“Former SunEdison Executives File Suit,” The Wall Street Journal, February 25, 23017 B3. Company allegedly told a different story to investors than it was discussing internally, and managers were instructed to make more optimistic projections. Two executives took their concerns to the Board, and were then replaced.
Employees have a duty to report concerns upwards. The company has a duty to its shareholders and to the market to disclose material information. Directors have a duty to the corporation and its shareholders to provide oversight and to handle reports of wrongdoing appropriately.
Watch this space. A chance for a Maryland court to look at Caremark, a Delaware case dealing with a director’s duty to provide oversight, and how derivative actions get decided.