# Conflict of interest

`kaal:entity:conflict-of-interest`

**Status.** derived

This node is assembled mechanically from the 5 claims that carry the concept tag `conflict-of-interest`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

5 claims across 4 works, 2009 to 2024.

**2009**

- [1428387-009](https://wulfkaal.github.io/claims/1428387-009) [mechanism/argued] *(failure mode)* -- Because net asset value drives subscriptions, redemptions, performance calculations, advertising, and fees, managers who both manage and value the portfolio have both an incentive and the ability to inappropriately over-value their portfolios.
  > Given the conflicting responsibilities, managers have an incentive and the ability to inappropriately over-value their portfolios.27
  Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387
- [1428387-023](https://wulfkaal.github.io/claims/1428387-023) [mechanism/argued] -- Because rating agencies are paid by CDO issuers while the ratings' main users are buyers, the agency as agent has an incentive to issue high ratings to satisfy its issuer principal, and the buyer has no means of controlling the agency other than through its relationship with the issuer.
  > The rating agency as the agent would probably have an incentive to issue high ratings to satisfy the issuer of a CDO as its principal. The buyer as the beneficiary of the rating has no means of controlling the rating agencies and its ratings other than through its relationship with the issuer.
  Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

**2010**

- [1558614-016](https://wulfkaal.github.io/claims/1558614-016) [mechanism/argued] -- U.S. corporate law centers so heavily on shareholder manager conflicts of interest that, absent a demonstrable conflict, it treats risk taking as a situation where managers' and shareholders' interests are aligned and legal intervention is unwarranted.
  > Risk taking is one of those situations where U.S. corporate law assumes that managers' and shareholders' interests are aligned, or at least not sufficiently di- vergent that legal intervention is justified.
  Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614

**2012**

- [2097160-030](https://wulfkaal.github.io/claims/2097160-030) [failure/argued] *(failure mode)* -- If executives influence the drafting of their own trigger, opportunism within the bounds of fiduciary duty will produce suboptimal early triggers and increase the potential for abuse, because executives can use the trigger to obtain cheap stock during a crisis.
  > Executives' opportunism and involvement in drafting the trigger could result in suboptimal early triggers in contingent convertible bonds issued to executives. If the trigger design allows executives to influence the early trigger, the suboptimal early trigger could increase the potential for abuse
  Wulf A. Kaal, Contingent Capital in Executive Compensation (2012). SSRN: https://ssrn.com/abstract=2097160

**2024**

- [4734750-005](https://wulfkaal.github.io/claims/4734750-005) [failure/argued] *(failure mode)* -- Bug bounty programs are structurally compromised by their reliance on a trusted intermediary that extracts high commission fees and may hold interests that conflict with the software vendor.
  > they use a trusted intermediary that charges hefty commission fees and may have a conflict of interest with the software vendor
  Wulf A. Kaal, Code Review DAO (2024). SSRN: https://ssrn.com/abstract=4734750

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/conflict-of-interest.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.