John,who has a reputation for dishonesty,recently incorporated an investment company to protect himself from liability for his dishonest activities.John makes himself an employee of the company and fraudulently misrepresents an investment to a new customer who invests a large sum of money,which John pockets.A few days later the company goes bankrupt.In this situation,the investor

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Since John incorporated the investment company to protect himself from liability and fraudulently misrepresented an investment and pocketed the money, the court may Pierce the corporate veil and hold John personally liable for his fraudulent activities. Therefore, the investor can move to have the court pierce the corporate veil and sue John directly for fraud. The investor may also sue the company, but it is unlikely to recover any money from the bankrupt company.

John,who Has a Reputation for Dishonesty,recently Incorporated an Investment Company