Proposal “dash-core-group-legal-expenses“ (Completed)Back
| Title: | Dash Core Group Legal Expenses |
| Owner: | glennaustin |
| One-time payment: | 570 DASH (17131 USD) |
| Completed payments: | 1 totaling in 570 DASH (0 month remaining) |
| Payment start/end: | 2020-03-15 / 2020-04-13 (added on 2020-03-09) |
| Votes: | 752 Yes / 59 No / 15 Abstain |
| External information: | app.dashnexus.org/proposals/dash-core-group-legal-expenses/overview |
Proposal description
Dash Core Group April 1st Funding Proposals
For Russian language translation please follow this link
For Chinese language translation please follow this link
DCG is submitting 2 funding proposals for the April 1st budget cycle:
1) DCG Compensation: Multi-month proposal (in 2nd month)
2) DCG Legal: $39,550
This Proposal
This proposal is cross-posted here
This proposal funds Dash Core Group’s Directors & Officers insurance. The current insurance policy expires on June 30, 2020 and DCG will look to enter into a new contract providing us with coverage commencing on July 1st, 2020. We project the costs associated with insurance renewal will be comparable to the previous contract which was approximately $50,000 for a year’s worth of coverage. Therefore, the funds from this proposal will be allocated toward D&O insurance. Any shortfall to the actual cost of insurance will be covered from existing DCG legal reserves.
What is Directors and Officers (D&O) Insurance and why is it important?
Wikipedia offers a great definition of D&O insurance. “... D&O insurance is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs ... as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.”
It is important for an organization to have D&O insurance as it protects the personal assets of directors and officers, as well as their spouses, in the event they are personally sued by employees, vendors, competitors, etc. D&O insurance provides financial backing for standard indemnification provisions, which holds officers harmless for losses due to their role in the company. Directors and officers can be and are often sued for a variety of reasons related to their company roles. Regardless of whether suits are legitimate, legal costs may be incurred defending directors or officers of the company.
Note that this insurance does not offer protection in cases of intentional illegal acts.
Given the highly uncertain regulatory environment in which DCG operates in as well as the litigious environment in the United States, it is important to offer this protection to senior management at DCG in order to mitigate risks. It would be difficult to attract and retain talent without this coverage in place, because it would require the leadership team to expose themselves to personal financial risks.
We last funded the legal budget on September 1st, 2019. That budget was used to support several initiatives:
A major accomplishment this past quarter within the legal category was having the crypto ratings council deem Dash to be a “1” in terms of security status meaning that Dash exhibits no to very few characteristics of a security. This is the best possible rating, and puts us on par with Bitcoin and at a lower risk profile than Ethereum.
If you have any questions, please direct them to Glenn Austin in DashCentral to ensure we are notified of your request.
Requested funding is as follows for the April 1st budget cycle:
· 565 Dash for legal expenses ($39,550 USD @ $70 per Dash)
· 5 Dash proposal reimbursement
Total: 570 Dash
Note: Any unused budget will be applied toward other legal expenses and related taxes.
For Russian language translation please follow this link
For Chinese language translation please follow this link
DCG is submitting 2 funding proposals for the April 1st budget cycle:
1) DCG Compensation: Multi-month proposal (in 2nd month)
2) DCG Legal: $39,550
This Proposal
This proposal is cross-posted here
This proposal funds Dash Core Group’s Directors & Officers insurance. The current insurance policy expires on June 30, 2020 and DCG will look to enter into a new contract providing us with coverage commencing on July 1st, 2020. We project the costs associated with insurance renewal will be comparable to the previous contract which was approximately $50,000 for a year’s worth of coverage. Therefore, the funds from this proposal will be allocated toward D&O insurance. Any shortfall to the actual cost of insurance will be covered from existing DCG legal reserves.
What is Directors and Officers (D&O) Insurance and why is it important?
Wikipedia offers a great definition of D&O insurance. “... D&O insurance is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs ... as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.”
It is important for an organization to have D&O insurance as it protects the personal assets of directors and officers, as well as their spouses, in the event they are personally sued by employees, vendors, competitors, etc. D&O insurance provides financial backing for standard indemnification provisions, which holds officers harmless for losses due to their role in the company. Directors and officers can be and are often sued for a variety of reasons related to their company roles. Regardless of whether suits are legitimate, legal costs may be incurred defending directors or officers of the company.
Note that this insurance does not offer protection in cases of intentional illegal acts.
Given the highly uncertain regulatory environment in which DCG operates in as well as the litigious environment in the United States, it is important to offer this protection to senior management at DCG in order to mitigate risks. It would be difficult to attract and retain talent without this coverage in place, because it would require the leadership team to expose themselves to personal financial risks.
We last funded the legal budget on September 1st, 2019. That budget was used to support several initiatives:
- Our run-rate expenses
- Patent application expenses
- Accounting and tax filing expenses
- Costs associated with organizing a response to a number of regulatory bodies that have expressed concern including JFSA, NYSDFS, FATF and other legal authorities, as well as exchanges, payment processors, or other entities that may be concerned with regulatory implications of the PrivateSend feature.
A major accomplishment this past quarter within the legal category was having the crypto ratings council deem Dash to be a “1” in terms of security status meaning that Dash exhibits no to very few characteristics of a security. This is the best possible rating, and puts us on par with Bitcoin and at a lower risk profile than Ethereum.
If you have any questions, please direct them to Glenn Austin in DashCentral to ensure we are notified of your request.
Requested funding is as follows for the April 1st budget cycle:
· 565 Dash for legal expenses ($39,550 USD @ $70 per Dash)
· 5 Dash proposal reimbursement
Total: 570 Dash
Note: Any unused budget will be applied toward other legal expenses and related taxes.
Show full description ...
Discussion: Should we fund this proposal?
Submit comment
|
No comments so far?
Be the first to start the discussion! |
Crypto currency was made to challenge fiat and GOVERNMENT.
The governments will do EVERYTHING in their power to ATTACK us.
Spending money to follow their rules is silly.
"Chancellor on brink of second bailout for banks".
If you are misappropriating funds i.e. giving funds to proposals that MNOs have voted against then the directors should be held accountable and should not be permitted to be protected by this type of liability insurance.
By not paying this liability insurance we keep DCG management accountable.
Start of WIKI quotes: I copied and pasted this out directly from the wiki article.
====================================================
Motivation and controversy
However, insuring negligence in supervising organizations, or wrongful acts and misrepresentation in financial statements is controversial due to its effect on accountability, otherwise known as the moral hazard problem. In the United States, corporate boards have a "duty of care", but if personal financial consequences for violating that duty of care are lacking, the boards may not perform proper due diligence. In the famous[16] case of Smith v. Van Gorkom (1985), the Delaware Supreme Court found a board grossly negligent and therefore liable. The decision created a backlash and a statute change in Delaware which allowed a corporation to amend its charter to eliminate directors' personal liability for violation of the duty of care; a version of this statute has been passed in all states, and most large corporations have such an "exculpatory clause".[1
==============================================
From reading WIKI article you gave it seems this type of insurance is of most value for large corporations with a very large number of employees and the directors are responsible for the employees actions but due to the large number of employees cannot oversee everything they do. Dash does not fall into that category right now as the work is primarily programming.
As one example only of loss of accountability. If MNOs gain evidence that DCG directors have been misusing funds, that may not be a criminal act per say, but it may a basis for MNOs to request legal action be taken against DCG directors for misusing the DAO funds. In order for misuse of funds to be classed as fraud there has to be a legal contract between DCG and the DAO Trust laying out precisely how DCG funds may or may not be used. Since we do not have such a contract yet, at least as far as I am aware then fraud could not be claimed and the insurance you are asking would protect the Directors of DCG - leading to a loss of accountability.
I would also prefer if you used less emotive words in your reply such as "accurate" or "inaccurate" rather than the emotive word "false" in your reply which implies truth or lie.
I have presented information from the reference you gave Glenn which clearly states lack of accountability of directors is one of the problems with this type of insurance.
MNOs in case have not run a limited company it offers substantial protection to the directors own assets and it's only in exceptional circumstances that assets could be taken from a director for wrongful acts. That is the one of the main goals of a limited liability company - to protect the personal assets of the directors.
50,000 USD for 1 year protection insurance for something in which you are already protected for most wrongful acts is over the top in my opinion and introduces the risk of lack of accountability by the directors as stated in the wiki article you referred us to.