic groups. Fox cited NABJ’s advice.
> CBS News said it would capitalize white, although not when referring to white supremacists, white nationalists or white privilege.
Oh, interesting - so would I be correct in saying that "white supremacists" are people thinking that White people are superior to others, whereas a "White supremacist" is a White person who is a supremacist of some group, e.g. "A White male supremacist"?
It is why African-American has dropped out of usage as the general term.
I don't think this is even right. For example, many Australian aborigines or natives of the Caribbean are "black" but are only from Africa in the sense that all humans are including Europeans. Likewise, a recent immigrant from Zimbabwe will have a very different "culture and history" than a fifth generation resident of Brooklyn, even if they have similar genetics and skin color. For that matter, at this point a resident of New York and a resident of Mississippi will have about as much in common as someone from France and someone from Poland, regardless of the color of their skin.
It also seems like quite a presumption to even suggest the contrary. Are we really safe to claim that people from Ghana and people from Ethiopia have a uniform culture just because they're both on the same continent and we aren't that familiar with either of them?
> Also "White" is the only ethnic group name that doesn't refer to a place, even though it's clearly a stand-in for "European"
How is this standing in any different than "Latino" implying Central and South America or "Black" implying Africa?
It seems like the best solution is to just not capitalize any of them. Or, for that matter, to stop trying to categorize people in this way, since the entire premise was established by foolish racists and doesn't deserve the dignity of continued deference.
Botham Jean was a first-generation immigrant from the Caribbean nation of St. Lucia but that did not prevent him from being a victim of police violence. https://en.wikipedia.org/wiki/Murder_of_Botham_Jean?wprov=sf...
I doubt this will pass the test of time, makes it seem like a noun ('a White'; it must be a noun to be a proper noun after all) rather than an adjective ('a black person') which (capitalisation aside) is way out of favour. (At least it is/would be in the UK, where 'PoC' isn't really used either, so ymmv.)
E.G. White Privilege helps to denote that this is a title for something, and might link to an outside definition, footnote that describes the term (in case someone somehow doesn't know it yet) etc.
Tired of questions asking "what I am", both from people and on forms. I'm American, not Asian, not Latinx. I have so far traced 3 great-grandparents lines back to England and 1 from an eastern European country that no longer exist (so how am I suppose to classify myself with that?). 2 left for Virginia in the 1600's the other 2 left for the US in the early 1800's. I'm an 11th generation American, yet I don't have that option on forms and people still ask me where I am from - no, I mean before that, what country are your(my) parents from? confusion
Also, I don't speak Spanish, so am not Hispanic (why is this even grouped with things like Asian, Black, White? and why are Asian's Asian but the other two get colors?)
In this context, they're both proper nouns and this is the correct stylization, what's interesting about it?
> I haven’t seen this style choice before.
Do people imagine that they're going to have an impact on any social outcome by merely changing capitalization of certain words? It's incomprehensible that this would be a "style choice" and not simply "moral navel gazing."
By the way, this whole thing is like the "He" in the bible:
https://en.wikipedia.org/wiki/Reverential_capitalization
Really I think it becomes clear when you know that Custer capitalized mule but not Indian.
As for your specific hypothetical, it still seems to be contrary to the stated goals. My guess is you'd want to cast your net wide to get a cross-section of qualified candidates and maybe not just hire from the same sources that produce homogenous candidates
I mean, horribly incompetent.
Like, what'd you do? Post your job ad in the mens room of a cracker barrel in rural Arkansas? How'd you manage it?!
Yet the pool of US-based applicants was anything but diverse. Very few women and almost zero URM (Under-represented minorities). Also the candidate diversity was worse for more senior levels.
Also it is very important to respect privacy. Many people have a family, that does not know about their secret gender identity or secret sexual orientation!
Unless things have drastically changed recently, I have no idea how normal companies can find black programmers. As I understand it, the FAANGs are able to hoover up a lot of the diversity to meet their DEI goals, because they can outbid everyone else.
[0]: https://www.bloomberg.com/opinion/articles/2021-02-03/goldma...
Turns out this is trivially true, because the game theory for rational corporations (and its executive decision makers) clearly suggests that on net, lying all the time is very, very profitable.
If a lie is whispered in the forest and no one is around to hear it, is it securities fraud?
> The fraud on the market theory is based on the hypothesis that, in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business. Misleading statements will therefore defraud purchasers of stock even if the purchasers do not directly rely on the misstatements. The causal connection between the defendants’ fraud and the plaintiffs’ purchase of stock in such a case is no less significant than in a case of direct reliance on misrepresentations.
Say you buy the stock even though you didn't read the DEI statement, but other people bought the stock before you having read it. Their purchases drove up the stock price, so you had to pay more for the stock. You got defrauded of the delta. Especially if now it comes out, the price goes down, and you make losses.
How would someone prove that they were mislead by this?
Me: I read their diversity statement and was mislead by it.
Them: Nuh-uh, you didn't!
If unqualified people get their time wasted by being invited because they fulfill some diversity quality, but no skill quality; I'll put the blame on the system that imposes the rule.
For example, if someone selling a house chose which prospective buyers were allowed to tour the house based on race, I assume that would definitely be illegal, even if the "final decision" on who to sell to was ostensibly not based on it.
I think the courts would take a dim view of claiming that a procedure to partly mitigate bias regarding attribute X is somehow illegal discrimination along the same attribute.
https://en.wikipedia.org/wiki/Rooney_Rule
It feels like we'd be suing ourselves. Wells Fargo defrauded us and if we win, we'll get money back from an entity we own
The might be a little bit of a shuffle with money going from people who bought one year to those who bought another, but for buy and hold, that's pretty moot. It seems like the lawyers are making money at my own expense?
What an I missing?
If you want to send a message to companies that they better not fuck about with this DEI stuff for example, this might send that message.
That's obviously only true if you remain a shareholder, but given the majority of stock generally doesn't change hands it seems like most people who are being represented as the victims in these lawsuits are worse off. Shouldn't the people who remain shareholders be able to exclude themselves from the suit, thus shrinking the size and maybe making it cheaper to settle? (It is possible this is a thing you can do, I've just never heard of it.)
Typically shareholder lawsuits are brought by minority shareholders (or, as you say it’s pointless) seeking to get paid to compensate for some malfeasance they feel was being perpetrated against them by the majority shareholders (and management, as their agents).
I don't know if this is true - I just asked Claude and it said the type of lawsuits I described are significantly more common, at least among suits against public companies.
But regardless of relative frequency, you say it's pointless, so why does it happen? (The answer seems clearly to be because the lawyers want it to happen, but still seems like it's a very inefficient process for most shareholders.)
Minority shareholders don’t control the cash held by the company so they need to sue to get access to it.
Wouldn’t they be better served by actually just doing their job? As far as to dissuade future malfeasance?
They already have all the control and power.
If they are the majority shareholder, suing the company they are the majority shareholder in for some tort has about as much point as suing themselves for punching themselves in the face.
They could literally just do a board consent to pay themselves directly instead if they wanted to. Or direct their management to do it, since they can literally fire that management otherwise (minor edge cases of bylaws withstanding).
A minority shareholder potentially has a lot of reasons to do a shareholder lawsuit though, especially in a privately held company where they can’t easily sell their shares.
They might be getting drug along on all sorts of silly wasteful misadventures, for instance, and have no control or way to get out.
Sounds like a Causal Decision Theorist. Every other rational decision theory supports suing under some circumstances, and refusing to settle under some circumstances; even when the expected monetary return (considered in isolation) is negative.
See https://intelligence.org/2018/10/31/embedded-decisions/
Also, oftentimes the bad action of the management impacts the value of the company. The past malfeasance and fraud committed by Wells Fargo is an excellent example of that, where it moved to criminal liability.”
But secondly, there's the meta game. If you're a good lawyer and you spot some company doing something egregious you can go shopping. Go and find a shareholder and say "Hey, we can sue that company, I'll take care of all of it, I just need your name because you're a shareholder". You can then conduct a massive expensive lawsuit against the company and if you win? They have to pay your exorbitant costs. Going back to the Musk example, the shareholder who sued to reverse the compensation package had a derisory number of shares, but the lawyers who took on that case are now asking for something like $5Bn in costs. That's a pretty nice payday, and in some ways it works like a bounty against companies with poor governance.
There’s clearly a huge disconnect between the numeric targets they set and the resulting behavior of employees. That’s always a hazard, but I wonder why it’s such a pattern at WF
See also: https://superbowl.substack.com/p/beware-the-variable-maximiz...
Make a web crawler that hits publicly traded tech companies careers page, once a day, and tracks how often their job listings change. Make a big line chart at the top of a landing page that compares the different companies job openings (by count), over time. Penalize listings that list/delete/re-list job openings to always make it seem like they are hiring. Maybe have a max time a job post can be open before it's no longer part of their count (3 months?)
What you'll end up showing is similar to this article: A lot of company's stock is evaluated on growth, and part of the growth estimation is based on how much they are hiring in this down market. Some companies know this, and are trying to game the system
Anyways, I bet a decent amount of people would watch that like a hawk, and the honest companies would love it because it would show how great they really are doing
My company keeps a req open on the off chance somebody in the domain (CAD data translation) will see it and apply. It's a small enough niche that if somebody with the right skillset comes along we'd like a chance to hire them, even if we're not in dire need of people at that particular moment.
I guess technically we're passively looking.
What would happen is the information goes ignored for the corps in good graces, and used negatively for the ones already going under as a small bullet point.
If you want markets based on sane economics this isn't the one to be in.
https://www.sec.gov/enforcement-litigation/whistleblower-pro...
1) Provide a paid service for users to get more pro level insights. Targeted at job seekers who don't want to waste time.
2) Expand into a job board where only companies that pledge not to engage in such tactics can advertise.
In other words, there are some legitimate reasons for a job posting to be indefinite, even if it doesn't seem common for software engineering jobs in particular.
Seems too easy to be abused.
Churn could mean many things, not necessarily a bad sign
But sure, that doesn't happen often in tech because they would hire a consultant or a specialized contractor for such roles of its necessary and very specialized.
Because? All workplaces should be based on merit. The whole reason why companies are doing this clown show is because of woke laws that don't take reality into account. Like the reality that maybe there just isn't enough women or minorities that are qualified.
Because? There are many different kinds of organizations that do work, including families where merit isn't as important. The whole reason why laws were written to enforce diversity is because narrow-minded, little white men weren't willing to accept reality. The reality being that in an equal opportunity society they can't bin the CVs because they don't like the color of their skin or their expressed gender.
Can you point me to the 'woke laws' ?
> To some extent you have to manage a big organization with simple, crude, legible metrics. In a big enough organization, somebody will game those metrics. Ideally you create a culture that minimizes that gamesmanship, one where employees understand and buy into the organization's real goals rather than just trying to maximize the dumb metrics. Wells Fargo seems to be having some trouble creating that culture.
It's really just a fantastic example of Peter Drucker's famous adage "Culture eats strategy for breakfast." And it's why I get very wary of any large organizations that focus too much on data-driven goal setting (OKRs and the like) without having some way of stepping back and doing a reality check. To be clear, I actually like OKRs if they are used correctly to help prioritize and focus, but too often I've seen them become a weird, gameable time sink.
This ideal culture is like unicorns and rainbows - some of it exists under very specific atmospheric conditions and some of it, when you look closely, is really just a horse with a toilet roll on its forehead sprinkled with glitter.
Because yes, in the US I rather suspect that this comes from high school and college sports worship. Winning is what it's about and someone who bends the rules to win can probably be put to good use and should be promoted to where they can do the most damage?, bending?
These cases all come down to a very simple thing: "Don't lie if you're a publicly listed company". Which is an enormous boon to society if enforced, like it is indirectly through these lawsuits.
Fake job interviews aren't securities fraud - as long as you don't lie about them. Bad passwords aren't securities fraud - as long as you don't lie about them. It has become entirely second nature for companies to lie about everything; there's a whole industry around it (usually known as "PR"). These lawsuits can disrupt this status quo. Stop saying A and doing B. All these cases are very clear in that the company said A without even doing A at the time. It's not like they were forced into either saying A or doing B. Both Wells Fargo and Solarwinds could very easily just not have made false claims wrt diversity and security. They willingly, knowingly did so.
But it's hard to see how to have a "Fake job interview" without lying, as the publicly listed job would itself be a lie. Or in the example given, the "diversity" candidates interviewed without any real intent to consider them for the job, were lied to.
yes, I see that this is covered better in the article.