Question

After several months of negotiations, the CEO of BIG Pty Ltd made the long-awaited announcement to board members that BIG Pty Ltd would be buying Melbourne based company, YAY Pty Ltd for $25m. The following persons were present at the meeting: Helen and Liam (Company Directors) and Tammy (Receptionist taking meeting minutes). News of the take-over would not be released to the public until the following week.

Question:
Discuss whether Tammy would be breaching any duties if, immediately after leaving the boardroom, she phoned her husband and told him to invest $100,000 in YAY Pty Ltd.

Suggested Answer Structure

Issue: What Tammy would be breaching any….

Rule: According to CA s 182 and 183….

Analyze: Here the facts tell us….

Conclusion: Clear that Tammy would be breaching Duty....

Answer 1

Issue

Here Tammy would be breaching the business ethics and will violate insider trading law and GDPR law

Rule

Tammy here is breaching insider trading law which is to protect companies material and non-material information, below is the definition of insider trading

• Insider trading

Under rule 10b5-1 the SEC defines insider trading as any securities transaction made when the person behind the trade is aware of non-public material information, and is hence violating his or her duty to maintain confidentiality of such knowledge.

Analyse

As we are now sure about Tammy breaching insider trading law here, we can add some checkpoints which can minimise the risk of insider trading wherein the person working in company or immediate dependent of that person should not be allowed to invest in the company and company related investments and subsidies.

Also to avoid such instances company should follow strict insider policy rules and employees should made aware about this by providing them training and impact of this if they do so.

Conclusion

After going through the above article I believe that strict action should be taken against Tammy as he has breached confidential information outside the company also to secure all this information there should be strict law which need to be in place