Discuss legal and ethical issues associated with vgv action

Assignment Help Operation Management

Reference no: EM13100537

Dracca's Senior Vice President of Sales, Bob Marley, and one of his sales representatives, Bill Farian, were on a conference call and learned that Dracca's new line of high chairs was going to be recalled the next day. During the call, Farian stated, "This won't be good for stock prices." After the call ended, Marley and Farian immediately contacted their brokers and sold a large portion of their interests in Dracca shares.

Very Good Vinyls (VGV) was a plastic company that periodically purchased used equipment from Dracca's plant where the new line of high chairs was produced. In 2009, VGV purchased a 750-ton injection-molding machine from Dracca for $150,000. Because of the good relationship between VGV and Dracca, Dracca extended credit to VGV for the equipment. Last month, VGV sold the injection-molding machine to a small start-up company for $1,500 two days before filing bankruptcy. VGV still owes Dracca $100,000 for the machine.

In light of these facts, please respond to the following questions using course material and credible outside research to support your findings. A minimum of one paragraph per question is necessary to adequately address the questions posed. Please submit the paper in APA format.

Did Marley and Farian commit any securities violations? Please explain the reasons for your conclusion. What factors might the court consider in conducting such an analysis? Would the analysis be different for Marley than Farian? Why or why not?
Presuming Farian's statement "This won't be good for stock prices" could be considered disclosure of plan to trade on the nonpublic information, would Farian's sale of stock be a section 10(b) violation? Would it be ethical? Why or why not?
Discuss the legal and ethical issues associated with VGV's action in selling the molding machine before filing bankruptcy. What recourse does Dracca have in recovering the monies still owed on the equipment?
What actions (internal and external) do you recommend to Dracca to remedy the ethical and legal considerations of this scenario?

Reference no: EM13100537

Questions Cloud

Probability in manufacturing aluminum plates : A manager at a local manufacturing company has been monitoring the output of one of the machines used to manufacture small aluminum plates.

Developing professional knowledge influence career success : Create the 500- to 700-word paper in which you describe how developing professional knowledge and abilities influence career success.

What happens to the size of the force : What happens to the size of the force on the proton if the electron is moved 0.50 m closer to the proton.

Probability of occurring a letter in a word : The letters of the word PRESERVE are arranged at random. Then what is the probability that all the 3 E's occur together??

Discuss legal and ethical issues associated with vgv action : Dracca's Senior Vice President of Sales, Bob Marley, and one of his sales representatives, Bill Farian, were on a conference call and learned that Dracca's new line of high chairs was going to be recalled the next day.

Calculate the torque on the center of mass : Calculate the torque on the center of mass of the rod alone with respect to the pivot point.(in N*m)? Calculate the unknown mass.(in kg).

Probability and statistics-early onset cardiovascular : An investigator wants to design a study to estimate the difference in the proportions of men and women who develop early onset cardiovascular disease

Why do they use volume instead of weight : A submerged solid object displaces a. its own volume in the liquid. b. more than its own volume in the liquid. c. less than its own volume of liquid. I am confused with the wording. Why do they use volume instead of weight?

Normal probability of fuel consumption : A delivery truck averages 15 miles per gallon, with a standard deviation of 3 miles per gallon, and that fuel consumption is Normally Distributed.

User Account

All Pages