This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
The preceding chapter disclosed some of the methods by which the active officers of a corporation may use their positions to carry through transactions which are primarily in their own interests and are injurious to the interests of all the other shareholders, including even their fellow officers and directors of the corporation. Now we have to consider instances in which the circle of inside schemers is enlarged so as to include all, or a majority, of the members of the board of directors, who misuse their positions to the injury of their fellow shareholders. The circle may be enlarged to include a majority of the shareholders who exploit the minority shareholders; or it may even be further enlarged to include all the shareholders who are banded together for the purpose of exploiting the creditors.
The principal methods employed do not differ fundamentally from those previously described, and may take the form of unfair contracts with a corporation, or of sales at exorbitant prices, or of misstatements of fact, thus misleading some of the outsiders into buying or selling at far above or below fair valuations, or of misusing the resources of the corporation to assist in outside ventures or speculations. These are the basic methods which in their infinitely varied forms are used again and again.