Question

Peter Sanders, a member of the Board of Directors of Wheat Growers Corporation (WGC), was getting his shoes shined on his lunch break and reading the daily newspaper. Two men sitting to his right were discussing a business deal. At one point one of the men told the other, "I think this year's corn supply is going to be very small due to the cold winter we just had. Plus, I know some other info that no one else knows. If I were you, I would buy as many shares of Corn Supply of America (CSA) as I could get." The other man replied, "Thanks for the tip. I'll go and do just that." At that time, both men left the area. Peter heard all their statements. After getting his shoes shined, Peter left to return to work at WGC.

In the afternoon, he got a phone call from a manager at Butter Is Good (BIG), a company that makes and sells butter. The BIG manager wanted to order 800 bushels of wheat at $2 per bushel. The manager asked Peter, "Does that sound good to you?" Peters responded, "Most likely. Write a check and then send it to me." The BIG Manager agreed and hung up the phone.

Before leaving work that day, Peter went online and bought 2,000 shares of CSA stock at $10 per share through his stockbroker. The next day, the shares went up to $15 per share in the morning. The same day, in the afternoon, WGC and CSA announced a joint venture and business deal to supply each other with all necessary wheat and corn. None of the information about the joint venture or deal was public knowledge. Both companies had been discussing this joint venture and deal for more than three months. The Board of Directors of WGC had approved the deal two months prior to the announcement. At the end of the day, the shares of CSA were selling at $30 per share.

1. Do BIG and WGC have a contract for the bushels of wheat? Why or why not? Analyze all issues.
2. Is Peter liable for any criminal activity because he bought 2,000 shares of CSA stock? Why or why not? Analyze all issues.
3. Is Peter liable to his company, WGC, in any capacity? Why or why not? Analyze all issues.
4. Suppose Peter is charged with a crime in federal court. At his arraignment the judge sets his bail at $100 million, orders a jury trial, and does not allow Peter to retain an attorney in any future court proceeding. What can Peter argue to the court? Discuss all relevant issues.

Answer 1

Here in the above article the relevant issues is-

For the principal a large portion of, the subject of whether partner government has capacity to attach an organization to relate understanding comes right down to working environment law. The showings of an authority (boss) can tie a head (association) any place the administrator has unmitigated or prompted genuine situation, in words or recorded as an extreme duplicate, got from his game plan. A boss could have evident force any place the association addresses the pariah getting with the main that he has authority, that so renders the association expected to play out its commitments thereunder understanding. there's in like manner settled case law that communicates that a manager of an organization has partner construed or standard situation to pick choices for the association inside the standard course of its business. afterward, immense related WGC have an understanding.

Die down is in peril to WGC as inside the constraint of partner government and might be inferable in show identified with business official trading. WGC and CSA zone unit 2 associations whereby the key information on one association will affect the options of different associations. Being the head of WGC, Peter is wakeful to a phenomenal arrangement of individual information and his exercises, as partner government, will affect the options of CSA. during this implies, any business official information could provoke taking uneven choices which can hamper WGC. on these lines, Peter is in peril to WGC.

Insider trading is described as a carelessness whereby trade of partner association's assurances is grasped by individuals World Health Organization by moderation of their work approach the regardless non open information which may be significant for settling on adventure choices. business official trading is partner off the mark watch, whereby the contrary financial specialists region unit at a farfetched weight because of nonattendance of incredible business official non-open information. Be that since it could, in explicit cases if the data has been made open, indicated each single included examiner approach it, that won't be partner case of unlawful business official trading. Subsequently, Peter is subject for exchanging as he has information known with WGC which can affect his choices at CSA. fall could in like manner take choices which can be significant for CSA and terrible for WGC. The misappropriation theory holds that an individual submits coercion "with respect to" a securities trade and during this implies mishandles 10 b and Rule 10b-5, when he abuses individual information for assurances trading capacities, in infiltrate of partner commitment owed to the wellspring of the data. underneath this theory, a trustee's incognito, greedy use of an essential's information to look for or sell assurances, in infiltrate of partner commitment of endurance and mystery, swindles the head of the particular usage of the data. In stead of presenting hazard on a watchman connection between association business official and vendee or vendor of the association's stock, the misappropriation theory premises commitment on a trustee turned-intermediary's guile of the individuals who depended him with access to non-open information.

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