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Universal Music Told, Once Again, It Can't Sue Veoh's Investors For Veoh's Actions
from the good-news dept
Back in February, Universal Music got slapped down for its highly questionable attempt to sue the investors in Veoh for the actions performed by the company itself. We've never quite understood why the major record labels have tried, repeatedly, to sue the investors of sites and services they don't like. It's hard to see how that's justified, because if those investors are found liable, it would create a huge liability for any investor. Investors don't have day-to-day control over a company, and trying to make them liable for the actions of the company makes no sense. However, not only was Universal shot down in this attempt, but it tried to refile the lawsuit against the investors... and was shot down yet again. The judge noted that Universal Music presented no evidence as to why the investors should somehow be responsible for the actions of the company and tossed out the lawsuits against them again. Hopefully this wakes up EMI, who recently sued the investors in a small startup as well.
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Simple answer
They are suing investors for the same reason Willy Sutton was reported to rob banks:
That's where the money is.
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Wrong, there are suing just to annoy investors so that they not investing in similar business models again and (in the long run) pull the money out of the current business.
I did that once as I had problems with a Company who was based on investment capital and it worked. They where much nicer to me after that.
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Re:
I hope it comes back to bite you, and maybe then you choke on it, too.
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The government needs to stop this nonsense.
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"there are suing just to annoy investors so that they not investing in similar business models again and (in the long run) pull the money out of the current business."
That was my suspicion. It's just a distraction/deterrent even if they know they'll lose. This is why it should be stopped.
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Re: Suing the Investors
KnowItAll wrote:
Fine. So what message does it send when they lose these lawsuits? That investment in businesses like these is in fact fine.
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Re: Re: Suing the Investors
"Fine. So what message does it send when they lose these lawsuits? That investment in businesses like these is in fact fine."
I don't really think they intend the outcome to make a point or send a message, just the fact that investors can be sued. Most people don't want to deal with lawsuits against them even if they know they'll win.
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Re: Suing the Investors
No they can’t. That’s the message that keeps coming through here, in case you hadn’t noticed.
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Universal's investors...
You'd think Universal's investors would be beating the living snot out of the board to make this stop. If by some miracle this suit went through, they'd be liable for any illegal things that Universal did, and who the heck knows what nefarious activities have happened there over the years?
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Hmmm, the SEC goes after investors with Bernie Madoff to recover profits from an illegal swindle, maybe this one isn't so far off if they determine that the company was in fact breaking the law.
Yeah, that is quite a stretch. I would have said leap, but no one can jump that far.
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Comparison to Madoff inappropriate
Madoff was running a fund - not a business. He was (supposed to be) investing in stocks, bonds, whatever. It's an entirely different thing.
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