Topic: Diablo Mining Company - page 24. (Read 96370 times)

The problem is we have ourselves a conundrum.

Your gentlemens agreement is all well and fine as long as there are no problems or no disagreements. Considering that sometimes my wife and I (married 10 years) sometimes cannot agree on something and argue, what do you think the chance is of you having a disagreement with your shareholders on how you run the business? A lot higher I think.

Now with your clause, you essentially say that you settle all disagreements in your favor, and the shareholder has to just suck it up. This is grossly unfair, and means that your gentlemans agreement isn't so gentle, it amounts to you not willing to put contractual power behind your word, making it worthless, and would not be in anyones interest to take you on it.

I have family, who I very much care for and trust, but some of them I would only lend money to or trust with money on the personal knowledge that I probably wont get it back. Which is fine for me I don't mind giving money to help out family, blood is blood but that even being the case that they are my own family, for anything large I'd get them to sign a contract( actually before I wouldn't have done this, but after running GLBSE for all this time it's certainly changed my mind).

Now if this is the situation for family imagine it for near faceless business partners over the internet and the problem is compounded.

The other problem is judicial, when a problem comes up and the two parties involved disagree who is to be the decider? In your clause you say it's always going to be you. Without such a clause, and in the event that there is nothing on the contract on who is the decider then by default that job falls to the person with most power and least stake. Which in our case happens to be me, simply because I am in the position of power as the admin of GLBSE.

I think a way around this (me becoming the default decider) is to have in your contract a person nominated to make decisive decisions in the event of disagreement. But failing this being in the contract there is really no one else but for me to do it.

Regarding the fullness of contracts and the assumption of a domain by the issuer unless strictly stated, we can't have a middle ground. Either we must accept that a lack of provisions in a contract means that either nothing can be done or that the decider has the power to do something. These choices are mutually exclusive. Either the decider has domain or the issuer has domain it cannot be both.

As you have stated you assumed (as I think most issuers have) that you had domain. I've never stated until my previous post whether this was or wasn't the case, as to be honest it hadn't really come up.

I think it is quite clear that having the default position of domain being with the issuer in the event of a dispute between issuers and asset holders is, of the choices available the worst one.

It requires all investors to become lawyers, and provides no recourse when they invest on incomplete, inaccurate or in some cases false information (fraud). Your provision would make it impossible for investors to take action in the event of fraud.

Also your statement on letting the market sort it out is wrong, markets can only act on the information available to them. When there is fraud, this information is lies, and the market has been deceived. Once the issuer has gotten a hold of the markets capital he has it and all the market can do is write it off if he turns out to be a thief. This is not an issue that the market can solve as it's the victim.

So then the question comes to, if I'm the decider, on what rules do I make decisions?

And then we have another problem, because I'm now in the position of being a judge without significant legal experience or training (I have my little area of legality that I'm quite familiar with, but it's very specific). I'm left as the judge without a set of rules or laws to make my decision by.

In this case we're lucky, an audit and a shareholder vote is obviously the solution to our problem. But in the future when it's more complicated, who knows. And this is why we have laws, lawyers, judges and courts.

You asked in whose interest am I doing this, obviously in GLBSE's interest, a healthy, growing, successful market is entirely in our interest as we gain from it.

So when a dispute arises I will try to get both parties to come to an agreement, failing this I must take up the position of the decider, and because the capital that is invested belongs to investors, it places an obligation on me, GLBSE, and the issuer, and directly as a result means (after careful consideration) that domain over the asset should not be with the asset issuer.

What is to stop GLBSE from deciding to ... keep said assets for itself in a dispute (as you say us being the decider means we can do anything)? Because GLBSE has an obligation to ensure all capital is returned to asset holders, since it was their capital in the first place, and we have no right to it (and in the case of fraud or miss management / incompetence the issuer has no right to that capital either). It's the same situation with deposits, we have an obligation to our users that have deposits with us to return those deposits on demand.

Nefario

*lol* Obsi is the one person, besides diablo, that doesnt like the ongoing course. Which is not a random happening but instead an action against fraud (or at least economic incompetence that hurts the shareholder). I already decided not to invest in any of your projects because you run a hyip at glbse. Making your other projects shine in a gray light too. So it sounds somewhat natural that the ongoing development isnt in your interest.

a) Nope.
b) Lost? Not quite. Get screwed on fixed mhash bonds? Yes, I will admit that was not one of my finer moments.
c) Withholding? No. Withholding the good news until the ink is dry? Yes. Plus, it has no monetary value until we have customers.
d) Largest? Nope. Second largest? Possibly. What you and nefario both have said do not make your case look good, he has clearly said he will look for a new CEO, and you "warned" me that if I didn't do what you said something would happen in the near future. Is it just a coincidence such a thing happened?

You're missing the fundamental point.

WHO interprets and enforces the contract between yourself and your shareholders?  Whoever does that has to:

1) Decide what the contract means,
2) Determine which parts of it are actually valid/enforcable,
3) Decide whether the parties to the contract are acting in good faith and which (if any) of them have broken the contract or their other responsibilities to one another,
4) Enforce it.

Without someone in that role the contract is meaningless - not worth the virtual ink on which it's written.

Given that someone has to have that role you can't then have a contract which explicitly attempts to deny that role - as the whole contract becomes unenforcable sue to noone being entitled to enforce it (you'd in effect be saying that X arbitrates disputes over the contract - but only so long as they rule in your favour).

Your shareholders have to trust that you'll deal with them fairly and with some degree of competence: otherwise they shouldn't have invested with you.

But similarly, when using GLBSE, you have to trust that nefario will deal with YOU fairly and with some degree of competence when it comes to disgareements over the contract between you/your shareholders or other aspects of your dealings via his exchange: otherwise you shouldn't be using it.

You appear to have some view that everyone should trust you, but you should trust noone else - and that in any dispiute between you and your shareholders YOU should be judge, jury and executioner.  Frankly, as a potential investor, that scares me.  A lot.

A few fundamental issues:

You appear happy for YOU to have an "I can do whatever I want" clause - but aren't interested in extending the same to nefario.  Why are you more trustworthy than him?

His "I can do whatever I want" clause trumps yours - as it was agreed first.

The DMC situation is NOT "some random occurence" - the only randomness seems to be in Diablo's mental process.

No terms in your contract can (or could in the "real world") sign away your fundamental obligations to your share-holders: to act in good faith in their interest.  If someone did what Diablo did in a "real" business then he'd certainly be under criminal investigation by now: handing out bundles of unissued shares to others at a tiny fraction of their value is essentially defrauding share-holders.

Who do YOU believe has the responsibility of enforcing/ruling upon your contract with your shareholders?  Whoever it is has to decide not only what teh contract says, but whether it's reasonable and whether the involved parties are acting in good faith.  That's why vague "anything I haven't thought of" clauses end up rarely being enforced - as the responsibility is on YOU to ensure that whatever that clause covers is something your shareholders would reasonably have known it to cover when they agreed to it.

As for the loophole - you can figure that out yourself but you may find it highly amusing when you do (depending which one you find).

Note also that your terms (if interpreted as you'd like them to be) would be extremely unfair to yoru investors in some circumstances.  e.g. If you die then noone could distribute assets to the shareholders - as it's not explicitly covered in your contract so only you can do it (which could be tricky for you).

Well if it's your contention that nothing in the OP here applies - only what's in the GLBSE contract then you've broken your contract every single time you bought shares rather than mining hardware.  As at no point did you submit a motion to change to an investment rather than a mining company.

"A share in the best mining company ever"

You aren't running it as a mining company - but as an investment company.

"2) 50% will be used to invest in additional hardware"

Where's this additional hardware?  And where's the original hardware to which it IS additional?

etc.

No use saying you agreed it with investors - as, you now seem to be claiming, what you've written in the OP (and discussed elsewhere in the thread) counts for nothing as it isn't in the GLBSE contract (or added to it via a motion).  You can't have it both ways.

Pretty pointless to add it anyway - if the point is to prevent nefario locking your account if he suspects fraud.  As you've explicitly given him permission to do that already when you agreed to GLBSE's TOS.  You've also agreed to provide information identifying yourself and that he can change the TOS at any time he wants.

"I can do whatever I want" contracts are essentially not legally enforcable anyway.  If your argument is that there's no "law authority" able to enforce the basic rights of your shareholders (against you) then it logically follows that there's also no such authority able to enforce YOUR rights (whatever they may be) against GLBSE.

Plus there's a glaring loophole in what you wrote anyway

The text you quoted is NOT in the contract. I have not violated the contract as stated on GLBSE.

I do have a responsibility to my shareholders to act in their interest: investing in assets that I believe will massively appreciate in value over the coming months is acting in their interest. Just because asicminer and abmo are both worth around 0.10 BTC now doesn't that their combined value and dividends paid cannot be ten times that or more over the next year.

This is how investing works: you buy at the bottom, you sell at the top.

The approval of your asset holders through a vote to make such a change would be required.

Although I can't see why they would approve that as it essentially gives all power to the issuer and removes any protections or recourse they may have.

This is essentially a "do what I like and get away with it" clause and would mean that any asset with it is worthless.

I also want that text added to DMC's contract to prevent future interference from non-shareholders.

Not a bug. I put 0 in that field, and nefario agreed to that, as did every shareholder.

To make sure everyone sees nefario's motion

https://glbse.com/vote/view/127

Click NO if you believe that I should remain CEO of Diablo Mining Company.

Nearly all the contracts on GLBSE are horribly short and have almost no provisions for exceptional events, the reason TOS on most websites or products are so long and boring is because they cover all that is needed to be covered.

Real world contracts are really really long, ever look at a mortgage contract? It's like 30 pages.

Now it's been the assumption of many on the forum here that if a provision for a specific event is not in a contract, then that event changes nothing.

"Nothing in the contract on what to do if shareholders are unhappy so they can't do anything"

If this is the case then it provides no incentive for the issuer to write any provisions into his contract, as the less there is in there then the more protection the issuer has. This is clearly not working and cannot work, it would be self defeating, as we have seen from the plethora of short but sweet contracts on GLBSE, the record being held by Goat with "test".

I have developed the opinion that if there is not a provision in the contract that covers an event, then the contract writer is leaving it up to the exchanges discretion to decide on what to do as a result of said event(since we have no default contract to go to). This provides a strong incentive to write accurate, detailed and clear contracts as then the asset holder gets more protection from the lack of a clear contract.

In this case there are a number of events that have coincided, 1) Diablo may have been destroying the assets value, 2) Diablo may have broken what little there was of a contract there.

Both of these events will be proven true or false after the investigation and audit. But the audit has been triggered by considerable protests of DMC shareholders which is the trigger event for this whole process.

There is no provision in the contract for what happens if a large percentage of shares (when we pool all the people who own them) are unhappy, and want "something" to be done.

Since there is no provision for this event it is up to my discretion to decide how to handle it, as per the TOS of GLBSE I have the power to freeze access to an issuers account, Diablo you agreed to those terms.

I have done just this, frozen his account and initiated an audit and a vote, the audit should be complete and public before the vote happens.

Diablo, in your lack of provision for such an event (shareholder protest) in your contract, you have given me the power to act.

OK I'd prefer to have a set of rules to which I could go to for such an event, i.e. a default assumed contract to go to with all possible provisions, when such provisions are missing from the contract. I guess you could call this default contract "law", and it is vast and complicated but I/we don't.

So I guess we're setting a precedent here and making GLBSE law as we do so, meaning that in the future if a similar event occurs then we do things in the same way.

Opinions on this are welcome on the above train of thought.

Regarding whether a vote would be binding or not, I'm not a shareholder, I'm the admin of the exchange, the regulator (but not a government one), and believe me, the vote is binding.

As I said if it's not in the contract you're then leaving it up to me. I as the GLBSE operator am launching the vote and audit, to which I have the powers to do.

If you're gonna try to argue technicalities then try this one:

Nefario raised this motion.

Nefario isn't a share-holder.

Hence this isn't a motion raised by a share-holder.  No rights were reserved in respect of motions raised by the exchange operator

Nah, that's sorta to be expected.

As it stands, they've got pretty much nothing on you.

For one thing you breached this:

"Given that, I am asking for 200k shares at 1 BTC each."

You clearly identifed that the shares were to be sold "at 1 BTC each".  Not exchanged for other shares worth way less than that.

That's the easiest breach to demonstrate.

Aside from specifics of contract breaching you also, as any director of a company does, have an obligation to act in the interest of your share-holders.  Spunking away 95% of nav without any proper accounting for it is clearly not fulfilling your resposibilities to those who entrusted you with their funds.

You forgot the part where nefario signed off on this contract when I opened the IPO to begin with, and every investor agreed to this contract when they invested.

So whats the Fifth Amendment for?

Seriously dude, we use red china now. You can do better than that.

This assumes you weren't going for the meme with your statement.

Guilty until proven innocent. I wasn't aware GLBSE was hosted in Soviet Russia.