A Securities Question: How can publicly held corporations justify

[StephanieMarie]

spending their investors money on partisan politics (as in, funding *'s coronation)? Could their be an investor class-action lawsuit for such actions?

[papau]

1. yes - but the courts give management wide discretion as to image

spending.

[RafterMan]

2. LOL

Don't you think it's a good investment?

Lawmakers are capitol goods.

[Gothmog]

3. You have to prove that this was waste

Corporate law gives a great deal of discretion to directors and in order to attack the political expenditures made, you have to prove that these expenditures amounted to corporate waste. This would mean showing that the corporation received no benefit from the expenditures. The courts would tend to give the benefit of the doubt on this issue to the board and so such a lawsuit would be difficult.

[klyon]

6. so if they are getting something for their money

wouldn't that be illegal?

KL

[StephanieMarie]

4. I don't suppose we could get a law

forbidding publicy held corporations from making political donations? This really bothers me. Or at least, could they be required to put it out on a vote and let the shareholders (who actually, by the way, own the company) decide whether or not they want to donate $250000 for a coronation ball?

[cattleman22]

5. I doubt management would let that happen unless unions were also

prevented from donating as well.

[DrGonzoLives]

7. Well, if you are a stockholder

the only solution would be to try to vote the execs out - unfortunately, a near impossible task.

The only way you get a lawsuit going was to prove that the funds sent for political purposes were misdirected or embezzled or something along those lines. Otherwise, you're out of luck.