“And if they could talk to one another, don’t you think they’d suppose that the names they used applied to the things they see passing before them?”
The Allegory of the Cave by Plato, line 515b2.
Reading a company’s SEC filings is always an interesting enterprise, particularly because you know that whatever they say is the absolute best thinking that all the top people in the company, their lawyers and their bankers can come up with. But sometimes it’s kind of like the shadows on the wall of the Cave, with the insiders as the puppeteers. Consider this excerpt from Google’s 8-K filed today:
“We may be subject to legal liability associated with providing online services or content: “…We also arrange for the distribution of third-party advertisements to third-party publishers and advertising networks, and we offer third-party products, services, or content. We may be subject to claims concerning these products, services, or content by virtue of our involvement in marketing, branding, broadcasting, or providing access to them, even if we do not ourselves host, operate, provide, or provide access to these products, services, or content. Defense of any such actions could be costly and involve significant time and attention of our management and other resources, may result in monetary liabilities or penalties, and may require us to change our business in an adverse manner.”
“If we lose.” Right? Shouldn’t it also say, “if we lose”? Isn’t the only time you would pay a penalty when you lose? Because you are found civilly or criminally liable for a bad act? But they left that out. And if they think they might lose, shouldn’t the company be reserving for a liability? You know, like they did with the $500,000,000 Google paid to keep the insiders from being indicted for violating the controlled substances laws? (Albeit Google held the reserve about a year or two late if you ask me. Or if you ask the shareholders who are suing Google for failing to disclose the risk.)
What do you suppose they could be thinking of, these puppeteers?
Who wants to bet? Drugs, illegal movies and music (or let’s just say “YouTube” for simplicity’s sake), bogus financial products, mail order brides, illegal Olympics tickets…one of those? Or is it something we haven’t thought of yet like the Foreign Corrupt Practices Act?