Corporate Governance. Did Drizin act ethically in this case? Provide your rational.

Corporate Governance
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Did Drizin act ethically in this case? Provide your rational.
The case involved local farmers within Manchester who got together to form Northeast Iowa Ethanol, LLC in plans of building an ethanol plant. The group of farmers contributed $3865000 towards the project but was still short of $20 million. As such, Jerry Drizin got on board as an investor and proceeded to form Global Syndicate International, Inc. (GSI) with $250 in capital. The primary purpose of GSI was to assist the local farmers in raising the additional capital for the construction of the ethanol plant. Drizin then lured the farmers into transferring the funds they had collected into GSI’s bank account under the pretense that they would eventually acquire a loan using them as security. However, through fraudulent transactions, the transferred funds were stolen. Consequently, Northeast Iowa Ethanol sued Drizin for civil fraud to recover their funds.
Based on the above facts, it is evident that Drizin acted unethically. According to Saxena (2010), “A major corporate officer cannot avoid liability be emulating the three fabled monkeys, “hearing, seeing and speaking no evil.” It is shared that Drizin formed GSI with the sole purpose of assisting the local farmers raise capital. As per the law, corporations are usually distinct and separate from their shareholders. As such, shareholders are usually insulated from any personal liability in the case of corporate debt (Man, 2016). However, under “exceptional circumstances”, shareholders are held personally liable and as such, the corporate veil is pierced. As indicated by the facts provided, GSI was merely a shell and didn’t serve any legitimate business purpose. It was just used to perpetuate fraud. GSI’s $250 capital was insufficient to meet any of its debts and was quite minimal in relation to the business it was supposed to conduct. Furthermore, Drizin acted unethically by using and mixing the corporate and personal funds and transactions. As a result of Drizin’s unethical business practices, the local farmers in M...