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).
By default I trust myself more than anyone else.
I am not claiming that Diablo-D3's situation is random.
With Nefario's stated stance on the issue, anything not covered in the contract is now up for debate and his decision at his discretion. I drafted my contracts with nearly completely opposite expectations... anything not explicitly stated is my domain. The statement I wish to add merely brings them back to my initial incorrectly assumed position.
In the event of my death, instructions have been left to allow an orderly shutdown & transfer of my securities. I freely decided and determined that mitigation procedure ahead of time. Without such a clause as I wish to add, Nefario could basically do whatever he wants at any time because anything.
To be clear I'm not calling Nefario's competency into question. These securities were launched with a contract between myself and my shareholders, I don't think
anyone should be able to insert themselves into the gaps, no matter their intentions.
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
