Case summary: Person DG was CEO of company FMC. Company FMC was interested in acquiring company RSC. Person DG met person GR, who was the CEO of RSC to initiate the negotiations. Person DG called his brother who purchased 3,800 shares of RSC. DG conferred the deal with his father who purchased 20,000 shares of RSC. DG called his at home and brother bought 3,200 more shares. The family continued to buy shares of RSC. The bid of FMC was refused but RSC announced the merger with some other company. The price of shares of RSC rose by 30 percent.
To find: Involvement of G in insider trading.
Case summary: Person DG was CEO of company FMC. Company FMC was interested in acquiring company RSC. Person DG met person GR, who was the CEO of RSC to initiate the negotiations. Person DG called his brother who purchased 3,800 shares of RSC. DG conferred the deal with his father who purchased 20,000 shares of RSC. DG called his at home and brother bought 3,200 more shares. The family continued to buy shares of RSC. The bid of FMC was refused but RSC announced the merger with some other company. The price of shares of RSC rose by 30 percent.
To find: Requirements for imposing sanctions under insider trading.
Case summary: Person DG was CEO of company FMC. Company FMC was interested in acquiring company RSC. Person DG met person GR, who was the CEO of RSC to initiate the negotiations. Person DG called his brother who purchased 3,800 shares of RSC. DG conferred the deal with his father who purchased 20,000 shares of RSC. DG called his at home and brother bought 3,200 more shares. The family continued to buy shares of RSC. The bid of FMC was refused but RSC announced the merger with some other company. The price of shares of RSC rose by 30 percent.
To find: The possibility of G to be held liable for insider trading.
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Chapter 28 Solutions
The Legal Environment of Business: Text and Cases (MindTap Course List)
- A proxy is a representative of a (shareholder, officer, director) who is liable to (vote, sell shares, buy shares) on the shareholder's behalf at a shareholder meeting. Proxy agreements are generally valid for (eleven months, twelve months, thirteen months). At the time of the shareholder meeting, Francescas's proxy agreement was (fourteen months, thirteen months, twelve months) old. Therefore, Francesca's proxy agreement with her representative (expired, did not expire), and her representative (may not, may) vote on Franscesca's behalf. What if the Facts were Different Assume that Brenda purchased Mike's 100 shares of stock and Fransesca signed a new proxy agreement on May 15, 2020. Brenda's purchase of stock on May 15, 2020, is (after, before) the record date. On the record date, (Mike, Brenda) is the owner of the 100 shares and (may not, may) vote based on ownership of the 100 shares at the shareholder meeting. If Francesca signed a proxy agreement on May 15, 2020, it is (more…arrow_forwardwhich is wrong The IPO tax applies only to the initial public offering of a closely held corporation. A sale is not subject to stock transaction tax if the shares were not listed and sold through the Philippine Stock Exchange (PSE). The sale, barter or exchange, including block sale, of listed stocks through the Philippine Stock Exchange (domestic or foreign stocks), other than by dealers in securities, is subject to a tax of 60% of 1% (6/10 of 1%) based on gross selling price. The sale, barter or exchange, including block sale, of listed stocks through the Philippine Stock Exchange (domestic or foreign stocks), other than by dealers in securities, is subject to a tax of 50% of 1% (5/10 of 1%) based on gross selling price.arrow_forwardProvide possible reasons for cheques being written to board members involved in fraudulent activities.arrow_forward
- John works as an engineer for a technological company, and Maria works as a sales executive for a competitor business. Maria reminded John that her profession contains sensitive information, and she cautions him not to reveal anything he learns from her work to anyone. While attending a conference, John overheard two executives from Maria's company discussing a new product launch. He chooses to buy a modest amount of Maria's company's shares, intending to profit from the predicted increase in the company's stock price following the product launch. John double-checked his company's regulations to ensure that there was no conflict of interest or limitation on the purchase. However, as a result of unanticipated factors, the product introduction was delayed, and the stock price of Maria's company fell instead. Instead of the predicted profit, John's investment resulted in a loss. Question : Explain whether "Unacceptable" is correct or incorrect with respect to the relevant Standard. State…arrow_forwardJohn works as an engineer for a technological company, and Maria works as a sales executive for a competitor business. Maria reminded John that her profession contains sensitive information, and she cautions him not to reveal anything he learns from her work to anyone. While attending a conference, John overheard two executives from Maria's company discussing a new product launch. He chooses to buy a modest amount of Maria's company's shares, intending to profit from the predicted increase in the company's stock price following the product launch. John double-checked his company's regulations to ensure that there was no conflict of interest or limitation on the purchase. However, as a result of unanticipated factors, the product introduction was delayed, and the stock price of Maria's company fell instead. Instead of the predicted profit, John's investment resulted in a loss. Question : In the view of conflict of interest of ethics in financial analysis, state the key points of the…arrow_forwardFranchising is a method of distributing products or services involving a franchisorthat establishes the brand's trademark, trade name, business system, and afranchisee who pays a royalty and an initial fee for the right to do business underthe franchisor's name and system. It is a contractual business relationship. Whatdo you think is the prime advantage and disadvantage in having a business ofthis nature?arrow_forward
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