Shareholders do cover company messes. In fact, shareholder's equity is the first thing that normally gets wiped out in an insolvency.
I have done 2 puts in my 17 years of trading options...2 One was to buy back a stock. The other was the "dot com bubble". I did my put on that one...I knew there was no real value behind so many of the tech companies. I just knew it...No earnings at all...No chance of earnings!! Well I was right about that...Just wrong about the timing. The dot com crash happened 6 months after my put expired. I was great at knowledge but bad on timing!! That soured me on puts. I'm just a boring and safe covered call guy...
Long EURCHF was not the right choice nor was the downside actually limited just because the SNB attempts to peg it (in fact, the events subsequent to that clearly prove that the downside was indeed not limited). The right play here was to not trade this pair at all. Don't get involved with hard pegged currencies because they're a dislocation just waiting to happen. I do agree from a literal standpoint they're not the same but from a "the status quo and/or trend should continue forever" standpoint they're similar. They both rely on "this should always happen" and when that type of trade is long in tooth it's a bad trade.
The only way for Seth M. Golden to make those returns was to use excessive leverage. And when you use excessive leverage on a product which is very risky to begin with, the end is well known. Nobody should be surprised.
Are we talking about the same thing? I was talking about the fact (again, from what I heard somewhere) that in the past shareholders would be liable with their own (read: personal) assets for any insolvency, so to protect from the stupidity. It's like if you're an owner (as shareholders are) then you are liable, not up to the share price, but all the way down. It does make sense if you are looking for the fair and capitalistic markets. It doesn't make sense if you're looking to game the system and abuse it (like it is now). Think along the recent stories about the bankruptcy of that PA refinery. If that fund (shareholder) were to be liable (like the shareholders were in the past) with their own funds then draining that refinery out of funds (leading to its bankruptcy) wouldn't happen in the first place. Never mind Ted Cruz (or other politicians) using that bankruptcy to lobby against corn based ethanol...
I really have a hard time imagining a case where ordinary shareholders can be personally liable for any wrongdoing, beyond their equity being wiped out. Indeed, would it seem fair to you if a pensioner with a passive small stake in a company had to be responsible for something over which they never have any control? Maybe the logic of personal liability can be applied to directors, but even that's not an obvious argument.