Zerify Inc (ZRFY)

[dukeb]

I am as anti-Kay and company as anyone and I'm not an attorney, but Mark seems to stop short of doing anything that would cause FINRA or the SEC to take action against the company. The defense of "we've been trying weewy weewy hawd to make this work" goes a long way, unfortunately. Can a case be made that the three amigos have been robbing shareholders through their compensation packages that vastly exceed the "results" that they have achieved over the last 20+ years? The answer is surely "yes" in the court of public opinion but in an official proceeding? I dunno.

Part of Zanfardino's lawsuit states (in part):

DUTIES OF THE DEFENDANTS
93. Because of their positions as directors of the Company, and because of their ability to control the business and corporate affairs of the Company, the
Defendants owed the Company and its shareholders—when discharging their duties as directors—a duty to act in good faith and in a manner not opposed to the Company and in the Company’s best interest.
94. These obligations required the Defendants to use their utmost abilities to control and manage the Company in an honest and lawful manner.
95. The Defendants were also required to act in furtherance of the best interests of the Company and its shareholders.
96. Further, each Defendant owes to the Company and its shareholders the duty to exercise loyalty, good faith, and diligence in the administration of the affairs of the Company, and in the use and preservation of its property and assets.
97. As directors of the Company, the Defendants must discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.
98. By virtue of such duties, the directors of the Company were required to, among other things:

(a) ensure that the Company complied with its legal obligations and requirements, including acting only within the scope of its legal authority and
disseminating truthful and accurate statements to the SEC and the investing
public;
(b) conduct the affairs of the Company to avoid wasting the Company’s assets, and to maximize the value of the Company’s stock and not
benefit themselves at the expense of the Company;
(c) remain informed as to how the Company conducted its operations, and, upon receipt of notice or information of imprudent or unsound conditions
or practices, make reasonable inquiries in connection therewith, take steps to correct such conditions or practices, and make such disclosures as necessary to comply with federal and state securities laws;
(d) ensure that the Company was operated in a diligent, honest, and prudent manner in compliance with all applicable federal, state, and local laws,
and rules and regulations; and
(e) ensure that all decisions were the product of independent business judgment and not the result of outside influences, entrenchment motives and not
benefit themselves at the expense of the Company.

Looking at (c) and (e) in particular can it be PROVEN that Mark, George and Raj are failing to do what is best for shareholders and are making decisions (particularly as it relates to executive compensation) that violate their duty to not enrich themselves (I'm guessing that is what they meant to say instead of entrenchment motives) at the expense of the company? I dunno. Generally speaking, company executives are given wide latitude on the decisions that they are allowed to make so a case (in civil court or through some government action) could be challenging.

Given the preferred stock held by Mark & Co that, for all intents and purposes, locks common shareholders out from any decision making combined with compensation that is wildly out of line with the "results" that the company has achieved could, I suppose, be considered so egregious that action will be taken.

Better (certainly faster) would be if the company just suffocates because no one buys new shares. When the cash dries up the 3 rats will be gone.